EXHIBIT 10.7
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$136,000,000
CREDIT AGREEMENT
among
DIRECTED ELECTRONICS, INC.,
as Borrower,
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF,
as Lenders,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
CIBC WORLD MARKETS CORP.,
as Syndication Agent,
and
ANTARES CAPITAL CORPORATION,
GENERAL ELECTRIC CAPITAL CORPORATION
and
XXXXX FARGO BANK, N.A.,
as Co-Documentation Agents
Dated as of June 17, 2004
WACHOVIA CAPITAL MARKETS, LLC
and
CIBC WORLD MARKETS, LLC,
as Co-Lead Arrangers and Joint Book Runners
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TABLE OF CONTENTS
PAGE
SECTION 1 DEFINITIONS................................................................................ 2
1.1 Certain Defined Terms.................................................................. 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement..... 30
1.3 Other Definitional Provisions and Rules of Construction................................ 30
1.4 Time References........................................................................ 31
SECTION 2 AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................................................. 31
2.1 Revolving Loans........................................................................ 31
2.2 Term Loan.............................................................................. 33
2.3 Letter of Credit Subfacility........................................................... 35
2.4 Swingline Loan Subfacility............................................................. 38
2.5 Incremental Facility................................................................... 40
2.6 Fees................................................................................... 41
2.7 Commitment Reductions.................................................................. 42
2.8 Prepayments............................................................................ 42
2.9 Default Rate and Payment Dates......................................................... 46
2.10 Conversion Options..................................................................... 47
2.11 Computation of Interest and Fees....................................................... 47
2.12 Pro Rata Treatment and Payments........................................................ 49
2.13 Non-Receipt of Funds by Administrative Agent........................................... 51
2.14 Inability to Determine Interest Rate................................................... 52
2.15 Illegality............................................................................. 52
2.16 Requirements of Law.................................................................... 53
2.17 Indemnity.............................................................................. 54
2.18 Taxes.................................................................................. 54
2.19 Indemnification; Nature of Issuing Lender's Duties..................................... 56
SECTION 3 [RESERVED]................................................................................. 58
SECTION 4 CONDITIONS PRECEDENT....................................................................... 58
4.1 Conditions to Closing Date............................................................. 58
4.2 Conditions to All Extensions of Credit................................................. 64
SECTION 5 BORROWER'S REPRESENTATIONS AND WARRANTIES.................................................. 65
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.......... 65
5.2 Authorization of Borrowing, etc........................................................ 66
5.3 Financial Condition.................................................................... 67
5.4 No Material Adverse Change; No Restricted Payments..................................... 68
5.5 Title to Properties; Liens; Real Property.............................................. 68
5.6 Litigation; Adverse Facts.............................................................. 69
5.7 Payment of Taxes....................................................................... 69
5.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts........... 69
5.9 Governmental Regulation................................................................ 70
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5.10 Securities Activities.................................................................. 70
5.11 Employee Benefit Plans................................................................. 70
5.12 Certain Fees........................................................................... 71
5.13 Environmental Protection............................................................... 71
5.14 Employee Matters....................................................................... 72
5.15 Solvency............................................................................... 72
5.16 Matters Relating to Collateral......................................................... 72
5.17 Disclosure............................................................................. 73
5.18 Use of Proceeds........................................................................ 73
5.19 Foreign Assets Control Regulations, Etc................................................ 74
5.20 Insurance.............................................................................. 74
SECTION 6 BORROWER'S AFFIRMATIVE COVENANTS........................................................... 74
6.1 Financial Statements and Other Reports................................................. 74
6.2 Corporate Existence, etc............................................................... 79
6.3 Payment of Taxes and Claims; Tax Consolidation......................................... 79
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/Condemnation
Proceeds............................................................................... 79
6.5 Inspection Rights; Audits of Inventory and Accounts Receivable; Lender Meeting; Books
and Records............................................................................ 82
6.6 Compliance with Laws, etc.............................................................. 82
6.7 Environmental Review and Investigation, Disclosure, Etc.; Borrower's Actions Regarding
Hazardous Materials Activities, Environmental Claims and Violations of Environmental
Laws................................................................................... 82
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents by Certain
Subsidiaries and Future Subsidiaries................................................... 85
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real Property
Collateral............................................................................. 86
6.10 Deposit Accounts and Cash Management Systems........................................... 86
6.11 Interest Rate Cap...................................................................... 87
6.12 Intellectual Property.................................................................. 87
6.13 Post Closing Covenants................................................................. 89
SECTION 7 BORROWER'S NEGATIVE COVENANTS.............................................................. 89
7.1 Indebtedness........................................................................... 90
7.2 Liens and Related Matters.............................................................. 91
7.3 Investments; Joint Ventures............................................................ 92
7.4 Contingent Obligations................................................................. 92
7.5 Restricted Payments.................................................................... 93
7.6 Financial Covenants.................................................................... 94
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions....................... 95
7.8 Consolidated Capital Expenditures...................................................... 96
7.9 Restriction on Leases.................................................................. 96
7.10 Sales and Lease Backs.................................................................. 97
7.11 Sale or Discount of Receivables........................................................ 97
7.12 Transactions with Shareholders and Affiliates.......................................... 97
7.13 Disposal of Subsidiary Stock........................................................... 98
7.14 Conduct of Business.................................................................... 98
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7.15 Amendments or Waivers of Related Agreements............................................ 98
7.16 Fiscal Year; Accounting Policies....................................................... 99
7.17 No Acquisition of Real Estate.......................................................... 99
7.18 Restrictions on Holdings............................................................... 99
SECTION 8 EVENTS OF DEFAULT.......................................................................... 99
8.1 Failure to Make Payments When Due...................................................... 99
8.2 Default in Other Agreements............................................................ 100
8.3 Breach of Certain Covenants............................................................ 100
8.4 Breach of Warranty..................................................................... 100
8.5 Other Defaults Under Loan Documents.................................................... 100
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc................................... 101
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc..................................... 101
8.8 Judgments and Attachments.............................................................. 101
8.9 Dissolution............................................................................ 102
8.10 Employee Benefit Plans................................................................. 102
8.11 Change in Control...................................................................... 102
8.12 Invalidity of Subsidiary Guaranty or Holdings Guaranty; Failure of Security;
Repudiation of Obligations............................................................. 102
8.13 Hedge Agreements....................................................................... 103
8.14 Subordinated Notes..................................................................... 103
SECTION 9 ADMINISTRATIVE AGENT....................................................................... 104
9.1 Appointment............................................................................ 104
9.2 Delegation of Duties................................................................... 104
9.3 Exculpatory Provisions................................................................. 105
9.4 Reliance by Administrative Agent....................................................... 105
9.5 Notice of Default...................................................................... 106
9.6 Non-Reliance on Administrative Agent and Other Lenders................................. 106
9.7 Indemnification........................................................................ 107
9.8 Administrative Agent in Its Individual Capacity........................................ 107
9.9 Successor Administrative Agent......................................................... 107
9.10 Other Agents........................................................................... 108
SECTION 10 MISCELLANEOUS............................................................................. 108
10.1 Successors and Assigns; Participations; Purchasing Lenders............................. 108
10.2 Expenses............................................................................... 111
10.3 Indemnity.............................................................................. 112
10.4 Set-Off; Security Interest in Deposit Accounts......................................... 113
10.5 Ratable Sharing........................................................................ 114
10.6 Amendments and Waivers................................................................. 114
10.7 Independence of Covenants.............................................................. 116
10.8 Notices................................................................................ 116
10.9 Survival of Representations, Warranties and Agreements................................. 118
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.................................. 118
10.11 Marshalling; Payments Set Aside........................................................ 118
10.12 Severability........................................................................... 119
10.13 Obligations Several; Independent Nature of Lenders' Rights............................. 119
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10.14 Headings............................................................................... 119
10.15 Applicable Law......................................................................... 119
10.16 Successors and Assigns................................................................. 119
10.17 Consent to Jurisdiction and Service of Process......................................... 120
10.18 Waiver of Jury Trial................................................................... 120
10.19 Confidentiality........................................................................ 121
10.20 Lead Arranger, Bookrunner, Documentation Agent and Syndication Agent................... 122
10.21 Counterparts; Effectiveness............................................................ 122
10.22 Patriot Act Notice..................................................................... 122
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EXHIBITS
Exhibit I FORM OF ACCOUNT DESIGNATION LETTER
Exhibit II FORM OF NOTICE OF BORROWING
Exhibit III FORM OF NOTICE OF CONVERSION/CONTINUATION
Exhibit IV FORM OF SECRETARY'S CERTIFICATE
Exhibit V FORM OF REVOLVING NOTE
Exhibit VI FORM OF TERM LOAN NOTE
Exhibit VII FORM OF SWINGLINE NOTE
Exhibit VIII FORM OF COMPLIANCE CERTIFICATE
Exhibit XI FORM OF COMMITMENT TRANSFER SUPPLEMENT
Exhibit XII FORM OF TAX EXEMPT CERTIFICATE
Exhibit XIII FORM OF SOLVENCY CERTIFICATE
Exhibit XIV FORM OF PLEDGE AGREEMENT
Exhibit XV FORM OF SECURITY AGREEMENT
Exhibit XVI FORM OF HOLDINGS GUARANTY
Exhibit XVII FORM OF SUBSIDIARY GUARANTY
Exhibit XVIII FORM OF COLLATERAL ACCESS AGREEMENT
SCHEDULES
Schedule 1.1(a) EBITDA ADDBACKS
Schedule 2.1(a) LENDERS' COMMITMENTS
Schedule 4.1(k) CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
Schedule 5.1 SUBSIDIARIES OF BORROWER
Schedule 5.5A INTELLECTUAL PROPERTY
Schedule 5.5B REAL PROPERTY
Schedule 5.8 MATERIAL CONTRACTS
Schedule 5.11 CERTAIN EMPLOYEE BENEFIT PLANS
Schedule 5.13 ENVIRONMENTAL MATTERS
Schedule 5.20 INSURANCE
Schedule 6.10 DEPOSIT ACCOUNTS
Schedule 7.2 CERTAIN EXISTING LIENS
Schedule 7.3 CERTAIN EXISTING INVESTMENTS
Schedule 7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
Schedule 10.8 LENDERS' LENDING OFFICES
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DIRECTED ELECTRONICS, INC.
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of June 17, 2004 and entered into by and
among DIRECTED ELECTRONICS, INC., a California corporation (the "Borrower"), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually
referred to herein as a "Lender" and collectively as "Lenders"), and WACHOVIA
BANK, NATIONAL ASSOCIATION ("Wachovia"), as administrative agent for Lenders (in
such capacity, "Administrative Agent").
R E C I T A L S
WHEREAS, Borrower has requested that Lenders make loans and other
financial accommodations to Borrower in an aggregate principal amount of up to
$136,000,000, as more particularly described herein;
WHEREAS, Lenders have agreed to extend certain credit facilities to
Borrower, the proceeds of which will be used to (i) refinance certain existing
Indebtedness of Borrower, (ii) pay a one-time dividend to the shareholders of
Borrower, (iii) pay any costs, fees and expenses in connection with this
Agreement and (iv) provide for the working capital and general corporate
requirements of Borrower and its Subsidiaries, including certain capital
expenditures and Permitted Acquisitions;
WHEREAS, Borrower desires to secure all of the Obligations hereunder and
under the other Loan Documents by granting to Administrative Agent, on behalf of
Lenders, a first priority Lien on substantially all of its real, personal and
mixed property, including a pledge of all of the capital stock of each of its
domestic Subsidiaries and 65% of its foreign Subsidiaries; and
WHEREAS, Holdings and all of the domestic Subsidiaries of Borrower have
agreed to guarantee the Obligations hereunder and under the other Loan Documents
and to secure their guaranties by granting to Administrative Agent, on behalf of
Lenders, a first priority Lien on substantially all of their respective real,
personal and mixed property, including a pledge of all of the capital stock of
each of their respective domestic Subsidiaries and 65% of their respective
foreign Subsidiaries:
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Lenders and Administrative
Agent agree as follows:
SECTION 1
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ABR Default Rate" shall have the meaning set forth in Section 2.9.
"Account Designation Letter" shall mean the Notice of Account Designation
Letter dated the Closing Date from Borrower to Administrative Agent in
substantially the form attached hereto as Exhibit I.
"Accounts" means all present and future rights of Borrower to payment for
goods sold or leased or for services rendered (including any such rights
evidenced by instruments or chattel paper), whether due or to become due,
whether now existing or hereinafter arising and wherever arising, and whether or
not they have been earned by performance.
"Additional Loan" shall have the meaning set forth in Section 2.5.
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to Section 9.9.
"Affiliate", as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to (i) direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities
or by contract or otherwise or (ii) vote twenty-five percent (25%) or more of
the securities having ordinary voting power for the election of directors of
such Person.
"Agents" means, collectively, Administrative Agent and Syndication Agent.
"Agreement" means this Credit Agreement dated as of June 17, 2004, as
amended, amended modified or supplemented from time to time in accordance with
its terms.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean, at any time, the rate of interest per annum publicly
announced or otherwise identified from time to time by Wachovia at its principal
office in Charlotte, North Carolina as its prime rate. The parties hereto
acknowledge that the rate announced publicly by Wachovia as its Prime Rate is an
index or base rate and shall not necessarily be its lowest or best rate charged
to its customers or other banks; and "Federal
2
Funds Effective Rate" shall mean, for any day, 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 on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by Administrative Agent from three federal
funds brokers of recognized standing selected by it. If for any reason
Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of Administrative Agent to obtain sufficient quotations in accordance with the
terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.
"Alternate Base Rate Loans" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
"Applicable Percentage" shall mean, for any day, the rate per annum set
forth below opposite the applicable level then in effect, it being understood
that the Applicable Percentage for (a) Revolving Loans that are LIBOR Rate Loans
and for the Letter of Credit Fee shall be the percentage set forth under the
column "LIBOR Rate Margin for Revolving Loans and Letter of Credit Fee", (b)
Revolving Loans that are Alternate Base Rate Loans shall be the percentage set
forth under the column "Alternate Base Rate Margin for Revolving Loans", (c)
Term Loans that are LIBOR Rate Loans shall be the percentage set forth under the
column "LIBOR Rate Margin for Term Loans", (d) Term Loans that are Alternate
Base Rate Loans shall be the percentage set forth under the column "Alternate
Base Rate Margin for Term Loans", and (e) the Commitment Fee shall be the
percentage set forth under the column "Commitment Fee":
LIBOR RATE
MARGIN FOR
REVOLVING ALTERNATE BASE
CONSOLIDATED TOTAL LOANS AND RATE MARGIN LIBOR RATE ALTERNATE BASE
LEVERAGE LETTER OF FOR REVOLVING MARGIN FOR TERM RATE MARGIN COMMITMENT
LEVEL RATIO CREDIT FEE LOANS LOANS FOR TERM LOANS FEE
----- ----------------------------- ---------- -------------- --------------- -------------- ----------
I < or = 3.00 to 1.0 2.75% 1.75% 4.00% 3.00% 0.375%
II > 3.00 to 1.0 but 3.00% 2.00% 4.00% 3.00% 0.50%
< or = 3.75 to 1.0
III > 3.75 to 1.0 but 3.25% 2.25% 4.00% 3.00% 0.50%
< or = 4.50 to 1.0
IV > 4.50 to 1.0 3.50% 2.50% 4.25% 3.25% 0.50%
The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the date five (5) Business Days after the date on which
Administrative Agent has received from Borrower the quarterly financial
information and certifications required to be delivered to Administrative Agent
and Lenders in accordance with the provisions of Sections 6.1(i) and 6.1(iii)
(each an "Interest Determination Date"). Subject to the last sentence of this
definition, such Applicable
3
Percentage shall be effective from such Interest Determination Date until the
next such Interest Determination Date. Notwithstanding the foregoing, the
initial Applicable Percentages shall be set at Level IV until the first Interest
Determination Date to occur after December 31, 2004. If Borrower shall fail to
provide the quarterly financial information and certifications in accordance
with the provisions of Sections 6.1(i) and 6.1(iii), the Applicable Percentage
shall, on the date five (5) Business Days after the date by which Borrower was
so required to provide such financial information and certifications to
Administrative Agent and Lenders, be based on Level IV until such time as such
information and certifications are provided, whereupon the Level shall be
determined by the then current Consolidated Total Leverage Ratio.
"Approved Fund" shall mean, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is managed
by the same investment advisor as such Lender or by an affiliate of such
investment advisor.
"Asset Sale" means the sale by Borrower or any of its Subsidiaries to any
Person other than Borrower or any of its wholly-owned Subsidiaries of (i) any of
the capital stock of any of Borrower's Subsidiaries, (ii) substantially all of
the assets of any division or line of business of Borrower or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Borrower or any of its Subsidiaries (other than (a) inventory sold in the
ordinary course of business and (b) any such other assets in an aggregate amount
not to exceed $200,000 in any fiscal year).
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Bankruptcy Event" shall mean any of the events described in Section 8.6
or 8.7.
"Borrower" means DEI.
"Business Day" shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina or New York, New York are
authorized or required by law to close; provided, however, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.
"Capital Lease", as applied to any Person, means any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.
"Cash" means money, currency or a credit balance in a Deposit Account.
"Cash Equivalents" means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each case maturing within one year
4
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or Xxxxx'x
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Xxxxx'x.
"Class" means, as applied to Lenders, each of the following two classes of
Lenders: (i) Lenders having Term Loan Exposure and (iii) Lenders having
Revolving Loan Exposure.
"Closing Date" means the date of this Agreement.
"Co-Lead Arrangers" means Wachovia Capital Markets, LLC and CIBC World
Markets, LLC, as co-lead arrangers and joint book runners.
"Collateral" means, collectively, all of the real, personal and mixed
property (including capital stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"Collateral Access Agreement" means any landlord waiver, mortgagee waiver,
bailee letter or any similar acknowledgement or agreement of any landlord or
mortgagee in respect of any Real Property Asset where any Collateral is located
or any warehouseman or processor in possession of any Inventory of any Loan
Party, substantially in the form of Exhibit XVIII annexed hereto with such
changes thereto as may be agreed to by Administrative Agent in the reasonable
exercise of its discretion.
"Collateral Account" has the meaning assigned to that term in the Security
Agreement.
"Collateral Documents" means the Pledge Agreement, the Security Agreement
and all other instruments or documents delivered by any Loan Party pursuant to
this Agreement or any of the other Loan Documents in order to grant to
Administrative Agent, on behalf of Lenders, a Lien on any real, personal or
mixed property of that Loan Party as security for the Obligations.
"Commitment" shall mean the Revolving Commitment, the LOC Commitment, the
Term Loan Commitment and the Swingline Commitment, individually or collectively,
as appropriate.
"Commitment Fee" shall have the meaning set forth in Section 2.6(a).
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"Commitment Percentage" shall mean the Revolving Commitment Percentage
and/or the Term Loan Commitment Percentage, as appropriate.
"Commitment Period" shall mean (a) with respect to Revolving Loans, the
period from and including the Closing Date to but excluding the Revolving
Commitment Termination Date and (b) with respect to Letters of Credit, the
period from and including the Closing Date to but excluding the date that is 5
days prior to the Revolving Commitment Termination Date.
"Commitment Transfer Supplement" shall mean a Commitment Transfer
Supplement, in substantially the form of Exhibit XI.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit VIII annexed hereto delivered to Administrative Agent and Lenders by
Borrower pursuant to subsection 6.1(iii).
"Confidential Information Memorandum" means that certain Confidential
Information Memorandum relating to Borrower dated May, 2004.
"Conforming Leasehold Interest" means any Leasehold Property as to which
the lessor has agreed in writing for the benefit of Administrative Agent (which
writing has been delivered to Administrative Agent), whether under the terms of
the applicable lease, under the terms of a Landlord Consent and Estoppel, or
otherwise, to the matters described in the definition of "Landlord Consent and
Estoppel," which interest, if a subleasehold or sub-subleasehold interest, is
not subject to any contrary restrictions contained in a superior lease or
sublease.
"Consolidated Capital Expenditures" means, for any period, the sum of (i)
the aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a liability and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of Borrower and its Subsidiaries)
by Borrower and its Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of Borrower and its
Subsidiaries plus (ii) to the extent not covered by clause (i) of this
definition, the aggregate of all expenditures by Borrower and its Subsidiaries
during that period to acquire (by purchase or otherwise) the business, property
or fixed assets of any Person, or the capital stock or other evidence of
beneficial ownership of any Person that, as a result of such acquisition,
becomes a Subsidiary of Borrower.
"Consolidated Current Assets" means, as at any date of determination, the
total assets of Borrower and its Subsidiaries on a consolidated basis that may
properly be classified as current assets in conformity with GAAP, excluding Cash
and Cash Equivalents.
"Consolidated Current Liabilities" means, as at any date of determination,
the total liabilities of Borrower and its Subsidiaries on a consolidated basis
that may properly be classified as current liabilities in conformity with GAAP,
excluding the current portions of Funded Debt and Capital Leases.
6
"Consolidated EBITDA" means, for any period, the sum of the amounts for
such period of (a) Consolidated Net Income plus to the extent deducted in
determining Consolidated Net Income, (i) Consolidated Interest Expense, (ii)
provisions for taxes based on income, (iii) total depreciation expense, (iv)
total amortization expense, (v) management fees paid to Trivest pursuant to the
Trivest Management Agreement to the extent permitted by Section 7.12, (vi) other
non-recurring and non-cash items reducing Consolidated Net Income in an
aggregate amount not to exceed $3,000,000 and (vii) other one-time add-backs set
forth on Schedule 1.1(a) attached hereto (it being understood that such one-time
add-backs shall roll-off on a quarterly basis and shall not affect Consolidated
EBITDA after one year following the Closing Date), less (b) interest income and
any non-operating, non-recurring and non-operating, non-cash items increasing
Consolidated Net Income, all of the foregoing as determined on a consolidated
basis for Borrower and its Subsidiaries in conformity with GAAP; provided that
in calculating any such items for such period, any Asset Sales or other
acquisitions or dispositions of assets during such period shall have been deemed
to have occurred on the first day of such period.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated EBITDA and (b) the Consolidated Working Capital
Adjustment minus (ii) the sum, without duplication, of the amounts for such
period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans except to the extent the Revolving
Commitments are permanently reduced in connection with such repayments), (b)
Consolidated Capital Expenditures, (c) Consolidated Interest Expense and (d) the
provision for current taxes based on income of Borrower and its Subsidiaries and
payable in cash with respect to such period.
"Consolidated Fixed Charges" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Interest Expense
to the extent payable in cash, (ii) cash payments for taxes based on income
(excluding cash payments on taxes resulting from that certain one-time
settlement in favor of the Borrower in the amount of approximately $6,500,000
from Toyota Motor Corporation), and (iii) all scheduled principal payments to be
made by Borrower or any of its Subsidiaries (whether or not such payments are
actually made) on all Indebtedness of Borrower and its Subsidiaries (including,
without limitation, the principal component of all Capital Leases), all of the
foregoing as determined on a consolidated basis for Borrower and its
Subsidiaries in conformity with GAAP; provided that, solely with respect to
clauses (i) and (iii) above, (a) such components of Consolidated Fixed Charges
for the four-Fiscal Quarter period ending on the last day of the first complete
Fiscal Quarter after the Closing Date shall be such components of Consolidated
Fixed Charges for such Fiscal Quarter multiplied by four, (b) such components of
Consolidated Fixed Charges for the four-Fiscal Quarter period ending on the last
day of the second complete Fiscal Quarter after the Closing Date shall be such
components of Consolidated Fixed Charges for the first two complete Fiscal
Quarters after the Closing Date multiplied by two, and (c) such components of
Consolidated Fixed Charges for the four-Fiscal Quarter period ending on the last
day of the third complete Fiscal Quarter after the Closing Date shall be such
components of Consolidated Fixed Charges for the first three complete Fiscal
Quarters after the Closing Date multiplied by four-thirds.
7
"Consolidated Interest Expense" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Borrower and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Borrower and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements.
