Exhibit 10.14
EXECUTION COPY
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CREDIT AGREEMENT
Dated as of June 30, 2004
among
PIERRE MERGER CORP.,
as the initial Borrower,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent, Swing Line Lender and
an L/C Issuer,
The Other Lenders Parties Hereto,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Collateral Agent,
and
BANC OF AMERICA SECURITIES LLC,
as Syndication Agent
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WACHOVIA CAPITAL MARKETS, LLC
and
BANC OF AMERICA SECURITIES LLC
Joint Lead Arrangers and Joint Bookrunning Managers
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms............................................................................2
1.02 Other Interpretive Provisions...........................................................31
1.03 Accounting Terms........................................................................31
1.04 Rounding................................................................................32
1.05 Times of Day............................................................................32
1.06 Letter of Credit Amounts................................................................32
1.07 Currency Equivalents Generally..........................................................32
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 The Loans...............................................................................32
2.02 Borrowings, Conversions and Continuations of Loans......................................33
2.03 Letters of Credit.......................................................................34
2.04 Swing Line Loans........................................................................38
2.05 Prepayments.............................................................................41
2.06 Termination or Reduction of Commitments.................................................43
2.07 Repayment of Loans......................................................................44
2.08 Interest................................................................................45
2.09 Fees....................................................................................46
2.10 Computation of Interest and Fees........................................................46
2.11 Evidence of Indebtedness................................................................46
2.12 Payments Generally; Administrative Agent's Clawback.....................................47
2.13 Sharing of Payments by Lenders..........................................................49
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes...................................................................................49
3.02 Illegality..............................................................................51
3.03 Inability to Determine Rates............................................................51
3.04 Increased Costs; Reserves on Eurodollar Rate Loans......................................52
3.05 Compensation for Losses.................................................................53
3.06 Mitigation Obligations..................................................................53
3.07 Survival................................................................................53
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension..................................................54
4.02 Conditions to all Credit Extensions.....................................................59
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Existence, Qualification and Power; Compliance with Laws................................60
5.02 Authorization; No Contravention.........................................................60
5.03 Governmental Authorization; Other Consents..............................................60
5.04 Binding Effect..........................................................................61
5.05 Financial Statements; No Material Adverse Effect........................................61
5.06 Litigation..............................................................................62
5.07 No Default..............................................................................62
5.08 Ownership of Property; Liens; Investments...............................................62
5.09 Environmental Compliance................................................................63
5.10 Insurance...............................................................................63
5.11 Taxes...................................................................................64
5.12 ERISA Compliance........................................................................64
5.13 Subsidiaries; Equity Interests; Loan Parties............................................64
5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act..........65
5.15 Disclosure..............................................................................65
5.16 Intellectual Property; Licenses, Etc....................................................66
5.17 Solvency................................................................................66
5.18 Casualty, Etc...........................................................................66
5.19 Perfection, Etc.........................................................................66
5.20 Designation as Senior Indebtedness......................................................66
ARTICLE VI
AFFIRMATIVE COVENANTS
6.01 Financial Statements....................................................................66
6.02 Certificates; Other Information.........................................................67
6.03 Notices.................................................................................69
6.04 Payment of Obligations..................................................................70
6.05 Preservation of Existence, Etc..........................................................70
6.06 Maintenance of Properties...............................................................70
6.07 Maintenance of Insurance................................................................70
6.08 Compliance with Laws....................................................................70
6.09 Books and Records.......................................................................70
6.10 Inspection Rights.......................................................................71
6.11 Use of Proceeds.........................................................................71
6.12 Covenant to Guarantee Obligations and Give Security.....................................71
6.13 Compliance with Environmental Laws......................................................73
6.14 Preparation of Environmental Reports....................................................73
6.15 Further Assurances......................................................................73
6.16 Compliance with Terms of Leaseholds.....................................................74
6.17 Cash Collateral Accounts................................................................74
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ARTICLE VII
NEGATIVE COVENANTS
7.01 Liens...................................................................................74
7.02 Indebtedness............................................................................76
7.03 Investments.............................................................................78
7.04 Fundamental Changes.....................................................................80
7.05 Dispositions............................................................................81
7.06 Restricted Payments.....................................................................82
7.07 Change in Nature of Business............................................................83
7.08 Transactions with Affiliates............................................................83
7.09 Burdensome Agreements...................................................................83
7.10 Financial Covenants.....................................................................84
7.11 Amendments of Organization Documents....................................................84
7.12 Accounting Changes......................................................................85
7.13 Prepayments, Etc. of Indebtedness.......................................................85
7.14 Amendment, Etc. of the Related Documents................................................85
7.15 Partnerships, Etc.......................................................................85
7.16 Speculative Transactions................................................................85
7.17 Formation of Subsidiaries...............................................................85
7.18 Designation as Designated Senior Debt...................................................85
7.19 Modification of Senior Subordinated Documents...........................................85
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default.......................................................................86
8.02 Remedies Upon Event of Default..........................................................88
8.03 Application of Funds....................................................................88
ARTICLE IX
ADMINISTRATIVE AGENT
9.01 Authorization and Action................................................................89
9.02 Agent's Reliance, Etc...................................................................89
9.03 Wachovia and Affiliates.................................................................90
9.04 Lender Credit Decision..................................................................90
9.05 Indemnification of Agents...............................................................90
9.06 Successor Agents........................................................................91
9.07 Arrangers and Syndication Agent Have No Liability.......................................91
9.08 Administrative Agent May File Proofs of Claim...........................................92
9.09 Collateral and Guaranty Matters.........................................................92
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ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc 93
10.02 Notices and Other Communications; Facsimile Copies......................................94
10.03 No Waiver; Cumulative Remedies..........................................................96
10.04 Expenses; Indemnity; Damage Waiver......................................................96
10.05 Payments Set Aside......................................................................97
10.06 Successors and Assigns..................................................................98
10.07 Treatment of Certain Information; Confidentiality......................................101
10.08 Right of Setoff. 102
10.09 Interest Rate Limitation...............................................................102
10.10 Release of Collateral..................................................................103
10.11 Counterparts; Integration; Effectiveness...............................................103
10.12 Survival of Representations and Warranties.............................................103
10.13 Severability 103
10.14 USA PATRIOT Act Notice.................................................................104
10.15 Governing Law; Jurisdiction; Etc.......................................................104
10.16 Waiver of Jury Trial...................................................................105
SIGNATURES....................................................................................S-1
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SCHEDULES
I Guarantors
II Existing Letters of Credit
III Adjusted Pro Forma Consolidated EBITDA
2.01 Commitments and Applicable Percentages
5.03 Certain Authorizations
5.05 Existing Indebtedness; Surviving Indebtedness; Supplement to Interim
Financial Statements
5.08(b) Existing Liens
5.08(c) Owned Real Property
5.08(d)(i) Leased Real Property (Lessee)
5.08(d)(ii) Leased Real Property (Lessor)
5.09 Environmental Matters
5.13 Subsidiaries and Other Equity Investments; Loan Parties
5.16 Intellectual Property Matters
7.03(f) Existing Investments
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
FORM OF
A Committed Loan Notice
B Swing Line Loan Notice
C-1 Term Note
C-2 Revolving Credit Note
D Compliance Certificate
E Assignment and Assumption
F-1 Parent Guaranty
F-2 Subsidiary Guaranty
G Security Agreement
H Mortgage
I Solvency Certificate
J-1 Opinion Matters - Counsel to Loan Parties
J-2 Opinion Matters - Local Counsel to Loan Parties
J-3 Opinion Matters - Real Estate Counsel to Lender Parties
K Assumption Agreement
CREDIT AGREEMENT
This
CREDIT AGREEMENT ("AGREEMENT") is entered into as of June 30,
2004, among PIERRE MERGER CORP., a North Carolina corporation ("MERGECO"), as
the initial borrower, each lender from time to time party hereto (collectively,
the "LENDERS" and individually, a "LENDER"), WACHOVIA BANK, NATIONAL
ASSOCIATION, as Administrative Agent, Swing Line Lender and an L/C Issuer,
WACHOVIA BANK, NATIONAL ASSOCIATION, as Collateral Agent, and Banc of America
Securities LLC, as Syndication Agent.
PRELIMINARY STATEMENTS:
(1) Pursuant to the Stock Purchase Agreement dated May 11, 2004
(as amended, supplemented or otherwise modified in accordance with its terms, to
the extent permitted in accordance with the Loan Documents (as, along with all
other capitalized terms not otherwise defined in these Preliminary Statements,
defined below), the "STOCK PURCHASE AGREEMENT") among PF Management Inc., a
North Carolina corporation (the "PARENT"), its shareholders and Xxxxx X. Xxxxx,
as shareholders' agent (collectively, the "SELLERS") and Pierre Holding Corp., a
Delaware corporation ("HOLDINGS"), Holdings has agreed to acquire (the
"ACQUISITION") all of the equity interests of the Parent, which directly owns,
and the sole asset of which is, all of the equity interests in Pierre Foods,
Inc. (the "COMPANY"). Upon consummation of the Acquisition, Holdings will be a
holding company that directly owns, and the only assets of which will be, (a)
all of the equity interests in the Parent and (b) all of the equity interests in
Mergeco.
(2) Immediately following the consummation of the Acquisition,
Mergeco intends to merge into and with the Company (the "MERGER"), with the
Company as the surviving entity.
(3) The Borrower has requested that (a) immediately upon the
consummation of the Acquisition, the Lenders lend to Mergeco a term loan of $150
million, the proceeds of which will be distributed to Holdings and used by
Holdings to pay to the Sellers part of the cash consideration for their shares
in the Acquisition and to pay certain transaction fees and expenses and to
refinance, redeem or discharge certain Indebtedness of the Company and its
Subsidiaries (including, without limitation, the Company's Existing
Credit
Agreement and all of the Company's 10-3/4% Senior Notes due 2006 (the "EXISTING
NOTES")) set forth on SCHEDULE 5.05 and (b) from time to time on and after the
Closing Date, the Lenders lend to the Borrower and the L/C Issuer issue Letters
of Credit for the account of the Borrower to provide a revolving credit facility
(with a subfacility for swingline loans) in an aggregate amount equal to $40
million to finance the ongoing working capital and other general corporate
purposes of the Borrower and its Subsidiaries.
(4) The Borrower has requested that the Lenders provide a
revolving credit facility, and a term loan facility, and the Lenders have
indicated their willingness to lend and the L/C Issuer has indicated its
willingness to so issue Letters of Credit, in each case, on the terms and
subject to the conditions set forth herein, including the granting of Collateral
pursuant to the Collateral Documents and the guarantees pursuant to the
Guaranties.
(5) It is a condition to the obligations of the Lenders and the
effectiveness of this Agreement that, among other conditions, (a) the
Acquisition is consummated pursuant to the Stock Purchase Agreement, (b) the
Merger is consummated, (c) to provide a portion of the financing for the
Acquisition, the Borrower shall have issued the Senior Subordinated Notes in an
aggregate principal amount of at least $125 million and (d) at least $140.0
million is contributed in cash (or, in the case of management of the Company, by
equity rollover in an aggregate amount not to exceed $5.4 million) (the "EQUITY
CONTRIBUTION") to Holdings by the Sponsor and such management.
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In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"ACT" has the meaning set forth in SECTION 10.14.
"ACQUISITION" has the meaning specified in the Preliminary
Statements to this Agreement.
"ADJUSTED PRO FORMA CONSOLIDATED EBITDA" means, for the fiscal
quarters ended May 31, 2003, August 30, 2003, November 29, 2003 and March
6, 2004, the respective amounts indicated in SCHEDULE III hereto.
"ADMINISTRATIVE AGENT" means Wachovia in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"ADMINISTRATIVE AGENT'S OFFICE" means the Administrative Agent's
address and, as appropriate, account maintained by the Administrative
Agent with Wachovia as the Administrative Agent may from time to time
notify to the Borrower and the Lenders.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"AGENTS" means, collectively, the Administrative Agent and the
Collateral Agent.
"AGGREGATE COMMITMENTS" means the Commitments of all the Lenders.
"AGGREGATE CREDIT EXPOSURES" means, at any time, the sum of (i) the
unused portion of the Revolving Credit Facility then in effect, (ii) the
unused portion of each Term B Commitment then in effect and (iii) the
Total Outstandings at such time.
"AGREEMENT" means this
Credit Agreement.
"AGREEMENT VALUE" means, with respect to each Swap Contract on any
date of determination, an amount equal to the greater of:
(a) (i) in the case of any Swap Contract documented pursuant to
the ISDA Master Agreement, the amount, if any, that would be payable by
any of the Loan Parties or any of their Subsidiaries to its counterparty
to such Swap Contract, as if (A) such Swap Contract was being terminated
early on such date of determination, (B) such Loan Party or such
Subsidiary, as the case may be, was the sole Affected Party (as defined in
the applicable ISDA Master Agreement) and (C) the Administrative Agent was
the sole party determining such payment amount (with the Administrative
Agent making such determination pursuant to the provisions of the form of
ISDA
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Master Agreement); or (ii) in the case of a Swap Contract traded on an
exchange, the xxxx-to-market value of such Swap Contract, which will be
the unrealized loss on such Swap Contract to the Loan Party or the
Subsidiary of a Loan Party party to such Swap Contract (determined by the
Administrative Agent based on the settlement price of such Swap Contract
on such date); or
(b) in all other cases, the xxxx-to-market value of such Swap
Contract, which will be the unrealized loss on such Swap Contract to the
Loan Party or the Subsidiary of a Loan Party party to such Swap Contract
(determined by the Administrative Agent based on the amount, if any, by
which (i) the present value of the future cash flows to be paid by such
Loan Party or such Subsidiary of a Loan Party, as the case may be, exceeds
(ii) the present value of the future cash flows to be received by such
Loan Party or such Subsidiary of a Loan Party pursuant to such Swap
Contract).
"APPLICABLE PERCENTAGE" means, with respect to any Lender at any
time, the percentage (carried out to the ninth decimal place) of the
Aggregate Commitments represented by such Lender's Commitment under the
applicable Facility or Facilities at such time. If the Commitments of each
Lender to make Loans and the obligation of the L/C Issuer to make L/C
Credit Extensions have been terminated pursuant to SECTION 8.02, or if the
Aggregate Commitments have expired, then the Applicable Percentage of each
Lender shall be determined based on the Applicable Percentage of such
Lender most recently in effect, giving effect to any subsequent
assignments. The initial Applicable Percentage of each Lender is set forth
opposite the name of such Lender on SCHEDULE 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as
applicable.
"APPLICABLE MARGIN" means:
(a) with respect to the Term B Facility, a per annum rate equal
to:
(i) in the case of Base Rate Loans, 1.50%; and
(ii) in the case of Eurodollar Rate Loans, 2.50%; and
(b) with respect to the Revolving Credit Facility, a rate per
annum equal to:
(i) for the first six months after the Closing Date, a rate
per annum equal to:
(A) in the case of Base Rate Loans, 1.50%; and
(B) in the case of Eurodollar Rate Loans and Letters
of Credit, 2.50%; and
(ii) thereafter, the following percentages per annum, based
upon the Consolidated Leverage Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant
to SECTION 6.02(b):
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Applicable Margin
Consolidated EURODOLLAR RATE +
Pricing Level Leverage Ratio Letters of Credit Base Rate +
1 GREATER THAN OR EQUAL TO4.50:1 2.75 1.75
2 GREATER THAN OR EQUAL TO4.0:1 but LESS THAN4.50:14 2.50 1.50
3 LESS THAN4.0:1 2.25 1.25
Any increase or decrease in the Applicable Margin resulting from a change
in the Consolidated Leverage Ratio shall become effective as of the first
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to SECTION 6.02(b); PROVIDED, HOWEVER, that if a
Compliance Certificate is not delivered when due in accordance with such
SECTION, then Pricing Level 1 shall apply as of the first Business Day
after the date on which such Compliance Certificate was required to have
been delivered until such Compliance Certificate is delivered, at which
time the Applicable Margin shall be based on such Compliance Certificate.
"APPROPRIATE LENDER" means, at any time, (a) with respect to the
Term B Facility or the Revolving Credit Facility, a Lender that has a
Commitment with respect to such Facility at such time, (b) with respect to
the Letter of Credit Sublimit, (i) the L/C Issuer and (ii) if any Letters
of Credit have been issued pursuant to SECTION 2.03(a), the Revolving
Credit Lenders and (c) with respect to the Swing Line Facility, (i) the
Swing Line Lender and (ii) if any Swing Line Loans are outstanding
pursuant to SECTION 2.04(a), the Revolving Credit Lenders.
"APPROVED FUND" means any Fund that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
"ARRANGER" means each of WCM and BAS, in its capacity as joint lead
arranger and joint bookrunning manager.
"ASSIGNMENT AND ASSUMPTION" means an assignment and assumption
entered into by a Lender and an Eligible Assignee (with the consent of any
party whose consent is required by SECTION 10.06(b), and accepted by the
Administrative Agent, in substantially the form of EXHIBIT E or any other
form approved by the Administrative Agent.
"ASSUMPTION AGREEMENT" means an assumption agreement entered into by
the Company in favor of the Administrative Agent on behalf of the Secured
Parties, in substantially the form of EXHIBIT K or any other form approved
by the Administrative Agent.
"ATTRIBUTABLE INDEBTEDNESS" means, on any date, (a) in respect of
any Capitalized Lease of any Person, the capitalized amount thereof that
would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP, and (b) in respect of any Synthetic Lease
Obligation, the capitalized amount of the remaining lease payments under
the relevant lease that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP if such lease were
accounted for as a Capitalized Lease.
"AUDITED FINANCIAL STATEMENTS" means the audited consolidated
balance sheet of the Company and its Subsidiaries for the fiscal year
ended March 6, 2004, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal year of
the Company and its Subsidiaries, including the notes thereto.
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"AVAILABILITY PERIOD" means, in the case of the Revolving Credit
Facility, the period from and including the Closing Date to the Maturity
Date for such Facility.
"BAS" means Banc of America Securities LLC and its successors.
"BASE RATE" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest per annum then most recently
publicly announced by Wachovia in Charlotte, North Carolina, from
time to time, as Wachovia's prime rate for Dollars loaned in the
United States; and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
The Base Rate is an index rate and is not necessarily intended to be the
lowest or best rate of interest charged to other customers in connection
with extensions of credit or to other banks.
"BASE RATE LOAN" means a Loan that bears interest based on the Base
Rate.
"BORROWER" means (a) prior to the Merger, Pierre Merger Corp. and
(b) from and after the Merger, the Company.
"BORROWING" means a Revolving Credit Borrowing, a Swing Line
Borrowing or a Term B Borrowing, as the context may require.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in
New York,
New York or Charlotte,
North Carolina and, if the applicable Business Day relates to any
Eurodollar Rate Loans, on which dealings are carried on in the London
interbank market.
"CAPITAL EXPENDITURES" means, with respect to any Person for any
period, any expenditure in respect of the purchase or other acquisition of
any fixed or capital asset (excluding normal replacements and maintenance
which are properly charged to current operations). For purposes of this
definition, (a) the purchase price of equipment that is purchased
substantially contemporaneously with the trade-in or sale of similar
existing equipment or with insurance proceeds therefrom shall be included
in Capital Expenditures only to the extent of the gross amount by which
such purchase price exceeds the credit granted by the seller of such
equipment for the equipment being traded in at such time or the proceeds
of such sale or the amount of such insurance proceeds, as the case may be,
and (b) the term "Capital Expenditures" shall not include any expenditures
made or paid with the net proceeds of amounts paid or contributed after
the Closing Date to Holdings by the Investors or their Affiliates in
consideration of the sale or issuance to the Investors or such Affiliates
of Equity Interests of Holdings, which amounts are contributed through the
Parent to the equity capital of the Company.
"CAPITALIZED LEASES" means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized leases.
"CASH COLLATERAL ACCOUNT" means an interest bearing deposit account
to be maintained at Wachovia (or another commercial bank selected in
compliance with SECTION 6.17) in the name of the Collateral Agent and
under the sole dominion and control of the Collateral Agent, and otherwise
established in a manner reasonably satisfactory to the Administrative
Agent.
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"CASH COLLATERALIZE" has the meaning specified in SECTION 2.03(h).
"CASH DISTRIBUTIONS" means, with respect to any Person for any
period, all dividends and other distributions on any of the outstanding
Equity Interests in such Person, all purchases, redemptions, retirements,
defeasances or other acquisitions of any of the outstanding Equity
Interests in such Person and all returns of capital to the stockholders,
partners or members (or the equivalent persons) of such Person, in each
case to the extent paid in cash by or on behalf of such Person during such
period.
"CASH EQUIVALENTS" means any of the following types of Investments:
(a) readily marketable obligations issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof having maturities of not more than
360 days from the date of acquisition thereof; PROVIDED that the
full faith and credit of the United States of America is pledged in
support thereof;
(b) time deposits with, or insured certificates of deposit
or bankers' acceptances of, any commercial bank that (i) (A) is a
Lender or (B) is organized under the laws of the United States of
America, any state thereof or the District of Columbia or is the
principal banking subsidiary of a bank holding company organized
under the laws of the United States of America, any state thereof or
the District of Columbia, and is a member of the Federal Reserve
System, (ii) issues (or the parent of which issues) commercial paper
rated as described in CLAUSE (c) of this definition and (iii) has
combined capital and surplus of at least $1,000,000,000, in each
case with maturities of not more than 360 days from the date of
acquisition thereof;
(c) commercial paper in an aggregate amount of no more than
$10,000,000 per issuer outstanding at any time issued by any Person
organized under the laws of any state of the United States of
America and rated at least "Prime-1" (or the then equivalent grade)
by Xxxxx'x or at least "A-1" (or the then equivalent grade) by S&P,
in each case with maturities of not more than 270 days from the date
of acquisition thereof; and
(d) Investments, classified in accordance with GAAP as
Current Assets of the Borrower or any of its Subsidiaries, in money
market investment programs registered under the Investment Company
Act of 1940, which are administered by financial institutions that
have the highest rating obtainable from either Xxxxx'x or S&P, and
the portfolios of which are limited solely to Investments of the
character, quality and maturity described in clauses (a), (b) and
(c) of this definition.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CFC" means a controlled foreign corporation as defined in Section
957(a) of the Internal Revenue Code.
"CHANGE IN LAW" means the occurrence, after the date of this
Agreement, of any of the following: (a) the adoption or taking effect of
any law, rule, regulation or treaty, (b) any change in any law, rule,
regulation or treaty or in the administration, interpretation or
application thereof by
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any Governmental Authority or (c) the making or issuance of any request,
guideline or directive (whether or not having the force of law) by any
Governmental Authority.
"CHANGE OF CONTROL" means, an event or series of events by which:
(a) the Sponsor shall cease to own and control legally and
beneficially, either directly or indirectly, equity securities in
Holdings representing more than 51% of the combined voting power of
all of equity securities entitled to vote for members of the board
of directors or equivalent governing body of such Person on a
fully-diluted basis; or
(b) on or after a Qualifying IPO, any "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit
plan of such person or its subsidiaries, and any person or entity
acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) other than the Sponsor becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall
be deemed to have "beneficial ownership" of all securities that such
person or group has the right to acquire (such right, an "OPTION
RIGHT"), whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of 40% or more of the
equity securities of Holdings or the Company entitled to vote for
members of the board of directors or equivalent governing body of
such Person on a fully-diluted basis (and taking into account all
such securities that such person or group has the right to acquire
pursuant to any option right); or
(c) during any period of 24 consecutive months, a majority
of the members of the board of directors or other equivalent
governing body of Holdings or the Company cease to be composed of
individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting
at the time of such election or nomination at least a majority of
that board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in
the case of both clause (ii) and clause (iii), any individual whose
initial nomination for, or assumption of office as, a member of that
board or equivalent governing body occurs as a result of an actual
or threatened solicitation of proxies or consents for the election
or removal of one or more directors by any person or group other
than a solicitation for the election of one or more directors by or
on behalf of the board of directors), or
(d) on or after a Qualifying IPO, any Person or two or more
Persons acting in concert, other than the Sponsor, shall have
acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation thereof, will result
in its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or policies
of Holdings or the Company or control over the equity securities of
such Person entitled to vote for members of the board of directors
or equivalent governing body of such Person on a fully-diluted basis
(and taking into account all such securities that such person or
group has the right to acquire pursuant to any option right)
representing 40% or more of the combined voting power of such
securities, or
8
(e) Parent shall cease, directly or indirectly, to own and
control legally and beneficially all of the Equity Interests in the
Company; or
(f) Holdings shall cease, directly or indirectly, to own and
control legally and beneficially all of the Equity Interests in the
Parent; or
(g) a "change of control" or any comparable term under, and
as defined in, the Senior Subordinated Indenture or any other
Indebtedness of any Loan Party or any Subsidiary of any Loan Party
in excess of the Threshold Amount shall have occurred.
"CLOSING DATE" means the first date all the conditions precedent in
SECTION 4.01 are satisfied or waived in accordance with SECTION 10.01.
"CODE" means the Internal Revenue Code of 1986.
"COLLATERAL" means all of the "COLLATERAL" and "MORTGAGED PROPERTY"
referred to in the Collateral Documents and all of the other property and
assets that are or are intended under the terms of the Collateral
Documents to be subject to Liens in favor of the Collateral Agent for the
benefit of the Secured Parties.
"COLLATERAL AGENT" means Wachovia in its capacity as collateral
agent under any of the Loan Documents, or any successor collateral agent.
"COLLATERAL DOCUMENTS" means, collectively, the Security Agreement,
the Intellectual Property Security Agreement, the Mortgages, each of the
mortgages, collateral assignments, Security Agreement Supplements, IP
Security Agreement Supplements, security agreements, pledge agreements or
other similar agreements delivered to the Collateral Agent pursuant to
SECTION 6.12, and each of the other agreements, instruments or documents
that creates or purports to create a Lien in favor of the Collateral Agent
for the benefit of the Secured Parties.
"COMMITMENT" means a Term B Commitment or a Revolving Credit
Commitment, as the context may require.
"COMMITTED LOAN NOTICE" means a notice of (a) a Term B Borrowing,
(b) a Revolving Credit Borrowing, (c) a conversion of Loans from one Type
to the other, or (d) a continuation of Eurodollar Rate Loans, pursuant to
SECTION 2.02(a), which, if in writing, shall be substantially in the form
of EXHIBIT A.
"COMPANY" has the meaning specified in the Preliminary Statements to
this Agreement.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of EXHIBIT D.
"CONSOLIDATED EBITDA" means, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, an amount equal to Consolidated
Net Income for such period PLUS (a) the following to the extent deducted
in calculating such Consolidated Net Income: (i) up to $2,000,000 of
transitional expenses and other one -time expenses incurred or paid after
the Closing Date; (ii) any purchase accounting adjustments, restructuring
and other non-recurring items or expenses incurred in connection with the
Transaction or any acquisition permitted under SECTION 7.03(i) (including
any debt or equity issuance in connection therewith) and any non-recurring
items or expenses incurred in connection with a Disposition permitted
under SECTION 7.05(a), (c), (f), (i) OR (l); (iii) earnout obligations
under the Stock Purchase Agreement; (iv)
9
Consolidated Interest Charges for such period; (v) the provision for
Federal, state, local and foreign income taxes payable by the Borrower and
its Subsidiaries for such period; (vi) depreciation and amortization
expense; (vii) all non-cash charges in connection with the granting of, or
accretion on, options, warrants or other equity interests; and (viii)
other non-recurring expenses of the Borrower and its Subsidiaries reducing
such Consolidated Net Income which do not represent a cash item in such
period or any future period, and MINUS (b) the following to the extent
included in calculating such Consolidated Net Income: (i) Federal, state,
local and foreign income tax credits of the Borrower and its Subsidiaries
for such period; (ii) all non-recurring non-cash items increasing
Consolidated Net Income for such period, and (iii) earnings attributable
to Investments in joint ventures and partnerships to the extent not
distributed in cash to the Borrower or its Subsidiaries. Notwithstanding
the foregoing, for purposes of determining "Consolidated EBITDA" in
calculating "Consolidated Fixed Charge Coverage Ratio" or "Consolidated
Leverage Ratio" (A) for the four fiscal quarters ending on September 4,
2004, Consolidated EBITDA shall mean the sum of Consolidated EBITDA for
the fiscal quarters ended June 5, 2004 and September 4, 2004, in each case
with adjustments for the period ending June 30, 2004 similar to those used
in calculating Adjusted Pro Forma Consolidated EBITDA for fiscal year 2004
on a quarterly basis as set forth in Schedule III and certified to the
Administrative Agent by the Chief Executive Officer or the Chief Financial
Officer of the Company as true and correct, PLUS Adjusted Pro Forma
Consolidated EBITDA for the previous two fiscal quarters; and (B) for the
four fiscal quarters ending on December 4, 2004, Consolidated EBITDA shall
mean the sum of Consolidated EBITDA for the fiscal quarter ended December
4, 2004 PLUS Consolidated EBITDA for the fiscal quarters ended June 5,
2004 and September 4, 2004, in each case with adjustments for the period
ending June 30, 2004 similar to those used in calculating Adjusted Pro
Forma Consolidated EBITDA for fiscal year 2004 on a quarterly basis as set
forth in Schedule III and certified to the Administrative Agent by the
Chief Executive Officer or the Chief Financial Officer of the Company as
true and correct, PLUS Adjusted Pro Forma Consolidated EBITDA for the
fiscal quarter ended March 6, 2004.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, for any period,
the ratio of (a) (i) Consolidated EBITDA for the period of the four prior
fiscal quarters ending on such date, LESS (ii) the aggregate amount of all
Capital Expenditures made in cash by or on behalf of the Borrower and its
Subsidiaries during such period (excluding Qualifying Facility Capex
during such period in an aggregate amount not to exceed the amount, if
any, by which $25,000,000 exceeds the aggregate amount of Qualifying
Facility Capex from all prior periods) TO (b) the sum of (i) Consolidated
Interest Charges for such period, (ii) the aggregate principal amount (or
the equivalent thereto) of all regularly scheduled principal payments or
redemptions and all required prepayments, repurchases, redemptions or
similar acquisitions for value of outstanding debt for borrowed money made
during such period, but excluding any such payments to the extent
refinanced through the incurrence of additional Indebtedness otherwise
expressly permitted under SECTION 7.02, (iii) the aggregate amount of all
Restricted Payments made by or on behalf of the Borrower during such
period and (iv) Federal, state, local and foreign income taxes of the
Borrower and its Subsidiaries paid in cash during such period; PROVIDED
that, for purposes of determining Consolidated Interest Charges and
Federal, state, local and foreign income taxes paid in cash (A) for the
four fiscal quarters ending on September 4, 2004, the applicable amount
shall be the amount for two fiscal quarters most recently ended,
multiplied by two; and (B) for the four fiscal quarters ending on December
4, 2004, the applicable amount shall mean amount for the three fiscal
quarters most recently ended, multiplied by 4/3.
"CONSOLIDATED FUNDED INDEBTEDNESS" means, as of any date of
determination, for the Borrower and its Subsidiaries on a consolidated
basis, the sum of (a) the outstanding principal amount of all obligations,
whether current or long-term, for borrowed money (including
10
Obligations hereunder) and all obligations evidenced by bonds, debentures,
notes, loan agreements or other similar instruments, (b) all purchase
money Indebtedness, (c) all direct obligations arising under letters of
credit (including standby and commercial) in excess of $3,825,000,
bankers' acceptances, bank guaranties, surety bonds and similar
instruments, (d) all obligations in respect of the deferred purchase price
of property or services (other than trade accounts payable and other
accrued expenses in the ordinary course of business), (e) Attributable
Indebtedness, (f) all Off-Balance Sheet Liabilities, (g) without
duplication, all Guarantees with respect to outstanding Indebtedness of
the types specified in clauses (a) through (e) above of Persons other than
the Borrower or any Subsidiary, and (h) all Indebtedness of the types
referred to in clauses (a) through (g) above of any partnership or joint
venture (other than a joint venture that is itself a corporation or
limited liability company) in which the Borrower or a Subsidiary is a
general partner or joint venturer, except for any portion of such
Indebtedness that is expressly made non-recourse to the Borrower or such
Subsidiary. For the avoidance of doubt, the term "Consolidated Funded
Indebtedness" shall not include any obligations of the Borrower (a)
pursuant to Section 3(d) of the Tax Sharing Agreement (as in effect on the
date hereof) in respect of cash "NOL" tax benefits actually realized by
the Borrower or (b) pursuant to the Stock Purchase Agreement up to an
aggregate amount of $13 million for any "Cash Increase" (as defined in the
Stock Purchase Agreement, as in effect on the date hereof) except, in each
case, to the extent that such obligations are not paid within 10 Business
Days after the same become due and payable pursuant to the terms thereof
as in effect on the date hereof.
"CONSOLIDATED INTEREST CHARGES" means, for any period, for the
Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all
interest, premium payments, debt discount, fees, charges and related
expenses of the Borrower and its Subsidiaries in connection with borrowed
money (including capitalized interest) or in connection with the deferred
purchase price of assets, in each case to the extent treated as interest
in accordance with GAAP and (b) the portion of rent expense of the
Borrower and its Subsidiaries with respect to such period under
Capitalized Leases that is treated as interest in accordance with GAAP.