"Consolidated Net Income" means, for any period, the net income (or loss)
of Borrower and its Subsidiaries on a consolidated basis for such period taken
as a single accounting period determined in conformity with GAAP; provided that
there shall be excluded (i) the income (or loss) of any Person (other than a
Subsidiary of Borrower) in which any other Person (other than Borrower or any of
its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Borrower or any of its
Subsidiaries by such Person during such period, (ii) the income of any
Subsidiary of Borrower to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iii) any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan, and (iv) (to the
extent not included in clauses (i) through (iii) above) any net extraordinary
gains or net non-cash extraordinary losses.
"Consolidated Net Worth" means, as at any date of determination, the sum
of the capital stock and additional paid-in capital plus retained earnings (or
minus accumulated deficits) of Borrower and its Subsidiaries on a consolidated
basis determined in conformity with GAAP.
"Consolidated Senior Debt" means, as at any date of determination, all
Consolidated Total Debt that is not subordinated in right of payment to the
Obligations.
"Consolidated Senior Leverage Ratio" means, as at the last day of any
Fiscal Quarter, the ratio of (a) Consolidated Senior Debt as of the last day of
such Fiscal Quarter, to (b) Consolidated EBITDA for the four Fiscal Quarter
period then ended.
"Consolidated Total Debt" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Borrower and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Leverage Ratio" means, as at the last day of any
Fiscal Quarter, the ratio of (a) Consolidated Total Debt as of the last day of
such Fiscal Quarter, to (b) Consolidated EBITDA for the four Fiscal Quarter
period then ended.
"Consolidated Working Capital" means, as at any date of determination, the
excess (or deficit) of Consolidated Current Assets over Consolidated Current
Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as
8
of the beginning of such period exceeds (or is less than) Consolidated Working
Capital as of the end of such period.
"Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Hedge Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (X) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"Contractual Obligation", as applied to any Person, means any provision of
any Security issued by that Person or of any material indenture, mortgage, deed
of trust, contract, undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement to which Borrower or any of its Subsidiaries is a
party.
"Defaulting Lender" shall mean, at any time, any Lender that, at such time
(a) has failed to make a Loan required pursuant to the term of this Agreement,
including the funding of a Participation Interest in accordance with the terms
hereof or (b) has failed to pay to the Administrative Agent or any Lender an
amount owed by such Lender pursuant to the terms of this Agreement.
"Deposit Account" means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
"DEI" means Directed Electronics, Inc., a California corporation.
9
"Dividend Transaction" shall mean distributions by Holdings in connection
with the closing of this Agreement consisting of the following: (a) a dividend
payment in an amount not to exceed $72,250,000 to certain equity owners of
Holdings, (b) a dividend payment in an amount not to exceed $28,915,000 to
certain equity owners of Holdings that have converted junior subordinated notes,
(c) a payment in an amount not to exceed $8,870,000 to certain warrant holders
pursuant to the terms of such warrants and (d) an equity gain share payment in
an amount not to exceed $1,285,000.
"Dollars" and the sign "$" mean the lawful money of the United States of
America.
"Domestic Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's Domestic Lending Office shown on Schedule 10.8; and
thereafter, such other office of such Lender (within the United States) as such
Lender may from time to time specify to Administrative Agent and Borrower as the
office of such Lender at which Alternate Base Rate Loans of such Lender are to
be made.
"Employee Benefit Plan" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is or was maintained or contributed to by Borrower,
any of its Subsidiaries or any of their respective ERISA Affiliates.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Borrower or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean
Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide
Act (7 U.S.C. Section 136 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et
seq) and the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
Section 11001 et seq.), each as amended or supplemented, any analogous present
or future state or local statutes or laws, and any regulations promulgated
pursuant to any of the foregoing.
10
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Borrower or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Borrower or
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Borrower or such Subsidiary and with
respect to liabilities arising after such period for which Borrower or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of Section
4043 of ERISA and the regulations issued thereunder with respect to any Pension
Plan (excluding those for which the provision for 30-day notice to the PBGC has
been waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of the Internal
Revenue Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any Pension
Plan or the failure to make any required contribution to a Multiemployer Plan;
(iii) the provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064
of ERISA; (v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which might constitute
grounds under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on Borrower, any
of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of Borrower, any of its Subsidiaries or
any of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefor, or the receipt by Borrower,
any of its Subsidiaries or any of their respective ERISA Affiliates of notice
from any Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act
or omission which could give rise to the imposition on Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates of fines, penalties,
taxes or related charges under Chapter 43 of the Internal Revenue Code or under
Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of
any Employee Benefit Plan; (ix) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Borrower, any of its
Subsidiaries or any of
11
their respective ERISA Affiliates in connection with any Employee Benefit Plan;
(x) receipt from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of
the Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
"Eurodollar Reserve Percentage" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
"Event of Default" means each of the events set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934.
"Extension of Credit" shall mean, as to any Lender, the making of a Loan
by such Lender or the issuance of, or participation in, a Letter of Credit by
such Lender.
"Facilities" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Borrower or any of its Subsidiaries or any of
their respective predecessors.
"Federal Funds Effective Rate" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"Fee Letter" shall mean the letter agreement dated May 21, 2004, addressed
to Borrower from Agents and Co-Lead Arrangers, as amended, modified or otherwise
supplemented.
"Financial Plan" has the meaning assigned to that term in subsection
6.1(x).
"First Priority" means, with respect to any Lien purported to be created
in any Collateral pursuant to any Collateral Document, that (i) such Lien has
priority over any other Lien on such Collateral and (ii) such Lien is the only
Lien (other than Permitted Encumbrances and Liens permitted pursuant to
subsection 7.2) to which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Borrower and its Subsidiaries
ending on December 31 of each calendar year.
12
"Flood Hazard Property" means a Real Property Asset located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"Fronting Fee" shall have the meaning set forth in Section 2.6(b).
"Funded Debt", as applied to any Person, means all Indebtedness of that
Person (including any current portions thereof) which by its terms or by the
terms of any instrument or agreement relating thereto matures more than one year
from, or is directly renewable or extendable at the option of that Person to a
date more than one year from (including an option of that Person under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of one year or more from), the date of the creation
thereof.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof set
forth in subsection 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the circumstances as of
the date of determination.
"Government Acts" shall have the meaning set forth in Section 2.19.
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"Guaranties" means the Holdings Guaranty and the Subsidiary Guaranty.
"Hazardous Materials" means (i) any chemical, material or substance at any
time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive
13
materials; (vi) any asbestos-containing materials; (vii) urea formaldehyde foam
insulation; (viii) electrical equipment which contains any oil or dielectric
fluid containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could pose a hazard to
the health and safety of the owners, occupants or any Persons in the vicinity of
any Facility or to the indoor or outdoor environment.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency Agreement
designed to hedge against fluctuations in interest rates or currency values,
respectively.
"Hedge Agreement Provider" shall mean any Person that enters into a
Secured Hedge Agreement with a Loan Party or any of its Subsidiaries that is
permitted by Section 7.1(v) to the extent such Person is a Lender, an Affiliate
of a Lender or any other Person that was a Lender (or an Affiliate of a Lender)
at the time it entered into the Secured Hedge Agreement but has ceased to be a
Lender (or whose Affiliate has ceased to be a Lender) under this Agreement.
"Holdings" means DEI Holdings, Inc., a Florida corporation.
"Holdings Guaranty" means the Holdings Guaranty executed and delivered by
Holdings on the Closing Date, substantially in the form of Exhibit XVI annexed
hereto, as such Holdings Guaranty may hereafter be amended, supplemented or
otherwise modified from time to time.
"Incremental Facility" shall have the meaning set forth in Section 2.5.
"Indebtedness", as applied to any Person, means (i) all indebtedness for
borrowed money, (ii) that portion of obligations with respect to Capital Leases
that is properly classified as a liability on a balance sheet in conformity with
GAAP, (iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money, (iv) any obligation
owed for all or any part of the deferred purchase price of property or services
(excluding any such obligations incurred under ERISA), which purchase price is
(a) due more than six months from the date of incurrence of the obligation in
respect thereof or (b) evidenced by a note or similar written instrument, and
(v) all indebtedness secured by any Lien on any property or asset owned or held
by that Person regardless of whether the indebtedness secured thereby shall have
been assumed by that Person or is nonrecourse to the credit of that Person.
Obligations under Interest Rate Agreements and Currency Agreements constitute
(X) in the case of Hedge Agreements, Contingent Obligations, and (Y) in all
other cases, Investments, and in neither case constitute Indebtedness.
"Indemnitee" has the meaning assigned to that term in subsection 10.3.
14
"Intellectual Property" means all patents, patent rights, patent
applications, licenses, inventions, trade secrets, trademarks, tradenames,
service marks, copyrights, technology, know-how and proprietary techniques
(including processes and substances) used in or necessary for the conduct of the
business of Borrower and its Subsidiaries as currently conducted that are
material to the condition (financial or otherwise), business or operations of
Borrower and its Subsidiaries, taken as a whole.
"Interest Payment Date" shall mean, commencing after June 30, 2004, (a) as
to any Alternate Base Rate Loan, the last day of each March, June, September and
December and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan
having an Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any LIBOR Rate Loan having an Interest Period longer than
three months, (i) each date that is three (3) calendar months after the first
day of such Interest Period and (ii) the last day of such Interest Period.
"Interest Period" shall mean, with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate Loan
and ending one, two, three or six months (or nine or twelve months if
available to all Lenders) thereafter, as selected by Borrower in the
Notice of Borrowing or Notice of Conversion given with respect thereto;
and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate Loan
and ending one, two, three or six months (or nine or twelve months if
available to all Lenders) thereafter, as selected by Borrower by
irrevocable notice to Administrative Agent not less than three Business
Days prior to the last day of the then current Interest Period with
respect thereto; provided that the foregoing provisions are subject to the
following:
(A) if any Interest Period pertaining to a LIBOR Rate Loan
would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business
Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(B) any Interest Period pertaining to a LIBOR Rate Loan 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 relevant calendar month;
(C) if Borrower shall fail to give notice as provided above,
Borrower shall be deemed to have selected an Alternate Base Rate
Loan to replace the affected LIBOR Rate Loan;
15
(D) no Interest Period in respect of any Loan shall extend
beyond the applicable Maturity Date and, further with regard to the
Term Loans, no Interest Period shall extend beyond any principal
amortization payment date unless the portion of such Term Loan
consisting of Alternate Base Rate Loans together with the portion of
such Term Loan consisting of LIBOR Rate Loans with Interest Periods
expiring prior to or concurrently with the date such principal
amortization payment date is due, is at least equal to the amount of
such principal amortization payment due on such date; and
(E) no more than six (6) LIBOR Rate Loans may be in effect at
any time. For purposes hereof, LIBOR Rate Loans with different
Interest Periods shall be considered as separate LIBOR Rate Loans,
even if they shall begin on the same date, although borrowings,
extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to
constitute a new LIBOR Rate Loan with a single Interest Period.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement to which Borrower or any of its Subsidiaries is a party.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"Inventory" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are then
held by such Person for sale or lease, including raw materials and work in
process.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Borrower or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Borrower), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Borrower from any Person other than
Borrower or any of its Subsidiaries, of any equity Securities of such
Subsidiary, (iii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by Borrower or any of its Subsidiaries to any other Person (other than a
wholly-owned Subsidiary of Borrower), including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business, or (iv)
Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"IP Collateral" means, collectively, the Collateral consisting of rights
in or to Intellectual Property under the Security Agreement.
"Issuing Lender" shall mean Wachovia.
16
"Issuing Lender Fees" shall have the meaning set forth in Section 2.6(c).
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
that in no event shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.
"Key-Man Insurance" shall have the meaning set forth in Section 6.13(a).
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, satisfactory in form and substance to Administrative
Agent, pursuant to which such lessor agrees, for the benefit of Administrative
Agent, (i) that such lessor shall not terminate such lease as a result of a
default by such Loan Party thereunder without first giving Administrative Agent
notice of such default and at least 60 days (or, if such default cannot
reasonably be cured by Administrative Agent within such period, such longer
period as may reasonably be required) to cure such default, (ii) to the matters
contained in a Collateral Access Agreement, and (iii) to such other matters
relating to such Leasehold Property as the Administrative Agent may reasonably
request.
"Leasehold Property" means any leasehold interest of any Loan Party as
lessee under any lease of real property, other than any leasehold interest
designated from time to time by Administrative Agent in its sole discretion as
not being required to be included in the Collateral.
"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement and any Person that becomes a
Lender hereunder pursuant to Section 2.5 or Section 10.1(c), together with their
successors and permitted assigns pursuant to Section 10.1, and the term
"Lenders" shall include Swingline Lender unless the context otherwise requires.
"Letter of Credit" shall mean any letter of credit issued by Issuing
Lender pursuant to the terms hereof as such letter of credit may be amended,
modified, extended, renewed or replaced from time to time.
"Letter of Credit Fee" shall have the meaning set forth in Section 2.6(b).
"Letter of Credit Usage" means, as at any date of determination, the sum
of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lender and not theretofore reimbursed by Borrower (including any such
reimbursement out of the proceeds of Mandatory LOC Borrowings).
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor 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
17
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, 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 (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean the rate per annum at which, as reasonably determined by
Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.
"LIBOR Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on Schedule 10.8; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to Administrative Agent and Borrower as the office of such Lender
at which the LIBOR Rate Loans of such Lender are to be made.
"LIBOR Rate" shall mean a rate per annum (rounded upwards, if necessary,
to the next higher 1/100th of 1%) determined by Administrative Agent pursuant to
the following formula:
LIBOR Rate = LIBOR
-----------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.
"Lien" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"Loan" or "Loans" means one or more of the Term Loans, Revolving Loans,
Additional Loans (if any) or Swingline Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of Credit
(and any LOC Documents), the Guaranties and the Collateral Documents.
"Loan Party" means each of Borrower, Holdings and any of Borrower's
Subsidiaries from time to time executing a Loan Document, and "Loan Parties"
means all such Persons, collectively.
18
"LOC Commitment" shall mean the commitment of Issuing Lender to issue
Letters of Credit and with respect to each Lender that has a Revolving
Commitment, the commitment of such Lender to purchase Participation Interests in
the Letters of Credit up to such Lender's LOC Committed Amount as specified in
Schedule 2.1(a), as such amount may be reduced from time to time in accordance
with the provisions hereof.
"LOC Committed Amount" shall have the meaning set forth in Section 2.3(a).
"LOC Documents" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or (ii) any collateral security for such obligations.
"LOC Obligations" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding (including any Existing Letters of
Credit), assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (ii) the aggregate amount of all drawings under
Letters of Credit honored by Issuing Lender but not theretofore reimbursed.
"Mandatory LOC Borrowing" shall have the meaning set forth in Section
2.3(e).
"Mandatory Swingline Borrowing" shall have the meaning set forth in
Section 2.4(b)(ii).
"Margin Determination Certificate" means an Officer's Certificate of
Borrower delivered (a) with respect to each Fiscal Quarter (other than each
fourth Fiscal Quarter), together with the three most recent financial statements
required pursuant to subsection 6.1(i), and (b) with respect to each fourth
Fiscal Quarter, within 45 days of the last day of such fourth Fiscal Quarter,
setting forth in reasonable detail the Consolidated Total Leverage Ratio that is
applicable as of the last day of the fiscal period for which such financial
statements and Officer's Certificate are being delivered.
"Margin Stock" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Borrower and its Subsidiaries, taken as a whole, or (ii) the
material impairment of the ability of the Borrower, individually, or the Loan
Parties, taken as a whole to perform, or of Administrative Agent or Lenders to
enforce, the Obligations.
"Material Contract" means any contract or other arrangement to which
Borrower or any of its Subsidiaries is a party (other than the Loan Documents)
(i) for which breach, nonperformance, cancellation or failure to renew could
reasonably be expected to have a Material Adverse Effect or (ii) involving
stated monetary liability of the Borrower or its Subsidiaries in an amount in
excess of $1,000,000 per annum.
19
"Maturity Date" shall mean (a) with respect to the Term Loan, the Term
Loan Maturity Date and (b) with respect to the Revolving Loans, Swingline Loans
and Letters of Credit, the Revolving Commitment Termination Date.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs (paid
to non-Affiliates) incurred in connection with such Asset Sale, including (i)
income taxes reasonably estimated to be actually payable within two years of the
date of such Asset Sale as a result of any gain recognized in connection with
such Asset Sale and (ii) payment of the outstanding principal amount of, premium
or penalty, if any, and interest on any Indebtedness (other than the Loans) that
is secured by a Lien on the stock or assets in question and that is required to
be repaid under the terms thereof as a result of such Asset Sale.
"Net Insurance/Condemnation Proceeds" means any Cash payments or proceeds
received by Borrower or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Borrower or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of (a)
any actual and reasonable documented costs incurred by Borrower or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Borrower or such Subsidiary in respect thereof, and (b) any amounts retained by
or paid to parties having superior rights, permitted by this Agreement, to such
proceeds, awards or payments.
"Note Purchase Agreement" means that certain Note Purchase Agreement, of
even date herewith, by and among the Loan Parties, American Capital Financial
Services, Inc., as agent and the purchasers identified therein, pursuant to
which certain Subordinated Notes are issued, as such Note Purchase Agreement may
be amended from time to time to the extent permitted under subsection 7.15.
"Notes" means one or more of the Term Loan Notes, Revolving Notes or
Swingline Notes or any combination thereof.
"Notice of Borrowing" shall mean a request for a Revolving Loan borrowing
pursuant to Section 2.1(b)(i) or a Swingline Loan borrowing pursuant to Section
2.4(b)(i), as appropriate. A Form of Notice of Borrowing is attached as Exhibit
II.
"Notice of Conversion" shall mean the written notice of extension or
conversion as referenced in Section 2.10.
20
"Obligations" means (i) all obligations of every nature of each Loan Party
from time to time owed to Administrative Agent, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise and (ii)
solely for purposes of the Collateral Documents and the Guaranties, all
liabilities and obligations, whenever arising, owing from any Loan Party or any
of their Subsidiaries to any Hedge Agreement Provider arising under any Secured
Hedge Agreement permitted pursuant to Section 7.1(v).
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents and by its chief
financial officer or its treasurer; provided that every Officers' Certificate
with respect to the compliance with a condition precedent to the making of any
Loans hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition and any
definitions or other provisions contained in this Agreement relating thereto,
(ii) a statement that, in the opinion of the signers, they have made or have
caused to be made such examination or investigation as is reasonably necessary
to enable them to express an informed opinion as to whether or not such
condition has been complied with, and (iii) a statement as to whether, in the
opinion of the signers, such condition has been complied with.
"Operating Lease" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) that is not a Capital Lease other than any
such lease under which that Person is the lessor.
"Participant" shall have the meaning set forth in Section 10.1(b).
"Participation Interest" shall mean a participation interest purchased by
a Revolving Lender in LOC Obligations as provided in Section 2.3(c) and in
Swingline Loans as provided in Section 2.4.
"Patriot Act" shall have the meaning set forth in Section 10.22.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to Section 412 of the Internal Revenue Code or Section
302 of ERISA.
"Permitted Acquisition" shall mean an acquisition or any series of related
acquisitions by a Loan Party of (a) all or substantially all of the assets or a
majority of the outstanding voting stock or economic interests of a Person that
is incorporated, formed or organized in the United States or Canada or (b) any
division, line of business or other business unit of a Person that is
incorporated, formed or organized in the United States or Canada (such Person or
such division, line of business or other business unit of such Person shall be
referred to herein as the "Target"), in each case that is a type of business (or
assets used in a type of business) permitted to be engaged in by Borrower and
its Subsidiaries pursuant to Section 7.14 hereof, so long as (i) no Event of
Default or Potential Event of Default shall then exist or would exist after
giving
21
effect thereto, (ii) Borrower shall demonstrate to the reasonable satisfaction
of Administrative Agent and the Requisite Lenders that, after giving effect to
the acquisition on a pro forma basis (giving effect to adjustments for owner
compensation for such period, documented to the reasonable satisfaction of the
Administrative Agent, to the extent such compensation does not continue after
such acquisition) (A) the Consolidated Total Leverage Ratio shall be less than
or equal to the ratio that is 0.25 lower than the Consolidated Total Leverage
Ratio then required under Section 7.6A and (B) Loan Parties are in compliance
with each of the financial covenants set forth in Section 7.6, (iii)
Administrative Agent, on behalf of Lenders, shall have received (or shall
receive in connection with the closing of such acquisition) a First Priority
perfected security interest in all property (including, without limitation,
capital stock) acquired with respect to the Target in accordance with the terms
of Sections 6.8 and 6.9 and the Target, if a Person, shall have executed
counterparts of the Subsidiary Guaranty and the Security Agreement and take such
further action as required under Sections 6.8 and 6.9, (iv) the Target shall
have earnings before interest, taxes, depreciation and amortization for the four
fiscal quarter period prior to the acquisition date in an amount greater than
$0, as adjusted for owner compensation for such period, documented to the
reasonable satisfaction of the Administrative Agent, to the extent such
compensation does not continue after such acquisition (provided that the
aggregate consideration paid by the Loan Parties and their Subsidiaries shall
not exceed $5,000,000 for any Target which, but for such owner compensation
adjustment, would have negative earnings for such period), (v) such acquisition
shall not be a "hostile" acquisition and shall have been approved by the board
of directors and/or shareholders of the applicable Loan Party and the Target,
(vi) the Borrower shall have provided at least ten (10) days prior written
notice of such acquisition to the Administrative Agent (which shall distribute
such notice to the Lenders), (vii) after giving effect to such acquisition,
there shall be at least $5,000,000 of borrowing availability under the Revolving
Commitment and (viii) the aggregate consideration (including without limitation
equity consideration, earn outs or deferred compensation or non-competition
arrangements and the amount of Indebtedness and other liabilities assumed by
Loan Parties and their Subsidiaries) paid by Loan Parties and their Subsidiaries
(A) in connection with any such acquisition of a Target organized in Canada
shall not exceed $7,000,000, (B) in connection with any such acquisition shall
not exceed $10,000,000 and (C) for all acquisitions made during any twelve month
period shall not exceed $20,000,000.
"Permitted Encumbrances" means the following types of Liens (excluding any
such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA, any such Lien relating to or imposed in connection
with any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in
each case incurred in the ordinary course of business (a) for amounts not
yet overdue or (b) for amounts that are overdue and that (in the case of
any such amounts overdue for a period in excess of 5 days) are being
contested in good faith by appropriate proceedings, so long as (1) such
reserves or
22
other appropriate provisions, if any, as shall be required by GAAP shall
have been made for any such contested amounts, and (2) in the case of a
Lien with respect to any portion of the Collateral, such contested
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the
Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance with
any applicable terms of the Collateral Documents and not interfering in
any material respect with the ordinary conduct of the business of Borrower
or any of its Subsidiaries or resulting in a material diminution in the
value of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do not
and will not interfere in any material respect with the ordinary conduct
of the business of Borrower or any of its Subsidiaries or result in a
material diminution in the value of any Collateral as security for the
Obligations;
(vii) any (a) interest or title of a lessor or sublessor under any
lease permitted by subsection 7.9, (b) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such lease
to any restriction or encumbrance referred to in the preceding clause (b),
so long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements relating
solely to leases permitted by this Agreement;
(ix) Liens securing Inventory financed through the issuance of
commercial letters of credit permitted pursuant to subsection 7.4(ii); and
(x) Liens in favor of a Hedge Agreement Provider in connection with
a Secured Hedge Agreement, but only if such Hedge Agreement Provider and
Administrative Agent, on behalf of Lenders, shall share pari passu in the
collateral subject to such Liens.
23
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"Pledge Agreement" means the Pledge Agreement executed and delivered by
the Loan Parties on the Closing Date, substantially in the form of Exhibit XIV
annexed hereto.
"Pledged Collateral" means, collectively, the "Pledged Collateral" as
defined in the Pledge Agreement or the Security Agreement.
"Potential Event of Default" means a condition or event that, after notice
or lapse of time or both, would constitute an Event of Default.
"Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.
"Pro Rata Share" means (i) with respect to all payments, computations and
other matters relating to the Term Loan Commitment or the Term Loan of any
Lender, the percentage obtained by dividing (x) the Term Loan Exposure of that
Lender by (y) the aggregate Term Loan Exposure of all Lenders, (ii) with respect
to all payments, computations and other matters relating to the Revolving
Commitment or the Revolving Loans of any Lender or any Letters of Credit issued
or participations therein purchased by any Lender, the percentage obtained by
dividing (x) the Revolving Loan Exposure of that Lender by (y) the aggregate
Revolving Loan Exposure of all Lenders, and (iii) for all other purposes with
respect to each Lender, the percentage obtained by dividing (x) the Term Loan
Exposure of that Lender plus the Revolving Loan Exposure of that Lender by (y)
the aggregate Term Loan Exposure of all Lenders plus the aggregate Revolving
Loan Exposure of all Lenders, in any such case as the applicable percentage may
be adjusted by assignments permitted pursuant to subsection 10.1. The initial
Pro Rata Share of each Lender for purposes of each of clauses (i), (ii), (iii)
and (iv) of the preceding sentence is set forth opposite the name of that Lender
on Schedule 2.1(a) annexed hereto.
"PTO" means the United States Patent and Trademark Office or any successor
or substitute office in which filings are necessary or, in the opinion of
Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"Purchasing Lenders" shall have the meaning set forth in Section 10.1(c).
"Real Property Asset" means, at any time of determination, any interest
then owned by any Loan Party in any real property.
"Register" shall have the meaning set forth in Section 10.1(d).
"Related Agreements" means Trivest Management Agreement.
24
"Release" means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of Hazardous Materials into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials), including the movement
of any Hazardous Materials through the air, soil, surface water or groundwater.
"Requirement of Law" shall mean, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Requisite Lenders" means Lenders holding in the aggregate greater than
50% of (i) the Commitments (and Participation Interests therein) or (ii) if the
Commitments have been terminated, the outstanding Loans and Participation
Interests (including the Participation Interests of the Issuing Lender in any
Letters of Credit and of the Swingline Lender in Swingline Loans) provided,
however, that if any Lender shall be a Defaulting Lender at such time, then
there shall be excluded from the determination of Required Lenders, Obligations
(including Participation Interests) owing to such Defaulting Lender and such
Defaulting Lender's Commitments, or after termination of the Commitments, the
principal balance of the Obligations owing to such Defaulting Lender.
"Restricted Payment" means (i) any dividend or other distribution, direct
or indirect, on account of any shares of any class of stock of Borrower or any
of its Subsidiaries now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of Borrower or any of its Subsidiaries now or hereafter outstanding, (iii) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of Borrower or
any of its Subsidiaries now or hereafter outstanding, (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to, any Subordinated Indebtedness
and (v) any prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any other
Indebtedness.
"Revolving Commitment" shall mean, with respect to each Revolving Lender,
the commitment of such Revolving Lender to make Revolving Loans in an aggregate
principal amount at any time outstanding up to an amount equal to such Revolving
Lender's Revolving Commitment Percentage of the Revolving Committed Amount.
"Revolving Commitment Percentage" shall mean, for each Revolving Lender,
the percentage identified as its Revolving Commitment Percentage on Schedule
2.1(a) or in the Register, as such percentage may be modified in connection with
any assignment made in accordance with the provisions of Section 10.1(c).
25
"Revolving Commitment Termination Date" shall mean the date that is five
(5) years from the Closing Date.
"Revolving Committed Amount" shall have the meaning set forth in Section
2.1(a).
"Revolving Lender" shall mean, as of any date of determination, a Lender
holding a Revolving Commitment on such date.
"Revolving Loan" shall have the meaning set forth in Section 2.1.
"Revolving Loan Exposure" means, with respect to any Lender as of any date
of determination (i) prior to the termination of the Revolving Commitments, that
Lender's Revolving Commitment and (ii) after the termination of the Revolving
Commitments, the sum of (a) the aggregate outstanding principal amount of the
Revolving Loans of that Lender plus (b) in the event that Lender is an Issuing
Lender, the aggregate Letter of Credit Usage in respect of all Letters of Credit
issued by that Lender (in each case net of any participations purchased by other
Lenders in such Letters of Credit or any unreimbursed drawings thereunder) plus
(c) the aggregate amount of all participations purchased by that Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any Letters of
Credit.
"Revolving Note" or "Revolving Notes" shall mean the promissory notes of
Borrower provided pursuant to Section 2.1(e) in favor of each of the Revolving
Lenders evidencing the Revolving Loans, individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"Secured Hedge Agreement" means any Hedge Agreement between a Loan Party
and a Hedge Agreement Provider, as amended, modified, supplemented, extended or
restated from time to time.
"Securities" means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities" or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing, but shall exclude the Subordinated
Notes.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor statute.
"Security Agreement" means the Security Agreement executed and delivered
by Holdings, Borrower and Borrower's Subsidiaries on the Closing Date,
substantially in the form of Exhibit XV annexed hereto.
26
"Solvent" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Subordinated Indebtedness" means (i) the Indebtedness of Borrower
evidenced by the Subordinated Notes and (ii) any other Indebtedness of Borrower
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
reasonably satisfactory to Agent.
"Subordinated Note Documents" means all material agreements, documents,
certificates and instruments executed into connection with the Subordinated
Notes.
"Subordinated Notes" means the (i) $37,000,000 in aggregate principal
amount of LIBOR +8% subordinated notes due June 17, 2011 of Borrower and the
other Loan Parties and (ii) $37,000,000 in aggregate principal amount of 12%
subordinated notes due June 17, 2012 of Borrower and the other Loan Parties, in
each case issued pursuant to the Note Purchase Agreement.
"Subordination Agreement" means that certain Subordination Agreement dated
as of the date hereof by and among the Administrative Agent, American Capital
Financial Services, Inc., Borrower and the other parties thereto, as amended,
modified or supplemented from time to time in accordance with its terms.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof. Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
Borrower.
27
"Subsidiary Guarantor" means any domestic Subsidiary of Borrower that
executes and delivers a counterpart of the Subsidiary Guaranty on the Closing
Date or from time to time thereafter pursuant to subsection 6.8.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and delivered
by existing domestic Subsidiaries of Borrower on the Closing Date and to be
executed and delivered by additional domestic Subsidiaries of Borrower from time
to time thereafter in accordance with subsection 6.8, substantially in the form
of Exhibit XVII annexed hereto, as such Subsidiary Guaranty may hereafter be
amended, supplemented or otherwise modified from time to time.
"Swingline Commitment" shall mean the commitment of Swingline Lender to
make Swingline Loans in an aggregate principal amount at any time outstanding up
to the Swingline Committed Amount, and the commitment of the Revolving Lenders
to purchase participation interests in the Swingline Loans as provided in
Section 2.4(b)(ii), as such amounts may be reduced from time to time in
accordance with the provisions hereof.
"Swingline Committed Amount" shall mean the amount of Swingline Lender's
Swingline Commitment as specified in Section 2.4(a).
"Swingline Lender" shall mean Wachovia and any successor swingline lender.
"Swingline Loan" shall have the meaning set forth in Section 2.4(a).
"Swingline Note" shall mean the promissory note of Borrower in favor of
Swingline Lender evidencing the Swingline Loans provided pursuant to Section
2.4(d), as such promissory note may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"Syndication Agent" shall mean CIBC World Markets Corp., acting through
one or more of its agencies, branches or affiliates.
"Tax Exempt Certificate" shall have the meaning set forth in Section 2.18.
"Taxes" shall have the meaning set forth in Section 2.18.
"Term Loan" shall have the meaning set forth in Section 2.2(a).
"Term Loan Commitment" shall mean, with respect to each Term Loan Lender,
the commitment of such Term Loan Lender to make its portion of the Term Loan in
a principal amount equal to such Term Loan Lender's Term Loan Commitment
Percentage of the Term Loan Committed Amount (and for purposes of making
determinations of Requisite Lenders hereunder after the Closing Date, the
principal amount outstanding on the Term Loan).
"Term Loan Commitment Percentage" shall mean, for any Term Loan Lender,
the percentage identified as its Term Loan Commitment Percentage on Schedule
2.1(a), as such
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percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 10.1.
"Term Loan Committed Amount" shall have the meaning set forth in Section
2.2(a).
"Term Loan Exposure" means, with respect to any Lender as of any date of
determination (i) prior to the funding of the Term Loans, that Lender's Term
Loan Commitment and (ii) after the funding of the Term Loans, the outstanding
principal amount of the Term Loan of that Lender.
"Term Loan Lender" shall mean, as of any date of determination, any Lender
that holds a portion of the outstanding Term Loan on such date.
"Term Loan Maturity Date" shall mean the date that is six (6) years from
the Closing Date.
"Term Note" or "Term Notes" shall mean the promissory notes of Borrower in
favor of each of the Term Loan Lenders evidencing the portion of the Term Loan
provided pursuant to Section 2.2(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"Total Utilization of Revolving Commitments" means, as at any date of
determination, the sum of (i) the aggregate principal amount of all outstanding
Revolving Loans (other than Revolving Loans made for the purpose of reimbursing
the applicable Issuing Lender for any amount drawn under any Letter of Credit
but not yet so applied) plus (ii) the aggregate principal amount of all
outstanding Swingline Loans plus (iii) the Letter of Credit Usage.
"Transfer Effective Date" shall have the meaning set forth in each
Commitment Transfer Supplement.
"Type" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan, as the case may be.
"Trivest" means Trivest Partners, L.P., a Florida limited partnership.
"Trivest Management Agreement" means that certain Management Agreement
dated as of December 21, 1999, as amended and modified, by and between Trivest
and Borrower, as in effect on the Closing Date.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"Wachovia" shall mean Wachovia Bank, National Association, a national
banking association.
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1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Borrower to Lenders pursuant to clauses (i), (ii) and (x) of
subsection 6.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(iv)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 5.3.
For purposes of computing the financial covenants set forth in Sections
7.6 and 7.8 for any applicable test period, any Permitted Acquisition or
permitted sale of assets (including a stock sale) shall have been deemed to have
taken place as of the first day of such applicable test period.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
D. The parties hereto acknowledge that they have each been represented by
counsel and have each cooperated in the drafting and preparation of this
Agreement. Accordingly, the general rule of contract interpretation requiring
any ambiguity to be construed against the drafter in connection with the
interpretation of this Agreement or any Loan Document shall be disregarded and
shall not be applied to construe any portion of this Agreement or any Loan
Document.
E. (i) Any reference in this Agreement or any Loan Document to any
agreement means such agreement as it may be amended, supplemented or otherwise
modified from time to time; (ii) any reference in this Agreement or any Loan
Document to any law, statute, regulation, rule or other legislative action shall
mean such law, statute, regulation, rule or other legislative action as amended,
supplemented or otherwise modified from time to time, and shall include any
30
rule or regulation promulgated thereunder; and (iii) any reference in this
Agreement or any Loan Document to a Person shall include the successor or
assignee of such Person.
1.4 TIME REFERENCES.
Unless otherwise specified, all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable).
SECTION 2
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 REVOLVING LOANS.
(a) Revolving Commitment. During the Commitment Period, subject to
the terms and conditions hereof, each Revolving Lender severally agrees to
make revolving credit loans ("Revolving Loans") to Borrower from time to
time for the purposes hereinafter set forth; provided, however, that (i)
with regard to each Revolving Lender individually, the sum of such
Revolving Lender's share of outstanding Revolving Loans plus such
Revolving Lender's Revolving Commitment Percentage of outstanding
Swingline Loans plus such Revolving Lender's Revolving Commitment
Percentage of outstanding LOC Obligations shall not exceed such Revolving
Lender's Revolving Commitment Percentage of the Revolving Committed Amount
and (ii) with regard to the Revolving Lenders collectively, the sum of the
aggregate amount of outstanding Revolving Loans plus outstanding Swingline
Loans plus outstanding LOC Obligations shall not exceed the Revolving
Committed Amount then in effect. For purposes hereof, the aggregate
maximum amount available hereunder shall be TWENTY-FIVE MILLION DOLLARS
($25,000,000) (as such aggregate maximum amount may be reduced from time
to time as provided in Section 2.7, the "Revolving Committed Amount").
Revolving Loans may consist of Alternate Base Rate Loans or LIBOR Rate
Loans, or a combination thereof, as Borrower may request, and may be
repaid and reborrowed in accordance with the provisions hereof; provided,
however, the Revolving Loans made on the Closing Date and on the two
Business Days immediately following the Closing Date shall bear interest
at the Alternate Base Rate unless Borrower executes a funding indemnity
letter in form and substance reasonably satisfactory to Administrative
Agent. LIBOR Rate Loans shall be made by each Revolving Lender at its
LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending
Office.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. Borrower may request a Revolving Loan
borrowing by delivering a written Notice of Borrowing (or telephone
notice promptly confirmed in writing by delivery of a written Notice
of Borrowing, which delivery may be by fax) to Administrative Agent
not later than 1:00 P.M. on the Business Day prior to the date of
the requested borrowing in the case of
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Alternate Base Rate Loans, and on the third Business Day prior to
the date of the requested borrowing in the case of LIBOR Rate Loans.
Each such Notice of Borrowing shall be irrevocable and shall specify
(A) that a Revolving Loan is requested, (B) the date of the
requested borrowing (which shall be a Business Day), (C) the
aggregate principal amount to be borrowed and (D) whether the
borrowing shall be comprised of Alternate Base Rate Loans, LIBOR
Rate Loans or a combination thereof, and if LIBOR Rate Loans are
requested, the Interest Period(s) therefor. If Borrower shall fail
to specify in any such Notice of Borrowing (1) an applicable
Interest Period in the case of a LIBOR Rate Loan, then such notice
shall be deemed to be a request for an Interest Period of one month,
or (2) the Type of Revolving Loan requested, then such notice shall
be deemed to be a request for an Alternate Base Rate Loan hereunder.
Administrative Agent shall give notice to each Revolving Lender
promptly upon receipt of each Notice of Borrowing, the contents
thereof and each such Revolving Lender's share thereof.
(ii) Minimum Amounts. Each Revolving Loan that is made as an
Alternate Base Rate Loan shall be in a minimum aggregate amount of
$250,000 and integral multiples of $100,000 in excess thereof (or
the remaining amount of the Revolving Committed Amount, if less).
Each Revolving Loan that is made as a LIBOR Rate Loan shall be in a
minimum aggregate amount of $1,000,000 and integral multiples of
$100,000 in excess thereof (or the remaining amount of the Revolving
Committed Amount, if less).
(iii) Advances. Each Revolving Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available to
Administrative Agent for the account of Borrower at the office of
Administrative Agent specified in Section 10.8, or at such other
office as Administrative Agent may designate in writing, upon
reasonable advance notice by 1:00 P.M. on the date specified in the
applicable Notice of Borrowing, in Dollars and in funds immediately
available to Administrative Agent. Such borrowing will then be made
available to Borrower by Administrative Agent by crediting the
account of Borrower on the books of such office with the aggregate
of the amounts made available to Administrative Agent by the
Revolving Lenders and in like funds as received by Administrative
Agent.
(c) Repayment. Revolving Loans may be borrowed, repaid and
reborrowed in accordance with the terms hereof. The principal amount of
all Revolving Loans shall be due and payable in full on the Revolving
Commitment Termination Date, unless accelerated sooner pursuant to Section
8.
(d) Interest. Subject to the provisions of Section 2.9, Revolving
Loans shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as
Revolving Loans shall be comprised of Alternate Base Rate Loans,
each such Alternate Base
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Rate Loan shall bear interest at a per annum rate equal to the sum
of the Alternate Base Rate plus the Applicable Percentage; and
(ii) LIBOR Rate Loans. During such periods as Revolving Loans
shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
shall bear interest at a per annum rate equal to the sum of the
LIBOR Rate plus the Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each Interest
Payment Date occurring after June 30, 2004.
(e) Revolving Notes. Borrower's obligation to pay each Revolving
Lender's Revolving Loans shall be evidenced by a Revolving Note made
payable to such Lender in substantially the form of Exhibit V.
2.2 TERM LOAN.
(a) Term Loan. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each
Term Loan Lender severally agrees to make available to Borrower on the
Closing Date such Term Loan Lender's Term Loan Commitment Percentage of a
term loan in Dollars (the "Term Loan") in the aggregate principal amount
of ONE HUNDRED ELEVEN MILLION DOLLARS ($111,000,000) (the "Term Loan
Committed Amount") for the purposes hereinafter set forth. The Term Loan
may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a
combination thereof, as Borrower may request; provided that on the Closing
Date and on the two Business Days following the Closing Date the Term Loan
shall bear interest at the Alternate Base Rate. LIBOR Rate Loans shall be
made by each Term Loan Lender at its LIBOR Lending Office and Alternate
Base Rate Loans at its Domestic Lending Office. Amounts repaid or prepaid
on the Term Loan may not be reborrowed.
(b) Repayment of Term Loan. The principal amount of the Term Loan
shall be repaid in twenty-four (24) consecutive quarterly installments (as
reduced pursuant to Section 2.8) as follows:
PRINCIPAL AMORTIZATION TERM LOAN
PAYMENT DATE PRINCIPAL AMORTIZATION PAYMENT
---------------------- ------------------------------
September 30, 2004 $ 277,500
December 31, 2004 $ 277,500
March 31, 2005 $ 277,500
June 30, 2005 $ 277,500
September 30, 2005 $ 277,500
December 31, 2005 $ 277,500
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PRINCIPAL AMORTIZATION TERM LOAN
PAYMENT DATE PRINCIPAL AMORTIZATION PAYMENT
----------------------- ------------------------------
March 31, 2006 $ 277,500
June 30, 2006 $ 277,500
September 30, 2006 $ 277,500
December 31, 2006 $ 277,500
March 31, 2007 $ 277,500
June 30, 2007 $ 277,500
September 30, 2007 $ 277,500
December 31, 2007 $ 277,500
March 31, 2008 $ 277,500
June 30, 2008 $ 277,500
September 30, 2008 $ 277,500
December 31, 2008 $ 277,500
March 31, 2009 $ 277,500
June 30, 2009 $ 277,500
September 30, 2009 $ 26,362,500
December 31, 2009 $ 26,362,500
March 31, 2010 $ 26,362,500
Term Loan Maturity Date $ 26,362,500
(c) Interest on the Term Loan. Subject to the provisions of Section
2.9, the Term Loan shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as the Term
Loan shall be comprised of Alternate Base Rate Loans, each such
Alternate Base Rate Loan shall bear interest at a per annum rate
equal to the sum of the Alternate Base Rate plus the Applicable
Percentage; and
(ii) LIBOR Rate Loans. During such periods as the Term Loan
shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
shall bear interest at a per annum rate equal to the sum of the
LIBOR Rate plus the Applicable Percentage.
Interest on the Term Loan shall be payable in arrears on each
Interest Payment Date occurring after June 30, 2004.
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(d) Term Notes. Borrower's obligation to pay each Term Loan
Lender's Term Loan shall be evidenced, upon such Term Loan Lender's
request, by a Term Note made payable to such Lender in substantially the
form of Exhibit VI.
2.3 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of
the LOC Documents, if any, and any other terms and conditions which
Issuing Lender may reasonably require, during the Commitment Period
Issuing Lender shall issue, and the Revolving Lenders shall participate
in, standby Letters of Credit for the account of Borrower from time to
time upon request in a form reasonably acceptable to Issuing Lender;
provided, however, that (i) the aggregate amount of LOC Obligations shall
not at any time exceed FIVE MILLION DOLLARS ($5,000,000) (the "LOC
Committed Amount"), (ii) the sum of the aggregate amount of outstanding
Revolving Loans plus outstanding Swingline Loans plus outstanding LOC
Obligations shall not at any time exceed the Revolving Committed Amount
then in effect, (iii) all Letters of Credit shall be denominated in U.S.
Dollars and (iv) Letters of Credit shall be issued for any lawful
corporate purposes, including in connection with workers' compensation and
other insurance programs. Except as otherwise expressly agreed upon by all
the Revolving Lenders, no Letter of Credit shall have an original expiry
date more than twelve (12) months from the date of issuance; provided,
however, so long as no Event of Default or Potential Event of Default has
occurred and is continuing and subject to the other terms and conditions
to the issuance of Letters of Credit hereunder, the expiry dates of
Letters of Credit may be extended annually or periodically from time to
time on the request of Borrower or by operation of the terms of the
applicable Letter of Credit to a date not more than twelve (12) months
from the date of extension; provided, further, that no Letter of Credit,
as originally issued or as extended, shall have an expiry date extending
beyond the date that is five (5) days prior to the Revolving Commitment
Termination Date. Each Letter of Credit shall comply with the related LOC
Documents. The issuance and expiry date of each Letter of Credit shall be
a Business Day. Any Letters of Credit issued hereunder shall be in a
minimum original face amount of $50,000.
(b) Notice and Reports. The request for the issuance of a Letter
of Credit shall be submitted to Issuing Lender at least three (3) Business
Days prior to the requested date of issuance. Issuing Lender will promptly
upon request provide to Administrative Agent for dissemination to the
Revolving Lenders a detailed report specifying the Letters of Credit which
are then issued and outstanding and any activity with respect thereto
which may have occurred since the date of any prior report, and including
therein, among other things, the account party, the beneficiary, the face
amount, expiry date as well as any payments or expirations which may have
occurred. Issuing Lender will further provide to Administrative Agent
promptly upon request copies of the Letters of Credit. Issuing Lender will
provide to Administrative Agent promptly upon request a summary report of
the nature and extent of LOC Obligations then outstanding.
35
(c) Participations. Each Revolving Lender, upon issuance of any
Letter of Credit (or upon a Person becoming a Revolving Lender hereunder),
shall be deemed to have purchased without recourse a risk participation
from Issuing Lender in such Letter of Credit and the obligations arising
thereunder and any collateral relating thereto, in each case in an amount
equal to its Revolving Commitment Percentage of the obligations under such
Letter of Credit and shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and be obligated to pay to
Issuing Lender therefor and discharge when due, its Revolving Commitment
Percentage of the obligations arising under such Letter of Credit. Without
limiting the scope and nature of each Revolving Lender's participation in
any Letter of Credit, to the extent that Issuing Lender has not been
reimbursed as required hereunder or under any LOC Document, each such
Revolving Lender shall pay to Issuing Lender its Revolving Commitment
Percentage of such unreimbursed drawing in same day funds on the day of
notification by Issuing Lender of an unreimbursed drawing pursuant to and
in accordance with the provisions of subsection (d) hereof. The obligation
of each Revolving Lender to so reimburse Issuing Lender shall be absolute
and unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event, provided
that the Revolving Lenders shall have no obligation to so reimburse the
Issuing Lender in respect of any liability incurred by the Issuing Lender
arising out of the gross negligence or willful misconduct of the Issuing
Lender, as determined by a court of competent jurisdiction. Any such
reimbursement shall not relieve or otherwise impair the obligation of
Borrower to reimburse Issuing Lender under any Letter of Credit, together
with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, Issuing Lender will promptly notify Borrower and Administrative
Agent. Borrower shall reimburse Issuing Lender on the day of drawing under
any Letter of Credit (either with the proceeds of a Revolving Loan
obtained hereunder or otherwise) in same day funds as provided herein or
in the LOC Documents. If Borrower shall fail to reimburse Issuing Lender
as provided herein, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the ABR Default Rate. Unless
Borrower shall immediately notify Issuing Lender and Administrative Agent
of its intent to otherwise reimburse Issuing Lender, Borrower shall be
deemed to have requested a Mandatory LOC Borrowing in the amount of the
drawing as provided in subsection (e) hereof, the proceeds of which will
be used to satisfy the reimbursement obligations. Borrower's reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of any rights of set-off, counterclaim or
defense to payment Borrower may claim or have against Issuing Lender,
Administrative Agent, Lenders, the beneficiary of the Letter of Credit
drawn upon or any other Person, including without limitation any defense
based on any failure of Borrower to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit. Issuing
Lender will promptly notify the other Revolving Lenders of the amount of
any unreimbursed drawing and each Revolving Lender shall promptly pay to
Administrative Agent for the account of Issuing Lender, in Dollars and in
immediately available funds, the amount of such Revolving Lender's
Revolving Commitment Percentage of such unreimbursed drawing. Such payment
shall be made on the day such notice is received by such
36
Revolving Lender from Issuing Lender if such notice is received at or
before 2:00 P.M., otherwise such payment shall be made at or before 12:00
Noon on the Business Day next succeeding the day such notice is received.
If such Revolving Lender does not pay such amount to Issuing Lender in
full upon such request, such Revolving Lender shall, on demand, pay to
Administrative Agent for the account of Issuing Lender interest on the
unpaid amount during the period from the date of such drawing until such
Revolving Lender pays such amount to Issuing Lender in full at a rate per
annum equal to, if paid within two (2) Business Days of the date of
drawing, the Federal Funds Effective Rate and thereafter at a rate equal
to the Alternate Base Rate. Each Revolving Lender's obligation to make
such payment to Issuing Lender, and the right of Issuing Lender to receive
the same, shall be absolute and unconditional, shall not be affected by
any circumstance whatsoever and without regard to the termination of this
Agreement or the Commitments hereunder, the existence of a Event of
Default or Potential Event of Default or the acceleration of the
Obligations hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Repayment with Revolving Loans. On any day on which Borrower
shall have requested, or been deemed to have requested, a Revolving Loan
to reimburse a drawing under a Letter of Credit, Administrative Agent
shall give notice to the Revolving Lenders that a Revolving Loan has been
requested or deemed requested in connection with a drawing under a Letter
of Credit, in which case a Revolving Loan borrowing comprised entirely of
Alternate Base Rate Loans (each such borrowing, a "Mandatory LOC
Borrowing") shall be immediately made (without giving effect to any
termination of the Commitments pursuant to Section 8) pro rata based on
each Revolving Lender's respective Revolving Commitment Percentage
(determined before giving effect to any termination of the Commitments
pursuant to Section 8) and the proceeds thereof shall be paid directly to
Issuing Lender for application to the respective LOC Obligations. Each
Revolving Lender hereby irrevocably agrees to make such Revolving Loans on
the day such notice is received by the Revolving Lenders from
Administrative Agent if such notice is received at or before 2:00 P.M.,
otherwise such payment shall be made at or before 12:00 Noon on the
Business Day next succeeding the day such notice is received, in each case
notwithstanding (i) the amount of Mandatory LOC Borrowing may not comply
with the minimum amount for borrowings of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Section 4.2
are then satisfied, (iii) whether a Default or an Event of Default then
exists, (iv) failure for any such request or deemed request for Revolving
Loan to be made by the time otherwise required in Section 2.1(b), (v) the
date of such Mandatory LOC Borrowing, or (vi) any reduction in the
Revolving Committed Amount after any such Letter of Credit may have been
drawn upon. In the event that any Mandatory LOC Borrowing cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to Borrower), then each such Revolving Lender
hereby agrees that it shall forthwith fund (as of the date the Mandatory
LOC Borrowing would otherwise have occurred, but adjusted for any payments
received from Borrower on or after such date and prior to such purchase)
its Participation Interests in the outstanding LOC Obligations; provided,
further, that in the event any Revolving Lender shall fail to fund its
Participation Interest on the day the
37
Mandatory LOC Borrowing would otherwise have occurred, then the amount of
such Revolving Lender's unfunded Participation Interest therein shall bear
interest payable by such Revolving Lender to Issuing Lender upon demand,
at the rate equal to, if paid within two (2) Business Days of such date,
the Federal Funds Effective Rate, and thereafter at a rate equal to the
Alternate Base Rate.
(f) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. Issuing Lender shall have the
Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP may
be incorporated therein and deemed in all respects to be a part thereof.
(h) Designation of Subsidiaries as Account Parties.
Notwithstanding anything to the contrary set forth in this Agreement,
including without limitation Section 2.3(a), a Letter of Credit issued
hereunder may contain a statement to the effect that such Letter of Credit
is issued for the account of a Subsidiary of Borrower; provided that,
notwithstanding such statement, Borrower shall be the actual account party
for all purposes of this Agreement for such Letter of Credit and such
statement shall not affect Borrower's reimbursement obligations hereunder
with respect to such Letter of Credit.
2.4 SWINGLINE LOAN SUBFACILITY.
(a) Swingline Commitment. During the Commitment Period, subject to
the terms and conditions hereof, Swingline Lender, in its individual
capacity, agrees to make certain revolving credit loans to Borrower (each
a "Swingline Loan" and, collectively, the "Swingline Loans") for the
purposes hereinafter set forth; provided, however, (i) the aggregate
amount of Swingline Loans outstanding at any time shall not exceed FIVE
MILLION DOLLARS ($5,000,000) (the "Swingline Committed Amount"), and (ii)
the sum of the outstanding Revolving Loans plus outstanding Swingline
Loans plus outstanding LOC Obligations shall not exceed the Revolving
Committed Amount. Swingline Loans hereunder may be repaid and reborrowed
in accordance with the provisions hereof.
(b) Swingline Loan Borrowings.
(i) Notice of Borrowing and Disbursement. Swingline Lender
will make Swingline Loans available to Borrower on any Business Day
upon delivery of a Notice of Borrowing by Borrower to Administrative
Agent not later than 3:00 P.M. on such Business Day. Swingline Loan
borrowings hereunder shall be made in minimum amounts of $100,000
and in integral amounts of $100,000 in excess thereof.
38
(ii) Repayment of Swingline Loans. Swingline Loans may be
borrowed, repaid and reborrowed in accordance with the terms hereof.
Each Swingline Loan borrowing shall be due and payable on the
Revolving Commitment Termination Date. Swingline Lender may, at any
time, in its sole discretion, by written notice to Borrower and
Administrative Agent, demand repayment of its Swingline Loans by way
of a Revolving Loan borrowing, in which case Borrower shall be
deemed to have requested a Revolving Loan borrowing comprised
entirely of Alternate Base Rate Loans in the amount of such
Swingline Loans; provided, however, that, in the following
circumstances, any such demand shall also be deemed to have been
given one Business Day prior to each of (A) the Revolving Commitment
Termination Date, (B) the occurrence of any Bankruptcy Event, (C)
upon acceleration of the Obligations hereunder, whether on account
of a Bankruptcy Event or any other Event of Default, and (D) the
exercise of remedies in accordance with the provisions of Section 8
hereof (each such Revolving Loan borrowing made on account of any
such deemed request therefor as provided herein being hereinafter
referred to as "Mandatory Swingline Borrowing"). Each Revolving
Lender hereby irrevocably agrees to make such Revolving Loans
promptly upon any such request or deemed request on account of each
Mandatory Swingline Borrowing in the amount and in the manner
specified in the preceding sentence and on the same such date
notwithstanding (1) the amount of Mandatory Swingline Borrowing may
not comply with the minimum amount for borrowings of Revolving Loans
otherwise required hereunder, (2) whether any conditions specified
in Section 4.2 are then satisfied, (3) whether a Default or an Event
of Default then exists, (4) failure of any such request or deemed
request for Revolving Loans to be made by the time otherwise
required in Section 2.1(b)(i), (5) the date of such Mandatory
Swingline Borrowing, or (6) any reduction in the Revolving Committed
Amount or termination of the Revolving Commitments immediately prior
to such Mandatory Swingline Borrowing or contemporaneously
therewith. In the event that any Mandatory Swingline Borrowing
cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code), then each Revolving Lender
hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Swingline Borrowing would otherwise have occurred, but
adjusted for any payments received from Borrower on or after such
date and prior to such purchase) from Swingline Lender such
participations in the outstanding Swingline Loans as shall be
necessary to cause each such Revolving Lender to share in such
Swingline Loans ratably based upon its respective Revolving
Commitment Percentage (determined before giving effect to any
termination of the Commitments pursuant to Section 8); provided that
(x) all interest payable on the Swingline Loans shall be for the
account of Swingline Lender until the date as of which the
respective participation is purchased, and (y) at the time any
purchase of participations pursuant to this sentence is actually
made, the purchasing Revolving Lender shall be required to pay to
Swingline Lender interest on the principal amount of such
participation purchased for each day from and including the day upon
which the Mandatory Swingline Borrowing would otherwise have
39
occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2) Business
Days of the date of the Mandatory Swingline Borrowing, the Federal
Funds Effective Rate, and thereafter at a rate equal to the
Alternate Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions of
Section 2.9(b), Swingline Loans shall bear interest at a per annum rate
equal to the Alternate Base Rate plus the Applicable Percentage for
Revolving Loans that are Alternate Base Rate Loans. Interest on Swingline
Loans shall be payable in arrears on each Interest Payment Date occurring
after June 30, 2004.
(d) Swingline Note. The Swingline Loans shall be evidenced by a
duly executed promissory note of Borrower to Swingline Lender in the
original amount of the Swingline Committed Amount and substantially in the
form of Exhibit VII.
2.5 INCREMENTAL FACILITY.
Subject to the terms and conditions set forth herein, Borrower shall have
the right, at any time and from time to time, to incur additional Indebtedness
under this Agreement in the form of one or more (but not to exceed five)
additional term loan facilities (each an "Incremental Facility") by an aggregate
amount of up to $50,000,000. The following terms and conditions shall apply to
each Incremental Facility: (a) the loans made under any such Incremental
Facility (each an "Additional Loan") shall constitute Obligations and will be
secured and guaranteed with the other Loans on a pari passu basis, (b) the
interest rate margin applicable to any such Incremental Facility shall be no
higher than 0.25% above the Applicable Percentage for any existing series of
Term Loans (including any existing Additional Loans) without a corresponding
increase in the Applicable Percentage for such existing Term Loans (including
any existing Additional Loans), (c) the interest rate margin, weighted average
life to maturity and final maturity applicable to any such Incremental Facility
shall be determined at the time such Incremental Facility is made available, but
in any event (i) such final maturity will not be shorter than the Term Loan
Maturity Date and will not extend beyond June 16, 2011 and (ii) such weighted
average life to maturity will not be shorter than the weighted average life to
maturity of any existing series of Term Loans (including any existing Additional
Loans), (d) any such Incremental Facility shall be entitled to the same voting
rights as the existing Loans and shall be entitled to receive proceeds of
prepayments on the same basis as comparable Loans, (e) any such Incremental
Facility shall be obtained from existing Lenders or from other banks, financial
institutions or investment funds, in each case in accordance with the terms set
forth below, (f) any such Incremental Facility shall be in a minimum principal
amount of $7,500,000 and integral multiples of $1,000,000 in excess thereof, (g)
the proceeds of any Additional Loan will be used to finance capital expenditures
and working capital and other general corporate purposes, including Permitted
Acquisitions, (h) the conditions to Extensions of Credit in Section 4.2 shall
have been satisfied and (i) Administrative Agent shall have received from
Borrower updated financial projections and an Officers' Certificate, in each
case in form and substance satisfactory to Administrative Agent, demonstrating
that, after giving effect to any such Incremental Facility, Borrower will be in
compliance with the financial covenants set forth in Section 7.6. Participation
in any such Incremental Facility hereunder shall be offered first to each of the
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existing Lenders, but each such Lender shall have no obligation to provide all
or any portion of such Incremental Facility. If, upon the date that is fifteen
(15) Business Days after the existing Lenders are invited by the Administrative
Agent to participate in such Incremental Facility, the amount of the Incremental
Facility requested by Borrower shall exceed the commitments which the existing
Lenders are willing to provide with respect to such Incremental Facility, then
Borrower may invite other banks, financial institutions and investment funds
reasonably acceptable to Administrative Agent to join this Agreement as Lenders
hereunder for the portion of such Incremental Facility not taken by existing
Lenders, provided that such other banks, financial institutions and investment
funds shall enter into such joinder agreements to give effect thereto as
Administrative Agent and Borrower may reasonably request. Administrative Agent
is authorized to enter into, on behalf of Lenders, any amendment to this
Agreement or any other Loan Document as may be necessary to incorporate the
terms of any new Incremental Facility therein.
2.6 FEES.
(a) Commitment Fee. In consideration of the Revolving Commitment,
Borrower agrees to pay to Administrative Agent, for the ratable benefit of
the Revolving Lenders, a commitment fee (the "Commitment Fee") in an
amount equal to the Applicable Percentage per annum on the average daily
unused amount of the Revolving Committed Amount. For purposes of
computation of the Commitment Fee, LOC Obligations shall be considered
usage but Swingline Loans shall not be considered usage of the Revolving
Committed Amount. The Commitment Fee shall be payable quarterly in arrears
on the last Business Day of each calendar quarter.
(b) Letter of Credit Fees. In consideration of the LOC
Commitments, Borrower agrees to pay to Administrative Agent, for the
ratable benefit of the Revolving Lenders, a fee (the "Letter of Credit
Fee") equal to the Applicable Percentage for Revolving Loans that are
LIBOR Rate Loans per annum on the average daily maximum amount available
to be drawn under each Letter of Credit from the date of issuance to the
date of expiration. In addition to such Letter of Credit Fee, Borrower
agrees to pay to Issuing Lender, for its own account without sharing by
the other Lenders, an additional fronting fee (the "Fronting Fee") of
one-eighth of one percent (0.125%) per annum on the average daily maximum
amount available to be drawn under each such Letter of Credit issued by
it. The Letter of Credit Fee and the Fronting Fee shall each be payable
quarterly in arrears on the last Business Day of each calendar quarter.
(c) Issuing Lender Fees. In addition to the Letter of Credit Fees
and Fronting Fees payable pursuant to subsection (b) hereof, Borrower
shall pay to Issuing Lender for its own account without sharing by the
other Lenders the reasonable and customary charges from time to time of
Issuing Lender with respect to the amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of Credit
(collectively, the "Issuing Lender Fees").
(d) Administrative Fee. Borrower agrees to pay to Administrative
Agent the annual administrative fee as described in the Fee Letter.
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2.7 COMMITMENT REDUCTIONS.
(a) Voluntary Reductions. Borrower shall have the right to
terminate or permanently reduce the unused portion of the Revolving
Committed Amount at any time or from time to time upon not less than five
(5) Business Days' prior written notice to Administrative Agent (which
shall notify Lenders thereof as soon as practicable) of each such
termination or reduction, which notice shall specify the effective date
thereof and the amount of any such reduction which shall be in a minimum
amount of $1,000,000 or a whole multiple of $100,000 in excess thereof and
shall be irrevocable and effective upon receipt by Administrative Agent;
provided that no such reduction or termination shall be permitted if after
giving effect thereto, and to any prepayments of the Revolving Loans made
on the effective date thereof, the sum of the then outstanding aggregate
principal amount of the outstanding Revolving Loans plus outstanding
Swingline Loans plus outstanding LOC Obligations would exceed the
Revolving Committed Amount then in effect.
(b) Mandatory Reductions. On any date that the Revolving Loans are
required to be prepaid pursuant to the terms of Section 2.8(b) (i) - (v),
the Revolving Committed Amount shall be automatically permanently reduced
by the amount of such required prepayment and/or reduction.
(c) Maturity Date. The Revolving Commitment, the LOC Commitment
and the Swingline Commitment shall automatically terminate on the
Revolving Commitment Termination Date, unless terminated sooner pursuant
to Section 8.
2.8 PREPAYMENTS.
(a) Optional Prepayments. Borrower shall have the right to prepay
Loans in whole or in part from time to time; provided, however, that each
partial prepayment of Term Loans (i) consisting of LIBOR Loans shall be in
a minimum principal amount of $1,000,000 and integral multiples of
$100,000 in excess thereof and (ii) consisting of Alternate Base Rate
Loans shall be in a minimum principal amount of $250,000 and integral
multiples of $100,000 in excess thereof. Borrower shall give three (3)
Business Days' irrevocable notice in the case of LIBOR Rate Loans and
same-day irrevocable notice on any Business Day in the case of Alternate
Base Rate Loans, to Administrative Agent (which shall notify Lenders
thereof as soon as practicable). To the extent that Borrower elects to
prepay the Term Loans, amounts prepaid under this Section 2.8(a) shall be
applied to the remaining amortization payments thereof on a pro rata
basis, first to Alternate Base Rate Loans and then to LIBOR Rate Loans in
direct order of Interest Period maturities. All prepayments under this
Section 2.8(a) shall be subject to Section 2.17, but otherwise without
premium or penalty. Interest on the principal amount prepaid shall be
payable on the next occurring Interest Payment Date that would have
occurred had such loan not been prepaid or, at the request of
Administrative Agent, interest on the principal amount prepaid shall be
payable on any date that a prepayment is made hereunder through the date
of prepayment.
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(b) Mandatory Prepayments and Mandatory Reductions of Revolving
Commitments. The Loans shall be prepaid and/or the Revolving Commitments
shall be permanently reduced in the amounts and under the circumstances
set forth below, all such prepayments and/or reductions to be applied as
set forth below or as more specifically provided in subsection 2.8(b)(ix):
(i) Prepayments and Reductions From Net Asset Sale Proceeds.
No later than the first Business Day following the date of receipt
by Borrower or any of its Subsidiaries of any Net Asset Sale
Proceeds in respect of any Asset Sale, Borrower shall prepay the
Loans and/or the Revolving Commitments shall be permanently reduced
in an aggregate amount equal to such Net Asset Sale Proceeds.
Notwithstanding the preceding sentence, such prepayment shall not be
required to the extent that Borrower or any of its Subsidiaries
reinvests the Net Asset Sale Proceeds within 180 days after the date
of such Net Asset Sale by making Consolidated Capital Expenditures
for productive fixed assets of a kind used or usable in the business
of Borrower and its Subsidiaries.
(ii) Prepayments and Reductions from Net
Insurance/Condemnation Proceeds. No later than the first Business
Day following the date of receipt by Administrative Agent or by
Borrower or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds that are required to be applied to
prepay the Loans and/or reduce the Revolving Commitments pursuant to
the provisions of subsection 6.4C, Borrower shall prepay the Loans
and/or the Revolving Commitments shall be permanently reduced in an
aggregate amount equal to the amount of such Net
Insurance/Condemnation Proceeds.
(iii) Prepayments and Reductions Due to Reversion of Surplus
Assets of Pension Plans. On the date of return to Borrower or any of
its Subsidiaries of any surplus assets of any pension plan of
Borrower or any of its Subsidiaries, Borrower shall prepay the Loans
and/or the Revolving Commitments shall be permanently reduced in an
aggregate amount (such amount being the "Net Pension Proceeds")
equal to 100% of such returned surplus assets, net of transaction
costs and expenses incurred in obtaining such return, including
incremental taxes payable as a result thereof.
(iv) Prepayments and Reductions Due to Issuance of Debt or
Equity Securities. On the date of receipt by Borrower of the Cash
proceeds (any such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated
therewith, in each case payable to non-Affiliates, including
reasonable legal fees and expenses, being "Net Securities Proceeds")
from the issuance after the Closing Date of any debt or equity
Securities of Holdings, Borrower or any of its Subsidiaries (except
for (A) the issuance of up to $2,500,000 of debt or equity
Securities to employees of Borrower and its Subsidiaries and (B) the
issuance of equity Securities to Persons who are shareholders or
warrant holders of Holdings as of the Closing Date, or their
43
successors and assigns, but only to the extent that the Net
Securities Proceeds of all issuances of equity Securities by
Holdings to such Persons hereafter do not exceed $5,000,000 in the
aggregate (excluding from such $5,000,000 limitation debt or equity
issued as consideration in connection with a Permitted
Acquisition)), Borrower shall prepay the Loans and/or the Revolving
Commitments shall be permanently reduced in an aggregate amount
equal to 100% of such Net Securities Proceeds in the case of debt
Securities issuances and 50% of such Net Securities Proceeds in the
case of equity Securities issuances.
(v) Prepayments and Reductions from Consolidated Excess Cash
Flow. On the 90th day after the end of each Fiscal Year, Borrower
shall prepay the Loans and/or the Revolving Commitments shall be
permanently reduced in an aggregate amount equal to (A) 75% of
Consolidated Excess Cash Flow if the Consolidated Total Leverage
Ratio as of the last day of such Fiscal Year is greater than 3.50x,
(B) 50% of Consolidated Excess Cash Flow if the Consolidated Total
Leverage Ratio as of the last day of such Fiscal Year is greater
than 2.50x but less than or equal to 3.50x or (C) 0% of Consolidated
Excess Cash Flow if the Consolidated Total Leverage Ratio as of the
last day of such Fiscal Year is less than or equal to 2.50x.
(vi) Key-Man Insurance. No later than the first Business Day
following the date of receipt by Administrative Agent or by Borrower
or any of its Subsidiaries of any proceeds from the Key-Man
Insurance, Borrower shall prepay the Loans and/or the Revolving
Commitments shall be permanently reduced in an aggregate amount
equal to 50% of the amount of such proceeds.
(vii) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Loans and/or reduction of
the Revolving Commitments pursuant to subsections 2.8(b) (i) - (vi),
Borrower shall deliver to Administrative Agent an Officers'
Certificate demonstrating the calculation of the amount (the "Net
Proceeds Amount") of the applicable Net Asset Sale Proceeds or Net
Insurance/Condemnation Proceeds, the applicable Net Pension Proceeds
or Net Securities Proceeds (as such terms are defined in subsections
2.8(b)(iii) and (iv), or the applicable Consolidated Excess Cash
Flow, as the case may be, that gave rise to such prepayment and/or
reduction. In the event that Borrower shall subsequently determine
that the actual Net Proceeds Amount was greater than the amount set
forth in such Officers' Certificate (including if any actual taxes
to be paid as a result of an Asset Sale is less than the estimated
taxes to be paid as a result of such Asset Sale), Borrower shall
promptly make an additional prepayment of the Loans (and/or, if
applicable, the Revolving Commitments shall be permanently reduced)
in an amount equal to the amount of such excess, and Borrower shall
concurrently therewith deliver to Administrative Agent an Officers'
Certificate demonstrating the derivation of the additional Net
Proceeds Amount resulting in such excess.
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(viii) Prepayments Due to Reductions or Restrictions of
Revolving Commitments. Borrower shall from time to time prepay first
the Swingline Loans, and second the Revolving Loans to the extent
necessary so that the Total Utilization of Revolving Commitments
shall not at any time exceed the Revolving Commitments.
(ix) Application of Prepayments.
(A) Application of Voluntary Prepayments by Type of
Loans and Order of Maturity. Any voluntary prepayments
pursuant to subsection 2.8(a) shall be applied as specified by
Borrower in the applicable notice of prepayment; provided that
in the event Borrower fails to specify the Loans to which any
such prepayment shall be applied, such prepayment shall be
applied first to repay outstanding Term Loans to the full
extent thereof, second to repay outstanding Swingline Loans to
the full extent thereof, and third to repay outstanding
Revolving Loans to the full extent thereof and permanently
reduce the Revolving Commitments. Any voluntary prepayments of
the Term Loans pursuant to subsection 2.8(a) shall be applied
to prepay the Term Loans on a pro rata basis (in accordance
with the outstanding principal amounts thereof) and to reduce
the scheduled installments of principal of the Term Loans set
forth in subsection 2.2(b) on a pro rata basis (in accordance
with the outstanding principal amounts thereof) to each
scheduled installment of principal of the Term Loans set forth
in subsection 2.2(b) that is unpaid at the time of such
prepayment; provided, however, that voluntary prepayments made
by Borrower during any calendar year may be applied in forward
order of maturity for the succeeding four quarterly payments.