"CONSOLIDATED LEVERAGE RATIO" means, as of any date of
determination, the ratio of (a) Consolidated Funded Indebtedness as of
such date MINUS the lesser of $5,000,000 and the aggregate amount of cash
and Cash Equivalents of the Borrower as of such date TO (b) Consolidated
EBITDA for the period of the four fiscal quarters most recently ended.
"CONSOLIDATED NET INCOME" means, for any period, for the Borrower
and its Subsidiaries on a consolidated basis, the net income of the
Borrower and its Subsidiaries (excluding extraordinary gains and any
extraordinary non-cash losses (other than non-cash losses attributable to
any impairment of inventory or receivables)) for that period.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any of
its property is bound.
"CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract
or otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative
thereto.
"CREDIT EXTENSION" means each of the following: (a) a Borrowing and
(b) an L/C Credit Extension.
11
"CURRENT ASSETS" means, with respect to any Person, all assets of
such Person that, in accordance with GAAP, would be classified as current
assets on the balance sheet of a company conducting a business the same as
or similar to that of such Person, after deducting appropriate and
adequate reserves therefrom in each case in which a reserve is proper in
accordance with GAAP.
"CURRENT LIABILITIES" means, with respect to any Person, without
duplication (a) all Indebtedness of such Person that by its terms is
payable on demand or matures within one year after the date of
determination (excluding any Indebtedness renewable or extendible, at the
option of such Person, to a date more than one year from such date or
arising under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
from such date), (b) all amounts of Funded Debt of such Person required to
be paid or prepaid within one year after such date and (c) all other items
(including, without limitation, taxes accrued as estimated and trade
payables otherwise excluded from Indebtedness under CLAUSE (d) of the
definition thereof) that, in accordance with GAAP, would be classified on
the balance sheet of such Person as current liabilities of such Person.
"DEBT RATING" means, as of any date of determination, the rating as
determined by either S&P or Xxxxx'x (collectively, the "DEBT RATINGS") of
the Borrower's non-credit-enhanced, senior unsecured long-term debt;
PROVIDED that if either S&P or Xxxxx'x shall change the basis on which
ratings are established by it, each reference to the Debt Rating announced
by S&P or Xxxxx'x shall refer to the then equivalent rating by S&P or
Xxxxx'x, as the case may be.
"DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or
other applicable jurisdictions from time to time in effect and affecting
the rights of creditors generally.
"DEFAULT" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or
both, would be an Event of Default.
"DEFAULT RATE" means (a) when used with respect to Obligations other
than the accrual of Letter of Credit Fees (but including interest payable
on accrued Letter of Credit Fees not paid when due), an interest rate
equal to (i) the Base Rate PLUS (ii) the Applicable Margin, if any,
applicable to Base Rate Loans PLUS (iii) 2.0% per annum; PROVIDED,
HOWEVER, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any
Applicable Margin) otherwise applicable to such Loan plus 2.0% per annum
and (b) when used with respect to the accrual of Letter of Credit Fees, a
rate equal to the Applicable Margin plus 2.0% per annum.
"DEFAULTING LENDER" means any Lender that (a) has failed to fund any
portion of the Term B Loans, Revolving Credit Loans, participations in L/C
Obligations or participations in Swing Line Loans required to be funded by
it hereunder within one Business Day of the date required to be funded by
it hereunder, (b) has otherwise failed to pay over to the Administrative
Agent or any other Lender any other amount required to be paid by it
hereunder within one Business Day of the date when due, unless the subject
of a good faith dispute, or (c) has been deemed insolvent or has become
the subject of a bankruptcy or insolvency proceeding.
"DISPOSITION" or "DISPOSE" means the sale, transfer, license, lease
or other disposition (including any sale and leaseback transaction) of any
property by any Person (or the granting of
12
any option or other right to do any of the foregoing), including any sale,
assignment, transfer or other disposal, with or without recourse, of any
Equity Interests owned by such Person, or any notes or accounts receivable
or any rights and claims associated therewith.
"DOLLAR" and "$" mean lawful money of the United States.
"DOMESTIC SUBSIDIARY" has the meaning specified in SECTION 6.12.
"EARNOUT PROVISION" means Section 2.1 of the Stock Purchase
Agreement, as in effect on the date hereof.
"ELIGIBLE ASSIGNEE" means (a) a Lender and (b) any other Person
(other than a natural person) approved by (i) the Administrative Agent and
(ii) in the case of any assignment of a Revolving Commitment, the L/C
Issuer, the Swing Line Lender and unless an Event of Default has occurred
and is continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed); PROVIDED that notwithstanding the foregoing (i) the
approval of the Borrower shall not be required in connection with an
assignment to an Affiliate of the Lender or to an Approved Fund, (ii) the
approval of the Administrative Agent shall not be required for the
assignment of Term B Loans to an Affiliate of a Lender or to an Approved
Fund and (iii) "Eligible Assignee" shall not include the Borrower or any
of the Borrower's Affiliates or Subsidiaries.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment,
including those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower, any other
Loan Party or any of their respective Subsidiaries directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b)
the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"EQUITY CONTRIBUTION" has the meaning specified in the Preliminary
Statements to this Agreement.
"EQUITY INTERESTS" means, with respect to any Person, all of the
shares of capital stock of (or other ownership or profit interests in)
such Person, all of the warrants, options or other rights for the purchase
or acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, all of the securities
convertible into or exchangeable for shares of capital stock of (or other
ownership or profit interests in) such Person or warrants, rights or
options for the purchase or acquisition from such Person of such shares
(or such other interests), and all of the other ownership or profit
interests in such Person (including, without limitation,
13
partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or
other interests are outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with any Loan Party within the meaning
of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the
Code for purposes of provisions relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by any Loan Party or any ERISA Affiliate from a
Pension 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)
or a cessation of operations that is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any Loan
Party or any ERISA Affiliate from a Multiemployer Plan or notification
that a Multiemployer Plan is in reorganization; (d) the filing of a notice
of intent to terminate, the treatment of a Plan amendment as a termination
under Sections 4041 or 4041A of ERISA, or the commencement of proceedings
by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an
event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; (f) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA
Affiliate or (g) the failure of any Loan Party or any ERISA Affiliate to
pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"EURODOLLAR RATE" means, for any Interest Period for any Eurodollar
Rate Loan, an interest rate per annum determined by the Administrative
Agent to be equal to the rate per annum obtained by dividing (a) (i) the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor or substitution page) as
the London interbank offered rate for deposits in U.S. dollars at 11:00
A.M. (London time) two Business Days before the first day of such Interest
Period for a period equal to such Interest Period (PROVIDED that, if for
any reason such rate is not available, the term "Eurodollar Rate" shall
mean, for any Interest Period for such Eurodollar Rate Loan, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate
for deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; PROVIDED, HOWEVER, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall
be the arithmetic mean of all such rates), or (ii) if such rate is for any
reason not available, the rate per annum equal to the rate at which the
Administrative Agent or its designee is offered Dollar deposits at or
about 11:00 A.M. (London time) two Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market for delivery on
the first day of such Interest Period for the number of days comprised
therein and in the amount requested to be outstanding, by (b) a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Interest Period.
14
"EURODOLLAR RATE LOAN" means a Loan that bears interest at a rate
based on the Eurodollar Rate.
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period for
each Eurodollar Rate Loan means the reserve percentage applicable two
Business Days before the first day of such Interest Period under
regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of
the Federal Reserve System in
New York City with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities (or with
respect to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Rate Loan is
determined) having a term equal to such Interest Period.
"EVENT OF DEFAULT" has the meaning specified in SECTION 8.01.
"EXCESS CASH FLOW" means, for any period (without duplication), (a)
Consolidated Net Income for such period, PLUS (b) an amount equal to the
aggregate amount of all noncash charges deducted in determining the
Consolidated Net Income for such period, PLUS (c) an amount (whether
positive or negative) equal to the change in consolidated Current
Liabilities of the Borrower and its Subsidiaries during such period, PLUS
(d) to the extent deducted in determining Consolidated Net Income for any
period subsequent to the fiscal year ending March 5, 2005, any amounts
deducted pursuant to CLAUSE (l) below in determining Excess Cash Flow for
the fiscal year ending March 5, 2005, PLUS (e) to the extent deducted in
determining Excess Cash Flow in any previous period under CLAUSE (n)
below, any amounts reimbursed to any Loan Party by the Seller under the
Related Documents in the current period, PLUS (f) to the extent not
included in determining Consolidated Net Income for such period, the
amount of any tax refunds received by or paid to or for the account of
Holdings and its Subsidiaries during such Period, LESS (g) an amount equal
to the aggregate amount of all noncash credits included in determining the
Consolidated Net Income for such period, LESS (h) an amount (whether
positive or negative) equal to the change in consolidated Current Assets
(excluding cash and Cash Equivalents) of the Borrower and its Subsidiaries
during such period, LESS (i) to the extent not deducted in determining
Consolidated Net Income for such period, an amount equal to the aggregate
amount of all Capital Expenditures made in cash by the Borrower and its
Subsidiaries during such period and permitted to be made pursuant to the
terms of this Agreement, LESS (j) an amount equal to the aggregate amount
of all Required Principal Payments in respect of Indebtedness permitted
under the terms of this Agreement made by the Borrower and its
Subsidiaries during such period, and the aggregate principal amount of all
optional prepayments made pursuant to SECTION 2.05(a) during such period
(so long as each such optional prepayment resulted in a corresponding
permanent commitment reduction pursuant to SECTION 2.06 at the time of
such prepayment), LESS (k) an amount equal to the aggregate amount of all
Cash Distributions paid by the Borrower during such period and permitted
to be made pursuant to the terms of this Agreement, LESS (l) to the extent
not deducted in determining Consolidated Net Income for such period, for
the fiscal year ending March 5, 2005, any amounts paid or payable to the
Sellers after the Closing Date pursuant to the Earnout Provision in an
aggregate amount not to exceed $13 million, whether actually paid during
such period or thereafter, LESS (m) to the extent not deducted in
determining Consolidated Net Income for such period, any amounts paid to
the Sellers after the Closing Date pursuant to Section 3(d) of the Tax
Sharing Agreement (as defined in the Stock Purchase Agreement, as in
effect on the date hereof) in respect of cash "NOL" tax benefits actually
realized by the Borrower after the Closing Date, LESS (n) to the extent
not deducted in determining Consolidated Net Income for such period, any
amount paid by the Loan Parties during such period that is reimbursable by
the Sellers under the Related Documents but which has not been so
15
reimbursed as of the end of such period, LESS (o) the amount of any
prepayment during such period pursuant to SECTION 2.05(b)(ii) AND (v),
LESS (p) to the extent not deducted in determining Consolidated Net Income
for such period, the amount of any "Purchase Price Adjustment" paid to the
Sellers during such period pursuant to Section 2.4 of the Stock Purchase
Agreement (as in effect on the date hereof).
"EXCLUDED TAXES" means, with respect to the Administrative Agent,
any Lender, the L/C Issuer or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a)
taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable
Lending Office is located, (b) any branch profits taxes imposed by the
United States or any similar tax imposed by any other jurisdiction in
which the Borrower is located and (c) in the case of a Foreign Lender
(other than an assignee pursuant to a request by the Borrower under
SECTION 10.13), any withholding tax that is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party hereto
(or designates a new Lending Office) or is attributable to such Foreign
Lender's failure or inability (other than as a result of a Change in Law)
to comply with SECTION 3.01(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation
of a new Lending Office (or assignment), to receive additional amounts
from the Borrower with respect to such withholding tax pursuant to SECTION
3.01(a).
"EXISTING
CREDIT AGREEMENT" means that certain loan and security
agreement dated as of August 13, 2003 by and among the Borrower, the
Parent and Fleet Capital Corporation, as lender, as amended.
"EXISTING INDEBTEDNESS" means Indebtedness of each Loan Party and
its Subsidiaries outstanding immediately before the occurrence of the
Closing Date set forth in PART (a) of SCHEDULE 5.05.
"EXISTING NOTES" has the meaning specified in the Preliminary
Statements to this Agreement.
"EXISTING LETTERS OF CREDIT" means the letters of credit listed in
Schedule II hereto in an aggregate stated amount of $3,825,000.
"EXTRAORDINARY RECEIPT" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business,
including, without limitation, pension plan reversions, proceeds of
insurance (other than proceeds of business interruption insurance to the
extent such proceeds constitute compensation for lost earnings),
condemnation awards (and payments in lieu thereof), indemnity payments and
any purchase price adjustments; PROVIDED, HOWEVER, that the term
"Extraordinary Receipt" shall not include cash receipts received from
proceeds of insurance, condemnation awards (or payments in lieu thereof)
or indemnity payments to the extent that such proceeds, awards or payments
(a) in respect of loss or damage to equipment, fixed assets or real
property, or other claims relating thereto, are applied (or in respect of
which expenditures were previously incurred) to replace, repair or
purchase the equipment, fixed assets or real property in respect of which
such proceeds were received in accordance with the terms of SECTION
2.05(b)(ii) or (b) are received by any Person in respect of any third
party claim against such Person and applied to pay (or to reimburse such
Person for its prior payment of) such claim and the costs and expenses of
such Person with respect thereto.
16
"FACILITY" means the Term B Facility, the Revolving Credit Facility,
the Swing Line Sublimit or the Letter of Credit Sublimit, as the context
may require.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of
New York, or,
if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"FEE LETTER" means the letter agreement, dated May 11, 2004, among
the Borrower, the Administrative Agent and the Arrangers.
"FOREIGN LENDER" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is resident for
tax purposes. For purposes of this definition, the United States, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.
"FRB" means the Board of Governors of the Federal Reserve System of
the United States.
"FUND" means any Person (other than a natural person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course.
"FUNDED DEBT" of any Person means Indebtedness in respect of the
Credit Extensions, in the case of the Borrower, and all other Indebtedness
of such Person that by its terms matures more than one year after the date
of creation or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year
after such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period of
more than one year after such date.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may be approved by a
significant segment of the accounting profession in the United States,
that are applicable to the circumstances as of the date of determination,
consistently applied.
"GOVERNMENTAL AUTHORITY" means the government of the United States
or any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government (including any supra-national
bodies such as the European Union or the European Central Bank).
"GRANTING LENDER" has the meaning specified in SECTION 10.06(h).
17
"GUARANTEE" means, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness payable by another Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and
including any obligation of such Person, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness, (ii) to purchase or lease property, securities or
services for the purpose of assuring the obligee in respect of such
Indebtedness of the payment of such Indebtedness, (iii) to maintain
working capital, equity capital or any other financial statement condition
or liquidity or level of income or cash flow of the primary obligor so as
to enable the primary obligor to pay such Indebtedness, or (iv) entered
into for the purpose of assuring in any other manner the obligee in
respect of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part), or (b) any
Lien on any assets of such Person securing any Indebtedness of any other
Person, whether or not such Indebtedness is assumed by such Person (or any
right, contingent or otherwise, of any holder of such Indebtedness to
obtain any such Lien). The amount of any Guarantee at any time shall be
deemed to be an amount then equal to the stated or determinable amount of
the related primary obligation, or portion thereof, in respect of which
such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term "GUARANTEE" as a verb has a
corresponding meaning.
"GUARANTORS" means, collectively, Holdings, the Parent and the
Subsidiary Guarantors.
"GUARANTIES" means the Parent Guaranty and the Subsidiary Guaranty.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances, wastes and
materials that are considered or deemed to be, or regulated as, hazardous,
toxic, infectious or dangerous under applicable Law.
"HEDGE BANK" means any Person that is a Lender or an Affiliate of a
Lender, in its capacity as a party to a Secured Hedge Agreement.
"HOLDINGS" has the meaning specified in the Preliminary Statements
hereto.
"INDEBTEDNESS" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness
or liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures,
notes, loan agreements or other similar instruments;
(b) the maximum amount of all direct or contingent
obligations of such Person arising under letters of credit
(including standby and commercial), bankers' acceptances, bank
guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred
purchase price of property or services (other than trade accounts
payable and other accrued expenses in the
18
ordinary course of business which are not outstanding for more than
60 days after the same are billed or invoiced or 120 days after the
same are created);
(e) indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such
Person (including indebtedness arising under conditional sales or
other title retention agreements); PROVIDED that if such
indebtedness shall not have been assumed by such Person and is
otherwise non-recourse to such Person, the amount of such obligation
treated as Indebtedness shall not exceed the value of such property
securing such obligations.
(f) all Attributable Indebtedness;
(g) all obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any
Equity Interests in such Person or any other Person or any warrants,
rights or options to acquire such Equity Interests, valued, in the
case of redeemable preferred interests, at its liquidation
preference; and
(h) all Guarantees of such Person in respect of any of the
foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in
which such Person is a general partner or a joint venturer, except to the
extent that such Indebtedness is expressly made non-recourse to such
Person. The amount of any net obligation under any Swap Contract on any
date shall be deemed to be the Swap Termination Value thereof as of such
date.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNIFIED COSTS" has the meaning specified in SECTION 9.05(a).
"INDEMNITEE" has the meaning specified in SECTION 10.04(b).
"INFORMATION" has the meaning specified in SECTION 10.07.
"INFORMATION MEMORANDUM" means the information memorandum dated June
2004 used by the Arrangers in connection with the syndication of the
Commitments.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" means an intellectual
property security agreement, substantially the form of EXHIBIT C to the
Security Agreement, together with each other intellectual property
security agreement and IP Security Agreement Supplement delivered pursuant
to SECTION 6.12, in each case as amended.
"INTEREST PAYMENT DATE" means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan
and the Maturity Date of the Facility under which such Loan was made;
PROVIDED, HOWEVER, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months
after the beginning of such Interest Period shall also be Interest Payment
Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the
last Business Day of each March, June, September and December and the
Maturity Date of the Facility under which such Loan was made.
19
"INTEREST PERIOD" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted
to or continued as a Eurodollar Rate Loan and ending on the date one, two,
three or six months thereafter, as selected by the Borrower in its
Committed Loan Notice, or nine or twelve months thereafter if requested by
the Borrower in its Committed Loan Notice and consented to by all the
Lenders; PROVIDED that:
(i) any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next
preceding Business Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity Date
of the Facility under which such Loan was made.
"INVESTMENT" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the
purchase or other acquisition of Equity Interests or debt of another
Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt
or equity participation or interest in, another Person, including any
partnership or joint venture interest in such other Person and any
arrangement pursuant to which the investor incurs debt of the type
referred to in clause (h) of the definition of "Indebtedness" set forth in
this SECTION 1.01 in respect of such Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit of, or all of a substantial
part of the business being conducted by, such Person. For purposes of
covenant compliance, the amount of any Investment shall be (a) the amount
actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment, MINUS (b) the net cash proceeds
realized by the Person making the Investment from substantially
contemporaneous disposition (to a Person other than a Loan Party or a
Subsidiary of a Loan Party) of Non-Core Assets; PROVIDED that no amount
shall be deducted under CLAUSE (b) unless and until such net cash proceeds
are received.
"INVESTORS" means, collectively, (a) the Sponsor and (b) the
shareholders of Holdings identified in SCHEDULE 5.13.
"IP RIGHTS" has the meaning specified in SECTION 5.16.
"IP SECURITY AGREEMENT SUPPLEMENT" has the meaning specified in
Section 1(g)(vi) of the Security Agreement.
"IRS" means the United States Internal Revenue Service.
"ISDA MASTER AGREEMENT" means the Master Agreement
(Multicurrency-Cross Border) published by the International Swap and
Derivatives Association, Inc., as in effect from time to time.
20
"ISP" means, with respect to any Letter of Credit, the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may
be in effect at the time of issuance).
"LAWS" means, collectively, all international, foreign, Federal,
state and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or
authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements
with, any Governmental Authority, in each case whether or not having the
force of law.
"L/C ADVANCE" means an advance made by the L/C Issuer or any
Revolving Credit Lender pursuant to SECTION 2.03(c).
"L/C BORROWING" means an extension of credit resulting from a
drawing under any Letter of Credit which has not been reimbursed on the
date when made or refinanced as a Revolving Credit Borrowing.
"L/C CREDIT EXTENSION" means, with respect to any Letter of Credit,
the issuance thereof or extension of the expiry date thereof, or the
increase of the amount thereof.
"L/C DISBURSEMENT" shall mean a payment or disbursement made by the
L/C Issuer pursuant to a Letter of Credit.
"L/C ISSUER" means Wachovia in its capacity as issuer of Letters of
Credit hereunder or any successor issuer of Letters of Credit hereunder
and, solely for purposes of the Existing Letters of Credit, Fleet National
Bank, a national banking association. The term "L/C Issuer" shall mean the
issuer of the relevant Letters of Credit as the context may require.
"L/C OBLIGATIONS" means, as at any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit PLUS the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For
all purposes of this Agreement, if on any date of determination a Letter
of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter
of Credit shall be deemed to be "outstanding" in the amount so remaining
available to be drawn.
"L/C RELATED DOCUMENTS" has the meaning specified in SECTION
2.03(c).
"LENDER" has the meaning specified in the introductory paragraph
hereto and, as the context requires, includes the Swing Line Lender.
"LENDING OFFICE" means, as to any Lender, the office or offices of
such Lender described as such in such Lender's Administrative
Questionnaire, or such other office or offices as a Lender may from time
to time notify the Borrower and the Administrative Agent.
"LETTER OF CREDIT" means any standby letter of credit issued
hereunder and shall include the Existing Letters of Credit.
"LETTER OF CREDIT APPLICATION" means an application and agreement
for the issuance or amendment of a Letter of Credit in the form from time
to time in use by the L/C Issuer.
21
"LETTER OF CREDIT FEE" has the meaning specified in SECTION
2.03(h)(i).
"LETTER OF CREDIT SUBLIMIT" means an amount equal to $10,000,000.
The Letter of Credit Sublimit is part of, and not in addition to, the
Revolving Credit Facility.
"LIEN" means any mortgage, pledge, hypothecation, collateral
assignment, deposit arrangement, encumbrance, lien (statutory or other) or
charge or preference or priority over assets or other security interest or
preferential arrangement in the nature of a security interest of any kind
or nature whatsoever (including any conditional sale or other title
retention agreement, any easement, right of way or other encumbrance on
title to real property, and any financing lease having substantially the
same economic effect as any of the foregoing).
"LOAN" means an extension of credit by a Lender to the Borrower
under ARTICLE II in the form of a Term B Loan, a Revolving Credit Loan or
a Swing Line Loan.
"LOAN DOCUMENTS" means, collectively, (a) for purposes of this
Agreement and the Notes and any amendment, supplement or other
modification hereof or thereof and for all other purposes other than for
purposes of the Guaranties and the Collateral Documents, (i) this
Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the Collateral
Documents, (v) the Fee Letter, (vi) each L/C Related Document and (vii)
the Assumption Agreement and (b) for purposes of the Guaranties and the
Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the
Guaranties, (iv) the Collateral Documents, (v) each L/C Related Document,
(vi) the Fee Letter, (vii) each Secured Hedge Agreement and (viii) the
Assumption Agreement.
"LOAN PARTIES" means, collectively, the Borrower, each Guarantor
and, prior to the Merger, the Company.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or
a material adverse effect upon, the business, properties, liabilities
(actual or contingent), operations, financial condition or prospects of
the Borrower and its Subsidiaries taken as a whole or the Parent and its
Subsidiaries taken as a whole; or (b) a material impairment of the rights
and remedies of any Agent or any Lender under any Loan Document, or of the
ability of any Loan Party to perform its obligations under any Loan
Document to which it is a party.
"MATURITY DATE" means (a) with respect to the Revolving Credit
Facility, the earlier of (i) the fifth anniversary of the Closing Date and
(ii) the date of termination in whole of the Revolving Credit Commitments,
the Letter of Credit Commitments and the Swing Line Commitments pursuant
to SECTION 2.06 OR 8.02 or the acceleration of the Revolving Credit Loans
or the Swing Line Loans pursuant to SECTION 8.02, and (b) with respect to
the Term B Facility, the earlier of (i) the sixth anniversary of the
Closing Date and (ii) the date of the acceleration of the Term B Loans
pursuant to SECTION 8.02.
"MAXIMUM RATE" has the meaning specified in SECTION 10.09.
"MERGECO" has the meaning specified in the introductory paragraph
hereto.
"MERGER" has the meaning specified in the Preliminary Statements to
this Agreement.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"MORTGAGE POLICY" has the meaning specified in SECTION
4.01(a)(iv)(B).
22
"MORTGAGES" means, collectively, the deeds of trust, trust deeds and
mortgages, in substantially the form of EXHIBIT H hereto (with such
changes as may be reasonably satisfactory to the Administrative Agent and
its counsel to account for local law matters) and covering the properties
specified on SCHEDULE 5.08(c) hereto, together with the Assignments of
Leases and Rents referred to therein and each other mortgage delivered
pursuant to SECTION 6.12, in each case as amended.
"MULTIEMPLOYER PLAN" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which any Loan Party or any
ERISA Affiliate makes or is obligated to make contributions, or during the
preceding five plan years, has made or been obligated to make
contributions.
"NET CASH PROCEEDS" means:
(a) with respect to any Disposition by any Loan Party or any
of its Subsidiaries, or any Extraordinary Receipt received or paid
to the account of any Loan Party or any of its Subsidiaries, the
excess, if any, of (i) the sum of cash and Cash Equivalents received
in connection with such transaction (including any cash or Cash
Equivalents received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and
when so received) over (ii) the sum of (A) the principal amount of
any Indebtedness that is secured by the applicable asset and that
is, or is required to be, repaid in connection with such transaction
(other than Indebtedness under the Loan Documents), (B) the
out-of-pocket expenses incurred by any Loan Party or such Subsidiary
in connection with such transaction and (C) income taxes reasonably
estimated to be actually payable within two years of the date of the
relevant transaction as a result of any gain recognized in
connection therewith; PROVIDED that any such estimated taxes not
actually due or payable by the end of such two year period shall
constitute Net Cash Proceeds upon the earlier of the date that such
taxes are determined not to be actually payable and the end of such
two year period; and
(b) with respect to the sale or issuance of any Equity
Interest by any Loan Party or any of its Subsidiaries, or the
incurrence or issuance of any Indebtedness by any Loan Party or any
of its Subsidiaries, the excess of (i) the sum of the cash and Cash
Equivalents received in connection with such transaction over (ii)
the underwriting discounts and commissions, and other out-of-pocket
expenses, incurred by Holdings, the Parent or such Subsidiary in
connection therewith; PROVIDED that "Net Cash Proceeds" shall not
include the cash proceeds of any issuance of Equity Interests to the
Investors or their Affiliates by Holdings to the extent that the net
proceeds thereof shall have been used by the Borrower and its
Subsidiaries to make Permitted Investments or are returned to such
Investors or Affiliates pursuant to SECTION 7.06(h).
"NON- CORE ASSETS" means assets that (a) are acquired by any Loan
Party or any Subsidiary of any Loan Party in an Investment permitted
hereunder that is either of the type described in CLAUSE (c) of the
definition thereof or comprises the purchase of Equity Interest in a
Person that thereupon becomes a Subsidiary, and (b) are not essential to
the business of the Company and its Subsidiaries and were acquired only
because such acquisition was a condition to the purchase of the other
assets comprising such Investment.
"NOTE" means a Term Note or a Revolving Credit Note, as the context
may require.
"NOTICE OF ISSUANCE" has the meaning specified in SECTION 2.03(b).
23
"NOTICE OF RENEWAL" has the meaning specified in SECTION 2.03(a).
"NOTICE OF TERMINATION" has the meaning specified in SECTION
2.03(a).
"NPL" means the National Priorities List under CERCLA.
"OBLIGATIONS" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any
Loan Document or otherwise with respect to any Loan or Letter of Credit,
whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter
arising and including interest and fees that accrue after the commencement
by or against any Loan Party or any Affiliate thereof of any proceeding
under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding. Without limiting the generality of the
foregoing, the Obligations of the Loan Parties under the Loan Documents
include (a) the obligation to pay principal, interest, Letter of Credit
commissions, charges, expenses, fees, attorneys' fees and disbursements,
indemnities and other amounts payable by any Loan Party under any Loan
Document and (b) the obligation of any Loan Party to reimburse any amount
in respect of any of obligation described in clause (a) that any Lender,
in its sole discretion, may elect to pay or advance on behalf of such Loan
Party.
"OFF-BALANCE SHEET LIABILITIES" means, with respect to any Person as
of any date of determination thereof, without duplication and to the
extent not included as a liability on the consolidated balance sheet of
such Person and its Subsidiaries in accordance with GAAP: (a) with respect
to any asset securitization transaction (including any accounts receivable
purchase facility) (i) the unrecovered investment of purchasers or
transferees of assets so transferred and (ii) any other payment, recourse,
repurchase, hold harmless, indemnity or similar obligation of such Person
or any of its Subsidiaries in respect of assets transferred or payments
made in respect thereof, other than limited recourse provisions that are
customary for transactions of such type and that neither (A) have the
effect of limiting the loss or credit risk of such purchasers or
transferees with respect to payment or performance by the obligors of the
assets so transferred nor (B) impair the characterization of the
transaction as a true sale under applicable Laws (including Debtor Relief
Laws); (b) the monetary obligations under any financing lease or so-called
"synthetic," tax retention or off-balance sheet lease transaction which,
upon the application of any Debtor Relief Law to such Person or any of its
Subsidiaries, would be characterized as indebtedness; or (c) the monetary
obligations under any sale and leaseback transaction which does not create
a liability on the consolidated balance sheet of such Person and its
Subsidiaries.
"ORGANIZATION DOCUMENTS" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent
or comparable constitutive documents with respect to any non-U.S.
jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating
agreement; and (c) with respect to any partnership, joint venture, trust
or other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement,
instrument, filing or notice with respect thereto filed in connection with
its formation or organization with the applicable Governmental Authority
in the jurisdiction of its formation or organization and, if applicable,
any certificate or articles of formation or organization of such entity.
"OTHER TAXES" means all present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or
24
under any other Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"OUTSTANDING AMOUNT" means (i) with respect to Term B Loans,
Revolving Credit Loans and Swing Line Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings
and prepayments or repayments of Term B Loans, Revolving Credit Loans and
Swing Line Loans, as the case may be, occurring on such date; and (ii)
with respect to any L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of
the L/C Obligations as of such date, including as a result of any
reimbursements by the Borrower of Unreimbursed Amounts.
"PARTICIPANT" has the meaning specified in SECTION 10.06(d).
"PARENT" has the meaning specified in the Preliminary Statements
hereto.
"PARENT GUARANTY" means the Parent Guaranty made by Holdings and the
Parent in favor of the Administrative Agent on behalf of the Lenders,
substantially in the form of EXHIBIT F-1.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PENSION PLAN" means any "employee pension benefit plan" (as such
term is defined in Section 3(2) of ERISA), other than a Multiemployer
Plan, that is subject to Title IV of ERISA and is sponsored or maintained
by any Loan Party or any ERISA Affiliate or to which any Loan Party or any
ERISA Affiliate contributes or has an obligation to contribute, or in the
case of a multiple employer or other plan described in Section 4064(a) of
ERISA, has made contributions at any time during the immediately preceding
five plan years.
"PERMITTED ENCUMBRANCES" has the meaning specified in the Mortgages.
"PERMITTED INVESTMENTS" means (a) acquisitions permitted under
SECTION 7.03(i) (without giving effect to clause (iv) thereof), (b) the
acquisition, construction or expansion of manufacturing facilities and (c)
the redemption or repurchase of Equity Interests in Holdings from former
members of management employees of the Borrower.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"PLAN" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by any Loan Party or, with respect to
any such plan that is subject to Section 412 of the Code or Title IV of
ERISA, any ERISA Affiliate.
"PLEDGED DEBT" has the meaning specified in Section 1(d)(iv) of the
Security Agreement.
"PLEDGED INTERESTS" has the meaning specified in Section 1(d)(iii)
of the Security Agreement.
"QUALIFYING FACILITY CAPEX" means Capital Expenditures by the
Borrower after the Closing Date for the acquisition or construction of a
new manufacturing facility; PROVIDED that, within 24 months after the
Closing Date, (a) the Borrower shall have entered into, and there shall
then be in effect, new contracts (the "New Contracts") with customers
(excluding (i) contracts in
25
effect on the Closing Date, (ii) contracts entered into after the Closing
Date that are, directly or indirectly, a continuation of, or in
substitution for or in replacement of, contracts or other supply
arrangements existing on the Closing Date, and (iii) contracts for volume
that do not represent a net increase in the business of the Borrower and
its Subsidiaries) providing for the purchase by such customers on a
"cost-plus" basis of not less than 20,000,000 pounds (by volume) of
protein per year (including for this purpose contracts or amendments to
contracts increasing the volume purchased by any such customer), (b) the
pro forma Consolidated Leverage Ratio for the twelve-month period most
recently ended, calculated as if all of the New Contracts and all
Indebtedness permitted under SECTION 7.02(c)(viii) had become effective on
the first day of such twelve-month period, does not exceed 5.15 to 1.00,
(c) the pro forma Consolidated EBITDA for the twelve-month period most
recently ended, calculated as if all of the New Contracts had become
effective on the first day of such twelve-month period, is not less than
$56,000,000, and (d) the Borrower shall have made commitments for the
acquisition or construction of such manufacturing facility.
"QUALIFYING IPO" means the issuance by Holdings of its common Equity
Interests in an underwritten primary public offering (other than a public
offering pursuant to a registration statement on Form S-8) pursuant to an
effective registration statement filed with the SEC in accordance with the
Securities Act (whether alone or in connection with a secondary public
offering).
"REDUCTION AMOUNT" has the meaning set forth in SECTION
2.05(b)(viii).
"REGISTER" has the meaning specified in SECTION 10.06(c).
"RELATED DOCUMENTS" means the Stock Purchase Agreement, the
Shareholders' Agreement, the Tax Sharing Agreement (each, as defined in
the Stock Purchase Agreement) and all other documents effecting the
Acquisition.
"RELATED PARTIES" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents,
trustees, attorneys and advisors of such Person and of such Person's
Affiliates.
"REPORTABLE EVENT" means any of the events set forth in Section
4043(c) of ERISA, other than events for which the 30-day notice period has
been waived.
"REQUEST FOR CREDIT EXTENSION" means (a) with respect to a
Borrowing, conversion or continuation of Term B Loans or Revolving Credit
Loans, a Committed Loan Notice, (b) with respect to an L/C Credit
Extension, a Letter of Credit Application, and (c) with respect to a Swing
Line Loan, a Swing Line Loan Notice.
"REQUIRED LENDERS" means, as of any date of determination, Lenders
having more than 50% of the sum of the (a) Total Outstandings (with the
aggregate amount of each Lender's risk participation and funded
participation in L/C Obligations and Swing Line Loans being deemed "held"
by such Lender for purposes of this definition), (b) aggregate unused Term
B Commitments and (c) aggregate unused Revolving Credit Commitments;
PROVIDED that the unused Term B Commitment and unused Revolving Credit
Commitment of, and the portion of the Total Outstandings held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.
26
"REQUIRED PRINCIPAL PAYMENTS" means, with respect to any Person for
any period, the sum of all regularly scheduled principal payments or
redemptions of outstanding Funded Debt made during such period.
"REQUIRED REVOLVING CREDIT LENDERS" means, as of any date of
determination, Revolving Credit Lenders owed or holding at least a
majority in interest of the sum of (a) the aggregate principal amount of
the Revolving Credit Loans outstanding at such time, (b) the Outstanding
Amount of all L/C Obligations at such time and (c) the aggregate unused
Revolving Credit Commitments at such time; PROVIDED, HOWEVER, that the
unused Revolving Credit Commitment of, the aggregate principal amount of
the Revolving Credit Loans outstanding and owing to, and the Applicable
Percentage of the Outstanding Amount of all L/C Obligations of, any
Defaulting Lender shall be excluded for purposes of making a determination
of Required Revolving Credit Lenders.
"REQUIRED TERM LENDERS" means, at any time, Term Lenders owed or
holding at least a majority in interest of the aggregate principal amount
of the Term B Loans outstanding at such time; PROVIDED, HOWEVER, that the
aggregate principal amount of the Term B Loans outstanding and owing to
any Defaulting Lender shall be excluded for purposes of making a
determination of Required Term Lenders.
"RESPONSIBLE OFFICER" means the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of a Loan Party.
Any document delivered hereunder that is signed by a Responsible Officer
of a Loan Party shall be conclusively presumed to have been authorized by
all necessary corporate, partnership and/or other action on the part of
such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.
"RESTRICTED PAYMENT" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any
capital stock or other Equity Interest of the Borrower or any of its
Subsidiaries, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, defeasance, acquisition,
cancellation or termination of any such capital stock or other Equity
Interest, or on account of any return of capital to the Borrower's
stockholders, partners or members (or the equivalent of any thereof), or
on account of any option, warrant or other right to acquire any such
dividend or other distribution or payment.
"REVOLVING CREDIT BORROWING" means a borrowing consisting of
simultaneous Revolving Credit Loans of the same Type and, in the case of
Eurodollar Rate Loans, having the same Interest Period made by each of the
Revolving Credit Lenders pursuant to SECTION 2.01(b).
"REVOLVING CREDIT COMMITMENT" means, as to each Revolving Credit
Lender, its obligation to (a) make Revolving Credit Loans to the Borrower
pursuant to SECTION 2.01(b), (b) purchase participations in L/C
Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the
amount set forth opposite such Lender's name on SCHEDULE 2.01 under the
caption "Revolving Credit Commitment" or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as
such amount may be adjusted from time to time in accordance with this
Agreement.
"REVOLVING CREDIT FACILITY" means, at any time, the aggregate amount
of the Revolving Credit Lenders' Revolving Credit Commitments at such
time.
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"REVOLVING CREDIT LENDER" means, at any time, any Lender that has a
Revolving Credit Commitment at such time.
"REVOLVING CREDIT LOAN" has the meaning specified in SECTION
2.01(b).
"REVOLVING CREDIT NOTE" means a promissory note of the Borrower
payable to the order of any Revolving Credit Lender, in substantially the
form of EXHIBIT C-2 hereto, evidencing the aggregate indebtedness of the
Borrower to such Revolving Credit Lender resulting from the Revolving
Credit Loans made by such Revolving Credit Lender.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"SECURED HEDGE AGREEMENT" means any interest rate Swap Contract
required or permitted under ARTICLE VI OR VII that is entered into by and
between the Borrower and any Hedge Bank.
"SECURED OBLIGATIONS" has the meaning specified in Section 2 of the
Security Agreement.
"SECURED PARTIES" means, collectively, the Agents, the Arrangers,
the Lenders, each L/C Issuer and the Hedge Banks.
"SECURITY AGREEMENT" means a security agreement substantially in the
form of Exhibit G hereto, together with each other security agreement and
Security Agreement Supplement delivered pursuant to SECTION 6.12, in each
case as amended.
"SECURITY AGREEMENT SUPPLEMENT" has the meaning specified in Section
24(b) of the Security Agreement.
"SELLERS" has the meaning specified in the Preliminary Statements to
this Agreement.
"SENIOR SUBORDINATED INDENTURE" has the meaning specified in the
definition of "Senior Subordinated Notes".
"SENIOR SUBORDINATED NOTES" means the 9 7/8% unsecured subordinated
notes of the Borrower due 2012 in an aggregate principal amount of $125
million, issued and sold on the Closing Date pursuant to the Senior
Subordinated Indenture between Pierre Foods, Inc. and U.S. Bank National
Association, as trustee, dated as of the Closing Date (the "SENIOR
SUBORDINATED INDENTURE") and any exchange notes issued in exchange
therefor in accordance with the terms of the Senior Subordinated
Indenture.
"SENIOR SUBORDINATED DOCUMENTS" means the Senior Subordinated
Indenture, the Senior Subordinated Notes and all other agreements,
instruments and other documents pursuant to which the Senior Subordinated
Notes have been or will be issued or otherwise setting forth the terms of
the Senior Subordinated Notes, in each case as such agreement, instrument
or other document may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof, but only to the extent
permitted under the terms of the Loan Documents.
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"SOLVENT" and "SOLVENCY" mean, with respect to any Person on any
date of determination, that on such date (a) the fair value of the
property of such Person is greater than the total amount of liabilities,
including, without limitation, 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 such debts and
liabilities as they mature and (d) such Person is not engaged in business
or a transaction, and is not about to engage in business or a transaction,
for which such Person's property would constitute unreasonably small
capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"SPC" has the meaning specified in SECTION 10.06(h).
"SPONSOR" means, collectively, Madison Dearborn Partners, LLC and
investment Affiliates of Madison Dearborn Partners, LLC that are
controlled by Madison Dearborn Partners, LLC.
"STOCK PURCHASE AGREEMENT" has the meaning specified in the
Preliminary Statements to this Agreement.
"SUBSIDIARY" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a
majority of the shares of securities or other interests having ordinary
voting power for the election of directors or other governing body (other
than securities or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned, directly,
or indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise specified, all references herein to a "SUBSIDIARY" or to
"SUBSIDIARIES" shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"SUBSIDIARY GUARANTORS" means the Subsidiaries of the Borrower
listed on Schedule I and each other Subsidiary of the Borrower that shall
be required to execute and deliver a guaranty or guaranty supplement
pursuant to SECTION 6.12.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty made by the
Subsidiary Guarantors in favor of the Administrative Agent on behalf of
the Lenders, substantially in the form of EXHIBIT F-2, together with each
other guaranty and guaranty supplement delivered pursuant to SECTION 6.12.
"SURVIVING INDEBTEDNESS" means the Indebtedness of each Loan Party
and its Subsidiaries outstanding immediately before and after giving
effect to the occurrence of the Closing Date and described in PART (b) of
SCHEDULE 5.05 hereto.
"SWAP CONTRACT" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or
equity index swaps or options, bond or bond price or bond index swaps or
options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar transactions,
currency swap transactions, cross-currency rate swap transactions,
currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into
any of the foregoing), whether or not any such
29
transaction is governed by or subject to any master agreement, and (b) any
and all transactions of any kind, and the related confirmations, which are
subject to the terms and conditions of, or governed by, any form of ISDA
Master Agreement, including any such obligations or liabilities under any
ISDA Master Agreement.
"SWAP TERMINATION VALUE" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or
after the date such Swap Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination value(s),
and (b) for any date prior to the date referenced in clause (a), the
amount(s) determined as the xxxx-to-market value(s) for such Swap
Contracts, as determined based upon one or more mid-market or other
readily available quotations provided by any recognized dealer in such
Swap Contracts (which may include a Lender or any Affiliate of a Lender).
"SWING LINE" means the revolving credit facility made available by
the Swing Line Lender pursuant to SECTION 2.04.
"SWING LINE BORROWING" means a borrowing of a Swing Line Loan
pursuant to SECTION 2.04.
"SWING LINE LENDER" means Wachovia in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.
"SWING LINE LOAN" has the meaning specified in SECTION 2.04(a).
"SWING LINE LOAN NOTICE" means a notice of a Swing Line Borrowing
pursuant to SECTION 2.04(b), which, if in writing, shall be substantially
in the form of EXHIBIT B.
"SWING LINE SUBLIMIT" means an amount equal to the lesser of (a)
$7,000,000 and (b) the Revolving Credit Commitments. The Swing Line
Sublimit is part of, and not in addition to, the Revolving Credit
Commitments.
"SYNDICATION AGENT" means BAS in its capacity as syndication agent
under this Agreement, or any successor syndication agent.
"SYNTHETIC LEASE OBLIGATION" means the monetary obligation of a
Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating
obligations that do not appear on the balance sheet of such Person but
which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to
accounting treatment).
"TAXES" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by
any Governmental Authority, including any interest, additions to tax or
penalties applicable thereto.
"TENDER OFFER" means the tender offer for the Existing Notes
commenced on June 1, 2004 by Pierre Merger Corp.
"TERM B BORROWING" means a borrowing consisting of simultaneous Term
B Loans of the same Type and, in the case of Eurodollar Rate Loans, having
the same Interest Period made by each of the Term Lenders pursuant to
SECTION 2.01(a).
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"TERM B COMMITMENT" means, as to each Term Lender, its obligation to
make Term B Loans to the Borrower pursuant to SECTION 2.01(a) in an
aggregate principal amount at any one time outstanding not to exceed the
amount set forth opposite such Lender's name on SCHEDULE 2.01 under the
caption "Term B Commitment" or in the Assignment and Assumption pursuant
to which such Lender becomes a party hereto, as applicable, as such amount
may be adjusted from time to time in accordance with this Agreement.
"TERM B FACILITY" means, at any time, the aggregate Term B
Commitments or Term B Loans, as applicable, of all Lenders at such time.
"TERM B LOAN" means an advance made by any Lender under the Term B
Facility.
"TERM LENDER" means, at any time, any Lender that has a Term B
Commitment or Term B Loan, as applicable, at such time.
"TERM NOTE" means a promissory note of the Borrower payable to the
order of any Term Lender, in substantially the form of EXHIBIT C-1 hereto,
evidencing the aggregate indebtedness of the Borrower to such Term Lender
resulting from the Term B Loans made by such Term Lender.
"THRESHOLD AMOUNT" means $5,000,000.
"TOTAL OUTSTANDINGS" means the aggregate Outstanding Amount of all
Loans and all L/C Obligations.
"TRANSACTION" means, collectively, (a) the organization of Holdings
and the issuance on the Closing Date of at least 90% of the Equity
Interests (excluding options and warrants) therein to Madison Dearborn
Capital Partners IV, L.P., with the balance of such Equity Interests to be
held on the Closing Date by the Investors (other than the Sponsor), (b)
the consummation of the Acquisition and the Merger, (c) the issuance and
sale of the Senior Subordinated Notes, (d) the entering into by the Loan
Parties and their applicable Subsidiaries of the Loan Documents, the
Senior Subordinated Documents and the Related Documents to which they are
or are intended to be a party, (e) the refinancing, redemption and
discharge of certain outstanding Indebtedness of the Borrower and its
Subsidiaries and the termination of all commitments thereunder, (f) the
Tender Offer, (g) the Equity Contribution and (h) the payment of the fees
and expenses incurred in connection with the consummation of the
foregoing.
"TYPE" means, with respect to a Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.
"UNACCRUED INDEMNITY CLAIMS" means claims for indemnification that
may be asserted by the Agents, any L/C Issuer, any Lender or any other
Indemnitee under the Loan Documents that are unaccrued and contingent and
as to which no claim, notice or demand has been given to or made on the
Borrower (with a copy to the Administrative Agent) within 5 Business Days
after the Borrower's request therefor to the Administrative Agent (unless
the making or giving thereof is prohibited or enjoined by any applicable
Law or any order of any Governmental Authority); PROVIDED that the failure
of any Person to make or give any such claim, notice or demand or
otherwise to respond to any such request shall not be deemed to be a
waiver and shall not otherwise affect any such claim for indemnification.
"UNITED STATES" and "U.S." mean the United States of America.
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"UNREIMBURSED AMOUNT" has the meaning specified in SECTION 2.03(e).
"WACHOVIA" means Wachovia Bank, National Association and its
successors.
"WCM" means Wachovia Capital Markets, LLC and its successors.
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this
Agreement and each other Loan Document, unless otherwise specified herein or in
such other Loan Document:
(a) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. The words "INCLUDE," "INCLUDES" and "INCLUDING" shall be
deemed to be followed by the phrase "without limitation." The word "WILL"
shall be construed to have the same meaning and effect as the word
"SHALL." Unless the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (iii) the words "HEREIN,"
"HEREOF" and "HEREUNDER," and words of similar import when used in any
Loan Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references
in a Loan Document to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules
to, the Loan Document in which such references appear, (v) any reference
to any law shall include all statutory and regulatory provisions
consolidating, amending replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified,
refer to such law or regulation as amended, modified or supplemented from
time to time, and (vi) the words "ASSET" and "PROPERTY" shall be construed
to have the same meaning and effect and to refer to any and all tangible
and intangible assets and properties, including cash, securities, accounts
and contract rights.
(b) In the computation of periods of time from a specified date to
a later specified date, the word "FROM" means "FROM AND INCLUDING;" the
words "TO" and "UNTIL" each mean "TO BUT EXCLUDING;" and the word
"THROUGH" means "TO AND INCLUDING."
(c) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS. (a) GENERALLY. All accounting terms not
specifically or completely defined herein shall be construed in conformity with,
and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing
the Audited Financial Statements, EXCEPT as otherwise specifically prescribed
herein.
(b) CHANGES IN GAAP. If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrower or the Required Lenders shall so request,
the Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent
32
thereof in light of such change in GAAP (subject to the approval of the Required
Lenders); PROVIDED that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(ii) the Borrower shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.
1.04 ROUNDING. Any financial ratios required to be maintained by
the Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 TIMES OF DAY. Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).
1.06 LETTER OF CREDIT AMOUNTS. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the L/C
Related Documents related thereto therefor, whether or not such maximum face
amount is in effect at such time.
1.07 CURRENCY EQUIVALENTS GENERALLY. Any amount specified in this
Agreement (other than in ARTICLES II, IX and X) or any of the other Loan
Documents to be in Dollars shall also include the equivalent of such amount in
any currency other than Dollars, such equivalent amount to be determined at the
rate of exchange quoted by Wachovia in Charlotte, North Carolina at the close of
business on the Business Day immediately preceding any date of determination
thereof, to prime banks in
New York,
New York for the spot purchase in the
New
York foreign exchange market of such amount in Dollars with such other currency.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 THE LOANS. (a) THE TERM B BORROWING. Subject to the terms and
conditions set forth herein, each Term Lender severally agrees to make a single
loan (consisting of a Term B Loan pursuant to the Term B Facility in an amount
equal to its Applicable Percentage of the Term B Facility) to the Borrower on
the Closing Date. The Term B Borrowing shall consist of Term B Loans made
simultaneously by the Term Lenders in accordance with their respective
Applicable Percentage of the Term B Facility. Amounts borrowed under this
SECTION 2.01(a) and repaid or prepaid may not be reborrowed. Term B Loans may be
Base Rate Loans or Eurodollar Rate Loans, as further provided herein.
(b) THE REVOLVING CREDIT BORROWINGS. Subject to the terms and
conditions set forth herein, each Revolving Credit Lender severally agrees to
make loans (each such loan, a "REVOLVING CREDIT LOAN") to the Borrower from time
to time, on any Business Day during the Availability Period, in an aggregate
amount not to exceed at any time outstanding the amount of such Lender's
Revolving Credit Commitment; PROVIDED that after giving effect to any Revolving
Credit Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Credit
Loans of any Lender, PLUS such Lender's Applicable Percentage of the Outstanding
Amount of all L/C Obligations, PLUS such Lender's Applicable Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Revolving Credit Commitment. Within
33
the limits of each Lender's Revolving Credit Commitment, and subject to the
other terms and conditions hereof, the Borrower may borrow under this SECTION
2.01(b), prepay under SECTION 2.05, and reborrow under this SECTION 2.01(b).
Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate Loans, as
further provided herein.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) Each Term B Borrowing, each Revolving Credit Borrowing, each
conversion of Term B Loans or Revolving Credit Loans from one Type to the other,
and each continuation of Eurodollar Rate Loans shall be made upon the Borrower's
irrevocable notice to the Administrative Agent, which may be given by telephone.
Each such notice must be received by the Administrative Agent not later than 2
p.m. (i) three Business Days prior to the requested date of any Borrowing of,
conversion to or continuation of Eurodollar Rate Loans or of any conversion of
Eurodollar Rate Loans to Base Rate Loans, and (ii) one Business Day prior to the
requested date of any Borrowing of Base Rate Loans; PROVIDED, HOWEVER, that if
the Borrower wishes to request Eurodollar Rate Loans having an Interest Period
other than one, two, three or six months in duration as provided in the
definition of "Interest Period", the applicable notice must be received by the
Administrative Agent not later than 2 p.m. four Business Days prior to the
requested date of such Borrowing, conversion or continuation, whereupon the
Administrative Agent shall give prompt notice to the applicable Lenders of such
request and determine whether the requested Interest Period is acceptable to all
of them. Not later than 2 p.m., three Business Days before the requested date of
such Borrowing, conversion or continuation, the Administrative Agent shall
notify the Borrower (which notice may be by telephone) whether or not the
requested Interest Period has been consented to by all the Lenders. Each
telephonic notice by the Borrower pursuant to this SECTION 2.02(a) must be
confirmed promptly by delivery to the Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Each Borrowing of, conversion to or continuation of
Eurodollar Rate Loans shall be in a principal amount of $2,500,000 or a whole
multiple of $1,000,000 in excess thereof. Except as provided in SECTIONS 2.03(f)
AND 2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in a
principal amount of $2,500,000 or a whole multiple of $1,000,000 in excess
thereof. Each Committed Loan Notice (whether telephonic or written) shall
specify (i) whether the Borrower is requesting a Term B Borrowing, a Revolving
Credit Borrowing, a conversion of Term B Loans or Revolving Credit Loans from
one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Loans to be
borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to
which existing Term B Loans or Revolving Credit Loans are to be converted, and
(v) if applicable, the duration of the Interest Period with respect thereto. If
the Borrower fails to specify a Type of Loan in a Committed Loan Notice or if
the Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Term B Loans or Revolving Credit Loans shall
be made as, or converted to, Base Rate Loans. Any such automatic conversion to
Base Rate Loans shall be effective as of the last day of the Interest Period
then in effect with respect to the applicable Eurodollar Rate Loans. If the
Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar
Rate Loans in any such Committed Loan Notice, but fails to specify an Interest
Period, it will be deemed to have specified an Interest Period of one month.
(b) Following receipt of a Committed Loan Notice, the
Administrative Agent shall promptly notify each Lender in writing or by
telecopier or other electronic communication of the amount of its Applicable
Percentage of the applicable Term B Loans or Revolving Credit Loans, and if no
timely notice of a conversion or continuation is provided by the Borrower, the
Administrative Agent shall notify each Lender in writing or by telecopier or
other electronic communication of the details of any automatic conversion to
Base Rate Loans described in SECTION 2.02(a). In the case of a Term B Borrowing
or a Revolving Credit Borrowing, each Appropriate Lender shall make the amount
of its Loan available to the Administrative Agent in immediately available funds
at the Administrative Agent's Office not later than
34
2:00 p.m. on the Business Day specified in the applicable Committed Loan Notice.
Upon satisfaction of the applicable conditions set forth in SECTION 4.02 (and,
if such Borrowing is the initial Credit Extension, SECTION 4.01), the
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of Wachovia with the amount of such
funds or (ii) wire transfer of such funds to an account designated by the
Borrower in writing, in each case in accordance with instructions provided to
(and reasonably acceptable to) the Administrative Agent by the Borrower;
PROVIDED, HOWEVER, that if, on the date the Committed Loan Notice with respect
to such Borrowing is given by the Borrower, there are L/C Borrowings
outstanding, then the proceeds of such Borrowing FIRST shall be applied to the
payment in full of any such L/C Borrowings and SECOND, shall be made available
to the Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan
may be continued upon the expiration of any applicable Interest Period or
converted only on the last day of an Interest Period for such Eurodollar Rate
Loan. During the existence of a Default, no Loans may be requested as, converted
to or continued as Eurodollar Rate Loans without the consent of the Required
Lenders.
(d) The Administrative Agent shall promptly notify the Borrower
and the Lenders (in writing or by telecopier or other electronic communication)
of the interest rate applicable to any Interest Period for Eurodollar Rate Loans
upon determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Borrower and the Lenders
of any change in Wachovia's prime rate used in determining the Base Rate
promptly following the public announcement of such change.
(e) After giving effect to the Term B Borrowing, all Revolving
Credit Borrowings, all conversions of Term B Loans or Revolving Credit Loans
from one Type to the other, and all continuations of Term B Loans or Revolving
Credit Loans as the same Type, there shall not be more than seven Interest
Periods in effect.
(f) The failure of any Lender to make the Loan to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Loan on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.
(g) Anything in this SECTION 2.02 to the contrary notwithstanding,
the Borrower may not select Eurodollar Rate for the initial Credit Extension
hereunder or for any Borrowing if the aggregate amount of such Borrowing is less
than $5,000,000 or if the obligation of the Appropriate Lenders to make
Eurodollar Rate Loans shall then be suspended pursuant to SECTION 2.09 or 2.10.
2.03 LETTERS OF CREDIT.
(a) ISSUANCE OF LETTERS OF CREDIT. The L/C Issuer agrees, on the
terms and conditions hereinafter set forth, to issue (or cause any of its
Affiliates that constitute a commercial bank to issue on its behalf) Letters of
Credit in Dollars for the account of the Borrower from time to time on any
Business Day during the period from the Closing Date until the day that is five
days prior to the Maturity Date then in effect for the Revolving Credit Facility
(or, if such day is not a Business Day, the next preceding Business Day);
PROVIDED that after giving effect to any L/C Credit Extension, (i) the Total
Outstandings shall not exceed the Aggregate Commitments, (ii) the aggregate
Outstanding Amount of the Loans of any Lender, PLUS such Lender's Applicable
Percentage of the Outstanding Amount of all L/C Obligations, PLUS such Lender's
Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender's Revolving Credit Commitment, and (iii) the Outstanding
Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. No
Letter of Credit shall have an expiration
35
date (including all rights of the Borrower or the beneficiary to require
renewal) later than five days before the Maturity Date in respect of the
Revolving Credit Facility, but may by its terms be renewable annually upon
written notice (a "NOTICE OF RENEWAL") given to the L/C Issuer and the
Administrative Agent on or prior to any date for notice of renewal set forth in
such Letter of Credit but in any event at least three Business Days prior to the
date of the proposed renewal of such Letter of Credit and upon fulfillment of
the applicable conditions set forth in ARTICLE IV unless the L/C Issuer has
notified the Borrower (with a copy to the Administrative Agent) on or prior to
the date for notice of termination set forth in such Letter of Credit but in any
event at least 30 days prior to the date of automatic renewal of its election
not to renew such Letter of Credit (a "NOTICE OF TERMINATION"); PROVIDED that
the terms of each Letter of Credit that is automatically renewable annually
shall (A) require the L/C Issuer to give the beneficiary named in such Letter of
Credit notice of any Notice of Termination, (B) permit such beneficiary, upon
receipt of such notice, to draw under such Letter of Credit prior to the date
such Letter of Credit otherwise would have been automatically renewed and (C)
not permit the expiration date (after giving effect to any renewal) of such
Letter of Credit in any event to be extended to a date later than five days
before the Maturity Date in respect of the Revolving Credit Facility. If either
a Notice of Renewal is not given by the Borrower or a Notice of Termination is
given by the L/C Issuer pursuant to the immediately preceding sentence, such
Letter of Credit shall expire on the date on which it otherwise would have been
automatically renewed. Within the limits of the Letter of Credit Facility, and
subject to the limits referred to above, the Borrower may request the issuance
of Letters of Credit under this SECTION 2.03(a), repay any L/C Advances
resulting from drawings thereunder pursuant to SECTION 2.03(e) and request the
issuance of additional Letters of Credit under this SECTION 2.03(a).
(b) REQUEST FOR ISSUANCE. Each Letter of Credit shall be issued
upon notice, given not later than 2:00 p.m. on the third Business Day prior to
the date of the proposed issuance of such Letter of Credit, by the Borrower to
the L/C Issuer, which shall give to the Administrative Agent and each Revolving
Credit Lender prompt notice thereof by telecopier or electronic communication.
Each such notice of issuance of a Letter of Credit (a "NOTICE OF ISSUANCE")
shall be by telephone, confirmed immediately in writing, or telecopier or
electronic communication, specifying therein the requested (i) date of such
issuance (which shall be a Business Day), (ii) amount of such Letter of Credit
(which amount shall (A) not be less than $500,000 or (z) be in such other amount
acceptable to the L/C Issuer), (B) expiration date of such Letter of Credit,
(iv) name and address of the beneficiary of such Letter of Credit and (v) form
of such Letter of Credit, and shall be accompanied by a Letter of Credit
Application. If (1) the requested form of such Letter of Credit is acceptable to
the L/C Issuer in its sole discretion and (2) it has not received notice of
objection to such issuance from the Required Lenders, the L/C Issuer will, upon
fulfillment of the applicable conditions set forth in ARTICLE IV, make such
Letter of Credit available to the Borrower at its office referred to in SCHEDULE
10.02 or as otherwise agreed with the Borrower in connection with such issuance.
In the event and to the extent that the provisions of any Letter of Credit
Application shall conflict with this Agreement, the provisions of this Agreement
shall govern.
(c) L/C ADVANCES.
(i) The Borrower shall repay to the Administrative Agent for the
account of the L/C Issuer and each other Revolving Credit Lender that has
made an L/C Advance on the earlier of demand and the Maturity Date in
respect of the Revolving Credit Facility the outstanding principal amount
of each L/C Advance made by each of them.
(ii) The Obligations of the Borrower and the Revolving Credit
Lenders under this Agreement, any Letter of Credit Application and any
other agreement or instrument relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance
with the terms of this Agreement, such Letter of Credit Application and
such other
36
agreement or instrument under all circumstances, including, without
limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Application, any Letter of Credit or
any other agreement or instrument relating thereto (all of the
foregoing being, collectively, the "L/C RELATED DOCUMENTS");
(B) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations of the
Borrower in respect of any L/C Related Document or any other
amendment or waiver of or any consent to departure from all or any
of the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary
or any transferee of a Letter of Credit (or any Persons for which
any such beneficiary or any such transferee may be acting), the L/C
Issuer or any other Person, whether in connection with the
transactions contemplated by the L/C Related Documents or any
unrelated transaction;
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(E) payment by the L/C Issuer under a Letter of Credit
against presentation of a draft, certificate or other document that
does not strictly comply with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any
Collateral or other collateral, or any release or amendment or
waiver of or consent to departure from the Guaranties or any other
guarantee, for all or any of the Obligations of the Borrower in
respect of the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including, without
limitation, any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrower or a
guarantor.
The foregoing provisions of this SECTION 2.03(c)(iii) shall not impair any claim
of the Borrower as provided in SECTION 10.06(j).
(d) LETTER OF CREDIT REPORTS. The L/C Issuer shall furnish (i) to
the Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (ii) to
each Revolving Credit Lender on the first Business Day of each month a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the preceding month and drawings during such month under all Letters of
Credit and (iii) to the Administrative Agent and each Revolving Credit Lender on
the first Business Day of each calendar quarter a written report setting forth
the average daily aggregate amount of Letters of Credit available to be drawn
during the preceding calendar quarter of all Letters of Credit.
(e) PARTICIPATIONS IN LETTERS OF CREDIT. Upon the issuance of a
Letter of Credit by the L/C Issuer under SECTION 2.03(b), the L/C Issuer shall
be deemed, without further action by any party
37
hereto, to have sold to each Revolving Credit Lender, and each such Revolving
Credit Lender shall be deemed, without further action by any party hereto, to
have purchased from the L/C Issuer, a participation in such Letter of Credit in
an amount for each Revolving Credit Lender equal to such Lender's Applicable
Percentage of the amount of such Letter of Credit available to be drawn,
effective upon the issuance of such Letter of Credit. In consideration and in
furtherance of the foregoing, each Revolving Credit Lender hereby absolutely and
unconditionally agrees to pay such Lender's Applicable Percentage of each L/C
Disbursement made by the L/C Issuer and not reimbursed by the Borrower forthwith
on the date due as provided in SECTION 2.03(c) (or which has been so reimbursed
but must be returned or restored by the L/C Issuer because of the occurrence of
an event specified in SECTION 8.01(f) or otherwise) (an "UNREIMBURSED AMOUNT")
by making available for the account of its Applicable Lending Office to the
Administrative Agent for the account of the L/C Issuer by deposit to the
Administrative Agent's Account, in same day funds, an amount equal to such
Lender's Applicable Percentage of such L/C Disbursement. Each Revolving Credit
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this SECTION 2.03(e) in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default or
the termination of the Commitments, and that each such payment shall be made
without any off-set, abatement, withholding or reduction whatsoever. If and to
the extent that any Revolving Credit Lender shall not have so made the amount of
such L/C Disbursement available to the Administrative Agent, such Revolving
Credit Lender agrees to pay to the Administrative Agent forthwith on demand such
amount together with interest thereon, for each day from the date such L/C
Disbursement is due pursuant to SECTION 2.03(c) until the date such amount is
paid to the Administrative Agent, at the Federal Funds Rate for its account or
the account of the L/C Issuer. If such Lender shall pay to the Administrative
Agent such amount for the account of the L/C Issuer on any Business Day, such
amount so paid in respect of principal shall constitute an L/C Advance made by
such Lender on such Business Day for purposes of this Agreement, and the
outstanding principal amount of an L/C Advance made by the L/C Issuer shall be
reduced by such amount on such Business Day.
(f) DRAWING AND REIMBURSEMENT. The payment by the L/C Issuer of a
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the L/C Issuer of an L/C Advance, which shall be a Base
Rate Loan, in the amount of such draft.
(g) FAILURE TO MAKE L/C ADVANCES. The failure of any Lender to
make an L/C Advance to be made by it on the date specified in SECTION 2.03(e)
shall not relieve any other Lender of its obligation hereunder to make its L/C
Advance on such date, but no Lender shall be responsible for the failure of any
other Lender to make the L/C Advance to be made by such other Lender on such
date.