(B) Application of Mandatory Prepayments by Type of
Loans. Any amount (the "Applied Amount") required to be
applied as a mandatory prepayment of the Loans and/or a
reduction of the Revolving Commitments pursuant to subsections
2.8(b) (i) - (v) shall be applied first to prepay the Term
Loans to the full extent thereof, second, to the extent of any
remaining portion of the Applied Amount, to prepay the
Swingline Loans to the full extent thereof and to permanently
reduce the Revolving Commitments by the amount of such
prepayment, third, to the extent of any remaining portion of
the Applied Amount, to prepay the Revolving Loans to the full
extent thereof and to further permanently reduce the Revolving
Commitments by the amount of such prepayment, and fourth, to
the extent of any remaining portion of the Applied Amount, to
further permanently reduce the Revolving Commitments to the
full extent thereof. Any mandatory prepayments of the Term
Loans pursuant to subsection 2.8(b) shall be applied to prepay
the Term Loans on a pro rata basis (in accordance with the
outstanding principal amounts thereof) and to reduce the
scheduled installments of principal of the Term Loans set
forth in subsection 2.2(b) on a pro rata basis (in accordance
with the outstanding
45
principal amounts thereof) to each scheduled installment of
principal of the Term Loans set forth in subsection 2.2(b)
that is unpaid at the time of such prepayment.
(C) Application of Prepayments to Base Rate Loans and
LIBOR Rate Loans. Considering Term Loans and Revolving Loans
being prepaid separately, any prepayment thereof shall be
applied first to Base Rate Loans to the full extent thereof
before application to LIBOR Rate Loans, in each case in a
manner which minimizes the amount of any payments required to
be made by Borrower pursuant to subsection 2.17.
(c) Hedging Obligations Unaffected. Any repayment or prepayment
made pursuant to this Section 2.8 shall not affect Borrower's obligation
to continue to make payments under any Secured Hedge Agreement, which
shall remain in full force and effect notwithstanding such repayment or
prepayment, subject to the terms of such Secured Hedge Agreement.
2.9 DEFAULT RATE AND PAYMENT DATES.
(a) If all or a portion of the principal amount of any Loan which
is a LIBOR Rate Loan shall not be paid when due or continued as a LIBOR
Rate Loan in accordance with the provisions of Section 2.10 (whether at
the stated maturity, by acceleration or otherwise), such overdue principal
amount of such Loan shall be converted to an Alternate Base Rate Loan at
the end of the Interest Period applicable thereto.
(b) (i) If all or a portion of the principal amount of any LIBOR
Rate Loan shall not be paid when due, such overdue amount shall bear
interest at a rate per annum which is equal to the rate that would
otherwise be applicable thereto plus 2%, until the end of the Interest
Period applicable thereto, and thereafter at a rate per annum which is
equal to the Alternate Base Rate plus the sum of the Applicable Percentage
then in effect for Alternate Base Rate Loans and 2% (the "ABR Default
Rate") or (ii) if any interest payable on the principal amount of any Loan
or any fee or other amount, including the principal amount of any
Alternate Base Rate Loan, payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum which is equal to
the ABR Default Rate, in each case from the date of such non-payment until
such amount is paid in full (after as well as before judgment). Upon the
occurrence, and during the continuance, of any other Event of Default
hereunder, at the option of the Requisite Lenders, the principal of and,
to the extent permitted by law, interest on the Loans and any other
amounts owing hereunder or under the other Loan Documents shall bear
interest, payable on demand, at a per annum rate which is (A) in the case
of principal, the rate that would otherwise be applicable thereto plus 2%
or (B) in the case of interest, fees or other amounts, the ABR Default
Rate (after as well as before judgment).
46
(c) Interest on each Loan shall be payable in arrears on each
Interest Payment Date; provided that interest accruing pursuant to
paragraph (b) of this Section 2.9 shall be payable from time to time on
demand.
2.10 CONVERSION OPTIONS.
(a) Borrower may, in the case of the Revolving Loans and the Term
Loan, elect from time to time to convert Alternate Base Rate Loans to
LIBOR Rate Loans by giving Administrative Agent at least three Business
Days' prior irrevocable written notice of such election. In addition,
Borrower may elect from time to time to convert LIBOR Rate Loans to
Alternate Base Rate Loans by giving Administrative Agent irrevocable
written notice by 1:00 P.M. one Business Date prior to the proposed date
of conversion. A form of Notice of Conversion is attached as Exhibit III.
If the date upon which an Alternate Base Rate Loan is to be converted to a
LIBOR Rate Loan is not a Business Day, then such conversion shall be made
on the next succeeding Business Day. All or any part of outstanding
Alternate Base Rate Loans may be converted as provided herein; provided
that (i) no Loan may be converted into a LIBOR Rate Loan when any Event of
Default or Potential Event of Default has occurred and is continuing and
(ii) partial conversions shall be in an aggregate principal amount of (A)
in the case of LIBOR Rate Loans, $1,000,000 or a whole multiple of
$100,000 in excess thereof, and (B) in the case of Alternate Base Rate
Loans, $250,000 or a whole multiple of $100,000 in excess thereof. LIBOR
Rate Loans may only be converted to Alternate Base Rate Loans on the last
day of the applicable Interest Period. If the date upon which a LIBOR Rate
Loan is to be converted to an Alternate Base Rate Loan is not a Business
Day, then such conversion shall be made on the next succeeding Business
Day and during the period from such last day of an Interest Period to such
succeeding Business Day such Loan shall bear interest as if it were an
Alternate Base Rate Loan.
(b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by
Borrower with the notice provisions contained in Section 2.10(a);
provided, that no LIBOR Rate Loan may be continued as such when any Event
of Default or Potential Event of Default has occurred and is continuing,
in which case such Loan shall be automatically converted to an Alternate
Base Rate Loan at the end of the applicable Interest Period with respect
thereto. If Borrower shall fail to give timely notice of an election to
continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not
permitted hereunder, such LIBOR Rate Loans shall be automatically
converted to Alternate Base Rate Loans at the end of the applicable
Interest Period with respect thereto.
2.11 COMPUTATION OF INTEREST AND FEES.
(a) Interest payable hereunder with respect to any Alternate Base
Rate Loan based on the Prime Rate shall be calculated on the basis of a
year of 365 days (or 366 days, as applicable) for the actual days elapsed.
All fees, interest and all other amounts payable hereunder shall be
calculated on the basis of a 360 day year for the actual days elapsed.
Administrative Agent shall as soon as practicable notify Borrower and
Lenders
47
of each determination of a LIBOR Rate on the Business Day of the
determination thereof. Any change in the interest rate on a Loan resulting
from a change in the Alternate Base Rate shall become effective as of the
opening of business on the day on which such change in the Alternate Base
Rate shall become effective. Administrative Agent shall as soon as
practicable notify Borrower and Lenders of the effective date and the
amount of each such change.
(b) Each determination of an interest rate by Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and
binding on Borrower and Lenders in the absence of manifest error.
Administrative Agent shall, at the request of Borrower, deliver to
Borrower a statement showing the computations used by Administrative Agent
in determining any interest rate.
(c) It is the intent of Lenders and Loan Parties to conform to and
contract in strict compliance with applicable usury law from time to time
in effect. All agreements between Lenders and Loan Parties are hereby
limited by the provisions of this paragraph which shall override and
control all such agreements, whether now existing or hereafter arising and
whether written or oral. In no way, nor in any event or contingency
(including but not limited to prepayment or acceleration of the maturity
of any Loans and LOC Obligations), shall the interest taken, reserved,
contracted for, charged, or received under this Agreement, under the Notes
or otherwise, exceed the maximum nonusurious amount permissible under
applicable law. If, from any possible construction of any of the Loan
Documents or any other document, interest would otherwise be payable in
excess of the maximum nonusurious amount, any such construction shall be
subject to the provisions of this paragraph and such interest shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum nonusurious
amount, an amount equal to the amount which would have been excessive
interest shall, without penalty, be applied to the reduction of the
principal amount owing on the Loans and not to the payment of interest, or
refunded to Borrower or the other payor thereof if and to the extent such
amount which would have been excessive exceeds such unpaid principal
amount of the Loans. The right to demand payment of the Loans or any other
Indebtedness evidenced by any of the Loan Documents does not include the
right to receive any interest which has not otherwise accrued on the date
of such demand, and Lenders do not intend to charge or receive any
unearned interest in the event of such demand. All interest paid or agreed
to be paid to Lenders with respect to the Loans shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term (including any renewal or extension) of
the Loans so that the amount of interest on account of such indebtedness
does not exceed the maximum nonusurious amount permitted by applicable
law.
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2.12 PRO RATA TREATMENT AND PAYMENTS.
(a) Allocation of Payments Before Event of Default. Each borrowing
of Revolving Loans and any reduction of the Revolving Commitments shall be
made pro rata according to the respective Revolving Commitment Percentages
of Lenders. Each payment under this Agreement or any Note shall be
applied, first, to any fees then due and owing by Borrower pursuant to
Section 2.6, second, to interest then due and owing hereunder and under
the Notes and, third, to principal then due and owing hereunder and under
the Notes. Each payment on account of any fees pursuant to Section 2.6
shall be made pro rata in accordance with the respective amounts due and
owing (except as to the Fronting Fees and Issuing Lender Fees). Each
payment (other than prepayments) by Borrower on account of principal of
and interest on the Revolving Loans and on the Term Loan shall be applied
to such Loans as directed by Borrower or otherwise applied in accordance
with the terms of Section 2.8(a) hereof. Each optional prepayment on
account of principal of the Loans shall be applied in accordance with
Section 2.8(a); provided, that prepayments made pursuant to Section 2.17
shall be applied in accordance with such Section. Each mandatory
prepayment on account of principal of the Loans shall be applied in
accordance with Section 2.8(b). All payments (including prepayments) to be
made by Borrower on account of principal, interest and fees shall be made
without defense, set-off or counterclaim (except as provided in Section
2.18(b)) and shall be made to Administrative Agent for the account of
Lenders at Administrative Agent's office specified on Section 10.8 in
Dollars and in immediately available funds not later than 1:00 P.M. on the
date when due. Administrative Agent shall distribute such payments to
Lenders entitled thereto promptly upon receipt in like funds as received.
If any payment hereunder (other than payments on the LIBOR Rate Loans)
becomes due and payable on a day other than a Business Day, such payment
shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a LIBOR Rate Loan
becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the
result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the
immediately preceding Business Day.
(b) Allocation of Payments After Exercise of Remedies.
Notwithstanding any other provisions of this Agreement to the contrary,
after the exercise of remedies (other than the invocation of default
interest pursuant to Section 2.9(b) by Administrative Agent or Lenders
pursuant to Section 8 (or after the Commitments shall automatically
terminate and the Loans (with accrued interest thereon) and all other
amounts under the Loan Documents (including without limitation the maximum
amount of all contingent liabilities under Letters of Credit) shall
automatically become due and payable in accordance with the terms of such
Section), all amounts collected or received by Administrative Agent or any
Lender on account of the Obligations or any other amounts outstanding
under any of the Loan Documents or in respect of the Collateral shall be
paid over or delivered as follows:
49
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
Administrative Agent in connection with enforcing the rights of Lenders
under the Loan Documents and any protective advances made by
Administrative Agent with respect to the Collateral under or pursuant to
the terms of the Collateral Documents;
SECOND, to the payment of any fees owed to Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of Lenders in connection with enforcing its rights under the Loan
Documents or otherwise with respect to the Obligations owing to such
Lender;
FOURTH, to the payment of all of the Obligations consisting of
accrued fees and interest, including, with respect to any Secured Hedge
Agreement, any fees, premiums and scheduled periodic payments due under
such Secured Hedge Agreement and any interest accrued thereon;
FIFTH, to the payment of the outstanding principal amount of the
Obligations and the payment or cash collateralization of the outstanding
LOC Obligations, including, with respect to any Secured Hedge Agreement,
any breakage, termination or other payments due under such Hedge Agreement
and any interest accrued thereon;
SIXTH, to all other Obligations and other obligations which shall
have become due and payable under the Loan Documents or otherwise and not
repaid pursuant to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the
next succeeding category; (ii) each of Lenders and any Hedge Agreement
Providers shall receive an amount equal to its pro rata share (based on
the proportion that the then outstanding Loans and LOC Obligations held by
such Lender or the outstanding obligations payable to such Hedge Agreement
Provider bears to the aggregate then outstanding Loans, LOC Obligations
and obligations payable under all Secured Hedge Agreements) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH" and
"SIXTH" above; and (iii) to the extent that any amounts available for
distribution pursuant to clause "FIFTH" above are attributable to the
issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by Administrative Agent in a cash collateral account and
applied (A) first, to reimburse Issuing Lender from time to time for any
drawings under such Letters of Credit and (B) then, following the
expiration of all Letters of Credit, to all other obligations of the types
described in clauses "FIFTH" and "SIXTH" above in the manner provided in
this Section 2.12(b). Notwithstanding the foregoing terms of this Section
2.12(b), only Collateral proceeds and payments under the Guaranties with
respect
50
to Secured Hedge Agreements shall be applied to obligations under any
Secured Hedge Agreement.
2.13 NON-RECEIPT OF FUNDS BY ADMINISTRATIVE AGENT.
(a) Unless Administrative Agent shall have been notified in
writing by a Lender prior to the date a Loan is to be made by such Lender
(which notice shall be effective upon receipt) that such Lender does not
intend to make the proceeds of such Loan available to Administrative
Agent, Administrative Agent may assume that such Lender has made such
proceeds available to Administrative Agent on such date, and
Administrative Agent may in reliance upon such assumption (but shall not
be required to) make available to Borrower a corresponding amount. If such
corresponding amount is not in fact made available to Administrative
Agent, Administrative Agent shall be able to recover such corresponding
amount from such Lender. If such Lender does not pay such corresponding
amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent will promptly notify Borrower, and Borrower shall
immediately pay such corresponding amount to Administrative Agent.
Administrative Agent shall also be entitled to recover from the Lender or
Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made
available by Administrative Agent to Borrower to the date such
corresponding amount is recovered by Administrative Agent at a per annum
rate equal to (i) from Borrower at the applicable rate for the applicable
borrowing pursuant to the Notice of Borrowing and (ii) from a Lender at
the Federal Effective Funds Rate.
(b) Unless Administrative Agent shall have been notified in
writing by Borrower, prior to the date on which any payment is due from it
hereunder (which notice shall be effective upon receipt) that Borrower
does not intend to make such payment, Administrative Agent may assume that
Borrower has made such payment when due, and Administrative Agent may in
reliance upon such assumption (but shall not be required to) make
available to each Lender on such payment date an amount equal to the
portion of such assumed payment to which such Lender is entitled
hereunder, and if Borrower has not in fact made such payment to
Administrative Agent, such Lender shall, on demand, repay to
Administrative Agent the amount made available to such Lender. If such
amount is repaid to Administrative Agent on a date after the date such
amount was made available to such Lender, such Lender shall pay to
Administrative Agent on demand interest on such amount in respect of each
day from the date such amount was made available by Administrative Agent
to such Lender to the date such amount is recovered by Administrative
Agent at a per annum rate equal to the Federal Funds Effective Rate.
(c) A certificate of Administrative Agent submitted to Borrower or
any Lender with respect to any amount owing under this Section 2.13 shall
be conclusive in the absence of manifest error.
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2.14 INABILITY TO DETERMINE INTEREST RATE.
Notwithstanding any other provision of this Agreement, if (i)
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Requisite Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that Borrower has requested be
outstanding during such Interest Period, Administrative Agent shall forthwith
give telephone notice of such determination, confirmed in writing, to Borrower,
and Lenders at least two Business Days prior to the first day of such Interest
Period. Unless Borrower shall have notified Administrative Agent upon receipt of
such telephone notice that it wishes to rescind or modify its request regarding
such LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate
Loans shall be made as Alternate Base Rate Loans and any Loans that were
requested to be converted into or continued as LIBOR Rate Loans shall remain as
or be converted into Alternate Base Rate Loans. Until any such notice has been
withdrawn by Administrative Agent, no further Loans shall be made as, continued
as, or converted into, LIBOR Rate Loans for the Interest Periods so affected.
2.15 ILLEGALITY.
Notwithstanding any other provision of this Agreement, if the adoption of
or any change in any Requirement of Law or in the interpretation or application
thereof by the relevant Governmental Authority to any Lender shall make it
unlawful for such Lender or its LIBOR Lending Office to make or maintain LIBOR
Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly notify Administrative Agent and
Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR Rate
Loans or continue LIBOR Rate Loans as such shall forthwith be suspended until
Administrative Agent shall give notice that the condition or situation which
gave rise to the suspension shall no longer exist, and (c) such Lender's Loans
then outstanding as LIBOR Rate Loans, if any, shall be converted on the last day
of the Interest Period for such Loans or within such earlier period as required
by law as Alternate Base Rate Loans. Borrower hereby agrees promptly to pay any
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for actual and direct costs (but not including anticipated profits)
reasonably incurred by such Lender in making any repayment in accordance with
this Section including, but not limited to, any interest or fees payable by such
Lender to lenders of funds obtained by it in order to make or maintain its LIBOR
Rate Loans hereunder. A certificate as to any additional amounts payable
pursuant to this Section submitted by such Lender, through Administrative Agent,
to Borrower shall be conclusive in the absence of manifest error. Each Lender
agrees to use reasonable efforts (including reasonable efforts to change its
LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise be
payable pursuant to this Section; provided, however, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its reasonable discretion to be
material.
52
2.16 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement of Law or
in the interpretation or application thereof or compliance by any Lender
with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any participation
therein or any application relating thereto, any LIBOR Rate Loan
made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for changes in the rate of tax on
the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the LIBOR Rate hereunder;
or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining LIBOR Rate Loans or the Letters of Credit
or the participations therein or to reduce any amount receivable hereunder
or under any Note, then, in any such case, Borrower shall promptly pay
such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such additional cost or reduced amount
receivable which such Lender reasonably deems to be material as determined
by such Lender with respect to its LIBOR Rate Loans or Letters of Credit.
A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender, through Administrative Agent, to
Borrower shall be conclusive in the absence of manifest error. Each Lender
agrees to use reasonable efforts (including reasonable efforts to change
its Domestic Lending Office or LIBOR Lending Office, as the case may be)
to avoid or to minimize any amounts which might otherwise be payable
pursuant to this paragraph of this Section; provided, however, that such
efforts shall not cause the imposition on such Lender of any additional
costs or legal or regulatory burdens deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that the
adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance by
such Lender or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of
law) from any central bank or Governmental Authority made subsequent to
the date hereof does or shall have the effect of reducing the rate of
return on such Lender's or such corporation's capital as a consequence of
its obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such
53
corporation's policies with respect to capital adequacy) by an amount
reasonably deemed by such Lender to be material, then from time to time,
within fifteen (15) days after demand by such Lender, Borrower shall pay
to such Lender such additional amount as shall be certified by such Lender
as being required to compensate it for such reduction. Such a certificate
as to any additional amounts payable under this Section submitted by a
Lender (which certificate shall include a description of the basis for the
computation), through Administrative Agent, to Borrower shall be
conclusive absent manifest error.
(c) The agreements in this Section 2.16 shall survive the
termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.
2.17 INDEMNITY.
Borrower hereby agrees to indemnify each Lender and to hold such Lender
harmless from any funding loss or expense which such Lender may sustain or incur
as a consequence of (a) the failure by Borrower to pay the principal amount of
or interest on any Loan by such Lender in accordance with the terms hereof, (b)
the failure of Borrower to accept a borrowing after Borrower has given a notice
in accordance with the terms hereof, (c) the failure of Borrower to make any
prepayment after Borrower has given a notice in accordance with the terms
hereof, and/or (d) the making by Borrower of a prepayment of a Loan, or the
conversion thereof, on a day which is not the last day of the Interest Period
with respect thereto, in each case including, but not limited to, any such loss
or expense arising from interest or fees payable by such Lender to lenders of
funds obtained by it in order to maintain its Loans hereunder. A certificate as
to any additional amounts payable pursuant to this Section submitted by any
Lender, through Administrative Agent, to Borrower (which certificate must be
delivered to Administrative Agent within thirty days following such default,
prepayment or conversion) shall be conclusive in the absence of manifest error.
The agreements in this Section shall survive termination of this Agreement and
payment of the Notes and all other amounts payable hereunder.
2.18 TAXES.
(a) All payments made by Borrower hereunder or under any Note will
be, except as provided in Section 2.18(b), made free and clear of, and
without deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments or other charges of whatever nature now
or hereafter imposed by any Governmental Authority or by any political
subdivision or taxing authority thereof or therein with respect to such
payments (but excluding any tax imposed on or measured by the net income
or profits of a Lender) and all interest, penalties or similar liabilities
with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively
as "Taxes"). If any Taxes are so levied or imposed, Borrower agrees to pay
the full amount of such Taxes, and such additional amounts as may be
necessary so that every payment of all amounts due under this Agreement or
under any Note, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein or in such
Note. Borrower will furnish to Administrative Agent as soon as practicable
after the date the payment of any Taxes is
54
due pursuant to applicable law certified copies (to the extent reasonably
available and required by law) of tax receipts evidencing such payment by
Borrower. Borrower agrees to indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to Borrower and
Administrative Agent on or prior to the Closing Date, or in the case of a Lender
that is an assignee or transferee of an interest under this Agreement pursuant
to Section 10.1(d) (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) if the Lender is a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, two accurate and complete original
signed copies of Internal Revenue Service Form X-0XXX, X-0XXX or W-8IMY (or
successor forms) certifying such Lender's entitlement to a complete exemption
from United States withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the Lender is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code, Internal Revenue Service Form
X-0XXX, X-0XXX or W-8IMY as set forth in clause (i) above, or (x) a certificate
in substantially the form of Exhibit XII (any such certificate, a "Tax Exempt
Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8BEN (or successor form) certifying such
Lender's entitlement to an exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note. In addition, each Lender agrees that it will deliver upon Borrower's
request updated versions of the foregoing, as applicable, whenever the previous
certification has become obsolete or inaccurate in any material respect,
together with such other forms as may be required in order to confirm or
establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note. Notwithstanding anything to the contrary contained in
Section 2.18(a), but subject to the immediately succeeding sentence, (x)
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold Taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder for the account of any Lender which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. federal income tax purposes to the extent that such Lender has not provided
to Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) Borrower shall not be
obligated pursuant to Section 2.18(a) hereof to gross-up payments to be made to
a Lender in respect of Taxes imposed by the United States if (I) such Lender has
not provided to Borrower the Internal Revenue Service Forms required to be
provided to Borrower pursuant to this Section 2.18(b) or (II) in the case of a
payment, other than interest, to a Lender described in clause (ii) above, to the
extent that such Forms do not establish a complete exemption from withholding of
such Taxes. Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 2.18, Borrower agrees to pay additional
amounts and to indemnify each Lender in the manner set forth in Section 2.18(a)
(without regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any
55
amounts deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes after the Closing Date in any applicable
law, treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its Domestic Lending Office or LIBOR Lending Office, as the
case may be) to avoid or to minimize any amounts which might otherwise be
payable pursuant to this Section; provided, however, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its reasonable discretion to be
material.
(d) If Borrower pays any additional amount pursuant to this Section 2.18
with respect to a Lender, such Lender shall use reasonable efforts to obtain a
refund of tax or credit against its tax liabilities on account of such payment;
provided that such Lender shall have no obligation to use such reasonable
efforts if either (i) it is in an excess foreign tax credit position or (ii) it
believes in good faith, in its reasonable discretion, that claiming a refund or
credit would cause adverse tax consequences to it. In the event that such Lender
receives such a refund or credit, such Lender shall pay to Borrower an amount
that such Lender reasonably determines is equal to the net tax benefit obtained
by such Lender as a result of such payment by Borrower. In the event that no
refund or credit is obtained with respect to Borrower's payments to such Lender
pursuant to this Section 2.18, then such Lender shall upon request provide a
certification that such Lender has not received a refund or credit for such
payments. Nothing contained in this Section 2.18 shall require a Lender to
disclose or detail the basis of its calculation of the amount of any tax benefit
or any other amount or the basis of its determination referred to in the proviso
to the first sentence of this Section 2.18 to Borrower or any other party.
(e) The agreements in this Section 2.18 shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder.