(h) CASH COLLATERAL. Upon the request of the Administrative Agent,
(i) if the L/C Issuer has made an L/C Disbursement under any Letter of Credit
and such L/C Disbursement has resulted in an L/C Borrowing or (ii) if, as of the
date five days prior to the Maturity Date then in effect for the Revolving
Credit Facility, any L/C Obligation for any reason remains outstanding, the
Borrower shall, in each case, immediately Cash Collateralize the then
Outstanding Amount of all L/C Obligations. SECTIONS 2.05 and 8.02(c) set forth
certain additional requirements to deliver Cash Collateral hereunder. For
purposes of this SECTION 2.03, SECTION 2.05 and SECTION 8.02(c), "CASH
COLLATERALIZE" means to pledge and deposit with or deliver to the Administrative
Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the
L/C Obligations, cash or deposit account balances pursuant to documentation in
form and substance satisfactory to the Administrative Agent and the L/C Issuer
(which documents are hereby consented to by the Lenders). Derivatives of such
term have corresponding meanings. The Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Unless otherwise agreed by the Administrative
Agent in its sole discretion, Cash Collateral shall be maintained in the Cash
Collateral Account. If at any time the Administrative Agent reasonably
38
determines that any funds held as Cash Collateral are subject to any right or
claim of any Person other than the Administrative Agent or that the total amount
of such funds is less than the aggregate Outstanding Amount of all L/C
Obligations, the Borrower will, forthwith upon demand by the Administrative
Agent, pay to the Administrative Agent, as additional funds to be deposited and
held in the deposit accounts at Wachovia as aforesaid, an amount equal to the
excess of (a) such aggregate Outstanding Amount of L/C Obligations over (b) the
total amount of funds, if any, then held as Cash Collateral that the
Administrative Agent determines to be free and clear of any such right and
claim. Upon the drawing of any Letter of Credit for which funds are on deposit
as Cash Collateral, such funds shall be applied, to the extent permitted under
applicable law, to reimburse the L/C Issuer.
(i) APPLICABILITY OF ISP98. Unless otherwise expressly agreed by
the L/C Issuer and the Borrower when a Letter of Credit is issued, the rules of
the ISP shall apply to each Letter of Credit.
(j) LETTER OF CREDIT FEES, ETC.
(i) The Borrower shall pay to the Administrative Agent for the
account of each Revolving Credit Lender in accordance with its Applicable
Percentage a Letter of Credit fee (the "LETTER OF CREDIT FEE") for each
Letter of Credit equal to the Applicable Margin TIMES the daily maximum
amount available to be drawn under such Letter of Credit. Letter of Credit
Fees shall be (a) computed on a quarterly basis in arrears and (b) due and
payable on the first Business Day after the end of each quarter,
commencing with the first such date to occur after the issuance of such
Letter of Credit, on the Maturity Date in respect of the Revolving Credit
Facility and thereafter on demand. If there is any change in the
Applicable Margin during any quarter, the daily maximum amount of each
Letter of Credit shall be computed and multiplied by the Applicable Margin
separately for each period during such quarter that such Applicable Margin
was in effect. Notwithstanding anything to the contrary contained herein,
while any Event of Default exists, all Letter of Credit Fees shall accrue
at the Default Rate.
(ii) The Borrower shall pay to the L/C Issuer, for its own account,
such commissions, issuance fees, fronting fees, transfer fees and other
fees and charges in connection with the issuance or administration of each
Letter of Credit as the Borrower and the L/C Issuer shall agree, with the
initial fronting fee equal to 0.125% per annum on the maximum amount
available to be drawn under all Letters of Credit issued by the L/C Issuer
payable quarterly in arrears on the first Business Day after the end of
each quarter, commencing with the first such date to occur after the
issuance of any Letter of Credit hereunder.
(k) EXISTING LETTERS OF CREDIT. The Existing Letters of Credit
will be deemed for all purposes of this Agreement to have been issued as Letters
of Credit hereunder as of the Closing Date.
2.04 SWING LINE LOANS.
(a) THE SWING LINE. The Swing Line Lender agrees, on the terms and
conditions hereinafter set forth, to make loans (each such loan, a "SWING LINE
LOAN") to the Borrower from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Applicable Percentage of the Outstanding
Amount of Loans and L/C Obligations of the Lender acting as Swing Line Lender,
may exceed the amount of such Lender's Commitment; PROVIDED, HOWEVER, that after
giving effect to any Swing Line Loan, (i) the Total Outstandings shall not
exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of
the Revolving Credit Loans of any Lender, PLUS such Lender's Applicable
Percentage of the Outstanding Amount of all L/C Obligations, PLUS such Lender's
Applicable Percentage of the Outstanding
39
Amount of all Swing Line Loans shall not exceed such Lender's Revolving Credit
Commitment, and PROVIDED FURTHER that the Borrower shall not use the proceeds of
any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Borrower may borrow under this SECTION 2.04, prepay under SECTION 2.05, and
reborrow under this SECTION 2.04. Each Swing Line Loan shall be a Base Rate
Loan. Immediately upon the making of a Swing Line Loan, each Revolving Credit
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender's Applicable Percentage TIMES
the amount of such Swing Line Loan.
(b) BORROWING PROCEDURES. Each Swing Line Borrowing shall be made
upon the Borrower's irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
2:00 p.m. on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which shall be in an amount of $100,000 or an integral multiple of
$25,000 in excess thereof, and (ii) the requested borrowing date, which shall be
a Business Day. Each such telephonic notice must be confirmed promptly by
delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Unless the Swing Line Lender has received notice (by
telephone or in writing) from the Administrative Agent (including at the request
of any Revolving Credit Lender) prior to 2:00 p.m. on the date of the proposed
Swing Line Borrowing (a) directing the Swing Line Lender not to make such Swing
Line Loan as a result of the limitations set forth in the proviso to the first
sentence of SECTION 2.04(a), or (b) that one or more of the applicable
conditions specified in ARTICLE IV is not then satisfied, then, subject to the
terms and conditions hereof, the Swing Line Lender will make the amount of the
requested Swing Line Loan available to the Administrative Agent at the
Administrative Agent's Office, in same day funds. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in ARTICLE IV, the Administrative Agent will make such funds available
to the Borrower by crediting the account of the Borrower on the books of
Wachovia with the amount of such funds.
(c) REFINANCING OF SWING LINE LOANS.
(i) The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of the Borrower (which hereby
irrevocably authorizes the Swing Line Lender to so request on its behalf),
or in any event automatically upon the maturity of each Swing Line Loan as
set forth in SECTION 2.07(c), that each other Revolving Credit Lender make
a Base Rate Loan in an amount equal to such Lender's Applicable Percentage
of the amount of Swing Line Loans then outstanding. Such request shall be
made in writing (which written request shall be deemed to be a Committed
Loan Notice for purposes hereof) and in accordance with the requirements
of SECTION 2.02, without regard to the minimum and multiples specified
therein for the principal amount of Base Rate Loans, but subject to the
unutilized portion of the aggregate Revolving Credit Commitments and the
conditions set forth in SECTION 4.02. The Swing Line Lender shall furnish
the Borrower with a copy of the applicable Committed Loan Notice promptly
after delivering such notice to the Administrative Agent. Each Revolving
Credit Lender shall make an amount equal to its Applicable Percentage of
the amount specified in such Committed Loan Notice available to the
Administrative Agent in immediately available funds for the account of the
Swing Line Lender at the Administrative Agent's Office not later than 2:00
p.m. on the Business Day specified in such Committed Loan Notice,
whereupon, subject to SECTION 2.04(c)(ii), each Revolving Credit Lender
that so makes funds available shall be deemed to have made a Base Rate
Loan to the Borrower in such amount. The Administrative Agent shall remit
the funds so received to the Swing Line Lender.
40
(ii) If for any reason any Swing Line Loan cannot be refinanced by
such a Revolving Credit Borrowing in accordance with SECTION 2.04(c)(i),
the request for Base Rate Loans submitted by the Swing Line Lender as set
forth herein shall be deemed to be a request by the Swing Line Lender that
each of the Revolving Credit Lenders fund its risk participation in the
relevant Swing Line Loan and each Revolving Credit Lender's payment to the
Administrative Agent for the account of the Swing Line Lender pursuant to
SECTION 2.04(c)(i) shall be deemed payment in respect of such
participation.
(iii) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions of
this SECTION 2.04(c) by the time specified in SECTION 2.04(c)(i), the
Swing Line Lender shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the date
on which such payment is immediately available to the Swing Line Lender at
a rate per annum equal to the Federal Funds Rate. A certificate of the
Swing Line Lender submitted to any Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (iii) shall be
conclusive absent manifest error.
(iv) Each Revolving Credit Lender's obligation to make Revolving
Credit Loans or to purchase and fund risk participations in Swing Line
Loans pursuant to this SECTION 2.04(c) shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may
have against the Swing Line Lender, the Borrower or any other Person for
any reason whatsoever, (B) the occurrence or continuance of a Default, or
(C) any other occurrence, event or condition, whether or not similar to
any of the foregoing; PROVIDED, HOWEVER, that each Revolving Credit
Lender's obligation to make Revolving Credit Loans pursuant to this
SECTION 2.04(c) is subject to the conditions set forth in SECTION 4.02. No
such funding of risk participations shall relieve or otherwise impair the
obligation of the Borrower to repay Swing Line Loans, together with
interest as provided herein.
(d) REPAYMENT OF PARTICIPATIONS. If any payment received by the
Administrative Agent in respect of principal or interest on any Swing Line Loan
is required to be returned by the Administrative Agent under any of the
circumstances described in SECTION 10.05, each Revolving Credit Lender shall pay
to the Administrative Agent for the account of the Swing Line Lender its
Applicable Percentage thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned, at a rate per annum equal to the Federal Funds Rate. The
Administrative Agent will make such demand upon the request of the Swing Line
Lender. The obligations of the Lenders under this clause shall survive the
payment in full of the Obligations and the termination of this Agreement.
(e) INTEREST FOR ACCOUNT OF SWING LINE LENDER. The Swing Line
Lender shall be responsible for invoicing the Borrower for interest on the Swing
Line Loans. Until each Revolving Credit Lender funds its Base Rate Loan or risk
participation pursuant to this SECTION 2.04 to refinance such Lender's
Applicable Percentage of any Swing Line Loan, interest in respect of such
Applicable Percentage shall be solely for the account of the Swing Line Lender.
41
2.05 PREPAYMENTS.
(a) OPTIONAL.
(i) The Borrower may, upon notice to the Administrative Agent at
any time or from time to time, voluntarily prepay Term B Loans and
Revolving Credit Loans in whole or in part without premium or penalty;
PROVIDED that (A) such notice must be received by the Administrative Agent
not later than 2:00 p.m. (1) three Business Days prior to any date of
prepayment of Eurodollar Rate Loans and (2) one Business Date Prior to any
date of prepayment of Base Rate Loans; and (B) any partial prepayment
shall be in a principal amount of $2,500,000 or a whole multiple of
$1,000,000 in excess thereof or, if less, the entire principal amount
thereof then outstanding. Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of
each such notice, and of the amount of such Lender's Applicable Percentage
of such prepayment. If such notice is given by the Borrower, the Borrower
shall make such prepayment, the payment amount specified in such notice
shall be due and payable on the date specified therein and each such
prepayment shall be paid to the Lenders in accordance with their
respective Applicable Percentages. Any prepayment of a Eurodollar Rate
Loan shall be accompanied by all accrued interest thereon, together with
any additional amounts required pursuant to SECTION 3.05. Each prepayment
of the outstanding Term B Loans pursuant to this SECTION 2.05(a) shall be
applied to the principal repayment installments thereof in direct order of
maturity.
(ii) The Borrower may, upon notice to the Swing Line Lender (with a
copy to the Administrative Agent), at any time or from time to time,
voluntarily prepay Swing Line Loans in whole or in part without premium or
penalty; PROVIDED that (A) such notice must be received by the Swing Line
Lender and the Administrative Agent not later than 2:00 p.m. on the date
of the prepayment, and (B) any such prepayment shall be in a minimum
principal amount of $100,000. Each such notice shall specify the date and
amount of such prepayment. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in
such notice shall be due and payable on the date specified therein.
(b) MANDATORY.
(i) Within five Business Days after the date the Borrower is
required to deliver financial statements pursuant to SECTION 6.01(a) and
the related Compliance Certificate pursuant to SECTION 6.02(b), the
Borrower shall prepay an aggregate principal amount of Loans equal to 75%
or, if the Consolidated Leverage Ratio for such fiscal year is less than
4.5:1.0, 50% of Excess Cash Flow for the fiscal year covered by such
financial statements.
(ii) If any Loan Party or any of its Subsidiaries Disposes of any
property or assets (other than any Disposition of any property or assets
permitted by XXXXXXX 0.00(x), (x)(xx), (x), (x), (x), (x), (x), (x) OR
(k)) and the aggregate Net Cash Proceeds received by the Loan Parties and
such Subsidiaries in any fiscal year exceeds $1,000,000, the Borrower
shall immediately prepay an aggregate principal amount of Loans equal to
100% of such Net Cash Proceeds, and thereafter as and when additional Net
Cash Proceeds are received during such year in an aggregate amount of
$500,000 or more, the Borrower shall immediately further prepay the
principal of the Loans in an amount equal to 100% of such Net Cash
Proceeds; PROVIDED, HOWEVER, that, with respect to any Net Cash Proceeds
realized (A) under a Disposition described in this SECTION 2.05(b)(ii) or
(B) from proceeds of insurance and condemnation awards or indemnities
covered by SECTION 2.05(b)(v), (1) at the option of the Borrower (as
elected by the Borrower in writing to the Administrative Agent on or prior
to the date of such Disposition or the receipt of such insurance
42
proceeds or condemnation awards), and so long as no Event of Default shall
have occurred and be continuing, the Borrower may reinvest all or any
portion of such Net Cash Proceeds in operating assets so long as (a)
within 180 days following receipt of such Net Cash Proceeds, a definitive
agreement for the purchase of such assets with such proceeds shall have
been entered into (as certified by the Borrower in writing to the
Administrative Agent), and (b) within 270 days after the receipt of such
Net Cash Proceeds, such purchase shall have been consummated (as certified
by the Borrower in writing to the Administrative Agent); PROVIDED FURTHER,
HOWEVER, that any Net Cash Proceeds not subject to such definitive
agreement or so reinvested shall be immediately applied to the prepayment
of the Loans as set forth in this SECTION 2.05; and (2) any amount
reinvested under CLAUSE (A) shall not be included in determining the
amount of any required prepayment of the Loans under this SECTION
2.05(b)(ii).
(iii) Upon the sale or issuance by any Loan Party or any of its
Subsidiaries of any of its Equity Interests, the Borrower shall prepay an
aggregate principal amount of Loans equal to 50% of all Net Cash Proceeds
received therefrom immediately upon receipt thereof by any Loan Party or
such Subsidiary.
(iv) Upon the incurrence or issuance by any Loan Party or any of
its Subsidiaries of any Indebtedness (other than Indebtedness expressly
permitted to be incurred or issued pursuant to SECTION 7.02), the Borrower
shall prepay an aggregate principal amount of Loans equal to 100% of all
Net Cash Proceeds received therefrom immediately upon receipt thereof by
any Loan Party or such Subsidiary.
(v) Upon any Extraordinary Receipt received by or paid to or for
the account of any Loan Party or any of its Subsidiaries, and not
otherwise included in clause (ii), (iii) or (iv) of this SECTION 2.05(b),
the Borrower shall prepay an aggregate principal amount of Loans equal to
100% of all Net Cash Proceeds received therefrom immediately upon receipt
thereof by any Loan Party or such Subsidiary.
(vi) If for any reason the Total Outstandings under any Facility
at any time exceed the Aggregate Commitments then in effect with respect
to such Facility, the Borrower shall immediately prepay the applicable
Loans and/or (in the case of the Revolving Credit Facility) Cash
Collateralize the L/C Obligations in an aggregate amount equal to such
excess; PROVIDED, HOWEVER, that the Borrower shall not be required to Cash
Collateralize the L/C Obligations pursuant to this SECTION 2.05(b)(vi)
unless after the prepayment in full of the Loans and Swing Line Loans the
Total Outstandings exceed the Aggregate Commitments then in effect.
(vii) Each prepayment of Loans pursuant to this SECTION 2.05(b)
shall be applied, FIRST, to principal payments of the Term B Facility
scheduled to be paid during the next 12 months in direct order of maturity
until such scheduled principal payments are paid in full, SECOND, ratably
to the remaining principal repayment installments of the Term B Facility
until all such installments are paid in full and, THEREAFTER, ratably to
the Revolving Credit Facility; PROVIDED that any prepayment of the
Revolving Credit Facility pursuant to CLAUSE (vi) shall be applied as set
forth herein.
(viii) Prepayments of the Revolving Credit Facility made pursuant to
CLAUSE (i), (ii), (iii), (iv), (v), (vi) OR (vii) OF THIS SECTION 2.05(b),
FIRST, shall be applied to prepay L/C Borrowings outstanding at such time
until all such L/C Borrowings are paid in full, SECOND, shall be applied
to prepay Swing Line Loans outstanding at such time until all such Swing
Line Loans are paid in full, THIRD, shall be applied to prepay Revolving
Credit Loans outstanding at such time until all such Revolving Credit
Loans are paid in full and, FOURTH, shall be used to Cash Collateralize
the
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L/C Obligations; and, in the case of prepayments of the Revolving Credit
Facility required pursuant to CLAUSE (i), (ii), (iii), (iv) OR (v) OF THIS
SECTION 2.05(b), the amount remaining, if any, after the prepayment in
full of all Loans and L/C Borrowings outstanding at such time and the L/C
Obligations have been Cash Collateralized in full (the sum of such
prepayment amounts, cash collateralization amounts and remaining amount
being, collectively, the "REDUCTION AMOUNT") may be retained by the
Borrower for use in the ordinary course of its business, and the Revolving
Credit Facility shall be automatically and permanently reduced by the
Reduction Amount as set forth in SECTION 2.06(b)(ii). Upon the drawing of
any Letter of Credit, which has been Cash Collateralized, such funds shall
be applied (without any further action by or notice to or from the
Borrower or any other Loan Party) to reimburse the L/C Issuer or the
Revolving Credit Lenders, as applicable.
(ix) Anything contained in this SECTION 2.05(b) to the contrary
notwithstanding, (A) if, following the occurrence of any "ASSET SALE" (as
such term is defined in the Senior Subordinated Indenture or any analogous
term (such as "ASSET DISPOSITION") is defined in any Senior Subordinated
Document) by any Loan Party or any of its Subsidiaries, the Borrower is
required to commit by a particular date (a "COMMITMENT DATE") to apply or
cause its Subsidiaries to apply an amount equal to any of the "NET
PROCEEDS" (as such term is defined in the Senior Subordinated Indenture or
any analogous term (such as "NET AVAILABLE CASH") as defined in any Senior
Subordinated Document) thereof in a particular manner, or to apply by a
particular date (an "APPLICATION DATE") an amount equal to any such "NET
PROCEEDS" in a particular manner, in either case in order to excuse the
Borrower from being required to make an "ASSET SALE OFFER" (as such term
is defined in the Senior Subordinated Indenture or any analogous term
(such as "OFFER") as defined in any Senior Subordinated Document) in
connection with such "ASSET SALE", and the Borrower shall have failed to
so commit or to so apply an amount equal to such "NET PROCEEDS" at least
30 days before the applicable Commitment Date or Application Date, as the
case may be, or (B) if the Borrower at any other time shall have failed to
apply or commit or cause to be applied an amount equal to any such "NET
PROCEEDS", and, within 30 days thereafter assuming no further application
or commitment of an amount equal to such "NET PROCEEDS" the Borrower would
otherwise be required to make an "ASSET SALE OFFER" in respect thereof,
then in either such case the Borrower shall immediately pay or cause to be
paid to the Administrative Agent (without duplication of any amount paid
or payable under this SECTION 2.05(b)) an amount equal to such "NET
PROCEEDS" to be applied to the payment of the Loans and L/C Borrowings and
to Cash Collateralize the L/C Obligations in the manner set forth in
SECTION 2.05(b) in such amounts as shall excuse the Borrower from making
any such "ASSET SALE OFFER".
2.06 TERMINATION OR REDUCTION OF COMMITMENTS.
(a) OPTIONAL. The Borrower may, upon written notice to the
Administrative Agent, terminate the unused portions of the Term B Commitments,
the Letter of Credit Sublimit, or the unused Revolving Credit Commitments, or
from time to time permanently reduce the unused portions of the Term B
Commitments, the Letter of Credit Sublimit, or the unused Revolving Credit
Commitments; PROVIDED that (i) any such notice shall be received by the
Administrative Agent not later than 2:00 p.m. five Business Days prior to the
date of termination or reduction, (ii) any such partial reduction shall in an
aggregate amount of at least $2,500,000 or an integral multiple of $1,000,000 in
excess thereof, and (iii) the Borrower shall not terminate or reduce the unused
portions of the Term B Commitments, the Letter of Credit Sublimit, or the unused
Revolving Credit Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
Aggregate Commitments.
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(b) MANDATORY. (i) The Term B Commitments shall be automatically
and permanently reduced on the date of the Term B Borrowing (after giving effect
to the Term B Borrowing), to zero.
(ii) The Revolving Credit Facility shall be automatically and
permanently reduced on each date on which the prepayment of Revolving Credit
Loans outstanding thereunder is required to be made pursuant to SECTION
2.05(b)(i),(ii), (iii), (iv) OR (v) by an amount equal to the applicable
Reduction Amount.
(iii) If after giving effect to any reduction or termination of
unused Revolving Credit Commitments under this SECTION 2.06, the Letter of
Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Aggregate
Revolving Credit Commitments, such Sublimit shall be automatically reduced by
the amount of such excess.
(c) APPLICATION OF COMMITMENT REDUCTIONS; PAYMENT OF FEES. The
Administrative Agent will promptly notify the Lenders of any termination or
reduction of unused portions of the Letter of Credit Sublimit, or the unused
Revolving Credit Commitment under this SECTION 2.06. Upon any reduction of
unused Commitments under a Facility, the Commitment of each Lender under such
Facility shall be reduced by such Lender's Applicable Percentage of the amount
by which such Facility is reduced. All fees accrued until the effective date of
any termination of the Aggregate Commitments shall be paid on the effective date
of such termination.
2.07 REPAYMENT OF LOANS.
(a) TERM B LOANS. The Borrower shall repay to the Administrative
Agent for the ratable account of the Term Lenders the aggregate principal amount
of all Term B Loans outstanding on the following dates in the respective amounts
set forth opposite such dates (which amounts shall be reduced as a result of the
application of prepayments in accordance with the order of priority set forth in
SECTION 2.06):
Date Amount
September 4, 2004 $ 375,000
December 4, 2004 $ 375,000
March 5, 2005 $ 375,000
June 4, 2005 $ 375,000
September 3, 2005 $ 375,000
December 3, 2005 $ 375,000
March 4, 2006 $ 375,000
June 3, 2006 $ 375,000
September 2, 2006 $ 375,000
December 2, 2006 $ 375,000
March 3, 2007 $ 375,000
June 2, 2007 $ 375,000
September 1, 2007 $ 375,000
December 1, 2007 $ 375,000
March 1, 2008 $ 375,000
May 31, 2008 $ 375,000
August 30, 2008 $ 375,000
November 29, 2008 $ 375,000
February 28, 2009 $ 375,000
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May 30, 2009 $ 375,000
August 29, 2009 $ 375,000
November 28, 2009 $ 375,000
March 6, 2010 $ 375,000
Maturity Date with respect to the
Term B Facility $ 141,375,000
PROVIDED, HOWEVER, that the final principal repayment installment of the Term B
Loans shall be paid on the Maturity Date for the Term B Facility and in any
event shall be in an amount equal to the aggregate principal amount of all Term
B Loans outstanding on such date.
(b) REVOLVING CREDIT LOANS. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Maturity Date for the Revolving Credit Facility the aggregate principal
amount of all Revolving Credit Loans outstanding on such date.
(c) SWING LINE LOANS. The Borrower shall repay to the
Administrative Agent for the ratable account of the Swing Line Lender and any
Revolving Credit Lender that has purchased a participation in a Swing Line Loan
pursuant to SECTION 2.04 the outstanding principal amount of each Swing Line
Loan on the earlier to occur of (i) the date five Business Days after such Loan
is made and (ii) the Maturity Date.
2.08 INTEREST.
(a) Subject to the provisions of SECTION 2.08(b), (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period PLUS the Applicable Margin; (ii) each Base Rate
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate PLUS the
Applicable Margin; and (iii) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate PLUS the Applicable Margin.
(b) (i) If any amount of principal of any Loan is not paid when
due (without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, such amount shall, upon the
request of the Required Lenders, bear interest at a fluctuating interest
rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by
the Borrower under any Loan Document is not paid when due (without regard
to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, then upon the request of the Required Lenders
such amount shall thereafter bear interest at a fluctuating interest rate
per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.
(iii) Upon the request of the Required Lenders, while any Event of
Default exists, the Borrower shall pay interest on the principal amount of
all outstanding Obligations hereunder at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.
46
(iv) Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on
each Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.09 FEES. In addition to certain fees described in SECTIONS
2.03(j):
(a) COMMITMENT FEE. The Borrower shall pay to the Administrative
Agent for the account of each Revolving Credit Lender in accordance with its
Applicable Percentage, a commitment fee of 0.50% per annum TIMES the actual
daily amount by which the aggregate Revolving Credit Commitments exceed the sum
of (i) the Outstanding Amount of Revolving Credit Loans and (ii) the Outstanding
Amount of L/C Obligations; PROVIDED, HOWEVER, that any commitment fee accrued
with respect to any of the Commitments of a Defaulting Lender during the period
prior to the time such Lender became a Defaulting Lender and unpaid at such time
shall not be payable by the Borrower so long as such Lender shall be a
Defaulting Lender except to the extent that such commitment fee shall otherwise
have been due and payable by the Borrower prior to such time; and PROVIDED
FURTHER that no commitment fee shall accrue on any of the Commitments of a
Defaulting Lender so long as such Lender shall be a Defaulting Lender. The
commitment fee shall accrue at all times during the Availability Period,
including at any time during which one or more of the conditions in ARTICLE IV
is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the Closing Date, and on the Maturity Date for
the Revolving Credit Facility. The commitment fee shall be calculated quarterly
in arrears.
(b) OTHER FEES. (i) The Borrower shall pay to the Arrangers and
the Administrative Agent for their own respective accounts fees in the amounts
and at the times specified in the Fee Letter. Such fees shall be fully earned
when paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Agents such fees as shall have
been separately agreed upon in writing in the amounts and at the times so
specified. Unless otherwise expressly agreed by the Agents in writing, such fees
shall be fully earned when paid and shall not be refundable for any reason
whatsoever.
2.10 COMPUTATION OF INTEREST AND FEES. All computations of interest
for Base Rate Loans when the Base Rate is determined by Wachovia's "prime rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed. Interest shall accrue on
each Loan for the day on which the Loan is made, and shall not accrue on a Loan,
or any portion thereof, for the day on which the Loan or such portion is paid;
PROVIDED that any Loan that is repaid on the same day on which it is made shall,
subject to SECTION 2.12(a), bear interest for one day. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.
2.11 EVIDENCE OF INDEBTEDNESS.
(a) The Credit Extensions made by each Lender shall be evidenced
by one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent and each Lender shall be
47
conclusive absent manifest error of the amount of the Credit Extensions made by
the Lenders to the Borrower and the interest and payments thereon. Any failure
to so record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrower hereunder to pay any amount owing with
respect to the Obligations. In the event of any conflict between the accounts
and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error. Upon the
request of any Lender made through the Administrative Agent, the Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender's Loans in addition to such accounts or
records. Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.
(b) In addition to the accounts and records referred to in SECTION
2.11(a), each Lender and the Administrative Agent shall maintain in accordance
with its usual practice accounts or records evidencing the purchases and sales
by such Lender of participations in Letters of Credit and Swing Line Loans. In
the event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.
(c) Entries made in good faith by the Administrative Agent in the
Register pursuant to SECTION 2.11(b), and by each Lender in its account or
accounts pursuant to SECTION 2.11(a), shall be PRIMA FACIE evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrower to, in the case of the Register, each Lender and, in the case
of such account or accounts, such Lender, under this Agreement and the other
Loan Documents, absent manifest error; PROVIDED that the failure of the
Administrative Agent or such Lender to make an entry, or any finding that an
entry is incorrect, in the Register or such account or accounts shall not limit
or otherwise affect the obligations of the Borrower under this Agreement and the
other Loan Documents.
2.12 PAYMENTS GENERALLY; ADMINISTRATIVE AGENT'S CLAWBACK.
(a) GENERAL. All payments to be made by the Borrower shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff. All payments by the Borrower hereunder shall be made to the
Administrative Agent, for the account of the respective Lenders to which such
payment is owed, at the Administrative Agent's Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified
herein. The Administrative Agent will promptly distribute to each Lender its
Applicable Percentage (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender's Lending
Office. All payments received by the Administrative Agent after 2:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.
(b) (i) FUNDING BY LENDERS; PRESUMPTION BY ADMINISTRATIVE AGENT.
Unless the Administrative Agent shall have received notice from a Lender prior
to the proposed date of any Borrowing that such Lender will not make available
to the Administrative Agent such Lender's share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with SECTION 2.02 and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount in immediately available funds with interest thereon,
for each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(A) in the case of a payment to be made by such Lender, the Federal Funds Rate
and (B) in the case of a payment to be made by the Borrower, the interest rate
applicable to Base Rate Loans. If the Borrower
48
and such Lender shall pay such interest to the Administrative Agent for the same
or an overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays its share of the applicable Borrowing to the Administrative
Agent, then the amount so paid shall constitute such Lender's Loan included in
such Borrowing. Any payment by the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.
(ii) PAYMENTS BY BORROWER; PRESUMPTIONS BY ADMINISTRATIVE AGENT.
Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or the L/C Issuer hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the L/C Issuer, as the case may
be, the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the L/C Issuer, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or the L/C Issuer, in immediately available
funds with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the Federal Funds Rate.
A notice of the Administrative Agent to any Lender or the Borrower
with respect to any amount owing under this SUBSECTION (b) shall be conclusive,
absent manifest error.
(c) FAILURE TO SATISFY CONDITIONS PRECEDENT. If any Lender makes
available to the Administrative Agent funds for any Loan to be made by such
Lender as provided in the foregoing provisions of this ARTICLE II, and such
funds are not made available to the Borrower by the Administrative Agent because
the conditions to the applicable Credit Extension set forth in ARTICLE IV are
not satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.
(d) OBLIGATIONS OF LENDERS SEVERAL. The obligations of the Lenders
hereunder to make Loans and to fund participations in Letters of Credit and
Swing Line Loans and to make payments pursuant to SECTION 10.04(c) are several
and not joint. The failure of any Lender to make any Loan or to fund any such
participation or make payments pursuant to SECTION 10.04(c) on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan or purchase its participation or make payments
pursuant to SECTION 10.04(c).
(e) FUNDING SOURCE. Nothing herein shall be deemed to obligate any
Lender to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.
(f) AUTHORIZATION. The Borrower hereby authorizes each Lender, if
and to the extent payment owed to such Lender is not made when due hereunder or,
in the case of a Lender holding a Note, under the Note held by such Lender, to
charge from time to time against any or all of the Borrower's accounts with such
Lender any amount so due.
(g) INSUFFICIENT PAYMENT. Whenever any payment received by the
Administrative Agent under this Agreement or any of the other Loan Documents is
insufficient to pay in full all amounts due and payable to the Agents and the
Lenders under or in respect of this Agreement and the other Loan Documents on
any date, such payment shall be distributed by the Administrative Agent and
applied by the Agents and the Lenders in the order of priority set forth in
SECTION 8.03. If the Administrative Agent
49
receives funds for application to the Obligations of the Loan Parties under or
in respect of the Loan Documents under circumstances for which the Loan
Documents do not specify the manner in which such funds are to be applied, the
Administrative Agent may, but shall not be obligated to, elect to distribute
such funds to each of the Lenders in accordance with such Lender's Applicable
Percentage of the sum of (i) the Outstanding Amount of all Loans outstanding at
such time and (ii) the Outstanding Amount of all L/C Obligations outstanding at
such time, in repayment or prepayment of such of the outstanding Loans or other
Obligations then owing to such Lender.
2.13 SHARING OF PAYMENTS BY LENDERS. If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of the Loans made by it, or the
participations in L/C Obligations or in Swing Line Loans held by it, resulting
in such Lender's receiving payment of a proportion of the aggregate amount of
such Loans or participations and accrued interest thereon greater than its PRO
RATA share thereof as provided herein, then the Lender receiving such greater
proportion shall (a) notify the Administrative Agent of such fact, and (b)
purchase (for cash at face value) participations in the Loans and
subparticipations in L/C Obligations and Swing Line Loans of the other Lenders,
or make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Revolving Credit Loans and Term B Loans and other amounts owing them; PROVIDED
that:
(i) if any such participations or subparticipations are purchased
and all or any portion of the payment giving rise thereto is recovered,
such participations or subparticipations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest;
and
(ii) the provisions of this SECTION shall not be construed to apply
to (x) any payment made by the Borrower pursuant to and in accordance with
the express terms of this Agreement or (y) any payment obtained by a
Lender as consideration for the assignment of or sale of a participation
in any of its Loans or subparticipations in L/C Obligations or Swing Line
Loans to any assignee or participant, other than to the Borrower or any
Subsidiary (as to which the provisions of this SECTION shall apply).