2.19 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other obligations under Section 2.3 and other than
as a result of the gross negligence or willful misconduct of the Issuing Lender,
Borrower hereby agrees to protect, indemnify, pay and save Issuing Lender and
each Revolving Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that Issuing Lender or such Revolving Lender may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit or (ii) the failure of Issuing Lender to honor a drawing under
a Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein called "Government
Acts").
(b) As between Borrower and Issuing Lender and each Revolving Lender,
Borrower shall assume all risks of the acts, omissions or misuse of any Letter
of Credit
56
by the beneficiary thereof. Neither Issuing Lender nor any Revolving Lender
shall be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason; (iii) for
failure of the beneficiary of a Letter of Credit to comply fully with conditions
required in order to draw upon a Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for
errors in interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and (vii) for any
consequences arising from causes beyond the control of Issuing Lender or any
Revolving Lender, including, without limitation, any Government Acts. None of
the above shall affect, impair, or prevent the vesting of Issuing Lender's
rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by Issuing Lender
or any Revolving Lender, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not put such Issuing Lender or such Revolving Lender
under any resulting liability to Borrower. It is the intention of the parties
that this Agreement shall be construed and applied to protect and indemnify
Issuing Lender and each Revolving Lender against any and all risks involved in
the issuance of the Letters of Credit, all of which risks are hereby assumed by
Borrower, including, without limitation, any and all risks of the acts or
omissions, whether rightful or wrongful, of any Government Authority. Issuing
Lender and the Revolving Lenders shall not, in any way, be liable for any
failure by Issuing Lender or anyone else to pay any drawing under any Letter of
Credit as a result of any Government Acts or any other cause beyond the control
of Issuing Lender and the Revolving Lenders.
(d) Nothing in this Section 2.19 is intended to limit the reimbursement
obligation of Borrower contained in Section 2.3(d) hereof. The obligations of
Borrower under this Section 2.19 shall survive the termination of this
Agreement. No act or omissions of any current or prior beneficiary of a Letter
of Credit shall in any way affect or impair the rights of Issuing Lender and the
Revolving Lenders to enforce any right, power or benefit under this Agreement.
(e) Notwithstanding anything to the contrary contained in this Section
2.19, Borrower shall have no obligation to indemnify Issuing Lender or any
Revolving Lender in respect of any liability incurred by Issuing Lender or such
Revolving Lender arising out of the gross negligence or willful misconduct of
Issuing Lender (including action not taken by Issuing Lender or such Revolving
Lender), as determined by a court of competent jurisdiction or pursuant to
arbitration.
57
SECTION 3
[RESERVED]
SECTION 4
CONDITIONS PRECEDENT
4.1 CONDITIONS TO CLOSING DATE.
This Agreement shall become effective upon, and the obligation of each
Lender to make the initial Revolving Loans, Term Loan and the Swingline Loan on
the Closing Date is subject to, the satisfaction of the following conditions
precedent:
(a) Execution of Agreement and Loan Documents. Administrative Agent
shall have received (i) counterparts of this Agreement, executed by a duly
authorized officer of each party hereto, (ii) for the account of each
Revolving Lender, a Revolving Note, (iii) for the account of each Term
Loan Lender requesting a promissory note, a Term Loan Note, (iv) for the
account of Swingline Lender, the Swingline Note, (v) counterparts of the
Security Agreement, the Pledge Agreement, the Holdings Guaranty and the
Subsidiary Guaranty, in each case conforming to the requirements of this
Agreement and executed by duly authorized officers of Loan Parties or
other Person, as applicable and (vi) counterparts of any other Loan
Document, executed by the duly authorized officers of the parties thereto.
(b) Authority Documents. Administrative Agent shall have received
the following:
(i) Articles of Incorporation; Partnership Agreement. Copies
of the articles of incorporation, partnership agreement or other
charter documents of each Loan Party certified to be true and
complete as of a recent date by the appropriate Governmental
Authority of the state of its organization or formation.
(ii) Resolutions. Copies of resolutions of the board of
directors or other comparable governing body of each Loan Party
approving and adopting the Loan Documents, the transactions
contemplated therein and authorizing execution and delivery thereof,
certified by an officer of such Loan Party as of the Closing Date to
be true and correct and in force and effect as of such date.
(iii) Bylaws. A copy of the bylaws or other operating
agreement of each Loan Party certified by an officer of such Loan
Party as of the Closing Date to be true and correct and in force and
effect as of such date.
58
(iv) Good Standing. Copies of (i) certificates of good
standing, existence or its equivalent with respect to each Loan
Party certified as of a recent date by the appropriate Governmental
Authorities of the state of incorporation and each other state in
which such Loan Party is qualified to do business and (ii) to the
extent readily available, a certificate indicating payment of all
corporate and other franchise taxes certified as of a recent date by
the appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of each Loan Party
certified by a secretary or assistant secretary to be true and
correct as of the Closing Date.
Each secretary's certificate delivered pursuant to this Section
4.1(b) shall be substantially in the form of Exhibit IV hereto.
(c) Legal Opinions of Counsel. Administrative Agent shall have
received opinions from counsel to Loan Parties, dated the Closing Date and
addressed to Administrative Agent and Lenders, in form and substance
reasonably acceptable to Agents.
(d) Personal Property Collateral. Administrative Agent shall have
received, in form and substance satisfactory to Agents:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office and the jurisdiction of
formation of each Loan Party and each jurisdiction where any
Collateral is located or where a filing would need to be made in
order to perfect Administrative Agent's security interest in the
Collateral, copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than Permitted
Encumbrances;
(ii) UCC financing statements for each appropriate
jurisdiction as is necessary, in the sole discretion of Agents, to
perfect Administrative Agent's security interest in the Collateral;
(iii) searches of ownership of Intellectual Property in the
appropriate governmental offices;
(iv) such patent/trademark/copyright filings as requested by
Agents in order to perfect Administrative Agent's security interest
in the Intellectual Property;
(v) all stock certificates, if any, evidencing the capital
stock pledged to Administrative Agent pursuant to the Pledge
Agreement, together with duly executed in blank undated stock powers
attached thereto;
59
(vi) all instruments and chattel paper in the possession of
any of Loan Parties, together with allonges or assignments as may be
necessary or appropriate to perfect Administrative Agent's security
interest in the Collateral;
(vii) duly executed consents as are necessary, in
Administrative Agent's sole discretion, to perfect Lenders' security
interest in the Collateral;
(viii) in the case of any personal property Collateral located
at premises leased by a Loan Party, a Landlord Consent and Estoppel
from the landlord of such real property; and
(ix) duly executed account control agreements with respect to
the Collateral for which a control agreement is required for
perfection of Administrative Agent's security interest under the
Uniform Commercial Code.
(e) Real Property Collateral. Administrative Agent shall have
received, in form and substance satisfactory to Agents and Lenders:
(i) fully executed and notarized mortgages, deeds of trust or
deeds to secure debt (each, as the same may be amended, modified,
restated or supplemented from time to time, a "Mortgage Instrument"
and collectively the "Mortgage Instruments") encumbering the fee
interest in the material Properties listed in Schedule 5.5B as
Properties owned by Loan Parties (each a "Mortgaged Property" and
collectively the "Mortgaged Properties");
(ii) a title report obtained by Loan Parties in respect of
each of the Mortgaged Properties;
(iii) with respect to each Mortgaged Property, an ALTA
mortgagee title insurance policy (the "Mortgage Policies"), in
amounts not less than the respective amounts designated in Schedule
5.5(B) with respect to any particular Mortgaged Property, assuring
Administrative Agent that each of the Mortgage Instruments creates a
valid and enforceable First Priority mortgage lien on the applicable
Mortgaged Property, free and clear of all defects and encumbrances
except Permitted Encumbrances, which Mortgage Policies shall be in
form and substance reasonably satisfactory to Agents and shall
provide for affirmative insurance and such reinsurance as any Agent
may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to Agents;
(iv) evidence as to (A) whether any Mortgaged Property is in
an area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards (a "Flood Hazard
Property") and (B) if any Mortgaged Property is a Flood Hazard
Property, (1) whether the community in which such Mortgaged Property
is located is participating in the National Flood Insurance Program,
(2) the applicable Loan Party's written acknowledgment of receipt of
written notification from Administrative Agent (a) as to the fact
that such
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Mortgaged Property is a Flood Hazard Property and (b) as to whether
the community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program and (3) copies
of insurance policies or certificates of insurance of Borrower and
their Subsidiaries evidencing flood insurance reasonably
satisfactory to Agents and naming Administrative Agent as sole loss
payee on behalf of Lenders;
(v) maps or plats of an as-built survey of the sites of the
Mortgaged Properties certified to Administrative Agent and the Title
Insurance Company in a manner reasonably satisfactory to them, dated
a date satisfactory to each of Agents and the Title Insurance
Company by an independent professional licensed land surveyor
reasonably satisfactory to each of Administrative Agent and the
Title Insurance Company, which maps or plats and the surveys on
which they are based shall be sufficient to delete any standard
printed survey exception contained in the applicable title policy
and be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted
by the American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the generality
of the foregoing, there shall be surveyed and shown on such maps,
plats or surveys the following: (A) the locations on such sites of
all the buildings, structures and other improvements and the
established building setback lines; (B) the lines of streets
abutting the sites and width thereof; (C) all access and other
easements appurtenant to the sites necessary to use the sites; (D)
all roadways, paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the sites
or otherwise known to the surveyor; (E) any encroachments on any
adjoining property by the building structures and improvements on
the sites; and (F) if the site is described as being on a filed map,
a legend relating the survey to said map;
(vi) opinions of counsel to Loan Parties for each jurisdiction
in which the Mortgaged Properties are located;
(vii) zoning letters from each municipality or other
Governmental Authority for each jurisdiction in which the Mortgaged
Properties are located; and
(viii) environmental reviews certified by a firm of surveyors
reasonably satisfactory to Agents of all real property owned by
Borrower and its Subsidiaries.
(f) Liability and Casualty Insurance. Administrative Agent shall
have received copies of insurance policies or certificates of insurance
evidencing liability and casualty insurance (including, but not limited
to, business interruption insurance) meeting the requirements set forth
herein or in the Collateral Documents. Administrative Agent shall be named
as loss payee on all casualty insurance policies and as additional insured
on all liability insurance policies, in each case for the benefit of
Lenders.
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(g) Fees. Agents and Lenders shall have received all fees, if any,
owing pursuant to the Fee Letter and Section 2.6.
(h) Litigation. There shall not exist any material pending or, to
the knowledge of Loan Parties, threatened litigation, investigation,
bankruptcy, insolvency, injunction, order or claim that (i) seeks to
enjoin, restrain, restrict, set aside or prohibit, impose material
conditions upon or obtain substantial damages in respect of the
consummation or performance of this Agreement or the other Loan Documents
that has not been settled, dismissed, vacated, discharged or terminated
prior to the Closing Date or (ii) purports to affect Borrower or any
Subsidiary, which, if adversely determined, could reasonably be expected
to have a Material Adverse Effect.
(i) Solvency Certificate. Administrative Agent shall have received
an Officers' Certificate prepared by the chief financial officer of
Borrower as to the financial condition, solvency and related matters of
the Borrower, individually, and the Loan Parties and their Subsidiaries
taken as a whole, after giving effect to the Dividend Transaction and the
initial borrowings under the Loan Documents, in substantially the form of
Exhibit XIII hereto.
(j) Account Designation Letter. Administrative Agent shall have
received the executed Account Designation Letter in the form of Exhibit I
hereto.
(k) Organizational Structure. The corporate or limited partnership
and capital and ownership structure of Loan Parties after giving effect to
the Dividend Transaction shall be as described on Schedule 4.1(k). Agents
shall be satisfied with the management structure, legal structure, voting
control, liquidity, total leverage and total capitalization of Loan
Parties after giving effect to the Dividend Transaction.
(l) Government Consent. Administrative Agent shall have received
evidence that all governmental, shareholder and material third party
consents and approvals necessary in connection with the financings and
other transactions contemplated hereby have been obtained and all
applicable waiting periods have expired without any action being taken by
any authority that could restrain, prevent or impose any material adverse
conditions on such transactions or that could seek or threaten any of the
foregoing.
(m) Compliance with Laws. The financings and other transactions
contemplated hereby shall be in compliance with all applicable laws and
regulations (including all applicable securities and banking laws, rules
and regulations).
(n) Bankruptcy. There shall be no bankruptcy or insolvency
proceedings with respect to Loan Parties or any of their Subsidiaries.
(o) Existing Indebtedness of Loan Parties. All of the existing
Indebtedness for borrowed money of Loan Parties (other than Indebtedness
permitted to exist pursuant to Section 7.1) shall be repaid in full and
all security interests related thereto shall be terminated on the Closing
Date.
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(p) Financial Statements. Agents and Lenders shall have received
copies of the financial statements referred to in Section 5.3 hereof, each
in form and substance satisfactory to it.
(q) No Material Adverse Change. Since December 31, 2003, there has
been no material adverse change in the business, properties, prospects,
operations or condition (financial or otherwise) of Borrower or any of its
Subsidiaries and there shall not have occurred any material disruption or
material adverse change in the financial, banking or capital markets
(including the loan syndication market) that has impaired or would impair
the Arrangers' ability to syndicate the facilities.
(r) Financial Condition Certificate. Administrative Agent shall have
received an Officers' Certificate of Borrower as of the Closing Date
stating that (i) no action, suit, investigation or proceeding is pending,
ongoing or, to the knowledge of any Loan Party, threatened in any court or
before any other Governmental Authority that purports to affect any Loan
Party or any other transaction contemplated by the Loan Documents, which
action, suit, investigation or proceeding could be reasonably expected to
have a Material Adverse Effect and (ii) immediately after giving effect to
this Agreement, the other Loan Documents, and all the transactions
contemplated therein to occur on such date, (A) no Event of Default or
Potential Event of Default exists, (B) all representations and warranties
contained herein and in the other Loan Documents are true and correct in
all material respects, and (C) Loan Parties are in compliance with each of
the financial covenants set forth in Section 7.6 (as demonstrated through
detailed calculations of such financial covenants on an exhibit to such
certificate).
(s) Consolidated Total Leverage Ratio/Consolidated Senior Leverage
Ratio. Administrative Agent shall have received evidence that, after
giving effect to the initial Extensions of Credit, the Dividend
Transaction and the other transactions to occur on the Closing Date, on a
pro forma basis as of the last day of the month immediately preceding the
Closing Date for which such statements are available, (i) the Consolidated
Total Leverage Ratio of Borrower and its Subsidiaries is not greater than
5.00 to 1.0 and (ii) the Consolidated Senior Leverage Ratio of Borrower
and its Subsidiaries is not greater than 3.00 to 1.0.
(t) Consolidated EBITDA. Administrative Agent shall have received
evidence reasonably satisfactory thereto provided by Borrower that
Consolidated EBITDA is not less than $37,000,000, calculated in accordance
with Regulation S-X and on a pro forma basis giving effect to the initial
Extensions of Credit and the other transactions to occur on the Closing
Date, for the twelve month period ending as of the last day of the month
most recently preceding the Closing Date for which such statements are
available.
(u) Subordinated Debt. Borrower and the lenders applicable thereto
shall have entered into documentation with respect to the issuance of the
Subordinated Notes in form and substance (including, but not limited to,
the composition, subordination and
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right of payment terms) satisfactory to Agents. Administrative Agent shall
have received a copy, certified by an officer of Borrower as true and
complete, of the Subordinated Note Documents as originally executed and
delivered, together with all exhibits and schedules thereto. There shall
not have been any material modification, amendment, supplement or waiver
to the Subordinated Note Documents without the prior written consent of
Agents. Borrowers shall have received gross proceeds from the issuance of
the Subordinated Notes in an amount not less than $74,000,000.
(v) Dividend Transaction. Agents shall be reasonably satisfied with
all legal, tax, accounting, business and other matters relating to the
Dividend Transaction or to Loan Parties and their Subsidiaries, and with
the fees and expenses payable in connection with the consummation of the
Dividend Transaction.
(w) Due Diligence. Agents shall have completed its legal and
environmental due diligence of Borrower and its Subsidiaries with the
scope, content and results of such due diligence to be satisfactory to
Agents in their sole discretion.
(x) Patriot Act Certificate. Administrative Agent shall have
received a certificate satisfactory thereto, for benefit of itself and
Lenders, provided by Borrower that sets forth information required by the
Patriot Act, including, without limitation, the identity of Loan Parties,
the name and address of Loan Parties and other information that will allow
Administrative Agent or any Lender, as applicable, to identify Loan
Parties in accordance with the Patriot Act.
(y) Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to Agents and their counsel.
4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent on the date of
making such Extension of Credit:
(a) Representations and Warranties. The representations and
warranties made by Loan Parties herein, in the Collateral Documents or
which are contained in any certificate furnished at any time under or in
connection herewith shall be true and correct on and as of the date of
such Extension of Credit as if made on and as of such date (except for
those that expressly related to an earlier date).
(b) No Event of Default or Potential Event of Default. No Event of
Default or Potential Event of Default shall have occurred and be
continuing on such date or after giving effect to the Extension of Credit
to be made on such date unless such Event of Default or Potential Event of
Default shall have been waived in accordance with this Agreement.
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(c) Compliance with Commitments. Immediately after giving effect to
the making of any such Extension of Credit (and the application of the
proceeds thereof), (i) the sum of outstanding Revolving Loans plus
outstanding Swingline Loans plus LOC Obligations shall not exceed the
Revolving Committed Amount, (ii) the LOC Obligations shall not exceed the
LOC Committed Amount and (iii) the Swingline Loans shall not exceed the
Swingline Committed Amount.
(d) Additional Conditions to Revolving Loans. If a Revolving Loan is
requested, all conditions set forth in Section 2.1 shall have been
satisfied.
(e) Additional Conditions to Term Loan. If the Term Loan is
requested, all conditions set forth in Section 2.2 shall have been
satisfied.
(f) Additional Conditions to Letters of Credit. If the issuance of a
Letter of Credit is requested, all conditions set forth in Section 2.3
shall have been satisfied.
(g) Additional Conditions to Swingline Loans. If a Swingline Loan is
requested, all conditions set forth in Section 2.4 shall have been
satisfied.
(h) Additional Conditions to Incremental Facility. If an Additional
Loan is requested, all conditions set forth in Section 2.5 shall have been
satisfied.
Each request for an Extension of Credit and each acceptance by Borrower of
any such Extension of Credit shall be deemed to constitute representations and
warranties by Loan Parties as of the date of such Extension of Credit that the
conditions set forth above in paragraphs (a) through (c) and in paragraph (d),
(e), (f), (g) or (h), as applicable, have been satisfied.
SECTION 5
BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, to induce Issuing Lender to issue Letters of Credit and to induce other
Lenders to purchase participations therein, Borrower represents and warrants to
each Lender, on the date of this Agreement, on each Funding Date and on the date
of issuance of each Letter of Credit, that the following statements are true,
correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. Organization and Powers. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 5.1 annexed hereto. Each
Loan Party has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and as
65
proposed to be conducted, to enter into the Loan Documents and Related
Agreements to which it is a party and to carry out the transactions contemplated
thereby.
B. Qualification and Good Standing. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and would not reasonably be expected to have a Material Adverse Effect.
C. Conduct of Business. Borrower and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to subsection 7.14.
D. Subsidiaries. All of the Subsidiaries of Borrower are identified in
Schedule 5.1 annexed hereto, as said Schedule 5.1 may be supplemented from time
to time pursuant to the provisions of subsection 6.1(xiii). The capital stock of
each of the Subsidiaries of Borrower identified in Schedule 5.1 annexed hereto
(as so supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock constitutes Margin Stock. Each of
the Subsidiaries of Borrower identified in Schedule 5.1 annexed hereto (as so
supplemented) is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation set
forth therein, has all requisite corporate power and authority to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, in each case except where failure to be
so qualified or in good standing or a lack of such corporate power and authority
has not had and would not reasonably be expected to have a Material Adverse
Effect. Schedule 5.1 annexed hereto (as so supplemented) correctly sets forth
the ownership interest of Borrower and each of its Subsidiaries in each of the
Subsidiaries of Borrower identified therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and the Related Agreements, and the Dividend Transaction,
have been duly authorized by all necessary corporate action on the part of each
Loan Party that is a party thereto.
B. No Conflict. The execution, delivery and performance by Loan Parties of
the Loan Documents and the Related Agreements to which they are parties and the
consummation of the transactions contemplated by the Loan Documents (including
the Dividend Transaction) and such Related Agreements do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to Borrower or any of its Subsidiaries, the Certificate or Articles
of Incorporation or Bylaws of Borrower or any of its Subsidiaries or any order,
judgment or decree of any court or other agency of government binding on
Borrower or any of its Subsidiaries, (ii) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Borrower or any of its Subsidiaries, (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of Borrower or any of its Subsidiaries (other than any Liens created
under any of the Loan Documents in favor of Administrative Agent on behalf of
Lenders), or (iv) require any approval
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of stockholders or any approval or consent of any Person under any Contractual
Obligation of Borrower or any of its Subsidiaries, except for such approvals or
consents which will be obtained on or before the Closing Date and disclosed in
writing to Lenders.
C. Governmental Consents. The execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents (including the Dividend Transaction) and such Related Agreements do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body. Each Loan Party (i) (x) has all
governmental approvals required by law for it to conduct its business, each of
which is in full force and effect, (y) each such governmental approval is final
and not subject to review on appeal and (z) each such governmental approval is
not the subject of any pending or, to the best of its knowledge, threatened
attack by direct or collateral proceeding, and (ii) is in compliance with each
governmental approval applicable to it and in compliance with all other
requirements of law relating to it or any of its respective properties, in each
case except to the extent the failure to obtain such governmental approval or
failure to comply with such governmental approval or requirement of law could
not reasonably be expected to have a Material Adverse Effect. Each Loan Party
possesses or has the right to use, all leaseholds, licenses, easements and
franchises and all authorizations and other rights that are necessary for the
conduct of its business, except to the extent the failure to possess or have the
right to use such leaseholds, licenses, easements and franchises and all
authorizations and other rights could not reasonably be expected to have a
Material Adverse Effect. Except to the extent noncompliance with the foregoing
leaseholds, easements and franchises could not reasonably be expected to have a
Material Adverse Effect, all of the foregoing are in full force and effect, and
the Loan Parties are in substantial compliance with the foregoing without any
known conflict with the valid rights of others. No event has occurred which
permits, or after notice or lapse of time or both would permit, the revocation
or termination of any such governmental approval, leasehold, license, easement,
franchise or other right, which termination or revocation could, individually or
in the aggregate, reasonably be expected to have Material Adverse Effect.
D. Binding Obligation. Each of the Loan Documents and Related Agreements
has been duly executed and delivered by each Loan Party that is a party thereto
and is the legally valid and binding obligation of such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
5.3 FINANCIAL CONDITION.
Borrower has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheet of Borrower and its Subsidiaries as at the Fiscal Years ended
December 31, 2001, 2002 and 2003 and the related consolidated statements of
income, stockholders' equity and cash flows of Borrower and its Subsidiaries for
such Fiscal Year then ended and (ii) the unaudited consolidated balance sheet of
Borrower and its Subsidiaries as at the month ended April 30, 2004 and the
related unaudited
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consolidated statements of income, stockholders' equity and cash flows of
Borrower and its Subsidiaries for the four months then ended. All such
statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position (on a consolidated basis) of the
entities described in such financial statements as at the respective dates
thereof and the results of operations and cash flows (on a consolidated basis)
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to the absence of
footnotes and to changes resulting from audit and normal year-end adjustments.
Borrower does not (and will not following the funding of the initial Loans) have
any Contingent Obligation, contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is not reflected
in the foregoing financial statements or the notes thereto and which in any such
case is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Borrower or any of its
Subsidiaries. The projections of Borrower and its Subsidiaries delivered to
Lenders on or prior to the Closing Date (consisting of balance sheets and
statements of income and cash flows prepared on a quarterly basis through the
first four complete fiscal quarters after the Closing Date and thereafter on an
annual basis through 2010) have been prepared in good faith based upon
reasonable assumptions.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED PAYMENTS.
Since December 31, 2003, no event or change has occurred that has caused
or evidences, either in any case or in the aggregate, a Material Adverse Effect.
Neither Borrower nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
Restricted Payment or agreed to do so except as permitted by subsection 7.5 and
in the Subordination Agreement.
5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
A. Title to Properties; Liens. Borrower and its Subsidiaries have (i)
valid leasehold interests in (in the case of leasehold interests in real or
personal property), and (ii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under subsection 7.7.
Except as permitted by this Agreement, all such properties and assets are free
and clear of Liens, other than Permitted Encumbrances. Borrower and each of its
Subsidiaries has the right to use all of the Intellectual Property necessary to
its business as presently conducted or as was necessary, all of which
Intellectual Property is set forth in Schedule 5.5A annexed hereto, and, to the
best knowledge of the Borrower, the Borrower's and each of its Subsidiaries' use
of the Intellectual Property does not infringe the rights of any other Person,
where such infringement could reasonably be expected to result in a Material
Adverse Effect. Except as set forth in Schedule 5.5A annexed hereto, the
Borrower and its Subsidiaries owe no royalties, honoraria or fees to any Person
by reason of their use of the Intellectual Property.
B. Real Property. As of the Closing Date, Borrower and its Subsidiaries
own no Real Property Assets except as set forth in Schedule 5.5B annexed hereto.
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5.6 LITIGATION; ADVERSE FACTS.
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Borrower or any of its
Subsidiaries) at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of Borrower, threatened against or affecting
Borrower or any of its Subsidiaries or any property of Borrower or any of its
Subsidiaries and that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither Borrower nor any of its
Subsidiaries (i) is in violation of any applicable laws (including Environmental
Laws) that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, or (ii) is subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all tax returns and
reports of Borrower and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes shown on such tax returns to be due and
payable and all assessments, fees and other governmental charges upon Borrower
and its Subsidiaries and upon their respective properties, assets, income,
businesses and franchises which are due and payable have been paid when due and
payable. Borrower knows of no proposed tax assessment against Borrower or any of
its Subsidiaries which is not being actively contested by Borrower or such
Subsidiary in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. Neither Borrower nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Borrower nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
C. Schedule 5.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date. Except as described on
Schedule 5.8, all such Material Contracts are in full force and effect and no
defaults currently exist thereunder, except for
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defaults which, individually or in the aggregate, could not reasonably be deemed
to have a Material Adverse Effect.
D. As of the Closing Date, each of the representations and warranties of
the Loan Parties in the Subordinated Note Documents are true and correct.
5.9 GOVERNMENTAL REGULATION.
Neither Borrower nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither Borrower nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
B. No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. No Loan Party
owns any Margin Stock in an amount that would cause any Loan Document to violate
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. .
5.11 EMPLOYEE BENEFIT PLANS.
A. Borrower, each of its Subsidiaries and each of their respective ERISA
Affiliates are in compliance in all material respects with all applicable
provisions and requirements of ERISA and the regulations and published
interpretations thereunder with respect to each Employee Benefit Plan, and have
performed all their obligations under each Employee Benefit Plan in all material
respects. Each Employee Benefit Plan which is intended to qualify under Section
401(a) of the Internal Revenue Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code or except as set forth in Schedule 5.11 annexed hereto, no Employee
Benefit Plan provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of Borrower, any of
its Subsidiaries or any of their respective ERISA Affiliates.
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D. As of the most recent valuation date for any Pension Plan, the amount
of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), does not exceed $500,000.
E. As of the most recent valuation date for each Multiemployer Plan (if
any) for which the actuarial report is available, the potential liability of
Borrower, its Subsidiaries and their respective ERISA Affiliates for a complete
withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of
ERISA), when aggregated with such potential liability for a complete withdrawal
from all Multiemployer Plans, based on information available pursuant to Section
4221(e) of ERISA, does not exceed $1,000,000.
5.12 CERTAIN FEES.
Except for a transaction fee of $1,500,000 payable to Trivest in
connection with the consummation of this Credit Agreement, no broker's or
finder's fee or commission will be payable with respect to this Agreement or any
of the transactions contemplated hereby, and Borrower hereby indemnifies Lenders
against, and agrees that it will hold Lenders harmless from, any claim, demand
or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 5.13 annexed hereto:
(i) neither Borrower nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect;
(ii) neither Borrower nor any of its Subsidiaries has received any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section
9604) or any comparable state law;
(iii) there are and, to Borrower's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim against
Borrower or any of its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect;
(iv) neither Borrower nor any of its Subsidiaries nor, to Borrower's
knowledge, any predecessor of Borrower or any of its Subsidiaries has
filed any notice
71
under any Environmental Law indicating past or present treatment of
Hazardous Materials at any Facility, and none of Borrower's or any of its
Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent; and
(v) compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the contrary, no event
or condition has occurred or is occurring with respect to Borrower or any of its
Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including any matter disclosed
on Schedule 5.13 annexed hereto, which individually or in the aggregate has had
or could reasonably be expected to have a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened involving
Borrower or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect.
5.15 SOLVENCY.
The Borrower individually is, and the Loan Parties and their Subsidiaries
taken as a whole are, and, upon the incurrence of any Obligations by the
Borrower or the Loan Parties and their Subsidiaries taken as a whole (after
giving effect to any rights of contribution) on any date on which this
representation is made, will be, Solvent.
5.16 MATTERS RELATING TO COLLATERAL.
A. Creation, Perfection and Priority of Liens. The execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions taken
on or prior to the date hereof pursuant to subsections 4.1(d), 4.1(e), 6.8 and
6.9 and (ii) the delivery to Administrative Agent of any Pledged Collateral not
delivered to Administrative Agent at the time of execution and delivery of the
applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Lenders, as security for the respective Secured Obligations (as
defined in the applicable Collateral Document in respect of any Collateral), a
valid and perfected First Priority Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing of any UCC financing
statements delivered to Administrative Agent for filing (but not yet filed) and
the periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.
B. Governmental Authorizations. No authorization, approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body is required for either (i) the pledge or grant by any Loan Party of the
Liens purported to be created in favor of
72
Administrative Agent pursuant to any of the Collateral Documents or (ii) the
exercise by Administrative Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to any of the
Collateral Documents or created or provided for by applicable law), except for
filings or recordings contemplated by subsection 5.16A and except as may be
required, in connection with the disposition of any Pledged Collateral, by laws
generally affecting the offering and sale of securities.
C. Absence of Third-Party Filings. Except such as may have been filed in
favor of Administrative Agent as contemplated by subsection 5.16A, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
D. Margin Regulations. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
5.17 DISCLOSURE.
No representation or warranty of Trivest or any Loan Party or any of their
Subsidiaries contained in the Confidential Information Memorandum or in any Loan
Document or Related Agreement or in any other document, certificate or written
statement furnished to Lenders by or on behalf of Trivest or any Loan Party or
any of its Subsidiaries for use in connection with the transactions contemplated
by this Agreement contains any untrue statement of a material fact or omits to
state a material fact (known to Borrower, in the case of any document not
furnished by it) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Borrower to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There are no facts known (or which should
upon the reasonable exercise of diligence be known) to Borrower (other than
matters of a general economic nature) that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect and that
have not been disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
5.18 USE OF PROCEEDS.
The proceeds of the Extensions of Credit shall be used (i) to refinance
certain existing Indebtedness of Borrower on the Closing Date, (ii) to finance
the Dividend transaction, after
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giving effect to the funding of the Subordinated Notes and having used all
proceeds thereof to finance the Dividend Transaction, (iii) to pay Transaction
costs and expenses associated with this Agreement on the Closing Date and (iv)
provide for the working capital and general corporate requirements of Borrower
and its Subsidiaries, including capital expenditures and Permitted Acquisitions.
5.19 FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the Borrower nor any of its Subsidiaries is an "enemy" or an "ally
of the enemy" within the meaning of Section 2 of the Trading with the Enemy Act
of the United States of America (50 U.S.C. App. Sections 1 et seq.), as amended.
Neither the Borrower nor any or its Subsidiaries is in violation of (a) the
Trading with the Enemy Act, as amended, (b) any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto or (c) the Patriot Act. No Loan Party (i) is a blocked person described
in section 1 of the Anti-Terrorism Order or (ii) to the best of its knowledge,
engages in any dealings or transactions, or is otherwise associated, with any
such blocked person.
5.20 INSURANCE.
The present insurance coverage of Borrower and its Subsidiaries is
outlined as to carrier, policy number, expiration date, type and amount on
Schedule 5.20 and such insurance coverage complies the requirements set forth in
Section 6.4A.
SECTION 6
BORROWER'S AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations, unless Requisite Lenders shall otherwise give prior
written consent, Borrower shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Borrower will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP; provided that quarterly financial statements shall not be required to
have footnote disclosure. Borrower will deliver to Administrative Agent and
Lenders:
(i) Quarterly Financials: as soon as available, and in any event
within 45 days after the end of each Fiscal Quarter (a) the consolidated
balance sheet of Borrower and its Subsidiaries as at the end of such
Fiscal Quarter and the related consolidated statements of income,
stockholders' equity and cash flows of Borrower and its
74
Subsidiaries for such Fiscal Quarter and for the period from the beginning
of the then current Fiscal Year to the end of such Fiscal Quarter, setting
forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, to the extent
prepared on a quarterly basis, all in reasonable detail and certified by
the chief financial officer or chief executive officer of Borrower that
they fairly present, in all material respects, the financial condition of
Borrower and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, subject
to changes resulting from audit and normal year-end adjustments, (b) a
narrative report describing the operations of Borrower and its
Subsidiaries in the form prepared for presentation to senior management
for such Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter and (c) financial
statements concerning the joint ventures of the Borrower and its
Subsidiaries, if any;
(ii) Year-End Financials: as soon as available and in any event
within 120 days after the end of each Fiscal Year, (a) the consolidated
balance sheet of Borrower and its Subsidiaries as at the end of such
Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows of Borrower and its Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding
figures from the Financial Plan for the Fiscal Year covered by such
financial statements, all in reasonable detail and certified by the chief
financial officer of Borrower that they fairly present, in all material
respects, the financial condition of Borrower and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated, (b) a narrative report describing the
operations of Borrower and its Subsidiaries in the form prepared for
presentation to senior management for such Fiscal Year, (c) in the case of
such consolidated financial statements, a report thereon of a nationally
recognized accounting firm or other independent certified public
accountants of recognized national standing selected by Borrower and
satisfactory to Administrative Agent, which report shall be unqualified,
shall express no doubts about the ability of Borrower and its Subsidiaries
to continue as a going concern, and shall state that such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of Borrower and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows
for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards, and (d) an updated
Schedule 5.8 to this Agreement setting forth all of the data required to
be set forth in Schedule 5.8 annexed hereto with respect to any Material
Contracts entered into during such Fiscal Year;
(iii) Officers' and Compliance Certificates: together with each
delivery of financial statements of Borrower and its Subsidiaries pursuant
to subdivisions (i) and (ii) above, (a) an Officers' Certificate of
Borrower stating that the signers have reviewed the terms of this
Agreement and have made, or caused to be made under their supervision, a
75
review in reasonable detail of the transactions and condition of Borrower
and its Subsidiaries during the accounting period covered by such
financial statements and that such review has not disclosed the existence
during or at the end of such accounting period, and that the signers do
not have knowledge of the existence as at the date of such Officers'
Certificate, of any condition or event that constitutes an Event of
Default or Potential Event of Default, or, if any such condition or event
existed or exists, specifying the nature and period of existence thereof
and what action Borrower has taken, is taking and proposes to take with
respect thereto; and (b) a Compliance Certificate demonstrating in
reasonable detail compliance during and at the end of the applicable
accounting periods with the restrictions contained in Section 7, in each
case to the extent compliance with such restrictions is required to be
tested at the end of the applicable accounting period;
(iv) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3 (other than
an immaterial change in GAAP), the consolidated financial statements of
Borrower and its Subsidiaries delivered pursuant to subdivisions (i), (ii)
or (x) of this subsection 6.1 will differ in any material respect from the
consolidated financial statements that would have been delivered pursuant
to such subdivisions had no such change in accounting principles and
policies been made, then (a) together with the first delivery of financial
statements pursuant to subdivision (i), (ii) or (x) of this subsection 6.1
following such change, consolidated financial statements of Borrower and
its Subsidiaries for (y) the current Fiscal Year to the effective date of
such change and (z) the two full Fiscal Years immediately preceding the
Fiscal Year in which such change is made, in each case prepared on a pro
forma basis as if such change had been in effect during such periods, and
(b) together with each delivery of financial statements pursuant to
subdivision (i), (ii) or (x) of this subsection 6.1 following such change,
a written statement of the chief accounting officer or chief financial
officer of Borrower setting forth the differences (including any
differences that would affect any calculations relating to the financial
covenants set forth in subsection 7.6) which would have resulted if such
financial statements had been prepared without giving effect to such
change;
(v) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Borrower by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Borrower and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management
in connection with their annual audit;
(vi) Events of Default, etc.: promptly upon any officer of Borrower
obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Lender has given any notice (other than to Administrative Agent) or taken
any other action with respect to a claimed Event of Default or Potential
Event of Default, (b) that any Person has given any notice to Borrower or
any of its Subsidiaries or taken any other action with respect to a
claimed
76
default or event or condition of the type referred to in subsection 8.2,
(c) of any condition or event that would be required to be disclosed in a
current report filed by Borrower with the Securities and Exchange
Commission on Form 8-K (Items 1, 2, 4 and 6 of such Form as in effect on
the date hereof) if Borrower were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officers' Certificate specifying the nature and period
of existence of such condition, event or change, or specifying the notice
given or action taken by any such Person and the nature of such claimed
Event of Default, Potential Event of Default, default, event or condition,
and what action Borrower has taken, is taking and proposes to take with
respect thereto;
(vii) Litigation or Other Proceedings: (a) promptly upon any officer
of Borrower obtaining knowledge of (X) the institution of, or (in the good
faith judgment of Borrower) non-frivolous threat of, any action, suit,
proceeding (whether administrative, judicial or otherwise), governmental
investigation or arbitration against or affecting Borrower or any of its
Subsidiaries or any property of Borrower or any of its Subsidiaries
(collectively, "Proceedings") not previously disclosed in writing by
Borrower to Lenders or (Y) any material development in any Proceeding
that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to uninsured liability in excess of $500,000; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Borrower to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each
Fiscal Quarter, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, Borrower or any of its
Subsidiaries equal to or greater than $500,000, and promptly after request
by Administrative Agent such other information as may be reasonably
requested by Administrative Agent to enable Administrative Agent and its
counsel to evaluate any of such Proceedings;
(viii) ERISA Events: promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the Department
of Labor or the PBGC with respect thereto;
(ix) ERISA Notices: with reasonable promptness, copies of (a) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates with the Internal Revenue Service with respect to each
Pension Plan; (b) all notices received by Borrower, any of its
77
Subsidiaries or any of their respective ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (c) copies of
such other documents or governmental reports or filings relating to any
Employee Benefit Plan as Administrative Agent shall reasonably request;
(x) Financial Plans: as soon as practicable and in any event no
later than 45 days after the beginning of each Fiscal Year, a consolidated
plan and financial forecast for such Fiscal Year (the "Financial Plan" for
such Fiscal Year), including (a) a forecasted consolidated balance sheet
and forecasted consolidated statements of income and cash flows of
Borrower and its Subsidiaries for such Fiscal Year, prepared on a
quarterly basis, together with a pro forma Compliance Certificate for such
Fiscal Year and an explanation of the assumptions on which such forecasts
are based, (b) the Intellectual Property disclosures required by Section
6.12 and (c) such other information and projections as any Lender may
reasonably request;
(xi) Insurance: as soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance reasonably
satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Borrower and its
Subsidiaries and all material insurance coverage planned to be maintained
by Borrower and its Subsidiaries in the immediately succeeding Fiscal
Year;
(xii) Board of Directors: with reasonable promptness, written notice
of any change in the composition of the Board of Directors of Borrower;
(xiii) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Borrower, a written notice setting forth with respect to
such Person (a) the date on which such Person became a Subsidiary of
Borrower and (b) all of the data required to be set forth in Schedule 5.1
annexed hereto with respect to all Subsidiaries of Borrower (it being
understood that such written notice shall be deemed to supplement Schedule
5.1 annexed hereto for all purposes of this Agreement);
(xiv) Margin Determination Certificate: together with each delivery
of financial statements for each Fiscal Quarter (other than each fourth
Fiscal Quarter) pursuant to subdivision (ii) above, and within 45 days of
the last day of each fourth Fiscal Quarter, a Margin Determination
Certificate demonstrating in reasonable detail the calculation of the
Consolidated Total Leverage Ratio for the four consecutive Fiscal Quarters
ending on the day of the accounting period covered by such financial
statements;
(xv) Deposit Accounts: promptly upon the opening of any Deposit
Account by Borrower or any of its Subsidiaries, a written notice setting
forth all of the data required to be set forth in Schedule 6.10 annexed
hereto with respect to such Deposit Account;
(xvi) Public Filings: promptly upon their becoming available, copies
of (i) all Securities and Exchange Commission reports, if any, of Borrower
and its Subsidiaries, (ii) all financial statements, reports, notices and
proxy statements sent or made available by Borrower to their security
holders, (iii) all regular and periodic reports and all
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registration statements and prospectuses, if any, filed by any of Borrower
and its Subsidiaries with any securities exchange or with the Securities
and Exchange Commission or any governmental or private regulatory
authority, and (iv) all press releases and other statements made available
by any of Borrower and its Subsidiaries to the public concerning material
developments in the business of any of Borrower and its Subsidiaries; and
(xvii) Other Information: with reasonable promptness, such other
information and data with respect to Borrower or any of its Subsidiaries
as from time to time may be reasonably requested by any Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, Borrower will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business; provided, however that neither Borrower nor any of its Subsidiaries
shall be required to preserve any such right or franchise if the Board of
Directors of Borrower or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Borrower or
such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Borrower, such Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Borrower will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided that no such charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (1) such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor and (2) in the case of a charge or claim which has or may become a
Lien against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such charge
or claim.
B. Borrower will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Borrower or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
INSURANCE/CONDEMNATION PROCEEDS.
A. Maintenance of Properties. Borrower will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary
79
wear and tear excepted, all material properties used or useful in the business
of Borrower and its Subsidiaries (including all Intellectual Property) and from
time to time will make or cause to be made all appropriate repairs, renewals and
replacements thereof.
B. Insurance. Borrower will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Borrower and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Borrower will maintain or cause to be maintained (i) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Administrative Agent in its commercially reasonable judgment.
Each such policy of insurance shall (a) name Administrative Agent for the
benefit of Lenders as an additional insured thereunder as its interests may
appear and (b) in the case of each business interruption and casualty insurance
policy, contain a loss payable clause or endorsement, satisfactory in form and
substance to Administrative Agent, that names Administrative Agent for the
benefit of Lenders as the loss payee thereunder for any covered loss in excess
of $500,000 and provides for at least 30 days prior written notice to
Administrative Agent of any modification or cancellation of such policy.
C. Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by Borrower or any
of its Subsidiaries of any business interruption insurance proceeds
constituting Net Insurance/Condemnation Proceeds, (a) so long as no Event
of Default, and no Potential Event of Default under subsections 8.1, 8.6,
8.7 or 8.9, shall have occurred and be continuing, Borrower or such
Subsidiary may retain and apply such Net Insurance/Condemnation Proceeds
for working capital purposes, and (b) if an Event of Default, or a
Potential Event of Default under subsections 8.1, 8.6, 8.7 or 8.9, shall
have occurred and be continuing, Borrower shall apply an amount equal to
such Net Insurance/Condemnation Proceeds to prepay the Loans (and/or the
Revolving Commitments shall be reduced) as provided in subsection
2.8(b)(ix)(B);
(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by
Borrower or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds other than from business interruption insurance, (a) so long as
no Event of Default, and no Potential Event of Default under subsections
8.1, 8.6, 8.7 or 8.9, shall have occurred and be continuing, Borrower
shall, or shall cause one or more of its Subsidiaries to, promptly and
diligently apply all Net Insurance/Condemnation Proceeds in excess of
$250,000 to
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pay or reimburse the costs of repairing, restoring or replacing the assets
in respect of which such Net Insurance/Condemnation Proceeds were received
or, to the extent not so applied, to prepay the Loans (and/or the
Revolving Commitments shall be reduced) as provided in subsection
2.8(b)(ix)(B), and (b) if an Event of Default, or a Potential Event of
Default under subsections 8.1, 8.6, 8.7 or 8.9, shall have occurred and be
continuing, Borrower shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving
Commitments shall be reduced) as provided in subsection 2.8(b)(ix)(B).
(iii) Net Insurance/Condemnation Proceeds Received by Administrative
Agent. Upon receipt by Administrative Agent of any Net
Insurance/Condemnation Proceeds as loss payee, (a) if the aggregate amount
of Net Insurance/Condemnation Proceeds received (and reasonably expected
to be received) by Administrative Agent in respect of any covered loss
exceeds $500,000, and if and to the extent Borrower would have been
required to apply such Net Insurance/Condemnation Proceeds (if it had
received them directly) to prepay the Loans and/or reduce the Revolving
Commitments pursuant to the terms of subsection (ii) above, Administrative
Agent shall, and Borrower hereby authorizes Administrative Agent to, apply
such Net Insurance/Condemnation Proceeds to prepay the Loans (and/or the
Revolving Commitments shall be reduced) as provided in subsection
2.8(b)(ix)(B), and (b) if and to the extent Borrower would not have been
required to apply such Net Insurance/Condemnation Proceeds (if it had
received them directly) to prepay the Loans and/or reduce the Revolving
Commitments pursuant to the terms of subsection (ii) above and (1) the
aggregate amount of such Net Insurance/Condemnation Proceeds received (and
reasonably expected to be received) by Administrative Agent in respect of
any covered loss does not exceed $500,000, Administrative Agent shall
deliver such Net Insurance/Condemnation Proceeds to Borrower, and Borrower
shall, or shall cause one or more of its Subsidiaries to, promptly apply
such Net Insurance/Condemnation Proceeds to the costs of repairing,
restoring, or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received, and (2) if the aggregate
amount of Net Insurance/Condemnation Proceeds received (and reasonably
expected to be received) by Administrative Agent in respect of any covered
loss exceeds $500,000, Administrative Agent shall hold such Net
Insurance/Condemnation Proceeds pursuant to the terms of the Security
Agreement and, so long as Borrower or any of its Subsidiaries proceeds
diligently to repair, restore or replace the assets of Borrower or such
Subsidiary in respect of which such Net Insurance/Condemnation Proceeds
were received, Administrative Agent shall from time to time disburse to
Borrower or such Subsidiary from the Collateral Account, to the extent of
any such Net Insurance/Condemnation Proceeds remaining therein in respect
of the applicable covered loss, amounts necessary to pay the cost of such
repair, restoration or replacement after the receipt by Administrative
Agent of invoices or other documentation reasonably satisfactory to
Administrative Agent relating to the amount of costs so incurred and the
work performed (including, if required by Administrative Agent, lien
releases and architects' certificates); provided, however that if at any
time Administrative Agent reasonably determines (A) that Borrower or such
Subsidiary is not proceeding diligently with such repair, restoration or
replacement or (B) that such repair, restoration or replacement cannot be
completed with the Net Insurance/Condemnation
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Proceeds then held by Administrative Agent for such purpose, together with
funds otherwise available to Borrower for such purpose, or that such
repair, restoration or replacement cannot be completed within 180 days
after the receipt by Administrative Agent of such Net
Insurance/Condemnation Proceeds, Administrative Agent shall, and Borrower
hereby authorizes Administrative Agent to, apply such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving
Commitments shall be reduced) as provided in subsection 2.8(b)(ix)(B).
6.5 INSPECTION RIGHTS; AUDITS OF INVENTORY AND ACCOUNTS RECEIVABLE;
LENDER MEETING; BOOKS AND RECORDS.