Each Loan Party consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) PAYMENTS FREE OF TAXES. Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes and for the full amount of any taxes of any
kind; PROVIDED that if the Borrower shall be required by applicable law to
deduct any Indemnified Taxes (including any Other Taxes) from such payments,
then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this SECTION) the Administrative Agent, Lender or L/C Issuer, as
the case may be, receives an amount equal to the sum it would have received had
no such deductions been made,
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(ii) the Borrower shall make such deductions and (iii) the Borrower shall timely
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) PAYMENT OF OTHER TAXES BY THE BORROWER. Without limiting the
provisions of SUBSECTION (a) above, the Borrower shall timely pay any
Indemnified or Other Taxes to the relevant Governmental Authority in accordance
with applicable law.
(c) INDEMNIFICATION BY THE BORROWER. The Borrower shall indemnify
the Administrative Agent, each Lender and the L/C Issuer, within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this SECTION) paid by the Administrative
Agent, such Lender or the L/C Issuer, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender or
the L/C Issuer (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender or the L/C
Issuer, shall be conclusive absent manifest error.
(d) EVIDENCE OF PAYMENTS. As soon as practicable after any payment
of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) STATUS OF LENDERS. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law and as are reasonably
requested by the Borrower or the Administrative Agent, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing, in the event that
the Borrower is resident for tax purposes in the United States, any Foreign
Lender shall deliver to the Borrower and the Administrative Agent (in such
number of copies as shall be requested by the recipient) on or prior to the date
on which such Foreign Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the request of the Borrower or the Administrative
Agent, but only if such Foreign Lender is legally entitled to do so), whichever
of the following is applicable:
(i) duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the
United States is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a "bank"
within the meaning of section 881(c)(3)(A) of the Code, (B) a "10
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percent shareholder" of the Borrower within the meaning of section
881(c)(3)(B) of the Code, or (C) a "controlled foreign corporation"
described in section 881(c)(3)(C) of the Code and (y) duly completed
copies of Internal Revenue Service Form W-8BEN, or
(iv) any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in United States Federal
withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable law to permit the
Borrower to determine the withholding or deduction required to be made.
(f) TREATMENT OF CERTAIN REFUNDS. If the Administrative Agent, any
Lender or the L/C Issuer determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this SECTION, it shall pay to the Borrower an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this SECTION with respect to
the Indemnified Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent, any Lender or the L/C
Issuer, as the case may be, and withholding at any amounts as required under
applicable Law and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); PROVIDED that the
Borrower, upon the request of the Administrative Agent, such Lender or the L/C
Issuer, agrees to repay the amount paid over to the Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent, such Lender or the L/C Issuer in the
event the Administrative Agent, such Lender or the L/C Issuer is required to
repay such refund to such Governmental Authority. This SUBSECTION (f) shall not
be construed to require the Administrative Agent, any Lender or the L/C Issuer
file its returns in a particular manner or to make available its tax returns (or
any other information relating to its taxes that it deems confidential) to the
Borrower or any other Person.
3.02 ILLEGALITY. If any Law has made it unlawful, or any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge interest rates based upon the Eurodollar Rate, or any
Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted.
3.03 INABILITY TO DETERMINE RATES. If the Required Lenders
determine that for any reason in connection with any request for a Eurodollar
Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits
are not being offered to banks in the London interbank eurodollar market for the
applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate
and reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or
(c) the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, or that Dollar deposits are not being offered
to banks in the London interbank eurodollar market for the applicable amount and
the Interest Period of such Eurodollar Rate Loan, the
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Administrative Agent will promptly so notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended until the Administrative Agent (upon the instruction of
the Required Lenders) revokes such notice. Upon receipt of such notice, the
Borrower may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Borrowing of Base Rate Loans in the
amount specified therein.
3.04 INCREASED COSTS; RESERVES ON EURODOLLAR RATE LOANS.
(a) INCREASED COSTS GENERALLY. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against
assets of, deposits with or for the account of, or credit extended or
participated in by, any Lender (except any reserve requirement taken into
account in determining the Eurodollar Rate) or the L/C Issuer;
(ii) subject any Lender or the L/C Issuer to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender or the L/C Issuer
in respect thereof (except for Indemnified Taxes or Other Taxes covered by
SECTION 3.01 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender or the L/C Issuer); or
(iii) impose on any Lender or the L/C Issuer or the London interbank
market any other condition, cost or expense affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or the
L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or
of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the L/C Issuer hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the L/C Issuer, the Borrower will
pay to such Lender or the L/C Issuer, as the case may be, such additional amount
or amounts as will compensate such Lender or the L/C Issuer, as the case may be,
for such additional costs incurred or reduction suffered.
(b) CAPITAL REQUIREMENTS. If any Lender or the L/C Issuer
determines that any Change in Law affecting such Lender or the L/C Issuer or any
Lending Office of such Lender or such Lender's or the L/C Issuer's holding
company, if any, regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the L/C Issuer's capital or on
the capital of such Lender's or the L/C Issuer's holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made
by, or participations in Letters of Credit held by, such Lender, or the Letters
of Credit issued by the L/C Issuer, to a level below that which such Lender or
the L/C Issuer or such Lender's or the L/C Issuer's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's or
the L/C Issuer's policies and the policies of such Lender's or the L/C Issuer's
holding company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender or the L/C Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the L/C Issuer or
such Lender's or the L/C Issuer's holding company for any such reduction
suffered.
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(c) CERTIFICATES FOR REIMBURSEMENT. A certificate of a Lender or
the L/C Issuer setting forth the amount or amounts necessary to compensate such
Lender or the L/C Issuer or its holding company, as the case may be, as
specified in SUBSECTION (a) or (b) of this SECTION or in SECTION 3.05, and
specifying in reasonable detail the basis for such compensation, and delivered
to the Borrower shall be conclusive absent manifest error. The Borrower shall
pay such Lender or the L/C Issuer, as the case may be, the amount shown as due
on any such certificate within 10 days after receipt thereof.
(d) Notwithstanding anything in this Agreement to the contrary,
the Borrower shall not be obligated to make any payment to any Lender or the L/C
Issuer under this SECTION 3.04 in respect of any change in Law for any period
more than 180 days prior to the date on which such Lender or L/C Issuer gives
notice to the Borrower of its intent to request such payment under this SECTION
3.04; PROVIDED, HOWEVER, that if such change in Law has retroactive effect, the
Borrower shall be required to make any such payments for the period of
retroactivity.
3.05 COMPENSATION FOR LOSSES. Upon demand of any Lender (with a
copy to the Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any
Loan other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the
failure of such Lender to make a Loan) to prepay, borrow, continue or
convert any Loan other than a Base Rate Loan on the date or in the amount
notified by the Borrower;
including any loss of anticipated profits (excluding the Applicable Margin) and
any loss or expense arising from the liquidation or reemployment of funds
obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. For purposes of calculating
amounts payable by the Borrower to the Lenders under this SECTION 3.05, each
Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at
the Eurodollar Rate for such Loan by a matching deposit or other borrowing in
the London interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Eurodollar Rate Loan was in fact so
funded.
3.06 MITIGATION OBLIGATIONS. If any Lender requests compensation
under SECTION 3.04, or the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to SECTION 3.01, or if any Lender gives a notice pursuant to SECTION 3.02, then
such Lender shall use reasonable efforts to designate a different Lending Office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to SECTION 3.01 or 3.04, as the case may be,
in the future, or eliminate the need for the notice pursuant to SECTION 3.02, as
applicable, and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
3.07 SURVIVAL. This ARTICLE III shall survive termination of the
Aggregate Commitments and repayment of all other Obligations hereunder.
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ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of the
L/C Issuer and each Lender to make its initial Credit Extension hereunder is
subject to satisfaction, or waiver in accordance with SECTION 10.01, of the
following conditions precedent:
(a) The Administrative Agent shall have received each of the
following, each of which shall be originals or telecopies (followed
promptly by originals), each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing
Date) each in form and substance satisfactory to the Administrative Agent
and each of the Lenders and in such number of copies as may be requested
by the Administrative Agent:
(i) duly executed counterparts of this Agreement and the
Guaranties, sufficient in number for distribution to each Agent,
each Lender and the Borrower;
(ii) a Note or Notes duly executed by the Borrower in favor
of each Lender requesting the same;
(iii) the Security Agreement, duly executed by each Loan
Party, together with:
(A) certificates representing the Pledged Interests
referred to therein accompanied by undated stock powers
executed in blank and instruments evidencing the Pledged Debt
indorsed in blank,
(B) acknowledgment copies or stamped receipt copies of
proper financing statements, duly filed on or before the day
of the initial Credit Extension under the Uniform Commercial
Code of all jurisdictions that the Administrative Agent may
reasonably deem necessary or desirable in order to perfect and
protect the first priority liens and security interests
created under the Security Agreement, covering the Collateral
described in the Security Agreement,
(C) completed requests for information, dated on or
before the date of the initial Credit Extension, listing the
financing statements referred to in clause (B) above and all
other effective financing statements filed in the
jurisdictions referred to in clause (B) above that name any
Loan Party as debtor, together with copies of such other
financing statements, and
(D) evidence of the completion of all other actions,
recordings and filings of or with respect to the Security
Agreement that the Administrative Agent may reasonably deem
necessary or desirable in order to perfect and protect the
liens and security interests created thereby (including,
without limitation, receipt of duly executed payoff letters,
UCC-3 termination statements, and to the extent obtainable
with the Borrower's reasonable commercial efforts with respect
to locations where any Collateral is located, landlords' and
bailees' waiver and consent agreements) and that all filing
and recording taxes and fees (if any) have been paid;
55
(iv) the Mortgages, duly executed by the appropriate Loan
Party, together with:
(A) evidence that counterparts of the Mortgages have
been duly executed, acknowledged and delivered and are in form
suitable for filing or recording in all filing or recording
offices that the Administrative Agent may reasonably deem
necessary or desirable in order to create a valid first and
subsisting Lien on the property described therein in favor of
the Administrative Agent for the benefit of the Secured
Parties and that all filing and recording taxes and fees have
been paid,
(B) fully paid American Land Title Association
Lender's Extended Coverage title insurance policies (or
counter-signed markups or pro formas of the same) (the
"MORTGAGE POLICIES") in respect to the owned real property
subject to the Mortgages in form and substance, with
endorsements (to the extent available at customary rates) and
in amount acceptable to the Administrative Agent, issued by
title insurers reasonably acceptable to the Administrative
Agent, insuring the Mortgages to be valid first and subsisting
Liens on the property described therein, free and clear of all
defects (including, but not limited to, mechanics' and
materialmen's Liens) and encumbrances, excepting only
Permitted Encumbrances and other liens permitted under the
Loan Documents, and providing for such other affirmative
insurance (including endorsements for future advances under
the Loan Documents and for mechanics' and materialmen's Liens)
as the Administrative Agent may deem necessary or desirable,
(C) American Land Title Association/American Congress
on Surveying and Mapping form surveys, for which all necessary
fees (where applicable) have been paid, and dated no more than
60 days before the day of the initial Credit Extension,
certified to the Administrative Agent and the issuer of the
Mortgage Policies in a manner reasonably satisfactory to the
Administrative Agent by a land surveyor duly registered and
licensed in the States in which the property described in such
surveys is located and reasonably acceptable to the
Administrative Agent, showing all buildings and other
improvements, the location of any easements noted in the
Mortgage policies, parking spaces, rights of way, building
set-back lines and other dimensional regulations (each to the
extent plottable) and the absence of encroachments, either by
such improvements or on to such property, and other defects,
which can not otherwise be insured over in the Mortgage
Policies, other than encroachments and other defects
reasonably acceptable to the Administrative Agent, and
(D) environmental and other reports as to the
properties described in the Mortgages, in form and substance
and from professional firms acceptable to the Administrative
Agent;
(v) the Intellectual Property Security Agreement, duly
executed by each Loan Party, together with evidence that all action
that the Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority liens and security
interests created under the Intellectual Property Security Agreement
has been taken;
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(vi) such duly executed certificates of resolutions or
consents, incumbency certificates and/or other duly executed
certificates of Responsible Officers of each Loan Party as the
Administrative Agent or the Lenders may reasonably require
evidencing the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in
connection with this Agreement and the other Loan Documents to which
such Loan Party is a party or is to be a party;
(vii) such documents and duly executed certifications as the
Administrative Agent or the Lenders may reasonably require to
evidence that each Loan Party is duly organized or formed, and that
each Loan Party is validly existing, in good standing and qualified
to engage in business in Ohio and North Carolina, as applicable,
except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect;
(viii) a favorable opinion of Xxxxxxxx & Xxxxx LLP, counsel to
the Loan Parties, addressed to each Agent and each Lender, in
substantially the form of EXHIBIT J-1 and such other matters
concerning the Loan Parties and the Loan Documents as the Required
Lenders may reasonably request;
(ix) a favorable opinion of Xxxxx & Xxx Xxxxx PLLC, local
counsel to the Loan Parties in North Carolina, in substantially the
form of EXHIBIT J-2 and such other matters concerning the Loan
Parties and the Loan Documents as the Required Lenders may
reasonably request;
(x) a favorable opinion of Xxxxxxx & Xxxxxx LLP, real
estate counsel to the Lender Parties in Ohio and a favorable opinion
of Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, real estate counsel to the
Lender Parties in North Carolina, in substantially the form of in
EXHIBIT J-3 and such other matters concerning the Loan Parties and
the Loan Documents as the Required Lenders may reasonably request;
(xi) the opinion of Xxxxx & Lardner LLP, counsel to the
Company and its shareholders, delivered in connection with the
Acquisition, which opinion is either (A) addressed to the
Administrative Agent and the Lenders or expressly states that the
Administrative Agent and the Lenders may expressly rely on such
opinion or (B) accompanied by a reliance letter from such counsel
addressed to the Administrative Agent and the Lenders that expressly
states that the Administrative Agent and the Lenders may rely on
such opinion;
(xii) a certificate of a Responsible Officer of each Loan
Party either (A) attaching copies of all governmental consents,
licenses and approvals required in connection with the execution,
delivery and performance by such Loan Party and the validity against
such Loan Party of the Loan Documents to which it is a party, and
such governmental consents, licenses and approvals shall be in full
force and effect, or (B) stating that no such governmental consents,
licenses or approvals are so required;
(xiii) a certificate signed by a Responsible Officer of the
Company certifying (A) that the conditions specified in SECTIONS
4.02(a) and (b) have been satisfied, (B) that there has been no
event or circumstance since March 6, 2004 that has had or could be
reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect; and (C) the current Debt
Ratings for the Facilities;
57
(xiv) a certificate signed by the Chief Executive Officer or
the Chief Financial Officer of the Company certifying that (A) the
Adjusted Pro Forma Consolidated EBITDA of the Company and its
Subsidiaries for the twelve-month period ended March 6, 2004 was not
less than $50,000,000; (B) the PRO FORMA Consolidated Leverage Ratio
as of the last day of the twelve-month period ended March 6, 2004,
calculated as if the Transaction had occurred on the first day of
such twelve-month period and using Adjusted Pro Form Consolidated
EBITDA in such calculation in place of Consolidated EBITDA for such
period, was not greater than 5.40 to 1.00; and (C) the calculations
prepared under clause (A) and (B) were made in good faith on the
basis of the assumptions stated in such certificate, which
assumptions were fair in light of the then existing conditions;
(xv) certificates attesting to the Solvency of (A) the
Company and its Subsidiaries taken as a whole and (B) the Parent and
its Subsidiaries taken as a whole, in each case before and after
giving effect to the Transaction, from the Chief Executive Officer
or the Chief Financial Officer of the Company and the Parent, as
appropriate, substantially in the form of EXHIBIT I hereto;
(xvi) audited annual financial statements for the Company
and its Subsidiaries for the fiscal years ended March 1, 2002, March
1, 2003 and March 6, 2004 (such audits to have been performed by
independent certified public accountants of nationally recognized
standing, whose report and opinion shall be prepared in accordance
with GAAP and not subject to any "going concern" or any other
qualifications (including as to scope)) and interim financial
statements dated the end of the most recent fiscal quarter for which
financial statements are available;
(xvii) PRO FORMA financial statements as to the Company and
its Subsidiaries giving effect to the Transaction for the most
recently completed fiscal year, which shall, in all material
respects, be prepared in accordance with Regulation S-X under the
Securities Act of 1933, as amended, and all other accounting rules
and regulations of the SEC promulgated thereunder applicable to a
registration statement under the Securities Act of 1933, as amended,
on Form S-1;
(xviii) forecasts prepared by management of the Company, in
form and substance satisfactory to the Arrangers, of balance sheets,
income statements and cash flow statements for the Company and its
Subsidiaries on a quarterly basis for the first four quarters
following the day of the initial Credit Extension and on an annual
basis commencing with the first fiscal year following the day of the
initial Credit Extension until the Maturity Date for the Term B
Facility;
(xix) a certificate signed by the Chief Executive Officer or
the Chief Financial Officer of the Company certifying that the PRO
FORMA financial statements delivered pursuant to clause (xvii) above
and the forecasts delivered pursuant to clause (xviii) above were
prepared in good faith on the basis of the assumptions stated
therein, which assumptions were reasonably believed to be fair in
light of the conditions existing at the time of delivery of such PRO
FORMA financial statements and forecasts, and, with respect to the
forecasts, represented, at the time of delivery, the Borrower's best
estimate of its future financial performance;
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(xx) evidence that all insurance required to be maintained
pursuant to the Loan Documents has been obtained and is in effect
and names the Collateral Agent as additional insured and loss payee;
(xxi) certified copies of each employment agreement and
other compensation arrangement with the Chief Executive Officer of
the Company;
(xxii) certified copies of the Related Documents, duly
executed by the parties thereto and in form and substance
satisfactory to the Lenders, together with all agreements,
instruments and other documents delivered in connection therewith as
the Administrative Agent shall request;
(xxiii) confirmation satisfactory to the Arrangers of the
consummation of the Merger from the Secretary of State of the State
of North Carolina;
(xxiv) an Assumption Agreement, duly executed by the Company;
(xxv) evidence that the Equity Contribution, on terms and
conditions satisfactory to the Arrangers, was made to Holdings;
(xxvi) a Committed Loan Notice or Notice of Issuance, as
applicable, relating to the initial Credit Extension;
(xxvii) evidence that (A) the Existing
Credit Agreement has
been or concurrently with the Closing Date is being terminated and
all Liens securing obligations under the Existing
Credit Agreement
have been or concurrently with the Closing Date are being released,
(B) all Existing Notes shall have been redeemed in full or
sufficient funds for the redemption thereof have been deposited with
the trustee under the indenture governing the Existing Notes in
order to discharge the Existing Notes with the proceeds of such
deposit (and thereby discharge all Liens securing the Existing
Notes) and (C) all other Existing Indebtedness, other than Surviving
Indebtedness, has been prepaid, redeemed or defeased in full other
otherwise satisfied and extinguished from cash on hand of the
Borrower and all commitments relating thereto terminated and that
all Surviving Indebtedness shall be on terms and conditions
satisfactory to the Administrative Agent; and
(xxviii)such other assurances, certificates, documents,
information, consents or opinions as any Agent, the L/C Issuer, the
Swing Line Lender or any Lender reasonably may require.
(b) The Borrower shall have paid all accrued fees and expenses of
the Agents, the Arrangers and the initial Lenders (including the fees and
expenses of Shearman & Sterling LLP, Xxxxxxx & Xxxxxx LLP and Xxxxxxx Xxxxxxxxx
Xxxxxxx & Xxxxxxx) on or before the Closing Date.
(c) The Closing Date shall have occurred on or before June 30,
2004.
(d) All governmental authorizations and all third party consents
and approvals necessary or, in the reasonable opinion of the Arrangers,
desirable in connection with the Transaction and the other transactions
contemplated thereby shall have been obtained (without the imposition of any
conditions that are not acceptable to the Lenders) and shall remain in effect;
all applicable waiting periods
59
in connection with the Transaction shall have expired without any action being
taken by any Governmental Authority, and no Law shall be applicable in the
reasonable judgment of the Lenders, in each case that restrains, prevents or
imposes materially adverse conditions upon the Transaction or the other
transactions contemplated thereby or the rights of the Loan Parties or their
Subsidiaries freely to transfer or otherwise dispose of, or to create any Lien
on, any properties now owned or hereafter acquired by any of them.
(e) The Acquisition shall have been consummated materially in
accordance with the terms of the Stock Purchase Agreement, without any waiver,
amendment or supplement not consented to by the Lenders of any material term,
provision or condition set forth therein or in any other Related Document, and
in material compliance with all applicable requirements of Law.
(f) The Stock Purchase Agreement shall be in full force and
effect.
(g) After giving effect to the Transaction, including all Credit
Extensions made in connection therewith, no Revolving Credit Borrowings shall be
outstanding on the Closing Date.
(h) The Borrower shall have received at least $125 million in
gross cash proceeds from the sale of the Senior Subordinated Notes.
Without limiting the generality of the provisions of SECTION 9.02,
for purposes of determining compliance with the conditions specified in this
SECTION 4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
4.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each
Lender to honor any Request for Credit Extension (other than a Committed Loan
Notice requesting only a conversion of Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of the Borrower contained
in ARTICLE V or any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or
therewith, shall be true and correct in all material respects on and as of
the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in
which case they shall be true and correct in all material respects as of
such earlier date, and except that for purposes of this SECTION 4.02, the
representations and warranties contained in SECTIONS 5.05(a), (b) AND (c)
shall be deemed to refer to the most recent statements furnished pursuant
to SECTIONS 6.01(a) AND (b), respectively.
(b) No Default or Event of Default has occurred and is continuing,
or would result from such proposed Credit Extension or from the
application of the proceeds therefrom.
(c) The Administrative Agent and, if applicable, the L/C Issuer or
the Swing Line Lender shall have received a Request for Credit Extension
in accordance with the requirements hereof.
Each Request for Credit Extension (other than a Committed Loan
Notice requesting only a conversion of Loans to the other Type or a continuation
of Eurodollar Rate Loans) submitted by the
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Borrower shall be deemed to be a representation and warranty that the conditions
specified in SECTIONS 4.02(a) and (b) have been satisfied on and as of the date
of the applicable Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agents and the Lenders
that:
5.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. Each
Loan Party and each of its Subsidiaries (a) is duly organized or formed, validly
existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
requisite governmental licenses, authorizations, consents and approvals to (i)
own or lease its assets and carry on its business, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect and (ii) execute, deliver and perform its obligations under the Loan
Documents and the Related Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, except to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect and (d) is in compliance with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its properties
(such compliance to include, without limitation, compliance with the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act
of 1970, and with the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56
and all other laws and regulations relating to money laundering and terrorist
activities), except in such instances in which (A) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (B) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document and Related Document to
which such Person is or is to be a party, and the consummation of the
Transaction, are within such Loan Party's corporate or other powers, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person's
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to
be made under (i) any Contractual Obligation to which such Person is a party or
affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law. No Loan Party or any of its Subsidiaries is in violation
of any Law or in breach of any such Contractual Obligation, the violation or
breach of which could be reasonably likely to have a Material Adverse Effect.
5.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in
connection with (i) the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement, any other Loan Document or any
Related Document, or for the consummation of the Transaction, (ii) the grant by
any Loan Party of the Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection or maintenance of the Liens created under the Collateral
Documents (including the first priority nature thereof) or (iv) the exercise by
any Agent or any Lender of its rights under the Loan Documents or the remedies
in respect of the Collateral pursuant to the Collateral Documents, except for
authorizations, approvals, actions, notices and filings that have been (or
contemporaneously herewith will be) duly obtained, taken, given or made and
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are (or, upon obtaining, taking, giving or making any such authorization,
approval, action, notice or filing, will be) in full force and effect and, in
the case of any authorizations, approvals, actions, notices or filings by, to or
with any Governmental Authority, are listed on SCHEDULE 5.03 hereto. All
applicable waiting periods in connection with the Transaction have expired
without any action having been taken by any Governmental Authority restraining,
preventing or imposing materially adverse conditions upon the Transaction or the
rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them. The Acquisition has been consummated in accordance with
the Stock Purchase Agreement and applicable Law.
5.04 BINDING EFFECT. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms, subject to the effect of
applicable bankruptcy, insolvency, reorganization, receivership, moratorium and
other similar laws relating to or affecting creditor's rights generally, and the
effect of general principles of equity, whether applied by a court of law or
equity.
5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; (ii) fairly present in all material
respects the financial condition of the Company and its Subsidiaries as of the
date thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; and (iii) show all material
indebtedness and other liabilities, direct or contingent, of the Company and its
Subsidiaries as of the date thereof, including liabilities for taxes, material
commitments and Indebtedness, to the extent required by GAAP to be shown
therein.
(b) The most recent quarterly unaudited consolidated financial
statements of the Company and its Subsidiaries delivered pursuant to SECTION
6.01(b), and the related consolidated statements of income or operations,
shareholders' equity and cash flows for the fiscal quarter ended on that date,
(i) were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein, and (ii)
fairly present in all material respects the financial condition of the Company
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.
(c) As of the Closing Date, (i) PARTS (a) AND (b) OF SCHEDULE 5.05
set forth all Existing Indebtedness and all Surviving Indebtedness,
respectively, of each Loan Party and its Subsidiaries, and (ii) PART (c) OF
SCHEDULE 5.05 sets forth all material Indebtedness and other material
liabilities, direct or contingent, of the Company and its consolidated
Subsidiaries as of the Closing Date, including liabilities for taxes and
material commitments, to the extent that the same would be included in annual
audited financial statements prepared in accordance with GAAP.
(d) Since the date of the Audited Financial Statements, there has
been no event or circumstance, either individually or in the aggregate, that has
had or could reasonably be expected to have a Material Adverse Effect.
(e) The consolidated PRO FORMA balance sheet of the Company and
its Subsidiaries and the related consolidated PRO FORMA statements of income and
cash flows of the Company and its
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Subsidiaries delivered in accordance with SECTION 4.01(a)(xviii), certified by
the Chief Executive Officer or the Chief Financial Officer of the Company,
fairly present in all material respects the consolidated PRO FORMA financial
condition of the Company and its Subsidiaries as at such date and the
consolidated PRO FORMA results of operations of the Company and its Subsidiaries
for the period ended on such date, in each case giving effect to the
Transaction, all in accordance with GAAP.
(f) The consolidated forecasted balance sheets, statements of
income and statements of cash flows of the Company and its Subsidiaries
delivered to the Lenders pursuant to SECTION 4.01(a)(xviii) OR 5.05 were
prepared in good faith on the basis of the assumptions stated therein, which
assumptions were reasonably believed by the Company to be fair in light of the
conditions existing at the time of delivery of such forecasts and at the Closing
Date, and represented, at the time of delivery, the Company's best estimate of
its future financial performance (it being understood and agreed that
projections, forecasts and budgets, whether delivered on, before or after the
Closing Date and whether delivered pursuant to this SECTION or any other
provision in this Agreement or the other Loan Documents, are by their nature
speculative and are not a guaranty of future performance).
5.06 LITIGATION. There are no actions, suits, proceedings, claims
or disputes pending or, to the knowledge of the Borrower or the Company after
due and diligent investigation, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, by or against any Loan
Party or any of its Subsidiaries or against any of their properties or revenues
that (a) purport to affect or pertain to this Agreement, any other Loan Document
or any Related Document or the consummation of the Transaction, or (b) either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
5.07 NO DEFAULT. Neither any Loan Party nor any of its Subsidiaries
is in default under or with respect to, or a party to, any Contractual
Obligation that could, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. No Default has occurred and is
continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.
5.08 OWNERSHIP OF PROPERTY; LIENS; INVESTMENTS.
(a) Each Loan Party and each of its Subsidiaries has good record
and marketable title in fee simple to, or valid leasehold interests in, all real
property necessary or used in the ordinary conduct of its business, except for
such defects in title as could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(b) The property of the Borrower and its Subsidiaries is not
subject to any Liens, other than Liens set forth on SCHEDULE 5.08(b), or as
otherwise permitted by SECTION 7.01.
(c) Set forth on SCHEDULE 5.08(c) hereto is a complete and
accurate list of all real property owned by any Loan Party or any of its
Subsidiaries as of the Closing Date, showing as of the date hereof the street
address, county or other relevant jurisdiction, state, record owner and, in the
cases of real property acquired after the Closing Date, the purchase price
thereof. Each Loan Party or such Subsidiary has good, marketable and insurable
fee simple title to such real property, free and clear of all Liens, other than
Liens created or permitted by the Loan Documents.
(d) (i) Set forth on SCHEDULE 5.08(d)(i) hereto is a complete
and accurate list of all leases of real property under which any Loan
Party or any of its Subsidiaries is the lessee, showing as of the date
hereof the street address, county or other relevant jurisdiction, state,
lessor, lessee as of the Closing Date, expiration date and annual rental
cost thereof. Each such lease to
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which any Loan Party remains a party, whether in effect on the Closing
Date or thereafter (excluding leases of real property involving less than
1,500 square feet), is the legal, valid and binding obligation of the
lessor thereof, enforceable in accordance with its terms, subject to the
effect of applicable bankruptcy, insolvency, reorganization, receivership,
moratorium and other similar laws relating to or affecting creditor's
rights generally, and the effect of general principles of equity, whether
applied by a court of law or equity.
(ii) Set forth on SCHEDULE 5.08(d)(ii) hereto is a complete and
accurate list of all leases of real property under which any Loan Party is
the lessor as of the Closing Date, showing as of the date hereof the
street address, county or other relevant jurisdiction, state, lessor,
lessee, expiration date and annual rental cost thereof. Each such lease to
which any Loan Party remains a party, whether in effect on the Closing
Date or thereafter (excluding leases of real property involving less than
1,500 square feet), is the legal, valid and binding obligation of the
lessee thereof, enforceable in accordance with its terms, subject to the
effect of applicable bankruptcy, insolvency, reorganization, receivership,
moratorium and other similar laws relating to or affecting creditor's
rights generally, and the effect of general principles of equity, whether
applied by a court of law or equity.
5.09 ENVIRONMENTAL COMPLIANCE.
(a) Each Loan Party conducts in the ordinary course of business a
review of the effect of existing Environmental Laws and claims alleging
potential liability or responsibility for violation of any Environmental Law on
its businesses, operations and properties, and as a result thereof the Borrower
has reasonably concluded that such Environmental Laws and claims could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(b) Except as otherwise set forth on SCHEDULE 5.09, (i) none of
the properties currently or formerly owned or operated by any Loan Party or any
of its Subsidiaries is listed or, to the knowledge of such Loan Party, proposed
for listing on the NPL or on the CERCLIS or any analogous foreign, state or
local list; (ii) there are no underground or aboveground storage tanks or any
surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous
Materials are being or have been treated, stored or disposed on any property
currently owned or operated by any Loan Party or any of its Subsidiaries or, to
the best of its knowledge, on any property formerly owned or operated by any
Loan Party or any of its Subsidiaries; (iii) there is no asbestos or
asbestos-containing material on any property currently owned or operated by any
Loan Party or any of its Subsidiaries; and (iv) Hazardous Materials have not
been released, discharged or disposed of on any property currently or formerly
owned or operated by any Loan Party or any of its Subsidiaries.
(c) Except as otherwise set forth on SCHEDULE 5.09, neither any
Loan Party nor any of its Subsidiaries is undertaking, and has not completed,
either individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of Hazardous Materials at
any site, location or operation, either voluntarily or pursuant to the order of
any Governmental Authority or the requirements of any Environmental Law; and all
Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or operated by
any Loan Party or any of its Subsidiaries have been disposed of in a manner not
reasonably expected to result in material liability to any Loan Party or any of
its Subsidiaries.
5.10 INSURANCE. The properties of each Loan Party and its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Borrower, in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged
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in similar businesses and owning similar properties in localities where such
Loan Party or the applicable Subsidiary operates.
5.11 TAXES. Each Loan Party and its Subsidiaries have filed all
Federal, state and other material tax returns and reports required to be filed,
and have paid all Federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves have been provided in accordance with GAAP. There is no
proposed tax assessment against the Borrower or any Subsidiary that would, if
made, have a Material Adverse Effect. Neither any Loan Party nor any of its
Subsidiaries is party to any tax sharing agreement other than any such agreement
among two or more Loan Parties (and no other Persons) and the Tax Sharing
Agreement (as defined in the Stock Purchase Agreement). Neither the Merger nor
the Acquisition will be taxable to the Company or any of its Subsidiaries or
Affiliates.
5.12 ERISA COMPLIANCE.
(a) Each Plan sponsored by any Loan Party is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
Federal or state Laws. Each Plan sponsored by any Loan Party that is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS or an application for such a letter is currently being
processed by the IRS with respect thereto and, to the knowledge of the Borrower,
nothing has occurred which would prevent, or cause the loss of, such
qualification. Each Loan Party and each ERISA Affiliate have made all required
contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan sponsored by any Loan Party that could be reasonably be
expected to have a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan sponsored by any Loan Party that has resulted or could reasonably be
expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has an "accumulated funding deficiency" (as defined
in Section 412 of the Code), whether or not waived, and no application for a
waiver of the minimum funding standard has been filed with respect to any
Pension Plan; (iii) neither any Loan Party nor, to the knowledge of the Loan
Parties, any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv) neither any
Loan Party nor, to the knowledge of the Loan Parties, any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither any Loan Party nor, to the knowledge of the
Loan Parties, any ERISA Affiliate has engaged in a transaction that could
reasonably be expected to result in a liability to a Loan Party by reason of
Sections 4069 or 4212(c) of ERISA.
5.13 SUBSIDIARIES; EQUITY INTERESTS; LOAN PARTIES. The Borrower has
no Subsidiaries other than those specifically disclosed in Part (a) of SCHEDULE
5.13, and all of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and non-assessable and are owned by a Loan Party
in the amounts specified on Part (a) of SCHEDULE 5.13 free and clear of all
Liens except
65
those created under the Collateral Documents. No Loan Party has any Equity
Interests or other equity investments in any other corporation or entity other
than those specifically disclosed in Part (b) of SCHEDULE 5.13 or as otherwise
permitted under SECTION 7.03. All of the outstanding Equity Interests in each
Loan Party (other than Holdings) have been validly issued, are fully paid and
non-assessable and are owned by such Person or Persons and in the amounts
specified on Part (c) of SCHEDULE 5.13 free and clear of all Liens except those
created under the Collateral Documents. As of the Closing Date, all of the
outstanding Equity Interests in Holdings have been validly issued and are fully
paid and non-assessable and are owned by such Person or Persons and in the
amounts specified on Part (c) of SCHEDULE 5.13, free and clear of all Liens. Set
forth on Part (d) of SCHEDULE 5.13 is a complete and accurate list of all Loan
Parties, showing (as to each Loan Party) the jurisdiction of its incorporation,
the address of its principal place of business and its U.S. taxpayer
identification number. As of the Closing Date, the copy of the charter of each
Loan Party and each amendment thereto provided pursuant to SECTION 4.01(a)(vii)
is a true and correct copy of each such document, each of which is valid and in
full force and effect.
5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT.
(a) The Borrower is not engaged and will not engage, principally
or as one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock and no
proceeds of any Borrowings or drawings under any Letter of Credit will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.
(b) No Loan Party, nor any Person Controlling any Loan Party or
any Subsidiaries of any Loan Party (i) is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, or (ii) is or is required to be registered
as an "investment company" under the Investment Company Act of 1940. Neither the
making of any Loan, nor the issuance of any Letters of Credit, nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated by the Loan Documents, will
violate any provision of any such Act or any rule, regulation or order of the
SEC thereunder.
5.15 DISCLOSURE. The Borrower has disclosed to the Agents and the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries or any other Loan Party is subject, and all other
matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither the Information
Memorandum nor any report, financial statement, certificate or other written
information furnished by or on behalf of any Loan Party to any Agent or any
Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document (in each case as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time; and PROVIDED FURTHER that no representation is made
in this SECTION 5.15 with respect to any materials delivered to the
Administrative Agent or the Lenders pursuant to SECTION 6.02(g), (h) OR (k) or
other materials that may be delivered by the Borrower or its Subsidiaries (other
than materials required to be delivered pursuant to the Loan Documents) that the
Borrower or such Subsidiary specifies in writing at the time of delivery is not
intended to be subject to this SECTION 5.15.
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5.16 INTELLECTUAL PROPERTY; LICENSES, ETC. Except as set forth on
Schedule 5.16, the Borrower and its Subsidiaries own, or possess the right to
use, all of the trademarks, service marks, trade names, copyrights, patents and
other intellectual property rights (collectively, "IP RIGHTS") that are
reasonably necessary for the operation of their respective businesses, without
infringement, dilution or misappropriation with the rights of any other Person.
Except as set forth on Schedule 5.16, to the knowledge of the Borrower, no
slogan or other advertising device, product, process, method, substance, part or
other material employed by the Borrower or any Subsidiary infringes, dilutes or
misappropriates upon any rights held by any other Person. No claim or litigation
regarding any of the foregoing is pending or, to the knowledge of the Borrower,
threatened, which, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
5.17 SOLVENCY. Each Loan Party is, individually and together with
its Subsidiaries, Solvent.
5.18 CASUALTY, ETC. Neither the business nor the properties of any
Loan Party or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that could be reasonably likely to have a
Material Adverse Effect.
5.19 PERFECTION, ETC. Except with the consent of the Administrative
Agent or as otherwise permitted under the Loan Documents, all filings and other
actions necessary or desirable to perfect (to the extent that perfection can be
achieved by such filing or other action) and protect the security interest in
the Collateral created under the Collateral Documents have been (or
contemporaneously herewith will be) duly made or taken and are (or, upon making
such filings or taking such action, will be) in full force and effect, and the
Collateral Documents create in favor of the Administrative Agent for the benefit
of the Secured Parties a valid and, together with such filings and other
actions, perfected first priority security interest in the Collateral (to the
extent that perfection can be achieved by such filing or other action), subject
to Liens permitted under SECTION 7.01, securing the payment of the Secured
Obligations, and all filings and other actions necessary or desirable to perfect
and protect such security interest have been (or contemporaneously herewith will
be) duly taken. The Loan Parties are the legal and beneficial owners of the
Collateral free and clear of any Lien, except for the liens and security
interests created or permitted under the Loan Documents.
5.20 DESIGNATION AS SENIOR INDEBTEDNESS. The Obligations of the
Loan Parties under the Loan Documents constitute "Senior Indebtedness" and
"Designated Senior Indebtedness" under and as defined in the Senior Subordinated
Indenture, as supplemented from time to time.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan
or other Obligation hereunder which is accrued and payable shall remain unpaid
or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower
shall, and shall (except in the case of the covenants set forth in SECTIONS
6.01, 6.02, 6.03 and 6.11) cause each Subsidiary to:
6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
(a) as soon as available, but in any event within 90 days after
the end of each fiscal year of the Borrower (commencing with the fiscal
year ended March 5, 2005), a consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal year, and the related
67
consolidated statements of income or operations, shareholders' equity and
cash flows for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail
and prepared in accordance with GAAP, audited and accompanied by a report
and opinion of an independent certified public accountant of nationally
recognized standing reasonably acceptable to the Required Lenders, which
report and opinion shall be prepared in accordance with generally accepted
auditing standards and shall not be subject to any "going concern" or like
qualification or exception or any qualification or exception as to the
scope of such audit;
(b) as soon as available, but in any event within 45 days after
the end of each of the first three fiscal quarters of each fiscal year of
the Borrower (commencing with the fiscal quarter ended June 5, 2004), a
consolidated balance sheet of the Borrower and its Subsidiaries as at the
end of such fiscal quarter, and the related consolidated statements of
income or operations, shareholders' equity and cash flows for such fiscal
quarter and for the portion of the Borrower's fiscal year then ended,
setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable
detail and certified by a Responsible Officer of the Borrower as fairly
presenting the financial condition, results of operations, shareholders'
equity and cash flows of the Borrower and its Subsidiaries in accordance
with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes; and
(c) as soon as available, but in any event no later than 30 days
after the end of each fiscal year (commencing with the fiscal year ended
March 5, 2005), forecasts prepared by management of the Borrower, in form
reasonably satisfactory to the Administrative Agent, of consolidated
balance sheets, income statements and cash flow statements of the Borrower
and its Subsidiaries on a quarterly basis for the fiscal year following
such fiscal year.
As to any information contained in materials furnished pursuant to SECTION
6.02(d), the Borrower shall not be separately required to furnish such
information under SECTION 6.01(a) OR (b), but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in SECTIONS 6.01(a) AND (b) at the times specified therein.
6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative
Agent and each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:
(a) concurrently with the delivery of the financial statements
referred to in SECTION 6.01(a), a certificate of its independent certified
public accountants certifying such financial statements and stating that
in making the examination necessary therefor no knowledge was obtained of
any Default or, if any such Default shall exist, stating the nature and
status of such event;
(b) concurrently with the delivery of the financial statements
referred to in SECTIONS 6.01(a) and (b), a duly completed Compliance
Certificate signed by a Responsible Officer of the Borrower, and in the
event of any change in generally accepted accounting principles used in
the preparation of such financial statements, the Borrower shall also
provide, if necessary for the determination of compliance with SECTION
7.10, a statement of reconciliation conforming such financial statements
to GAAP;
(c) promptly after any request by the Administrative Agent or any
Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit
committee of the board of directors) of any Loan Party by independent
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accountants in connection with the accounts or books of any Loan Party or
any of its Subsidiaries, or any audit of any of them;
(d) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent
to the stockholders of any Loan Party, and copies of all annual, regular,
periodic and special reports and registration statements which any Loan
Party may file or be required to file with the SEC under Section 13 or
15(d) of the Securities Exchange Act of 1934, or with any Governmental
Authority that may be substituted therefor, or with any national
securities exchange, and in any case not otherwise required to be
delivered to the Administrative Agent pursuant hereto;
(e) promptly after the furnishing thereof, copies of any statement
or report furnished to any holder of debt securities of any Loan Party or
of any of its Subsidiaries pursuant to the terms of any indenture, loan or
credit or similar agreement and not otherwise required to be furnished to
the Lenders pursuant to any other clause of this SECTION 6.02;
(f) as soon as available and in any event within 30 days after the
end of each fiscal year (commencing with the fiscal year ended March 5,
2005), a report summarizing the insurance coverage (specifying type,
amount and carrier) in effect for each Loan Party and its Subsidiaries and
containing such additional information as the Administrative Agent, or any
Lender through the Administrative Agent, may reasonably specify;
(g) promptly and in any event within five Business Days after
receipt thereof by any Loan Party or any of its Subsidiaries, copies of
each notice or other correspondence received from the SEC (or comparable
agency in any applicable non-U.S. jurisdiction) concerning any
investigation or possible investigation or other inquiry by such agency
regarding financial or other operational results of any Loan Party or any
of its Subsidiaries;
(h) promptly upon receipt thereof, copies of all notices, requests
and other documents received by any Loan Party or any of its Subsidiaries
under or pursuant to (i) any instrument, indenture, or loan or credit or
similar agreement, in respect of Indebtedness having an aggregate
principal amount in excess of the Threshold Amount or (ii) any Related
Document regarding or related to any breach or default by any party
thereto, and copies of any amendment, modification or waiver of any
provision of any Related Document and, from time to time upon request by
the Administrative Agent, such other information and reports regarding any
of the Related Documents or any Indebtedness in excess of the Threshold
Amount as the Administrative Agent may reasonably request;
(i) promptly after the assertion or occurrence thereof, notice of
any Environmental Action against or of any noncompliance by any Loan Party
or any of its Subsidiaries with any Environmental Law or Environmental
Permit that could (i) reasonably be expected to have a Material Adverse
Effect or (ii) cause any property described in the Mortgages to be subject
to any material restrictions on ownership, occupancy, use or
transferability under any Environmental Law;
(j) not less frequently than annually, a report supplementing
SCHEDULES 5.08(c) and 5.08(d)(i) AND (ii), 5.08(e) and 5.13 hereto,
including an identification of all owned and leased real property disposed
of by any Loan Party or any of its Subsidiaries during such fiscal year, a
list and description (including the street address, county or other
relevant jurisdiction and state and, in the case of leases of property,
lessor, lessee, expiration date and annual rental cost thereof and, in the
case of owned real property, the purchase price thereof) of all real
property acquired or
69
leased during such fiscal year (in the case of leases, exceeding 1,500
square feet) and a description of such other changes in the information
included in such Schedules as may be necessary for such Schedules to be
accurate and complete;
(k) promptly after the receipt thereof, copies of all Revenue
Agent Reports (Internal Revenue Service Form 886), or other written
proposals of the Internal Revenue Service, that propose, determine or
otherwise set forth positive adjustments to the Federal income tax
liability of the affiliated group (within the meaning of Section
1504(a)(1) of the Code) of which the Borrower is a member aggregating
$1,000,000 or more; and
(l) promptly, such additional information regarding the business,
financial, legal or corporate affairs of any Loan Party or any of its
Subsidiaries, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may from time to time reasonably
request.
Documents required to be delivered pursuant to SECTION 6.01(a) OR (b) OR SECTION
6.02(d) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) on which the Borrower posts
such documents, or provides a link thereto on the Borrower's website on the
Internet at the website address listed on SCHEDULE 10.02; or (ii) on which such
documents are posted on the Borrower's behalf on an Internet or intranet
website, if any, to which each Lender and each Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); PROVIDED that: (i) the Borrower shall deliver paper copies of such
documents to the Administrative Agent or any Lender that requests the Borrower
to deliver such paper copies until a written request to cease delivering paper
copies is given by the Administrative Agent or such Lender and (ii) the Borrower
shall notify the Administrative Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (I.E., soft copies)
of such documents. Notwithstanding anything contained herein, in every instance
the Borrower shall be required to provide paper copies of the Compliance
Certificates required by SECTION 6.02(c) to the Administrative Agent. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
6.03 NOTICES. Promptly notify the Administrative Agent and each
Lender:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect;
(c) of the occurrence of any ERISA Event;
(d) of any material change in accounting policies or financial
reporting practices by any Loan Party or any of its Subsidiaries; and
(e) of the (i) occurrence of any Disposition of property or assets
for which the Borrower is required to make a mandatory repayment pursuant
to SECTION 2.06(b)(ii), (ii) occurrence of any sale of capital stock or
other Equity Interests for which the Borrower is required to make a
mandatory repayment pursuant to SECTION 2.06(b)(iii), (iii) incurrence or
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issuance of any Indebtedness for which the Borrower is required to make a
mandatory repayment pursuant to SECTION 2.06(b)(iv) and (iv) receipt of
any Extraordinary Receipt for which the Borrower is required to make a
mandatory repayment pursuant to SECTION 2.06(b)(v).
Each notice pursuant to this SECTION shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to SECTION 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.
6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall
become due and payable or within 45 days thereafter, all its obligations and
liabilities, including (a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets and all lawful claims
which, if unpaid, would by law become a Lien upon its property; PROVIDED,
HOWEVER, that neither the Borrower nor any of its Subsidiaries shall be required
to pay or discharge any such obligation that is being contested in good faith
and (where appropriate) by proper proceedings and as to which appropriate
reserves are being maintained; and (b) all Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any instrument
or agreement evidencing such Indebtedness.
6.05 PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and
maintain in full force and effect its legal existence and good standing under
the Laws of the jurisdiction of its organization except in a transaction
permitted by SECTION 7.04 OR 7.05; PROVIDED, HOWEVER, that the Borrower may
consummate the Merger and the Acquisition; (b) take all reasonable action to
maintain all rights, privileges, permits, licenses and franchises necessary in
the normal conduct of its business, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (c)
preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
6.06 MAINTENANCE OF PROPERTIES. Maintain, preserve, protect and
repair all of its material properties and equipment necessary in the operation
of its business in good working order and condition, ordinary wear and tear
excepted.
6.07 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons and providing for not less than 30 days'
prior notice to the Administrative Agent of termination, lapse or cancellation
of such insurance.
6.08 COMPLIANCE WITH LAWS. Comply in all material respects with the
requirements of all Laws applicable to it or its business or property and all
orders, writs, injunctions and decrees binding on it or its business or
property, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted; or (b) the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.
6.09 BOOKS AND RECORDS. (a) Maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of the financial transactions and matters
involving the assets and business of the Borrower or such Subsidiary, as the
case may be; and (b) maintain such books of record and account in material
conformity with all applicable
71
requirements of any Governmental Authority having regulatory jurisdiction over
the Borrower or such Subsidiary, as the case may be.
6.10 INSPECTION RIGHTS. Permit representatives and independent
contractors of each Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants (at
which an authorized representative of the Borrower shall be entitled to be
present), all at the expense of the Borrower and at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower; PROVIDED, HOWEVER, that (a) unless an Event of
Default has occurred and is continuing, the Borrower shall not be responsible
for the expense of any such inspections other than one inspection per year by
the Administrative Agent, and (b) when an Event of Default exists any Agent or
any Lender (or any of their respective representatives or independent
contractors) may do any of the foregoing at the expense of the Borrower at any
time during normal business hours and without advance notice.
6.11 USE OF PROCEEDS. Use the proceeds of the Credit Extensions to
(a) finance in part the Acquisition; (b) refinance certain Existing Indebtedness
and any preferred stock of the Company and its Subsidiaries (including, without
limitation, the Company's Existing
Credit Agreement and the redemption (on the
Closing Date or within 35 days thereafter) of all of the Company's 10-3/4%
Senior Notes due 2006); (c) to pay fees and expenses incurred in connection with
the Transaction; and (d) provide ongoing working capital and for general
corporate purposes not in contravention of any Law or of any Loan Document;
PROVIDED that such proceeds shall not be used to fund any portion of the "Cash
Increase" (as defined in the Earnout Provision) if the PRO FORMA Consolidated
Leverage Ratio for the twelve-month period most recently ended, calculated as if
the Transaction had occurred on the first day of such twelve-month period, is
greater than 5.15 to 1.00.
6.12 COVENANT TO GUARANTEE OBLIGATIONS AND GIVE SECURITY. Upon (a)
the request of the Administrative Agent following the occurrence and during the
continuance of a Default, (b) the formation or acquisition of any new direct or
indirect Subsidiary by any Loan Party or any of its Subsidiaries or (c) the
acquisition of any property by any Loan Party or any of its Subsidiaries that is
not already be subject to a perfected first priority security interest (subject
to Permitted Liens) in favor of the Collateral Agent for the benefit of the
Secured Parties, the Borrower shall, in each case at the Borrower's expense:
(i) in connection with the formation or acquisition of a
Subsidiary (A) that is neither a CFC nor a Subsidiary that is held
directly or indirectly by a CFC (a "DOMESTIC SUBSIDIARY"), or (B) that is
a CFC or held directly or indirectly by a CFC, to the extent no material
adverse tax consequences to the Borrower would result therefrom, within 10
Business Days after such formation or acquisition, cause each such
Subsidiary, and cause each direct and indirect parent of such Subsidiary
(if it has not already done so), to duly execute and deliver to the
Administrative Agent a guaranty or guaranty supplement, in form and
substance reasonably satisfactory to the Administrative Agent,
guaranteeing the other Loan Parties' obligations under the Loan Documents,
(ii) within 10 Business Days after such request, formation or
acquisition, furnish to the Administrative Agent a description of the
material real and personal properties of the Loan Parties and their
respective Subsidiaries in detail reasonably satisfactory to the
Administrative Agent,
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(iii) within 15 Business Days after such request, formation or
acquisition, duly execute and deliver, and cause each such Subsidiary and
each direct and indirect parent of such Subsidiary (if it has not already
done so) to duly execute and deliver, to the Administrative Agent
mortgages, pledges, assignments, Security Agreement Supplements, IP
Security Agreement Supplements and other instruments of the type specified
in SECTION 4.01(a)(iii), in form and substance consistent with the
Collateral Documents delivered on the Closing Date and reasonably
satisfactory to the Collateral Agent (including delivery of all Pledged
Interests in and of such Subsidiary), securing payment of all the
Obligations of the applicable Loan Party, such Subsidiary or such parent,
as the case may be, under the Loan Documents and constituting Liens on the
Equity Interests of such Subsidiary and in its assets; PROVIDED that (A)
the Equity Interests of any Subsidiary of a Loan Party held directly or
indirectly by a CFC shall not be pledged, and (B) if such new property is
Equity Interests in a CFC or assets of a CFC and to the extent the pledge
of greater than 65% of such Equity Interests or a pledge, Lien or security
interest in such assets would result in material adverse tax consequences
to the Borrower, only 65% of such Equity Interests shall be pledged in
favor of the Secured Parties and no pledge, Lien or security interest
shall be granted in such assets in favor of the Secured Parties.
(iv) within 30 days after such request, formation or acquisition,
take, and cause such Subsidiary or such parent to take (other than any
Subsidiary of a Loan Party that is a CFC or whose direct or indirect
parent is a CFC), whatever action (including, without limitation, the
recording of mortgages, the filing of Uniform Commercial Code financing
statements, the giving of notices and the endorsement of notices on title
documents) may be necessary or advisable in the reasonable opinion of the
Administrative Agent to vest in the Collateral Agent (or in any
representative of the Collateral Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the
mortgages, pledges, assignments, Security Agreement Supplements, IP
Security Agreement Supplements and security agreements delivered pursuant
to this SECTION 6.12, enforceable against third parties in accordance with
their terms,
(v) within 60 days after such request, formation or acquisition,
deliver to the Administrative Agent, upon the reasonable request of the
Administrative Agent in its sole discretion, a signed copy of a favorable
opinion, addressed to the Administrative Agent, the Collateral Agent and
the other Secured Parties, of counsel for the Loan Parties acceptable to
the Administrative Agent as to the matters contained in clauses (i), (iii)
and (iv) above, as to such guaranties, guaranty supplements, mortgages,
pledges, assignments, Security Agreement Supplements, IP Security
Agreement Supplements and security agreements being legal, valid and
binding obligations of each Loan Party party thereto enforceable in
accordance with their terms, as to the matters contained in clause (iv)
above, as to such recordings, filings, notices, endorsements and other
actions being sufficient to create valid perfected Liens on such
properties, and as to such other matters as the Administrative Agent may
reasonably request,
(vi) as promptly as practicable after such request, formation or
acquisition, deliver, upon the reasonable request of the Administrative
Agent, to the Administrative Agent with respect to each parcel of real
property owned or leased by the entity that is the subject of such request
(not to include any Subsidiary of a Loan Party that is a CFC or a
Subsidiary of a Loan Party that is held directly or indirectly by a CFC to
the extent material adverse tax consequences to the Borrower would result
therefrom), formation or acquisition title reports, surveys and
environmental assessment reports, and such other reports as the
Administrative Agent may reasonably request, each in scope, form and
substance reasonably satisfactory to the Collateral Agent,
73
(vii) upon the occurrence and during the continuance of an Event of
Default, with respect to any and all cash dividends paid or payable to it
or any of its Subsidiaries from any of its Subsidiaries from time to time
upon the Administrative Agent's request, promptly execute and deliver, or
cause such Subsidiary to promptly execute and deliver, as the case may be,
any and all further instruments and take or cause such Subsidiary to take,
as the case may be, all such other action as the Administrative Agent may
reasonably deem necessary or desirable in order to obtain and maintain
from and after the time such dividend is paid or payable a perfected,
first priority lien on and security interest in such dividends, and
(viii) at any time and from time to time, promptly execute and
deliver any and all further instruments and documents and take all such
other action as the Administrative Agent may reasonably deem necessary or
desirable in perfecting and preserving the Liens of such mortgages,
pledges, assignments, Security Agreement Supplements, IP Security
Agreement Supplements and security agreements.
6.13 COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause all
lessees and other Persons operating or occupying its properties to comply, in
all material respects, with all applicable Environmental Laws and Environmental
Permits; obtain and renew all Environmental Permits necessary for its operations
and properties; and conduct any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to materially
comply with all Environmental Laws; PROVIDED, HOWEVER, that neither the Borrower
nor any of its Subsidiaries shall be required to undertake any such cleanup,
removal, remedial or other action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and appropriate reserves
are being maintained with respect to such circumstances.
6.14 PREPARATION OF ENVIRONMENTAL REPORTS. In the event that the
Required Lenders reasonably believe that the Borrower has breached any provision
of this Agreement relating to environmental matters, at the written request of
the Required Lenders from time to time, which shall specify in reasonable detail
the basis for such request, provide to the Lenders within 60 days after such
request, at the expense of the Borrower, an environmental site assessment report
for any of its properties described in such request, prepared by an
environmental consulting firm acceptable to the Administrative Agent, indicating
the presence or absence of such breach and the estimated cost of any compliance,
removal or remedial action in connection with curing such breach; without
limiting the generality of the foregoing, if the Administrative Agent determines
at any time that a material risk exists that any such report will not be
provided within the time referred to above, the Administrative Agent may retain
an environmental consulting firm to prepare such report at the expense of the
Borrower, and the Borrower hereby grants and agrees to cause any Subsidiary that
owns any property described in such request to grant at the time of such request
to the Administrative Agent, the Lenders, such firm and any agents or
representatives thereof an irrevocable non-exclusive license, subject to the
rights of tenants, to enter onto their respective properties to undertake such
an assessment.
6.15 FURTHER ASSURANCES. Promptly upon request by any Agent, or
any Lender through the Administrative Agent, (i) correct any material defect or
error in the execution, acknowledgment, filing or recordation of any Loan
Document, and (ii) execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register any and all such further deeds, certificates,
assurances and other instruments as any Agent, or any Lender through the
Administrative Agent, may reasonably require from time to time in order to (A)
carry out more effectively the purposes of the Loan Documents, (B) to the
fullest extent permitted by applicable law, subject any Loan Party's or any of
its Subsidiaries' properties, assets, rights or interests now or hereafter
intended to be covered by any of the Collateral Documents to the Liens of the
Collateral Documents, (C) perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and any of the Liens intended to be
created thereunder and (D) assure, convey,
74
grant, assign, transfer, preserve, protect and confirm more effectively unto the
Secured Parties the rights and Liens granted or now or hereafter intended to be
granted to the Secured Parties under any Loan Document or under any other
instrument executed in connection with any Loan Document to which any Loan Party
or any of its Subsidiaries is or is to be a party, and cause each of its
Subsidiaries to do so.
6.16 COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all payments and
otherwise perform all obligations in respect of all leases of real property to
which the Borrower or any of its Subsidiaries is a party, keep such leases in
full force and effect and not allow such leases to lapse or be terminated or any
rights to renew such leases to be forfeited or cancelled, notify the
Administrative Agent of any default by any party with respect to such leases and
cooperate with the Administrative Agent in all respects to cure any such
default, and cause each of its Subsidiaries to do so, except, in any case, where
the failure to do so, either individually or in the aggregate, could not be
reasonably likely to have a Material Adverse Effect.
6.17 CASH COLLATERAL ACCOUNTS. Maintain the Cash Collateral Account
with Wachovia or another commercial bank located in the United States that has
executed an account control agreement with the Borrower and the Collateral Agent
for the benefit of the Secured Parties pursuant to the Security Agreement.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan
or other Obligation hereunder which is accrued and payable shall remain unpaid
or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower
shall not, nor shall it permit any Subsidiary to, directly or indirectly:
7.01 LIENS. Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, or sign or file or suffer to exist under the Uniform Commercial Code
of any jurisdiction a financing statement that names the Borrower or any of its
Subsidiaries as debtor, or sign or suffer to exist any security agreement
authorizing any secured party thereunder to file such financing statement, or
assign any accounts or other right to receive income, other than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on SCHEDULE
5.08(b) and any renewals or extensions thereof; PROVIDED that (i) the
property covered thereby is not changed, (ii) the amount not increased,
(iii) none of the Loan Parties or their Subsidiaries shall become a direct
or contingent obligor and (iv) any renewal or extension of the obligations
secured or benefited thereby is permitted by SECTION 7.02(c)(ii);
(c) Liens for taxes not yet due or which are being contested in
good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the
applicable Person in accordance with GAAP;
(d) landlords', carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business which are not overdue for a period of more than 30 days
or which are being contested in good faith and by appropriate proceedings
75
diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person;
(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts
and leases (other than Indebtedness), statutory obligations, surety bonds
(other than bonds related to judgments or litigation), performance bonds
and other obligations of a like nature incurred in the ordinary course of
business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which either exist as of the Closing
Date or, in the aggregate, are not substantial in amount, and which do not
in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business
of the applicable Person;
(h) Liens securing judgments for the payment of money not
constituting an Event of Default under SECTION 8.01(h) or securing appeal
or other surety bonds related to such judgments;
(i) Liens securing Indebtedness permitted under SECTION
7.02(c)(iv) OR (viii); PROVIDED that (i) such Liens do not at any time
encumber any property other than the property financed by such
Indebtedness, (ii) the Indebtedness secured thereby does not exceed the
cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition and (iii) with respect to Capitalized
Leases, such Liens do not at any time extend to or cover any Collateral or
assets other than the assets subject to such Capitalized Leases;
(j) Liens on property or assets of a Person (other than any Equity
Interests in any Person) existing at the time such Person is merged into
or consolidated with the Borrower or any Subsidiary or becomes a
Subsidiary of the Borrower or any Subsidiary Guarantor; PROVIDED that any
such Lien was not created in contemplation of such merger, consolidation
or investment and does not extend to any assets other than those of the
Person merged into or consolidated with the Borrower or such Subsidiary or
acquired by the Borrower or such Subsidiary; and PROVIDED FURTHER that any
Indebtedness or other Obligations secured by such Liens shall otherwise be
permitted under SECTION 7.02;
(k) banker's liens, rights of setoff and other similar Liens
existing solely with respect to cash and Cash Equivalents on deposit in
one or more accounts maintained by the Borrower or its Subsidiaries;
(l) any interest or title of a licensor, sublicensor, lessor or
sublessor with respect to any assets under any license or lease agreement
entered into in the ordinary course of business; PROVIDED that the same
(i) do not in any material respect interfere with the business of the
Borrower or its Subsidiaries or materially detract from the value of the
relative assets of the Borrower or its Subsidiaries and (ii) are subject
and subordinate to any Lien on such assets pursuant to the Collateral
Documents;
(m) licenses, sublicenses, leases or subleases with respect to any
assets granted to third Persons in the ordinary course of business;
PROVIDED that the same (i) do not in any material respect interfere with
the business of the Borrower or its Subsidiaries or materially detract
from
76
the value of the relative assets of the Borrower or its Subsidiaries and
(ii) are subject and subordinate to any Lien on such assets pursuant to
the Collateral Documents;
(n) Liens which arise under Article 4 of the Uniform Commercial
Code in any applicable jurisdictions on items in collection and documents
and proceeds related thereto;
(o) precautionary filings of financing statements under the
Uniform Commercial Code of any applicable jurisdictions in respect of
operating leases or consignments entered into by the Borrower or its
Subsidiaries in the ordinary course of business;
(p) Liens on any property or assets (other than any Equity
Interests in any Person) existing at the time such property or assets is
or are purchased or otherwise acquired by the Borrower or any of its
Subsidiaries; PROVIDED that any such Lien was not created in contemplation
of such purchase or acquisition and does not extend to any assets other
than the assets so acquired by the Borrower or such Subsidiary; and
PROVIDED FURTHER that any Indebtedness or other Obligations secured by
such Liens shall otherwise be permitted under SECTION 7.02; and
(q) other Liens securing Indebtedness outstanding in an aggregate
principal amount not to exceed $2,500,000; PROVIDED that no such Lien
shall extend to or cover any Collateral or may be granted when any Default
shall have occurred and be continuing.
7.02 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) in the case of the Borrower:
(i) Indebtedness in respect of Swap Contracts designed to
hedge against fluctuations in interest rates, and not for
speculative purposes, incurred in the ordinary course of business
and consistent with prudent business practice;
(ii) Indebtedness owed to a Subsidiary Guarantor, which
Indebtedness shall (A) constitute Pledged Debt, (B) be on terms
acceptable to the Administrative Agent and (C) be evidenced by
promissory notes in form and substance satisfactory to the
Administrative Agent and such promissory notes shall be pledged as
security for the Obligations of the holder thereof under the Loan
Documents to which such holder is a party and delivered to the
Collateral Agent pursuant to the terms of the Security Agreement,
and
(iii) Indebtedness evidenced by the Senior Subordinated Notes,
in an aggregate principal amount not to exceed $125 million;
(b) in the case of any Subsidiary, Indebtedness owed to the
Borrower or to a Subsidiary Guarantor; PROVIDED that (i) such Indebtedness
(A) shall constitute Pledged Debt, (B) shall be on terms acceptable to the
Administrative Agent and (C) shall be evidenced by promissory notes in
form and substance satisfactory to the Administrative Agent and such
promissory notes shall be pledged as security for the Obligations of the
holder thereof under the Loan Documents to which such holder is a party
and delivered to the Collateral Agent pursuant to the terms of the
Security Agreement and (ii) in the case of any such Indebtedness of a
Subsidiary that is not a Loan Party, such Indebtedness shall be (A) on
terms acceptable to the Administrative Agent and (B) in an aggregate
amount for all such Subsidiaries not to exceed $2,500,000 at any time
outstanding; and
77
(c) in the case of the Borrower and the Subsidiary Guarantors,
without duplication:
(i) Indebtedness under the Loan Documents;
(ii) Surviving Indebtedness outstanding on the date hereof
and listed on PART (b) of SCHEDULE 5.05 and any refinancings,
refundings, renewals or extensions of such Surviving Indebtedness or
of the Senior Subordinated Notes; PROVIDED that the amount of such
Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing
and the direct and contingent obligors thereof shall not be changed,
as a result of or in connection with such refinancing, refunding,
renewal or extension; PROVIDED STILL FURTHER that the terms relating
to principal amount, amortization, maturity, collateral (if any) and
subordination (if any), and other material terms taken as a whole,
of any such extending, refunding or refinancing Indebtedness, and of
any agreement entered into and of any instrument issued in
connection therewith, are no less favorable in any material respect
to the Loan Parties or the Lenders than the terms of any agreement
or instrument governing the Indebtedness being extended, refunded or
refinanced and the interest rate applicable to any such extending,
refunding or refinancing Indebtedness does not exceed the then
applicable market interest rate;
(iii) Guarantees of the Borrower or any Subsidiary Guarantor
in respect of Indebtedness otherwise permitted hereunder of the
Borrower or any of the Subsidiary Guarantors;
(iv) Indebtedness in respect of Capitalized Leases,
Synthetic Lease Obligations and purchase money obligations for fixed
or capital assets within the limitations set forth in SECTION
7.01(i); PROVIDED, HOWEVER, that the aggregate amount of all such
Indebtedness at any one time outstanding shall not exceed
$5,000,000;
(v) Indebtedness of any Person that becomes a Subsidiary
Guarantor after the date hereof in accordance with the terms of
SECTION 7.03(i) which Indebtedness is existing at the time such
Person becomes a Subsidiary of the Borrower (other than Indebtedness
incurred solely in contemplation of such Person becoming a
Subsidiary);
(vi) Indebtedness consisting of promissory notes issued by
any Loan Party to current or former officers, directors and
employees (or their estates, spouses or former spouses) of the
Borrower or any Guarantor issued to purchase or redeem capital stock
of the Parent permitted by SECTION 7.06;
(vii) amounts owed by the Borrower or its Subsidiaries under
the Stock Purchase Agreement and the Tax Sharing Agreement as in
effect on the date hereof, in each case to the extent that such
amounts are paid within 10 Business Days after the same become due
and payable pursuant to the terms thereof as in effect on the date
hereof;
(viii) Indebtedness incurred to finance Qualifying Facility
Capex in an aggregate principal amount not to exceed $20,000,000;
and
(ix) unsecured Indebtedness in an aggregate principal amount
not to exceed $7,500,000 at any time outstanding.
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7.03 INVESTMENTS. Make or hold any Investments, except:
(a) Investments held by the Borrower or such Subsidiary in the
form of cash or Cash Equivalents;
(b) advances to officers, directors and employees of the Borrower
and Subsidiaries in an aggregate amount not to exceed $750,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(c) equity Investments of the Borrower in any Subsidiary Guarantor
and Investments of any Subsidiary in the Borrower or in another Subsidiary
Guarantor;
(d) Investments consisting of extensions of credit in the nature
of accounts receivable or notes receivable arising from the grant of trade
credit in the ordinary course of business, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary in order to prevent or
limit loss;
(e) Guarantees permitted by SECTION 7.02;
(f) Investments existing on the date hereof and set forth on
SCHEDULE 7.03(f);
(g) Investments by the Borrower in Swap Contracts permitted under
SECTION 7.02(a)(i);
(h) Investments consisting of intercompany debt permitted under
SECTION 7.02(a)(ii) OR 7.02(b); and
(i) the purchase or other acquisition of all of the Equity
Interests in, any Person that, upon the consummation thereof, will be
wholly owned directly by the Borrower or one or more of its wholly-owned
Subsidiaries (including, without limitation, as a result of a merger or
consolidation) or the purchase or other acquisition of all or
substantially all of the property and assets of any Person; PROVIDED that,
with respect to each purchase or other acquisition made pursuant to this
SECTION 7.03(i):
(i) any such newly created or acquired Subsidiary shall
comply with the requirements of SECTIONS 6.12;
(ii) the lines of business of the Person to be (or the
property and assets of which are to be) so purchased or otherwise
acquired shall be substantially the same lines of business as one or
more of the principal businesses of the Borrower and its
Subsidiaries in the ordinary course;
(iii) such purchase or other acquisition shall not include or
result in any contingent liabilities that could reasonably be
expected to be material to the business, financial condition,
operations or prospects of the Borrower and its Subsidiaries, taken
as a whole (as determined in good faith by the board of directors
(or the persons performing similar functions) of the Borrower or
such Subsidiary if the board of directors is otherwise approving
such transaction and, in each other case, by a Responsible Officer);
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(iv) the total cash and noncash consideration (including,
without limitation, the fair market value of all Equity Interests
issued or transferred to the sellers thereof, all indemnities,
earnouts and other contingent payment obligations to, and the
aggregate amounts paid or to be paid under noncompete, consulting
and other affiliated agreements with, the sellers thereof, all
write-downs of property and assets and reserves for liabilities with
respect thereto and all assumptions of debt, liabilities and other
obligations in connection therewith) paid by or on behalf of the
Borrower and its Subsidiaries for any such purchase or other
acquisition (A) shall not exceed $10,000,000 and (B) when aggregated
with the total cash and noncash consideration paid by or on behalf
of the Borrower and its Subsidiaries for all other purchases and
other acquisitions made by the Borrower and its Subsidiaries
pursuant to this SECTION 7.03(i), shall not exceed $30,000,000;
PROVIDED that, in any event, no such Investment may be made pursuant
to this clause (iv) unless, after giving effect to the consummation
of such purchase or other acquisition, at least $5,000,000 is
available to be drawn under the Revolving Credit Facility after
consummation of such purchase or other acquisition;
(v) (A) immediately before and immediately after giving PRO
FORMA effect to any such purchase or other acquisition, no Default
shall have occurred and be continuing and (B) immediately after
giving effect to such purchase or other acquisition, the Borrower
and its Subsidiaries shall be in PRO FORMA compliance with all of
the covenants set forth in SECTION 7.10, such compliance to be
determined on the basis of the financial information most recently
delivered to the Agents and the Lenders pursuant to SECTION 6.01(a)
OR (b) as though such purchase or other acquisition had been
consummated as of the first day of the twelve-month period ending as
of the last day of the fiscal period covered thereby; and
(vi) the Borrower shall have delivered to the Administrative
Agent, on behalf of the Lenders, at least five Business Days prior
to the date on which any such purchase or other acquisition is to be
consummated, a certificate of a Responsible Officer, in form and
substance reasonably satisfactory to the Administrative Agent,
certifying that all of the requirements set forth in this SECTION
7.03(i) have been satisfied or will be satisfied on or prior to the
consummation of such purchase or other acquisition; and
(j) the portion of any Permitted Investments described in CLAUSE
(a) of the definition thereof made with the proceeds of equity contributed
by the Investors and their Affiliates to Holdings which is in turn
contributed through the Parent to the Borrower; PROVIDED that (i)
immediately before and immediately after giving PRO FORMA effect to any
such Investment no Default shall have occurred and be continuing and (ii)
the Person, business or assets acquired shall have had positive PRO FORMA
Consolidated EBITDA (assuming for such purposes that the definition of
such term referred to such Person, business or assets in lieu of the
Borrower) for the twelve-month period most recently ended, calculated as
if the Investment had been made on the first day of such twelve-month
period;
(k) loans and advances to Holdings in lieu of, and not in excess
of the amount of (after giving effect to any other loans, advances or
Restricted Payments in respect thereof) Restricted Payments to the extent
permitted to be made to Holdings in accordance with SECTION 7.06;
(l) prepaid expenses or lease, utility and other similar deposits,
in each case made in the ordinary course of business;
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(m) Investments by the Borrower and its Subsidiaries outstanding
at any time in joint ventures and partnerships in an aggregate amount not
to exceed $2,500,000; PROVIDED that, with respect to each Investment made
pursuant to this SECTION 7.03(m):
(i) if such Investment is as a general partner, such
Investment shall be made by a Subsidiary that has no assets other
than such Investment; and in any case, such Investment shall not
include or result in any contingent liabilities that could
reasonably be expected to be material to the business, financial
condition, operations or prospects of the Borrower and its
Subsidiaries, taken as a whole;
(ii) such joint venture or partnership shall be engaged in a
business which is substantially the same as one or more of the
principal businesses of the Borrower and its Subsidiaries in the
ordinary course; and
(iii) any determination of the amount of such Investment shall
include all cash and noncash consideration paid by or on behalf of
the Borrower and its Subsidiaries in connection with such
Investment.
(n) other Investments (including those of the types described in
CLAUSES (a) through (l) above) not exceeding $2,500,000 in the aggregate
in any fiscal year of the Borrower.
7.04 FUNDAMENTAL CHANGES. Merge, dissolve, liquidate, consolidate
with or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) the Borrower; PROVIDED that
the Borrower shall be the continuing or surviving Person, or (ii) any one
or more other Subsidiaries, PROVIDED that when any Subsidiary Guarantor is
merging with another Subsidiary, the Subsidiary Guarantor shall be the
continuing or surviving Person;
(b) any Subsidiary may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or to
another Subsidiary; PROVIDED that a Subsidiary Guarantor may make such
Disposal to the Borrower or another Subsidiary Guarantor;
(c) any Subsidiary which is not a Loan Party may dispose of all or
substantially all its assets to the Borrower or another Subsidiary;
(d) the Borrower and its Subsidiaries may consummate the
Acquisition and the Merger; and
(e) in connection with any acquisition permitted under SECTION
7.03, any Subsidiary may merge into or consolidate with any other Person
or permit any other Person to merge into or consolidate with it; PROVIDED
that the Person surviving such merger shall be a wholly-owned Subsidiary
and the Person surviving any such merger involving a Subsidiary Guarantor
shall be a Subsidiary Guarantor;
PROVIDED, HOWEVER, that in each case, immediately after giving effect
thereto, no Default shall have occurred and be continuing.
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7.05 DISPOSITIONS. Make any Disposition or enter into any agreement
to make any Disposition, except:
(a) Dispositions of obsolete or worn out property or property no
longer used in the business of the Borrower or its Subsidiaries, whether
now or hereafter owned or leased, in the ordinary course of business of
such Loan Party;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of equipment, software or real property to the
extent that (i) such property is exchanged for credit against the purchase
price of similar replacement property or (ii) the proceeds of such
Disposition are reasonably promptly applied to the purchase price of such
replacement property;
(d) Dispositions of property by any Subsidiary to the Borrower or
to Subsidiary Guarantor or by the Borrower to a Subsidiary Guarantor;
(e) Dispositions permitted by SECTION 7.04;
(f) Dispositions of Non-Core Assets immediately upon the
acquisition thereof or the acquisition of Equity Interests in a Person
that thereby becomes a Subsidiary of the Borrower and which owns such
Non-Core Assets at such time;
(g) cancellations of any intercompany Indebtedness among the Loan
Parties;
(h) the licensing of intellectual property to third Persons on
customary terms in the ordinary course of business;
(i) the sale, lease, sub-lease, license, sub-license or
consignment of personal property of the Borrower or its Subsidiaries in
the ordinary course of business and leases or subleases of real property
permitted by CLAUSE (a) for which rentals are paid on a periodic basis
over the term thereof;
(j) the settlement or write-off of accounts receivable or sale of
overdue accounts receivable for collection in the ordinary course of
business consistent with past practice;
(k) sale, exchange or other disposition of cash and Cash
Equivalents in the ordinary course of business;
(l) Dispositions by the Borrower and its Subsidiaries not
otherwise permitted under this SECTION 7.05; PROVIDED that (i) at the time
of such Disposition, no Default shall exist or would result from such
Disposition, (ii) the aggregate book value of all property Disposed of in
reliance on this clause (f) in any fiscal year shall not exceed $2,000,000
and (iii) at least 75% of the purchase price for such asset shall be paid
to the Borrower or such Subsidiary in cash;
(m) so long as no Default shall occur and be continuing, the grant
of any option or other right to purchase any asset in a transaction that
would be permitted under the provisions of SECTION 7.05(f) above; and
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(n) the assignment, transfer, license, sale, lease or other
disposition of the "HOT `N' READY" trademark in connection with a pending
dispute with Little Caesar's and Pinnacle Pizza Company related to such
trademark, as described on Schedule 5.16;
PROVIDED, HOWEVER, that any Disposition pursuant to SECTION 7.05(a) through
SECTION 7.05(m) shall be for fair market value.
7.06 RESTRICTED PAYMENTS. Declare or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so, or issue or sell any Equity Interests or accept any capital contributions,
except that:
(a) so long as no Default shall have occurred and be continuing or
would result therefrom, each Subsidiary may make Restricted Payments to
the Borrower and the Subsidiary Guarantors, ratably according to their
respective holdings of the type of Equity Interest in respect of which
such Restricted Payment is being made;
(b) the Borrower and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock or
other common Equity Interests of such Person;
(c) the Borrower may make cash distributions to the Parent to fund
payments to the Sellers (i) pursuant to Section 3(d) of the Tax Sharing
Agreement in respect of cash "NOL" tax benefits actually realized by the
Borrower and (ii) pursuant to the Stock Purchase Agreement up to an
aggregate amount of $13 million for any "Cash Increase" (as defined in the
Stock Purchase Agreement, as in effect on the date hereof) so long as no
Default shall have occurred and be continuing or would occur after giving
effect thereto and the PRO FORMA Consolidated Leverage Ratio for the
twelve-month period most recently ended, calculated as if the Transaction
had occurred on the first day of such twelve-month period, does not exceed
5.15 to 1.00;
(d) so long as no Default shall have occurred and be continuing or
would result therefrom, the Borrower may declare and directly or
indirectly pay cash dividends and distributions to the Parent and Holdings
for the purpose of permitting such Persons to pay federal and state income
taxes, franchise taxes, and other taxes, fees, and assessments to the
extent attributable to the business of the Borrower and its Subsidiaries;
PROVIDED that any refunds received by the Parent or Holdings attributable
to the Borrower or any of its Subsidiaries shall promptly be returned by
such Person to the Borrower through an equity contribution to the
Borrower;
(e) so long as no Event of Default shall have occurred and be
continuing or would result therefrom, the Borrower may declare and
directly or indirectly pay cash dividends and distributions to Parent and
Holdings for customary and reasonable out-of-pocket expenses, legal and
accounting fees and expenses and overhead of Parent and Holdings incurred
in the ordinary course of business to the extent attributable to the
business of the Borrower and its Subsidiaries;
(f) the Borrower may purchase (with cash or notes) Equity
Interests in Holdings from former directors or employees of the Parent,
Holdings, the Borrower or its Subsidiaries, their estates, spouses or
former spouses in connection with the termination of such employee's
employment (or such director's directorship) and the Borrower may make
distributions to Parent and Holdings to effect such purchases and/or to
make payments on any notes issued in connection with any such repurchase;
PROVIDED, HOWEVER, that (i) no such purchase or distribution and no
payment on any such note shall be made if a Default shall have occurred
and be continuing, (ii)
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no such note shall require any payment if such payment or a distribution
by the Borrower to make such payment is prohibited by the terms hereof,
(iii) the aggregate amount of all payments under this SECTION 7.06(f)
(including payments in respect of any such purchase or any such notes or
any such distributions to Parent or Holdings for such purposes) shall not
exceed the sum of (A) $2,000,000 in any fiscal year or $5,000,000 in the
aggregate during the term of this Agreement, plus (B) the amount of any
cash equity contributions received by the Borrower for the purpose of
making such payments and used for such purpose, and (iv) unless the
Consolidated Leverage Ratio as of the fiscal quarter most recently ended
is 4.50 to 1.00 or less, no such payments shall be made other than
payments from the proceeds of cash equity contributions referred to in
clause (iii)(B) above;
(g) so long as no Event of Default shall have occurred and be
continuing or would result therefrom, the Borrower may make distributions
to the Parent and Holdings to enable the Parent and Holdings to pay
directors' fees, expenses and indemnities owing to directors of the Parent
and Holdings; and
(h) if the Investors or their Affiliates shall have made cash
equity contributions to the Borrower to fund any Permitted Investments or
expenditures that would, by reason of such funding, be excluded from the
definition of "Capital Expenditures", and such Permitted Investment or
expenditure is not made within 10 Business Days after receipt of such
equity contributions, the Borrower may return such equity contributions to
such Investors or their Affiliates.
To the extent that the Borrower or its Subsidiaries are permitted to make any
Restricted Payments pursuant to this SECTION 7.06, the same may be made as a
loan or advance to the recipient thereof, and in such case the amount of such
loan or advance so made shall reduce the amount of Restricted Payments that may
be made by the Borrower and its Subsidiaries in respect thereof.
7.07 CHANGE IN NATURE OF BUSINESS. Engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and its Subsidiaries on the date hereof or any business substantially
related or incidental thereto.
7.08 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of
any kind with any Affiliate of the Borrower, whether or not in the ordinary
course of business, other than on fair and reasonable terms substantially as
favorable to the Borrower or such Subsidiary as would be obtainable by the
Borrower or such Subsidiary at the time in a comparable arm's length transaction
with a Person other than an Affiliate; PROVIDED that the foregoing restriction
shall not apply to (a) transactions between or among the Borrower and any of its
wholly-owned Subsidiaries or between and among any wholly-owned Subsidiaries,
(b) transactions, arrangements, fees reimbursements and indemnities specifically
and expressly permitted between or among such parties under this Agreement, (c)
reasonable compensation and indemnities to officers and directors and (d)
management fees paid to the Sponsor in an amount not to exceed $500,000 in any
fiscal year and reimbursement of the Sponsor for out-of-pocket expenses paid by
the Sponsor on behalf of the Borrower in the ordinary course of business to the
extent that the Borrower is not otherwise prohibited from making or incurring
such expenses hereunder.
7.09 BURDENSOME AGREEMENTS. Enter into or permit to exist any
Contractual Obligation (other than this Agreement, any other Loan Document and
the Senior Subordinated Documents) that (a) limits the ability (i) of any
Subsidiary to make Restricted Payments to the Borrower or any Guarantor, to make
intercompany loans or advances to the Borrower or any Guarantor or to repay such
loans or advances, or to otherwise transfer property to or invest in the
Borrower or any Guarantor, except for any agreement in effect (A) on the date
hereof or (B) at the time any Subsidiary becomes a
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Subsidiary of the Borrower, so long as such agreement was not entered into
solely in contemplation of such Person becoming a Subsidiary of the Borrower,
(ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of
the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens
on property of such Person; PROVIDED, HOWEVER, that this clause (iii) shall not
prohibit (A) any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under SECTION 7.02(c)(iv) solely to the extent any such
negative pledge relates to the property financed by or the subject of such
Indebtedness nor (B) customary anti-assignment provisions in contracts
restricting the assignment thereof; or (b) requires the grant by a Loan Party of
a Lien to secure an obligation of such Loan Party if a Lien is granted to secure
another obligation of such Loan Party.
7.10 FINANCIAL COVENANTS.
(a) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated Leverage
Ratio at any time during any period set forth below to be greater than the ratio
set forth below opposite such period:
Maximum
Four Fiscal Quarters Ending during or Consolidated
nearest to the periods set forth below Leverage Ratio
Closing Date through September 3, 2005 6.25:1.00
December 3, 2005 through September 2, 2006 5.75:1.00
December 2, 2006 through September 1, 2007 5.25:1.00
December 1, 2007 through August 30, 2008 4.50:1.00
November 29, 2008 through August 29, 2009 4.00:1.00
November 28, 2009 and each fiscal quarter
thereafter 3.25:1.00
(b) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the
Consolidated Fixed Charge Coverage Ratio at any time during any period set forth
below to be less than the ratio set forth below opposite such period:
Minimum Fixed
Four Fiscal Quarters Ending during or Charge Coverage
nearest to the periods set forth below Ratio
Date through September 2, 2006 1.05:1.00
December 2, 2006 through September 1, 2007 1.10:1.00
December 1, 2007 through August 30, 2008 1.15:1.00
November 29, 2008 and each fiscal quarter 1.20:1.00
thereafter
7.11 AMENDMENTS OF ORGANIZATION DOCUMENTS. Amend any of its
Organization Documents.
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7.12 ACCOUNTING CHANGES. Make any change in (i) accounting policies
or reporting practices, except as required by generally accepted accounting
principles, or (ii) fiscal year.
7.13 PREPAYMENTS, ETC. OF INDEBTEDNESS. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Indebtedness, except (i) the prepayment of the Credit Extensions in accordance
with the terms of this Agreement and (ii) regularly scheduled or required
repayments or redemptions of Indebtedness listed on PART (b) of SCHEDULE 5.05,
or amend, modify or change in any manner materially adverse to the Lenders any
term or condition of any such Indebtedness listed on PART (b) of SCHEDULE 5.05.
7.14 AMENDMENT, ETC. OF THE RELATED DOCUMENTS. Cancel or terminate
any Related Document or consent to or accept any cancellation or termination
thereof except in accordance with its terms, amend, modify or change in any
manner any term or condition of any Related Document or give any consent, waiver
or approval thereunder, waive any default under or any breach of any term or
condition of any Related Document, agree in any manner to any other amendment,
modification or change of any term or condition of any Related Document or take
any other action in connection with any Related Document that would impair the
value of the interest or rights of any Loan Party thereunder or that would
impair the rights or interests of any Agent or any Lender.
7.15 PARTNERSHIPS, ETC. Become a general partner in any general or
limited partnership or joint venture, except to the extent permitted by and
subject to SECTION 7.03(m).
7.16 SPECULATIVE TRANSACTIONS. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts for speculative purposes or any similar speculative
transactions, which are, in any case, inconsistent with prior practice and not
otherwise made in the ordinary course of business.
7.17 FORMATION OF SUBSIDIARIES. Organize or invest in any new
Subsidiary except as permitted under SECTION 7.03.
7.18 DESIGNATION AS DESIGNATED SENIOR DEBT. Designate any other
Indebtedness of the Loan Parties as "Designated Senior Debt" for purposes of and
as defined in the Senior Subordinated Indenture, or any supplemental indentures
thereto.
7.19 MODIFICATION OF SENIOR SUBORDINATED DOCUMENTS. Amend,
supplement or otherwise modify in any manner any of the terms or provisions
contained in, or applicable to, any Senior Subordinated Documents, unless (a) no
fee is payable to the holders of the Senior Subordinated Notes and (b) the sole
purpose of any such amendment, supplement or other modification is one or more
of the following: (i) to extend the date or reduce the amount of any required
repayment, prepayment or redemption of the principal of the Senior Subordinated
Notes, (ii) to reduce the rate or extend the date for payment of the interest,
premium (if any) or fees payable on the Senior Subordinated Notes or (iii) to
make the covenants, events of default or remedies in the Senior Subordinated
Notes less restrictive on such Borrower.
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following shall constitute an
Event of Default:
(a) NON-PAYMENT. The Borrower or any other Loan Party fails to pay
(i) when and as required to be paid herein, any amount of principal of any
Loan or any L/C Obligation, or (ii) within three days after the same
becomes due, any interest on any Loan or on any L/C Obligation, or any fee
due hereunder, or (iii) within five days after the same becomes due, any
other amount payable hereunder or under any other Loan Document; or
(b) SPECIFIC COVENANTS. (i) The Borrower fails to perform or
observe any term, covenant or agreement contained in any of SECTION 6.01,
6.02, 6.03, 6.05, 6.09, 6.10, 6.11, 6.12 or ARTICLE VII, (ii) either of
the Parent or Holdings fails to perform or observe any term, covenant or
agreement contained in Section 7 of the Parent Guaranty, or (iii) any of
the Subsidiary Guarantors fails to perform or observe any term, covenant
or agreement contained in Section 7 of the Subsidiary Guaranty; or
(c) OTHER DEFAULTS. Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in SECTION 8.01(a) OR (b)
above) contained in any Loan Document on its part to be performed or
observed and such failure continues for 30 days; or
(d) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of
the Borrower or any other Loan Party herein, in any other Loan Document,
or in any document delivered in connection herewith or therewith shall be
incorrect or misleading in any material respect when made or deemed made;
or
(e) CROSS-DEFAULT. (i) Any Loan Party or any of its Subsidiaries
(A) fails to make any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and, except in
the case of any such payment due at scheduled maturity or by acceleration,
such payment is not made within any applicable grace period, in respect of
any Indebtedness or Guarantee (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount, or (B) fails to observe or
perform any other agreement or condition relating to any such Indebtedness
or Guarantee or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event occurs, the effect of
which default or other event is to cause, or to permit the holder or
holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise),
or an offer to repurchase, prepay, defease or redeem such Indebtedness to
be made, prior to its stated maturity, or such Guarantee to become payable
or cash collateral in respect thereof to be demanded; or (ii) there occurs
under any Swap Contract an Early Termination Date (as defined in such Swap
Contract) resulting from (A) any event of default under such Swap Contract
as to which the Borrower or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which the Borrower or any
Subsidiary is an Affected Party (as defined in such Swap Contract) and, in
either event, the Swap Termination Value owed by the Loan Party or such
Subsidiary as a result thereof is greater than the Threshold Amount; or
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(f) INSOLVENCY PROCEEDINGS, ETC. Any Loan Party or any of its
Subsidiaries institutes or consents to the institution of any proceeding
under any Debtor Relief Law, or makes an assignment for the benefit of
creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar
officer for it or for all or any material part of its property; or any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of such
Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to
any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any
such proceeding; or
(g) INABILITY TO PAY DEBTS; ATTACHMENT. (i) Any Loan Party or any
of its Subsidiaries becomes unable or admits in writing its inability or
fails generally to pay its debts as they become due, or (ii) any writ or
warrant of attachment or execution or similar process is issued or levied
against all or any material part of the property of any such Person and is
not released, vacated or fully bonded within 30 days after its issue or
levy; or
(h) JUDGMENTS. There is entered against any Loan Party or any of
its Subsidiaries (i) a final judgment or order for the payment of money in
an aggregate amount exceeding the Threshold Amount (to the extent not
covered by independent third-party insurance as to which the insurer is
rated at least "A" by A.M. Best Company, has been notified of the
potential claim and does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in
either case, (A) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (B) there is a period of 30 consecutive
days during which a stay of enforcement of such judgment, by reason of a
pending appeal or otherwise, is not in effect; or
(i) ERISA. An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of any Loan Party in an aggregate amount in excess of
the Threshold Amount; or
(j) INVALIDITY OF LOAN DOCUMENTS. Any material provision of any
Loan Document, at any time after its execution and delivery and for any
reason other than as expressly permitted hereunder or thereunder or
satisfaction in full of all the Obligations, ceases to be in full force
and effect; or any Loan Party or any other Person contests in any manner
the validity or enforceability of any provision of any Loan Document; or
any Loan Party denies that it has any or further liability or obligation
under any Loan Document, or purports to revoke, terminate or rescind any
Loan Document; or
(k) CHANGE OF CONTROL. There occurs any Change of Control; or
(l) COLLATERAL DOCUMENT. Any Collateral Document after delivery
thereof pursuant to SECTION 4.01 OR 6.12 shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected first
priority lien on and security interest in the Collateral purported to be
covered thereby; or any Loan Party contests in any manner the validity,
perfection or priority of any lien or security interest in the Collateral
purported to be covered thereby; or
(m) "EVENT OF DEFAULT". An "Event of Default" (as defined in the
Senior Subordinated Indenture) shall have occurred and be continuing under
the Senior Subordinated Indenture; or
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(n) SENIOR INDEBTEDNESS. The Obligations of the Loan Parties under
the Loan Documents shall not constitute or shall cease to constitute
"Senior Indebtedness" or "Designated Senior Indebtedness" under and as
defined in the Senior Subordinated Indenture.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs
and is continuing, the Administrative Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following
actions:
(a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due
and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C
Obligations (in an amount equal to the then Outstanding Amount thereof);
and
(d) exercise on behalf of itself, the other Agents and the Lenders
all rights and remedies available to it, the other Agents and the Lenders
under the Loan Documents;
PROVIDED, HOWEVER, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of any Agent or any Lender.
8.03 APPLICATION OF FUNDS. After the exercise of remedies provided
for in SECTION 8.02 (or after the Loans have automatically become immediately
due and payable and the L/C Obligations have automatically been required to be
Cash Collateralized as set forth in the proviso to SECTION 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
FIRST, to payment of that portion of the Obligations constituting
fees, indemnities, expenses and other amounts (other than principal and
interest but including fees, charges and disbursements of counsel to the
Administrative Agent and amounts payable under ARTICLE III) payable to the
Agents in their capacities as such ratably among them in proportion to the
amounts described in this clause FIRST payable to them;
SECOND, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest)
payable to the Lenders and the L/C Issuer (including fees, charges and
disbursements of counsel to the respective Lenders and the L/C Issuer),
ratably among them in proportion to the amounts described in this clause
SECOND payable to them;
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THIRD, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans, L/C Borrowings and other
Obligations, ratably among the Lenders and the L/C Issuer in proportion to
the respective amounts described in this clause THIRD payable to them;
FOURTH, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings, ratably among the
Lenders the L/C Issuer in proportion to the respective amounts described
in this clause FOURTH held by them;
FIFTH, to the Administrative Agent for the account of the L/C
Issuer, to Cash Collateralize that portion of L/C Obligations comprised of
the aggregate undrawn amount of Letters of Credit;
SIXTH, to the payment of all other Obligations of the Loan Parties
owing under or in respect of the Loan Documents that are then due and
payable to the Agents and the other Secured Parties on such date, ratably
based upon the respective aggregate amounts of all such Obligations owing
to the Agents and the other Secured Parties on such date; and
LAST, the balance, if any, after all of the Obligations have been
indefeasibly paid in full (excluding, for this purpose, any Unaccrued
Indemnity Claims), to the Borrower or as otherwise required by Law.
Subject to SECTION 2.03(e), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause FIFTH above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above, and thereafter
applied as provided in CLAUSE "LAST" above.
ARTICLE IX
ADMINISTRATIVE AGENT
9.01 AUTHORIZATION AND ACTION. Each Lender (in its capacities as a
Lender, the Swing Line Lender (if applicable), the L/C Issuer (if applicable)
and on behalf of itself and its Affiliates as potential Hedge Banks) hereby
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement and the other
Loan Documents as are delegated to such Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), no Agent shall be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders (or, if
required hereby, all Lenders), and such instructions shall be binding upon all
Lenders and all holders of Notes; PROVIDED, HOWEVER, that no Agent shall be
required to take any action that exposes such Agent to personal liability or
that is contrary to this Agreement or applicable law. Each Agent agrees to give
to each Lender prompt notice of each notice given to it by the Borrower pursuant
to the terms of this Agreement.
9.02 AGENT'S RELIANCE, ETC.. Neither any Agent 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
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may treat the payee of any Note as the holder thereof until, in the case of
the Administrative Agent, the Administrative Agent receives and accepts an
Assignment and Assumption entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of the
Collateral Agent, such
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Agent has received notice from the Administrative Agent that it has received and
accepted such Assignment and Assumption, in each case as provided in SECTION
10.06; (b) may consult with legal counsel (including counsel for any Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it 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 (whether written
or oral) made in or in connection with the Loan Documents; (d) shall not have
any duty to ascertain or to inquire as to the performance, observance or
satisfaction of any of the terms, covenants or conditions of any Loan Document
on the part of any Loan Party or the existence at any time of any Default under
the Loan Documents or to inspect the property (including the books and records)
of any Loan Party; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
electronic mail or Internet or intranet posting or other distribution) believed
by it to be genuine and signed or sent by the proper party or parties.
9.03 WACHOVIA AND AFFILIATES. With respect to its Commitments, the
Loans made by it and the Notes issued to it, if any, Wachovia shall have the
same rights and powers under the Loan Documents as any other Lender and may
exercise the same as though it were not an Agent; and the term "Lender" shall,
unless otherwise expressly indicated, include Wachovia in its individual
capacity. Wachovia and its affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking engagements from
and generally engage in any kind of business with, any Loan Party, any
Subsidiaries of any Loan Party and any Person that may do business with or own
securities of any Loan Party or any such Subsidiary, all as if Wachovia was not
an Agent and without any duty to account therefor to the Lenders. No Agent shall
have any duty to disclose any information obtained or received by it or any of
its Affiliates relating to any Loan Party or any Subsidiaries of any Loan Party
to the extent such information was obtained or received in any capacity other
than as such Agent.
9.04 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender and based
on the financial statements referred to in SECTION 6.01 and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
9.05 INDEMNIFICATION OF AGENTS. (a) Each Term Lender severally
agrees to indemnify each Agent or any Related Party and each Revolving Credit
Lender severally agrees to indemnify each Agent, the L/C Issuer or any Related
Party (in each case, to the extent not reimbursed by the Borrower) from and
against such Lender's Applicable Percentage of 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 such Agent, the L/C Issuer or any Related
Party in any way relating to or arising out of the Loan Documents or any action
taken or omitted by such Agent, the L/C Issuer or any Related Party under the
Loan Documents (collectively, the "INDEMNIFIED COSTS"); PROVIDED, HOWEVER, 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 such Agent's, the L/C Issuer's or any Related
Party's gross negligence or willful misconduct as found in a final,
non-appealable judgment by a court of competent jurisdiction.
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Without limitation of the foregoing, each Lender agrees to reimburse each Agent,
the L/C Issuer or any Related Party promptly upon demand for its Applicable
Percentage of any costs and expenses (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) (including,
without limitation, reasonable fees and expenses of counsel) payable by the
Borrower under SECTION 10.04, to the extent that such Agent, the L/C Issuer or
any Related Party is not promptly reimbursed for such costs and expenses by the
Borrower. In the case of any investigation, litigation or proceeding giving rise
to any Indemnified Costs, this SECTION 9.05 applies whether any such
investigation, litigation or proceeding is brought by any Lender or any other
Person. The obligations of the Lenders under this SUBSECTION (b) are subject to
the provisions of SECTION 2.12(d).
(b) The failure of any Lender to reimburse any Agent, the L/C
Issuer or any Related Party, as the case may be, promptly upon demand for its
Applicable Percentage of any amount required to be paid by the Lenders to such
Agent, the L/C Issuer, or any Related Party, as the case may be, as provided
herein shall not relieve any other Lender of its obligation hereunder to
reimburse such Agent, the L/C Issuer, or Related Party, as the case may be, for
its Applicable Percentage of such amount, but no Lender shall be responsible for
the failure of any other Lender to reimburse such Agent, the L/C Issuer, or
Related Party, as the case may be, for such other Lender's Applicable Percentage
of such amount. Without prejudice to the survival of any other agreement of any
Lender hereunder, the agreement and obligations of each Lender contained in this
SECTION 9.05 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan Documents.
9.06 SUCCESSOR AGENTS Any Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent (which, unless an Event of Default has occurred and is continuing at the
time of such appointment, shall be reasonably acceptable to the Borrower). If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
of notice of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which, unless an Event of Default shall have occurred
and is continuing, shall be reasonably acceptable to the Borrower and which
shall be a commercial bank organized under the laws of the United States or of
any State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent and, in the case of a successor Collateral Agent, upon the
execution and filing or recording of such financing statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Agent shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under the
Loan Documents. If within 45 days after written notice is given of the retiring
Agent's resignation under this SECTION 9.06 no successor Agent shall have been
appointed and shall have accepted such appointment, then on such 45th day (a)
the retiring Agent's resignation shall become effective, (b) the retiring Agent
shall thereupon be discharged from its duties and obligations under the Loan
Documents and (c) the Required Lenders shall thereafter perform all duties of
the retiring Agent under the Loan Documents until such time, if any, as the
Required Lenders appoint a successor Agent as provided above. After any retiring
Agent's resignation hereunder as Agent shall have become effective, the
provisions of this ARTICLE IX shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
9.07 ARRANGERS AND SYNDICATION AGENT HAVE NO LIABILITY. It is
understood and agreed that neither the Arrangers nor the Syndication Agent have
any duties, responsibilities or liabilities under this Agreement whatsoever.
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9.08 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, L/C
Obligations and all other Obligations that are owing and unpaid and to
file such other documents as may be necessary or advisable in order to
have the claims of the Lenders and the Agents (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Lenders and the Agents and their respective agents and counsel and all
other amounts due the Lenders and the Agents under SECTIONS 2.03(j), 2.09
AND 10.04) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the Agents
and their respective agents and counsel, and any other amounts due the Agents
under SECTIONS 2.09 AND 10.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
9.09 COLLATERAL AND GUARANTY MATTERS. The Lenders and the L/C
Issuer irrevocably authorize the Collateral Agent and the Administrative Agent,
at their option and in their discretion,
(a) to release any Lien on any property granted to or held by the
Collateral Agent under any Loan Document (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations not yet accrued and payable) and
the expiration or termination of all Letters of Credit, (ii) that is sold
or to be sold as part of or in connection with any sale permitted
hereunder or under any other Loan Document, or (iii) subject to SECTION
10.01, if approved, authorized or ratified in writing by the Required
Lenders;
(b) to release any Guarantor from its obligations under the
applicable Guaranty if such Person ceases to be a Subsidiary as a result
of a transaction permitted hereunder; and
(c) to subordinate any Lien on any property granted to or held by
the Collateral Agent under any Loan Document to the holder of any Lien on
such property that is permitted by SECTION 7.01(i).
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Upon request by the Administrative Agent or the Collateral Agent at
any time, the Required Lenders (or, if necessary, all Lenders) will confirm in
writing the authority of the Agents to release its interest in particular types
or items of property, or to release any Guarantor from its obligations under the
applicable Guaranty pursuant to this SECTION 9.09. In each case as specified in
this SECTION 9.09, the Administrative Agent and the Collateral Agent will, at
the Borrower's expense, execute and deliver to the applicable Loan Party such
documents as such Loan Party may reasonably request to evidence the release of
such item of Collateral from the assignment and security interest granted under
the Collateral Documents, or to release such Guarantor from its obligations
under the applicable Guaranty, in each case in accordance with the terms of the
Loan Documents and this SECTION 9.09.
ARTICLE X
MISCELLANEOUS
10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; PROVIDED, HOWEVER, that no such
amendment, waiver or consent shall:
(a) extend or increase the Commitment of any Lender (or reinstate
any Commitment terminated pursuant to SECTION 8.02) without the written
consent of such Lender;
(b) postpone any date scheduled for any payment of principal or
interest or fees under SECTIONS 2.07, 2.08 or 2.09 without the written
consent of each Lender directly affected thereby;
(c) reduce or forgive the principal of, or the rate of interest
specified herein on, any Loan or L/C Borrowing, or (subject to clause (v)
of the second proviso to this SECTION 10.01) any fees or other amounts
payable hereunder or under any other Loan Document, or change the manner
of computation of Consolidated Leverage Ratio (including any change in any
applicable defined term) used in determining the Applicable Margin that
would result in a reduction of any interest rate on any Loan or any fee
payable hereunder without the written consent of each Lender directly
affected thereby; PROVIDED, HOWEVER, that only the consent of the Required
Lenders shall be necessary to amend the definition of "Default Rate" or to
waive any obligation of the Borrower to pay interest or Letter of Credit
Fees at the Default Rate;
(d) change the order of application of any reduction in the
Commitments or any prepayment of Loans between the Facilities from the
application thereof set forth in the applicable provisions of SECTION
2.05(b), 2.06(b), SECTION 2.06(c) or SECTION 8.03, respectively, or in any
other manner that materially and adversely affects the Lenders under such
Facilities or require the permanent reduction of the Revolving Credit
Facility at any time when all or a portion of the Term B Facility remains
in effect without the written consent of each such Lender directly
affected thereby;
(e) change any provision of this SECTION 10.01 or the definition
of "Required Lenders" or any other provision hereof specifying the number
or percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender;
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(f) release all or substantially all of the Collateral in any
transaction or series of related transactions, without the written consent
of each Lender;
(g) release all or substantially all of the value of the Parent
Guaranty or the Subsidiary Guaranty, without the written consent of each
Lender;
(h) impose any greater restriction on the ability of any Lender to
assign any of its rights or obligations hereunder without the written
consent of Lenders having more than 50% of the Aggregate Credit Exposures
then in effect within each of the following classes of Commitments, Loans
and other Credit Extensions: (i) the class consisting of the Revolving
Credit Commitments, combined on an aggregate basis, and (ii) the class
consisting of the Term B Commitments, combined on an aggregate basis. For
purposes of this clause, the aggregate amount of each Lender's risk
participation and funded participation in L/C Obligations and Swing Line
Loans shall be deemed to be held by such Lender;
(i) affect adversely the interests, rights or obligations of the
Revolving Credit Lenders in a manner substantially different from the
effect of such amendment, waiver or consent on the Term Lenders, unless
consented to by the Required Revolving Credit Lenders, it being understood
that any amendment, waiver or consent that has the effect of curing or
waiving any Default and that contemplates a Borrowing in connection with
such amendment, waiver or consent shall require the consent of the
Required Revolving Credit Lenders;
(j) affect adversely the interests, rights or obligations of the
Term Lenders in a manner substantially different from the effect of such
amendment, waiver or consent on the Revolving Credit Lenders, unless
consented to by Required Term Lenders; or
(k) change SECTION 2.12(a) and 2.13, without the consent of each
Lender;
and PROVIDED FURTHER that, without limiting any requirement that the same be
signed or executed by the Borrower or any other applicable Loan Party, (i) no
amendment, waiver or consent shall, unless in writing and signed by the L/C
Issuer in addition to the Lenders required above, affect the rights or duties of
the L/C Issuer under this Agreement or any L/C Related Document relating to any
Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Swing Line Lender in addition
to the Lenders required above, affect the rights or duties of the Swing Line
Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless
in writing and signed by an Agent in addition to the Lenders required above,
affect the rights or duties of, or any fees or other amounts payable to, such
Agent under this Agreement or any other Loan Document; (iv) SECTION 10.06(h) may
not be amended, waived or otherwise modified without the consent of each
Granting Lender all or any part of whose Loans are being funded by an SPC at the
time of such amendment, waiver or other modification; and (v) the Fee Letter may
be amended, or rights or privileges thereunder waived, in a writing executed
only by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.
10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) NOTICES GENERALLY. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in SUBSECTION (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all
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notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:
(i) if to the Borrower, the Administrative Agent, the L/C Issuer
or the Swing Line Lender, to the address, telecopier number, electronic
mail address or telephone number specified for such Person on SCHEDULE
10.02; and
(ii) if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its
Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received. Notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in SUBSECTION (b) below shall be effective as provided in such
SUBSECTION (b).
(b) ELECTRONIC COMMUNICATIONS. Notices and other communications to
the Lenders and the L/C Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, PROVIDED that the
foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to
ARTICLE II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
PROVIDED that approval of such procedures may be limited to particular notices
or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices
and other communications sent to an e-mail address shall be deemed received upon
the sender's receipt of an acknowledgement from the intended recipient (such as
by the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), PROVIDED that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
(c) CHANGE OF ADDRESS, ETC. Each of the Borrower, the
Administrative Agent, the L/C Issuer and the Swing Line Lender may change its
address, telecopier or telephone number for notices and other communications
hereunder by notice to the other parties hereto. Each other Lender may change
its address, telecopier or telephone number for notices and other communications
hereunder by notice to the Borrower, the Administrative Agent, the L/C Issuer
and the Swing Line Lender.
(d) RELIANCE BY ADMINISTRATIVE AGENT, L/C ISSUER AND LENDERS. The
Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Committed Loan Notice and Swing
Line Loan Notices) purportedly given by or on behalf of the Borrower even if (i)
such notices were not made in a manner specified herein, were incomplete or were
not preceded or followed by any other form of notice specified herein, or (ii)
the terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Borrower shall indemnify the Administrative Agent, the L/C Issuer,
each Lender and the Related Parties of each of them from all losses,
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costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of the Borrower. All telephonic
notices to and other telephonic communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender, the
L/C Issuer or the Administrative Agent to exercise, and no delay by any such
Person in exercising, any right, remedy, power or privilege hereunder or any
other Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided,
and provided under each other Loan Document, are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.
10.04 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) COSTS AND EXPENSES. The Borrower agrees to pay on demand (i)
all costs and expenses of each Agent and its Affiliates in connection with the
preparation, execution, delivery, administration, modification and amendment of,
or any consent or waiver under, the Loan Documents (whether or not the
transactions contemplated hereby or thereby shall be consummated) (including,
without limitation, (A) all due diligence, collateral review, arrangement,
syndication, transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of counsel for each Agent with respect thereto,
with respect to advising such Agent as to its rights and responsibilities, or
the perfection, protection, interpretation or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries and
with respect to presenting claims in or otherwise participating in or monitoring
any bankruptcy, insolvency or other similar proceeding involving creditors'
rights generally and any proceeding ancillary thereto), (ii) all costs and
expenses incurred by the L/C Issuer in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all costs and expenses of each Agent, the L/C Issuer and
each Lender in connection with the enforcement or protection of its rights in
connection with the Loan Documents, whether in any action, suit or litigation,
or any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally and all costs and expenses of each Agent and its Affiliates
with respect to any negotiations arising out of any Default (including, without
limitation, the fees and expenses of counsel for each Agent, the L/C Issuer and
each Lender with respect thereto). The Borrower further agrees to pay any stamp
or other taxes that may be payable in connection with the execution or delivery
of any Loan Document.
(b) INDEMNIFICATION BY THE BORROWER. The Borrower shall indemnify
the Administrative Agent (and any sub-agent thereof), each Agent, each Lender
and the L/C Issuer, and each Related Party of any of the foregoing Persons (each
such Person being called an "INDEMNITEE") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses (including the fees, charges and disbursements of any counsel for any
Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the L/C Issuer
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrower or
any of its Subsidiaries, or any Environmental Liability related in any way to
the Borrower or any of its
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Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by a third party or by the Borrower or any
other Loan Party or any of the Borrower's or such Loan Party's directors,
shareholders or creditors, and regardless of whether any Indemnitee is a party
thereto and whether or not any of the transactions contemplated hereunder or
under any of the other Loan Documents is consummated, in all cases, whether or
not caused by or arising, in whole or in part, out of the negligence of the
Indemnitee; PROVIDED that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee or (y) result from a claim brought by the
Borrower or any other Loan Party against an Indemnitee for breach in bad faith
of such Indemnitee's obligations hereunder or under any other Loan Document, if
the Borrower or such Loan Party has obtained a final and nonappealable judgment
in its favor on such claim as determined by a court of competent jurisdiction.
(c) WAIVER OF CONSEQUENTIAL DAMAGES, ETC. To the fullest extent
permitted by applicable law, the Borrower shall not assert, and hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in SUBSECTION (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent or any Lender, in
its sole discretion.
(e) PAYMENTS. All amounts due under this SECTION shall be payable
not later than ten Business Days after demand therefor.
(f) SURVIVAL. The agreements in this SECTION shall survive the
resignation of the Administrative Agent and the L/C Issuer, the replacement of
any Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.
10.05 PAYMENTS SET ASIDE. To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent, the L/C Issuer or
any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises
its right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Administrative Agent, the L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
and the L/C Issuer severally agrees to pay to the Administrative Agent upon
demand its applicable share (without duplication) of any amount so recovered
from or repaid by the Administrative Agent, plus interest thereon from the date
of such demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect. The obligations of the Lenders
and the L/C Issuer
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under clause (b) of the preceding sentence shall survive the payment in full of
the Obligations and the termination of this Agreement.
10.06 SUCCESSORS AND ASSIGNS.
(a) SUCCESSORS AND ASSIGNS GENERALLY. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that
neither the Borrower nor any other Loan Party may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of SECTION 10.06(b), (ii) by way of
participation in accordance with the provisions of SECTION 10.06(d), (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of SECTION 10.06(f), or (iv) to an SPC in accordance with the provisions of
SECTION 10.06(h) (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in SUBSECTION (d) of this SECTION and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) ASSIGNMENTS BY LENDERS. Any Lender may at any time assign to
one or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this SECTION 10.06(b), participations in L/C
Obligations and in Swing Line Loans) at the time owing to it); PROVIDED that (i)
except in the case of an assignment of the entire remaining amount of the
assigning Lender's Commitments and the Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the Loan
of the assigning Lender subject to each such assignment, determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent or, if "Trade Date" is specified in the Assignment
and Assumption, as of the Trade Date, shall not be less than $2,500,000, in the
case of any assignment in respect of the Revolving Credit Facility, or
$1,000,000, in the case of any assignment in respect of the Term Facility
(PROVIDED that simultaneous assignments by or to two or more Approved Funds
managed by the same investment advisor shall be aggregated for purposes of the
minimum assignment amount), unless each of the Administrative Agent and, so long
as no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed); (ii)
each partial assignment shall be made as an assignment of a proportionate part
of all the assigning Lender's rights and obligations under this Agreement with
respect to the Loans or the Commitment assigned, except that this clause (ii)
shall not (A) apply to rights in respect of Swing Line Loans or (B) prohibit any
Lender from assigning all or a portion of its rights and obligations among
separate Facilities on a non-pro rata basis; (iii) any assignment of a Revolving
Credit Commitment must be approved by the Administrative Agent, the L/C Issuer
and the Swing Line Lender unless the Person that is the proposed assignee is
itself a Revolving Credit Lender (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Assumption, together with a processing and recordation fee of $3,500 (which
shall not be subject to reimbursement by the Borrower); PROVIDED that (x) no
such fee shall be payable in the case of an assignment to another Lender, an
Affiliate of a Lender or an Approved Fund, and (y) in the case of
contemporaneous assignments by a Lender to more than one Fund managed by the
same investment advisor (which Funds are not then Lenders hereunder) only one
such fee shall be payable for all such contemporaneous assignments, and the
Eligible Assignee, if it shall not be a Lender, shall deliver to the
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Administrative Agent an Administrative Questionnaire. Subject to acceptance and
recording thereof by the Administrative Agent pursuant to SUBSECTION (c) of this
SECTION, from and after the effective date specified in each Assignment and
Assumption, the Eligible Assignee thereunder shall be a party to this Agreement
and, to the extent of the interest assigned by such Assignment and Assumption,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of SECTIONS 3.01, 3.04, 3.05 and 10.04 with respect to facts and
circumstances occurring prior to the effective date of such assignment). Upon
request, the Borrower (at its expense) shall execute and deliver a Note to the
assignee Lender. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this SUBSECTION (b) shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with SECTION
10.06(d); PROVIDED that in the case of an assignment to an Affiliate of the
assigning Lender, such assignment shall be effective as an assignment between
such Lender and its Affiliate immediately without compliance with the conditions
for assignment under this SECTION 10.06(b), but shall not be effective with
respect to the Loan Parties, the Agents, any L/C Issuer or any other Lender, and
each Loan Party, each Agent, each L/C Issuer and each other Lender shall be
entitled to deal solely with such assigning Lender under any such assignment,
and such assigning Lender shall continue to be bound by the Loan Documents in
its capacity as a Lender, in each case until the conditions for assignment under
this SECTION 10.06(b) have been satisfied.
(c) REGISTER. The Administrative Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at the Administrative
Agent's Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and L/C Obligations owing to,
each Lender pursuant to the terms hereof from time to time (the "REGISTER"). The
entries in the Register shall be conclusive absent manifest error, and the
Borrower, the Agents and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by each of the Borrower and the L/C
Issuer at any reasonable time and from time to time upon reasonable prior
notice. In addition, at any time that a request for a consent for a material or
other substantive change to the Loan Documents is pending, any Lender may
request and receive from the Administrative Agent a copy of the Register.
(d) PARTICIPATIONS. Any Lender may at any time, without the
consent of, or notice to, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower or any
of the Borrower's Affiliates or Subsidiaries) (each, a "PARTICIPANT") in all or
a portion of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitments and/or the Loans (including such
Lender's participations in L/C Obligations and/or Swing Line Loans) owing to
it); PROVIDED that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Agents and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; PROVIDED that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
SECTION 10.01 that directly affects such Participant. Subject to SUBSECTION (e)
of this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of SECTIONS 3.01, 3.04 AND 3.05 to the same extent as if it were
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a Lender and had acquired its interest by assignment pursuant to SECTION
10.06(b). To the extent permitted by law, each Participant also shall be
entitled to the benefits of SECTION 10.08 as though it were a Lender, PROVIDED
such Participant agrees to be subject to SECTION 2.13 as though it were a
Lender.
(e) LIMITATIONS UPON PARTICIPANT RIGHTS. A Participant shall not
be entitled to receive any greater payment under SECTION 3.01 or 3.04 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent specifically
waiving the limitations of this sentence. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of SECTION 3.01
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with
SECTION 3.01(e) as though it were a Lender.
(f) CERTAIN PLEDGES. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; PROVIDED that no such pledge or assignment shall release such Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
(g) ELECTRONIC EXECUTION OF ASSIGNMENTS. The words "execution,"
"signed," "signature," and words of like import in any Assignment and Assumption
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the
New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
(h) Notwithstanding anything to the contrary contained herein, any
Lender (a "GRANTING LENDER") may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an "SPC") the option to provide all or
any part of any Loan that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; PROVIDED that (i) nothing herein shall
constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof or, if it fails to do so, to make such payment to the
Administrative Agent as is required under SECTION 2.13. Each party hereto hereby
agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such
option shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrower under this Agreement (including its obligations
under SECTION 3.04), (ii) no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would be liable, and
(iii) the Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder. The making of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if, such Loan were made by such Granting Lender. In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior debt of any SPC, it will not institute against, or join any other Person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceeding under the laws of the United States or any
State thereof. Notwithstanding anything to the contrary contained herein, any
SPC may (i) with notice to, but without prior consent of, the Borrower and the
Administrative Agent and with the payment of a processing fee of $3,500 (which
shall not be
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reimbursable by the Borrower), assign all or any portion of its right to receive
payment with respect to any Loan to the Granting Lender and (ii) disclose on a
confidential basis any non-public information relating to its funding of Loans
to any rating agency, commercial paper dealer or provider of any surety or
Guarantee or credit or liquidity enhancement to such SPC.
(i) RESIGNATION AS L/C ISSUER OR SWING LINE LENDER AFTER
ASSIGNMENT. Notwithstanding anything to the contrary contained herein, if at any
time Wachovia assigns all of its Commitments and Loans pursuant to SECTION
10.06(b), Wachovia may, (i) upon 30 days' notice to the Borrower and the
Lenders, resign as L/C Issuer and/or (ii) upon 30 days' notice to the Borrower,
resign as Swing Line Lender. In the event of any such resignation as L/C Issuer
or Swing Line Lender, the Borrower shall be entitled to appoint from among the
Lenders a successor L/C Issuer or Swing Line Lender hereunder; PROVIDED,
HOWEVER, that no failure by the Borrower to appoint any such successor shall
affect the resignation of Wachovia as L/C Issuer or Swing Line Lender, as the
case may be. If Wachovia resigns as L/C Issuer, it shall retain all the rights
and obligations of the L/C Issuer hereunder with respect to all Letters of
Credit outstanding as of the effective date of its resignation as L/C Issuer and
all L/C Obligations with respect thereto (including the right to require the
Lenders to make Base Rate Loans or fund risk participations in Unreimbursed
Amounts pursuant to SECTION 2.03(e)). If Wachovia resigns as Swing Line Lender,
it shall retain all the rights of the Swing Line Lender provided for hereunder
with respect to Swing Line Loans made by it and outstanding as of the effective
date of such resignation, including the right to require the Lenders to make
Base Rate Loans or fund risk participations in outstanding Swing Line Loans
pursuant to SECTION 2.04(c).
(j) NO LIABILITY OF THE L/C ISSUER. As against the L/C Issuer, the
Agents and the Lenders, the Borrower assumes all risks of the acts or omissions
of any beneficiary or transferee of any Letter of Credit with respect to its use
of such Letter of Credit. Neither the L/C Issuer nor any of its officers or
directors shall be liable or responsible for: (i) the use that may be made of
any Letter of Credit or any acts or omissions of any beneficiary or transferee
in connection therewith; (ii) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should prove to
be in any or all respects invalid, insufficient, fraudulent or forged; (iii)
payment by the L/C Issuer against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any documents to bear
any reference or adequate reference to the Letter of Credit; or (iv) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that the Borrower shall have a claim against the L/C Issuer,
and the L/C Issuer shall be liable to the Borrower, to the extent of any direct,
but not consequential, damages suffered by the Borrower that the Borrower proves
were caused by (A) the L/C Issuer's willful misconduct or gross negligence as
determined in a final, non-appealable judgment by a court of competent
jurisdiction in determining whether documents presented under any Letter of
Credit comply with the terms of the Letter of Credit or (B) the L/C Issuer's
willful failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying with the terms
and conditions of the Letter of Credit. In furtherance and not in limitation of
the foregoing, the L/C Issuer may accept documents that appear on their face to
be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary.
10.07 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY. Each of the
Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information, except that Information may be disclosed (a)
to its Affiliates and to its Affiliates' respective partners, directors,
officers, employees, agents, advisors, trustees and representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it; (c) to the extent required by
applicable Laws or regulations or by any subpoena or similar legal process; (d)
to any other party to this Agreement; (e) in connection with the
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exercise of any remedies hereunder or any suit, action or proceeding relating to
this Agreement or the enforcement of rights hereunder; (f) subject to an
agreement containing provisions substantially the same as those of this SECTION
10.07, to (i) any Eligible Assignee of or Participant in, or any prospective
Eligible Assignee of or Participant in, any of its rights or obligations under
this Agreement or (ii) any direct or indirect contractual counterparty or
prospective counterparty (or such contractual counterparty's or prospective
counterparty's professional advisor) to any credit derivative transaction
relating to obligations of the Loan Parties; (g) with the consent of the
Borrower; (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this SECTION 10.07 or (ii) becomes
available to the Administrative Agent, any Lender, the L/C Issuer or any of
their respective Affiliates on a nonconfidential basis from a source other than
the Borrower; (i) to any state, Federal or foreign authority or examiner
(including the National Association of Insurance Commissioners or any other
similar organization) regulating any Lender; or (j) to any rating agency when
required by it (it being understood that, prior to any such disclosure, such
rating agency shall undertake to preserve the confidentiality of any Information
relating to the Loan Parties received by it from such Lender). In addition, the
Administrative Agent, the L/C Issuer and the Lenders may disclose the existence
of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service
providers to the Agents and the Lenders in connection with the administration
and management of this Agreement, the other Loan Documents, the Commitments, and
the Credit Extensions. For the purposes of this SECTION, "INFORMATION" means all
information received from any Loan Party relating to any Loan Party or its
business, other than any such information that is available to the
Administrative Agent, the L/C Issuer or any Lender on a nonconfidential basis
prior to disclosure by any Loan Party; PROVIDED that, in the case of information
received from a Loan Party after the date hereof, such information is clearly
identified in writing at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
SECTION 10.07 shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information. The Borrower shall have the right to approve any
public advertisement or other public notice issued or placed by the Agents with
respect to the Loan Documents and the transactions thereunder, which approval
shall not be unreasonably withheld.
10.08 RIGHT OF SETOFF. If an Event of Default shall have occurred
and be continuing, each Lender, the L/C Issuer and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the L/C Issuer or any such Affiliate to or for the
credit or the account of the Borrower or any other Loan Party against any and
all of the obligations of the Borrower or such Loan Party now or hereafter
existing under this Agreement or any other Loan Document to such Lender or the
L/C Issuer, irrespective of whether or not such Lender or the L/C Issuer shall
have made any demand under this Agreement or any other Loan Document and
although such obligations of the Borrower or such Loan Party may be contingent
or unmatured or are owed to a branch or office of such Lender or the L/C Issuer
different from the branch or office holding such deposit or obligated on such
indebtedness. The rights of each Lender, the L/C Issuer and their respective
Affiliates under this SECTION are in addition to other rights and remedies
(including other rights of setoff) that such Lender, the L/C Issuer or their
respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify
the Borrower and the Administrative Agent promptly after any such setoff and
application, PROVIDED that the failure to give such notice shall not affect the
validity of such setoff and application.
10.09 INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "MAXIMUM RATE"). If any
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Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by an Agent or a
Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.
10.10 RELEASE OF COLLATERAL. Upon the sale, lease, transfer or other
disposition of any item of Collateral of any Loan Party (including, without
limitation, as a result of the sale, in accordance with the terms of the Loan
Documents, of a Subsidiary Guarantor that owns such Collateral) in accordance
with the terms of the Loan Documents, the Collateral Agent will, at the
Borrower's expense, execute and deliver to such Loan Party such documents as
such Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the
Collateral Documents in accordance with the terms of the Loan Documents and, if
applicable, the release of such Subsidiary Guarantor from its obligations under
the Subsidiary Guaranty. Upon the indefeasible payment in full of all
Obligations (including, in the case of any outstanding Letters of Credit,
indefeasible payment to the Administrative Agent for the account of the L/C
Issuer of amounts sufficient to fully Cash Collateralize the aggregate undrawn
amounts thereof, but excluding for this purpose any Unaccrued Indemnity Claims)
after the later of the Maturity Date for the Revolving Credit Facility and the
Term Facility and the termination of all of the Commitments, the Agents shall
take such action as may be reasonably required by the Borrower, at the expense
of the Borrower, to release the Liens created by the Loan Documents.
10.11 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may
be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in SECTION 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
10.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by each Agent
and each Lender, regardless of any investigation made by any Agent or any Lender
or on their behalf and notwithstanding that any Agent or any Lender may have had
notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.
10.13 SEVERABILITY. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the
104
illegal, invalid or unenforceable provisions. The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
10.14 USA PATRIOT ACT NOTICE. Each Lender and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the "ACT"), it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the Act.
10.15 GOVERNING LAW; JURISDICTION; ETC.
(a) GOVERNING LAW. THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
(b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN
PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A
PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY LAW, IN SUCH FEDERAL
COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT THE AGENTS, ANY LENDER OR
THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY
JURISDICTION.
(c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND
EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY IN ANY NEW
YORK STATE OR FEDERAL COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH LOAN PARTY IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY
105
AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE
LAW.
10.16 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENTS AND THE
LENDERS IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS, THE LOANS, THE LETTERS OF CREDIT OR THE
ACTIONS OF ANY AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
PIERRE MERGER CORP.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION, as
a Lender, L/C Issuer and Swing Line Lender
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
BANK OF AMERICA, N.A., as a Lender and
Syndication Agent
By: /s/ W. Xxxxxx Xxxxxxx
---------------------------------
Name: W. Xxxxxx Xxxxxxx
Title: Managing Director
LaSalle Bank N.A.,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
CIT LENDING SERVICES CORPORATION,
as a Lender
By: /s/ Xxxx X. Xxxxxx, XX
---------------------------------
Name: Xxxx X. Xxxxxx, XX
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK, B.A., "RABOBANK
INTERNATIONAL" NEW YORK BRANCH
as a Lender
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Director
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Director
The undersigned hereby agrees to be bound
by the provisions of the
Credit Agreement
as an L/C Issuer solely with respect to
the Existing Letters of Credit
FLEET NATIONAL BANK
By: /s/ W. Xxxxxx Xxxxxxx
---------------------------------
Name: W. Xxxxxx Xxxxxxx
Title: Managing Director
SCHEDULE II
EXISTING LETTERS OF CREDIT
LETTER OF CREDIT EXPIRATION
NUMBER AMOUNT NAME OF BENEFICIARY DATE
3013112 $ 3,500,000.00 International Fidelity Insurance Co. 09/30/04
3013089 $ 250,000.00 Tyson Foods, Inc. 10/31/04
3013148 $ 75,000.00 The Xxxxxxx Indemnity Company 11/30/04
SCHEDULE III
Quarters Ended
----------------------------------------------------------------------
August 30, November 29,
May 31, 2003 2003 2003 March 6, 2004
--------------- --------------- --------------- ---------------
(DOLLARS IN THOUSANDS)
Net income (loss) ........................... 376,235 (1,934,115) 1,768,328 1,223,347
Income Tax provision ........................ 188,207 (1,039,296) 955,872 1,198,564
Interest expense ............................ 3,447,480 5,883,160 3,670,889 3,977,499
Depreciation and amortization ............... 1,150,757 1,164,222 1,165,673 1,124,302
--------------- --------------- --------------- ---------------
EBITDA ...................................... 5,162,679 4,073,971 7,560,762 7,523,712
Restructuring Adjustments: (a)
Distribution expense ...................... 3,157,414 2,690,041 2,594,224 3,171,523
Commissions ............................... 1,166,332 1,154,123 1,520,652 1,471,871
Rent expense .............................. 36,000 36,000 36,000 36,000
Acquisition Adjustments: (b) ................
Compensation expense ...................... 704,307 674,834 715,946 694,983
Travel and entertainment ................. 491,854 514,331 490,030 504,222
Office expense ............................ 96,054 156,502 269,670 101,946
Aircraft expense .......................... 291,547 404,449 315,644 465,930
Operating loss of business retained .......
by selling shareholders ................. 237,356 189,594 138,655 178,723
Other Adjustments:
Professional fees(c) ...................... 734,800 448,220 357,630 852,010
Board of director fees(d) ................. 48,389 16,229 17,020 33,514
Community relations and donations(e) ...... 29,989 28,455 197,947 80,320
Other(f) .................................. 52,928 58,149 63,288 430,590
--------------- --------------- --------------- ---------------
Adjusted EBITDA ............................. 12,209,649 10,444,898 14,277,468 15,545,344
=============== =============== =============== ===============
----------
(a) Represents expenses incurred under related party agreements that
were terminated in March 2004 as part of the Restructuring, including (1)
distribution expenses paid to PF Distribution, LLC in excess of the costs of
such services; (2) commissions paid to PF Purchasing, LLC in excess of the
costs; and (3) rent expense, maintenance and other occupancy costs paid to
related parties pursuant to a lease that was terminated in connection with the
Restructuring. PF Distribution and PF Purchasing were formerly subsidiaries of
PF Management, and were dissolved in connection with the Restructuring.
(b) Represents the following expenses that will no longer be incurred
following the Transaction: (1) compensation expense paid to personnel who will
be terminated in connection with the Transaction and will not be replaced; (2)
travel and entertainment expenses incurred by personnel who will be terminated
in connection with the Transaction and will not be replaced; (3) rent expense,
maintenance and other occupancy costs associated with the lease of an office
building from a related party that will be terminated in connection with the
Transaction; (4) leasing of an aircraft owned by Columbia Hill Aviation, LLC,
which was formerly a subsidiary of PF Management, which will be retained by the
selling shareholders and (5) operating loss (excluding depreciation) of Compass
Outfitters, which will be retained by the selling shareholders.
(c) Represents professional fees related primarily to the management
buyout of PF Management in 2002 and the Restructuring, as well as other fees not
related to our operations.
(d) Following the Transaction, we will not pay fees to members of our
board of directors.
(e) Represents expenses not expected to be incurred following the
Transactions, and consists primarily of Xx. Xxxxxxxxxx'x contributions to the
University of South Carolina, his xxxx mater.
(f) Represents other office and administrative expenses unrelated to
the Pierre Foods business.