A. Inspection Rights. Borrower shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Borrower or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Borrower may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
B. Lender Meeting. Borrower will, upon the request of Administrative
Agent, participate in a meeting of Administrative Agent and Lenders once during
each Fiscal Year to be held at Borrower's corporate offices (or at such other
location as may be agreed to by Borrower and Administrative Agent) at such time
as may be agreed to by Borrower and Administrative Agent.
C. Books and Records. Borrower shall, and shall cause each of its
Subsidiaries to, keep proper books of records and account in which full, true
and correct entries in conformity with GAAP.
6.6 COMPLIANCE WITH LAWS, ETC.
Borrower shall comply, and shall cause each of its Subsidiaries and all
other Persons on or occupying any Facilities to comply, with the requirements of
all applicable laws, rules, regulations and orders of any governmental authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to cause, individually or in the aggregate, a Material Adverse Effect.
6.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; BORROWER'S
ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES, ENVIRONMENTAL
CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
A. Environmental Review and Investigation. Borrower agrees that
Administrative Agent may, from time to time and in its reasonable discretion, if
(i) Administrative Agent reasonably believes that Borrower has breached any
representation, warranty or covenant contained in subsection 5.6, 5.13, 6.6 or
6.7 or that there has been a material violation of
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Environmental Laws at any Facility or by Borrower or any of its Subsidiaries at
any other location or (ii) an Event of Default has occurred and is continuing,
retain, at Borrower's expense, an independent professional consultant to review
any environmental audits, investigations, analyses and reports relating to
Hazardous Materials prepared by or for Borrower or conduct its own investigation
of any Facility; provided that, in the case of any Facility no longer owned,
leased, operated or used by Borrower or any of its Subsidiaries, Borrower shall
only be obligated to use its reasonable commercial efforts to obtain permission
for Administrative Agent's professional consultant to conduct an investigation
of such Facility. For purposes of conducting such a review and/or investigation,
Borrower hereby grants to Administrative Agent and its agents, employees,
consultants and contractors the right to enter into or onto any Facilities
currently owned, leased, operated or used by Borrower or any of its Subsidiaries
and to perform such tests on such property (including taking samples of soil,
groundwater and suspected asbestos-containing materials) as are reasonably
necessary in connection therewith. Any such investigation of any Facility shall
be conducted, unless otherwise agreed to by Borrower and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing operations at such Facility or
to cause any damage or loss to any property at such Facility. Borrower and
Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of Administrative Agent pursuant to this
subsection 6.7A will be obtained and shall be used by Administrative Agent and
Lenders for the purposes of Lenders' internal credit decisions, to monitor and
police the Loans and to protect Lenders' security interests, if any, created by
the Loan Documents. Administrative Agent agrees to deliver a copy of any such
report to Borrower with the understanding that Borrower acknowledges and agrees
that (x) it will indemnify and hold harmless Administrative Agent and each
Lender from any costs, losses or liabilities relating to Borrower's use of or
reliance on such report, (y) neither Administrative Agent nor any Lender makes
any representation or warranty with respect to such report, and (z) by
delivering such report to Borrower, neither Administrative Agent nor any Lender
is requiring or recommending the implementation of any suggestions or
recommendations contained in such report.
B. Environmental Disclosure. Borrower will deliver to Administrative Agent
and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Borrower or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility which,
individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect or with respect to any Environmental Claims
which, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
upon the occurrence thereof, written notice describing in reasonable
detail (a) any Release required to be reported to any federal, state or
local governmental or regulatory agency under any applicable Environmental
Laws which Release would reasonably be expected to have a Material Adverse
Effect, and (b) any remedial action taken by Borrower or any other
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Person in response to (1) any Hazardous Materials Activities the existence
of which has a reasonable possibility of resulting in one or more
Environmental Claims having, individually or in the aggregate, a Material
Adverse Effect, or (2) any Environmental Claims that, individually or in
the aggregate, would reasonably be expected to have a Material Adverse
Effect.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof by Borrower or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect, (b) any Release required to be reported
to any federal, state or local governmental or regulatory agency, and (c)
any request for information from any governmental agency that suggests
such agency is investigating whether Borrower or any of its Subsidiaries
may be potentially responsible for any Hazardous Materials Activity.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by Borrower or any of its
Subsidiaries that could reasonably be expected to (1) expose Borrower or
any of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or (2) affect the ability of Borrower or any of
its Subsidiaries to maintain in full force and effect all material
Governmental Authorizations required under any Environmental Laws for
their respective operations and (b) any proposed action to be taken by
Borrower or any of its Subsidiaries to modify current operations in a
manner that could reasonably be expected to subject Borrower or any of its
Subsidiaries to any additional obligations or requirements under any
Environmental Laws that could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 6.7.
C. Borrower's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials
Activities. Borrower shall promptly undertake, and shall cause each
of its Subsidiaries promptly to undertake, any and all
investigations, studies, sampling, testing, abatement, cleanup,
removal, remediation or other response actions necessary to remove,
remediate, clean up or xxxxx any Hazardous Materials Activity on,
under or about any Facility that is in violation of any
Environmental Laws or that presents a material risk of giving rise
to an Environmental Claim. In the event Borrower or any of its
Subsidiaries undertakes any such action with respect to any
Hazardous Materials, Borrower or such Subsidiary shall conduct and
complete
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such action in compliance with all applicable Environmental Laws and
in accordance with the policies, orders and directives of all
federal, state and local governmental authorities except when, and
only to the extent that, Borrower's or such Subsidiary's liability
with respect to such Hazardous Materials Activity is being contested
in good faith by Borrower or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
Environmental Laws. Borrower shall promptly take, and shall cause each of
its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws by Borrower or its
Subsidiaries that could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect and (ii) make an appropriate
response to any Environmental Claim against Borrower or any of its
Subsidiaries and discharge any obligations it may have to any Person
thereunder where failure to do so could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
6.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS BY CERTAIN SUBSIDIARIES AND FUTURE SUBSIDIARIES.
A. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. If any Person organized under the laws of the United States or any
State thereof or the District of Columbia becomes a Subsidiary of Borrower after
the date hereof, Borrower will promptly notify Administrative Agent of that fact
and cause such Subsidiary to execute and deliver to Administrative Agent a
counterpart of the Subsidiary Guaranty and the Security Agreement and to take
all such further actions and execute all such further documents and instruments
(including actions, documents and instruments comparable to those described in
subsections 4.19(d) and (e)) as may be necessary or, in the opinion of
Administrative Agent, desirable to create in favor of Administrative Agent, for
the benefit of Lenders, a valid and perfected First Priority Lien on all of the
personal and mixed property assets of such Subsidiary described in the
applicable forms of Collateral Documents.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Borrower shall
deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its incorporation and each other state in which such Person is
qualified as a foreign corporation to do business and, to the extent generally
available, a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority of
each of such jurisdictions, each to be dated a recent date prior to their
delivery to Administrative Agent, (ii) a copy of such Subsidiary's Bylaws,
certified by its corporate secretary or an assistant secretary as of a recent
date prior to their delivery to Administrative Agent, (iii) a certificate
executed by the secretary or an assistant secretary of such Subsidiary as to (a)
the fact that the attached resolutions of the Board of Directors of such
Subsidiary approving and authorizing the execution, delivery and performance of
such Loan Documents are in full force and effect and have not been modified or
amended and (b) the incumbency and signatures of the officers of such Subsidiary
executing such Loan Documents, and (iv) a favorable opinion of counsel to such
Subsidiary, in form and
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substance satisfactory to Administrative Agent and its counsel, as to (a) the
due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary of such Loan Documents,
(c) the enforceability of such Loan Documents against such Subsidiary, (d) such
other matters (including matters relating to the creation and perfection of
Liens in any Collateral pursuant to such Loan Documents) as Administrative Agent
may reasonably request, all of the foregoing to be satisfactory in form and
substance to Administrative Agent and its counsel.
6.9 CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO ADDITIONAL REAL
PROPERTY COLLATERAL.
A. Conforming Leasehold Interests. If Borrower or any of its Subsidiaries
acquires any Leasehold Property, Borrower shall, or shall cause such Subsidiary
to, use commercially reasonable efforts (without requiring Borrower or such
Subsidiary to relinquish any material rights or incur any material obligations
or to expend more than a nominal amount of money over and above the
reimbursement, if required, of the landlord's out-of-pocket costs, including
attorneys fees) to cause such Leasehold Property to be a Conforming Leasehold
Interest.
B. Landlord Consent and Estoppel, Etc. From and after the Closing Date, in
the event that (i) Borrower or any Subsidiary Guarantor acquires any Leasehold
Property or (ii) at the time any Person becomes a Subsidiary Guarantor, such
Person owns or holds any Leasehold Property, in either case excluding any such
Real Property Asset the encumbrancing of which requires the consent of any
applicable lessor or (in the case of clause (ii) above) then-existing senior
lien holder, where Borrower and its Subsidiaries are unable to obtain such
lessor's or senior xxxx xxxxxx'x consent (any such non-excluded Real Property
Asset described in the foregoing clause (i) or (ii) being an "Additional
Mortgaged Property"), Borrower or such Subsidiary Guarantor shall deliver to
Administrative Agent, as soon as practicable after such Person acquires such
Additional Mortgaged Property or becomes a Subsidiary Guarantor, as the case may
be, the following:
(i) Landlord Consent and Estoppel. In the case of an Additional
Mortgaged Property consisting of a Leasehold Property, a Landlord Consent
and Estoppel; and
(ii) Environmental Audit. If required by Administrative Agent,
reports and other information, in form, scope and substance satisfactory
to Administrative Agent and prepared by environmental consultants
satisfactory to Administrative Agent, concerning any environmental hazards
or liabilities to which Borrower or any of its Subsidiaries may be subject
with respect to such Additional Mortgaged Property.
6.10 DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS.
Borrower shall, and shall cause each of its Subsidiaries to, use and
maintain its Deposit Accounts and cash management systems solely with one or
more of the Lenders hereunder and in a manner reasonably satisfactory to
Administrative Agent. Information regarding these Deposit Accounts, including
(a) the name and address of the financial institutions maintaining the Deposit
Accounts, and (b) the Deposit Account numbers, shall be set forth on Schedule
6.10
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annexed hereto. Borrower shall not permit any of such Deposit Accounts at any
time to have a principal balance in excess of $2,000,000 unless such Deposit
Account is with Administrative Agent or Borrower or such Subsidiary, as the case
may be, has (i) delivered to Administrative Agent an agreement, satisfactory in
form and substance to Administrative Agent and executed by the financial
institution at which such Deposit Account is maintained, pursuant to which such
financial institution confirms and acknowledges Administrative Agent's security
interest in, and sole dominion and control over, such Deposit Account and waives
its rights to set-off with respect to amounts in such Deposit Account and (ii)
taken all other steps necessary or, in the opinion of Administrative Agent,
desirable to ensure that Administrative Agent has sole dominion and control over
such Deposit Account; provided that if Borrower or such Subsidiary is unable to
obtain such agreement from such financial institution Borrower shall, or shall
cause such Subsidiary to, within 30 days after receiving a written request by
Administrative Agent to do so, transfer all amounts in the applicable Deposit
Account to a Deposit Account maintained at a financial institution from which
Borrower or such Subsidiary has obtained such an agreement.
6.11 INTEREST RATE CAP.
Borrower shall, within ninety (90) days of the Closing Date enter into a
Hedge Agreement protecting against fluctuations in interest rates, in amounts
and for periods of time reasonably satisfactory to Administrative Agent, which
agreements shall provide for coverage in a minimum amount of at least 50% of the
initial principal amount of the Term Loans made on the Closing Date for a period
of at least three (3) years.
6.12 INTELLECTUAL PROPERTY.
(a) Borrower shall notify Administrative Agent promptly if it knows
or has reason to know that any application, letters patent or registration
relating to any material Patent, material Patent License, material
Trademark or material Trademark License of Loan Parties or any of their
Subsidiaries may become abandoned, or of any adverse determination or
development (including, without limitation, the institution of, or any
such determination or development in, any proceeding in the United States
Patent and Trademark Office or any court) regarding Borrower's or any of
its Subsidiary's ownership of any material Patent or material Trademark,
its right to patent or register the same, or to enforce, keep and maintain
the same, or its rights under any material Patent License or material
Trademark License.
(b) Borrower shall notify Administrative Agent promptly after it
knows or has reason to know of any adverse determination or development
(including, without limitation, the institution of, or any such
determination or development in, any proceeding in any court) regarding
any material Copyright or material Copyright License of Loan Parties or
any of their Subsidiaries, whether (i) such material Copyright or material
Copyright License may become invalid or unenforceable prior to its
expiration or termination, or (ii) Borrower's or any of its Subsidiary's
ownership of such material Copyright, its right to register the same or to
enforce, keep and maintain the same, or its rights under such material
Copyright License, may become affected.
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(c) (i) Borrower shall promptly notify Administrative Agent of any
filing by any Loan Party or any of its Subsidiaries, either itself or
through any agent, employee, licensee or designee (but in no event later
than the fifteenth day following such filing), of any application for
registration of any material Intellectual Property with the United States
Copyright Office or United States Patent and Trademark Office or any
similar office or agency in any other country or any political subdivision
thereof.
(ii) Concurrently, with the delivery of quarterly and annual
financial statements of Borrower pursuant to Section 6.1 hereof,
Borrower shall provide Administrative Agent and its counsel a
complete and correct list of all registered Intellectual Property
owned by or licensed to Loan Parties or any of their Subsidiaries
that have not been set forth as annexes of such documents and
instruments showing all filings and recordings for the protection of
the security interest of the Administrative Agent therein pursuant
to the agreements of the United States Patent and Trademark Office
or the United States Copyright Office.
(iii) Upon request of Administrative Agent, Borrower shall
execute and deliver any and all agreements, instruments, documents,
and papers as Administrative Agent may reasonably request to
evidence Administrative Agent's security interest in the
Intellectual Property and the general intangibles referred to in
clauses (i) and (ii), including, without limitation, the goodwill of
Borrower or its Subsidiaries, relating thereto or represented
thereby (or such other Intellectual Property or the general
intangibles relating thereto or represented thereby as
Administrative Agent may reasonably request).
(d) Loan Parties and their Subsidiaries will take all necessary
actions, including, without limitation, in any proceeding before the
United States Patent and Trademark Office or the United States Copyright
Office, to maintain each item of Intellectual Property of Borrower and its
Subsidiaries, including, without limitation, payment of maintenance fees,
filing of applications for renewal, affidavits of use, affidavits of
incontestability and opposition, interference and cancellation
proceedings.
(e) In the event that any Loan Party becomes aware that any material
Intellectual Property is infringed, misappropriated or diluted by a third
party in any material respect, Borrower shall notify Administrative Agent
promptly after it learns thereof and shall, unless Borrower or the
relevant Subsidiary, as the case may be, shall reasonably determine that
such Intellectual Property is not material to the business of Loan Parties
and their Subsidiaries taken as a whole, (i) promptly and diligently take
such prudent actions as are necessary to protect such Intellectual
Property (which prudent actions may include, without limitation, suing for
infringement, misappropriation or dilution and to recover any and all
damages for such infringement, misappropriation or dilution or pursuing
settlement negotiations with such third party), and (ii) take such other
actions as Borrower or such Subsidiary, as the case may be, shall
reasonably deem appropriate under the circumstances to protect such
Intellectual Property.
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6.13 POST-CLOSING COVENANTS.
(a) Within ninety (90) calendar days of the Closing Date, obtain,
and thereafter maintain, key-man insurance ("Key-Man Insurance") with
respect to Xx. Xxxxxxx on the following basis:
(i) such insurance shall be with respect to the death and
disability of Xx. Xxxxxxx;
(ii) such insurance shall be paid by the Loan Parties;
(iii) such insurance shall be issued by a carrier or carriers
reasonably acceptable to the Administrative Agent, and shall name
the Administrative Agent (on behalf of the Lenders) and the agent
under the Subordinated Note Documents (on behalf of the holders of
the Subordinated Notes) each as beneficiaries of 50% of the proceeds
of such insurance; and
(iv) such insurance shall be in such amounts up to (but not
exceeding) $5,000,000 with respect to both death and disability and
allocated between such death and disability benefits as the
Administrative Agent and the agent under the Subordinated Note
Documents shall agree, provided that the Loan Parties shall not be
required to pay premiums in respect of such insurance in an amount
in excess of the lower of (A) $40,000 and (B) the premiums required
to obtain insurance on both death and disability of Xx. Xxxxxxx in
the amount of $5,000,000.
(b) Within sixty (60) days after the Closing Date (or such extended
period of time as agreed to by the Administrative Agent), the Borrower
shall, and shall cause its Subsidiaries to, deliver to the Administrative
Agent such documentation as may be reasonably required by the
Administrative Agent to correct any chain-of-title issues in the records
of the United States Patent and Trademark Office and the United States
Copyright Office with respect to the IP Collateral of the Loan Parties and
to release of record any security interests filed against such IP
Collateral in favor of any Person other than the Administrative Agent.
SECTION 7
BORROWER'S NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Borrower shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7.
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7.1 INDEBTEDNESS.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Borrower may become and remain liable with respect to the
Obligations;
(ii) Borrower and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon
any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished;
(iii) Borrower and its Subsidiaries may become and remain liable
with respect to Indebtedness in respect of Capital Leases; provided that
such Capital Leases are permitted under the terms of subsection 7.9;
(iv) Borrower may become and remain liable with respect to
Indebtedness to any of its wholly-owned domestic Subsidiaries, and any
wholly-owned domestic Subsidiary of Borrower may become and remain liable
with respect to Indebtedness to Borrower or any other wholly-owned,
domestic Subsidiary of Borrower; provided that (a) all such intercompany
Indebtedness shall be evidenced by promissory notes which are pledged to
the Administrative Agent for the benefit of the Lenders, (b) all such
intercompany Indebtedness owed by Borrower to any of its Subsidiaries
shall be subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of the applicable promissory notes or an
intercompany subordination agreement on terms and conditions reasonably
satisfactory to the Administrative Agent, and (c) any payment by any
Subsidiary of Borrower under any guaranty of the Obligations shall result
in a pro tanto reduction of the amount of any intercompany Indebtedness
owed by such Subsidiary to Borrower or to any of its Subsidiaries for
whose benefit such payment is made;
(v) Indebtedness and obligations owing under Secured Hedge
Agreements and other Hedge Agreements entered into in order to manage
existing or anticipated interest rate or exchange rate risks and not for
speculative purposes;
(vi) Borrower and its Subsidiaries may become and remain liable with
respect to other Indebtedness in an aggregate principal amount not to
exceed $2,000,000 at any time outstanding;
(vii) Borrower and its Subsidiaries may become and remain liable
with respect to trade letters of credit entered into in the ordinary
course of the Loan Parties' business; and
(viii) Borrower may become and remain liable with respect to the
Subordinated Indebtedness so long as any Subordinated Indebtedness
incurred by the Borrower other
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than the Subordinated Notes shall be used to prepay the Obligations in
accordance with Section 2.8(b).
7.2 LIENS AND RELATED MATTERS.
A. Prohibition on Liens. Borrower shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described in Schedule 7.2 annexed hereto; and
(iv) Other Liens on assets securing Indebtedness incurred to acquire
such assets pursuant to subsection 7.1(vi), in an aggregate amount not to
exceed the aggregate purchase price of such assets.
B. Equitable Lien in Favor of Lenders. If Borrower or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale, neither Borrower nor any
of its Subsidiaries shall enter into any agreement (other than (i) the Note
Purchase Agreement, so long as such Note Purchase Agreement does not prohibit
the Liens granted pursuant to the Collateral Documents, or (ii) any other
agreement prohibiting only the creation of Liens securing Subordinated
Indebtedness) prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Borrower or Other
Subsidiaries. Except as provided herein or in the Note Purchase Agreement,
Borrower will not, and will not permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to
(i)
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pay dividends or make any other distributions on any of such Subsidiary's
capital stock owned by Borrower or any other Subsidiary of Borrower, (ii) repay
or prepay any Indebtedness owed by such Subsidiary to Borrower or any other
Subsidiary of Borrower, (iii) make loans or advances to Borrower or any other
Subsidiary of Borrower, or (iv) transfer any of its property or assets to
Borrower or any other Subsidiary of Borrower.
7.3 INVESTMENTS; JOINT VENTURES.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Borrower and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii) Borrower and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries of
Borrower;
(iii) Borrower and its Subsidiaries may make intercompany loans to
the extent permitted under subsection 7.1(iv);
(iv) Borrower and its Subsidiaries may make Consolidated Capital
Expenditures permitted by subsection 7.8;
(v) Borrower and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
(vi) Borrower and its Subsidiaries may make prepayments in the
ordinary course of business to vendors for Inventory to be delivered
within 30 days following the date of such prepayment;
(vii) Borrower may make loans to its employees in an aggregate
amount not to exceed $675,000, for the purpose of assisting its employees
in the acquisition of certain common stock of Holdings;
(viii) Borrower and its Subsidiaries may make Permitted
Acquisitions; and
(ix) and Borrower and its Subsidiaries may make other Investments in
an aggregate amount not to exceed $400,000.
7.4 CONTINGENT OBLIGATIONS.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Borrower may become and remain liable with respect to Contingent
Obligations in respect of Letters of Credit issued under this Agreement
and Subsidiaries
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of Borrower may become and remain liable with respect to Contingent
Obligations in respect of the Subsidiary Guaranty;
(ii) Borrower and its Subsidiaries may become and remain liable with
respect to other Contingent Obligations (including letters of credit and
Contingent Obligations assumed in a Permitted Acquisition) in an aggregate
amount not to exceed $5,000,000 at any time;
(iii) Borrower and its Subsidiaries may become and remain liable (A)
with respect to Contingent Obligations under the Related Agreements or (B)
in respect of customary indemnification and purchase price adjustment
obligations incurred in connection with (x) Asset Sales or other sales of
assets, in each case, permitted under this Agreement, and (y) Permitted
Acquisitions;
(iv) Borrower and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of any Indebtedness of
Borrower or any of its Subsidiaries permitted by subsection 7.1;
(v) Borrower and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 7.4 annexed
hereto;
(vi) Borrower and its Subsidiaries may become and remain liable with
respect to Contingent Obligations incurred in the ordinary course of
business with respect to surety and appeal bonds, performance bonds and
other similar obligations; and
(vii) Borrower and its Subsidiaries may become and remain liable
with respect to Contingent Obligations incurred in the ordinary course of
business under indemnity agreements to title insurers to cause such title
insurers to issue title insurance policies to Administrative Agent and/or
to Borrower or any of its Subsidiaries.
7.5 RESTRICTED PAYMENTS.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Payment; provided, however, that:
(i) Notwithstanding anything to the contrary in this Agreement,
Borrower may pay accrued and unpaid interest on the Subordinated Notes,
and fees, expenses and other amounts payable pursuant to the Note Purchase
Agreement, in each case to the extent permitted by the terms of the
Subordination Agreement;
(ii) Borrower may make Restricted Payments to Holdings to redeem
shares of its capital stock or warrants or options to acquire any such
shares from employees of Borrower and its Subsidiaries upon the death or
other termination of employment of such employees, provided that all of
the following conditions are satisfied:
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(a) no Potential Event of Default or Event of Default shall
have occurred and be continuing or would arise as a result of such
Restricted Payment;
(b) after giving effect to such Restricted Payment (together
with all prior or concurrent Restricted Payments permitted under
this subsection 7.5(ii)(b)), Borrower shall be in compliance on a
pro forma basis with the covenants set forth in Section 7.6,
recomputed for the most recent month for which financial statements
have been delivered by Borrower pursuant to Section 6.1; and
(c) the aggregate amount of such Restricted Payments permitted
in any Fiscal Year of Borrower shall not exceed $500,000;
(iii) if Borrower files a consolidated income tax return with
Holdings, Borrower may make distributions to Holdings to permit Holdings
to pay federal and state income taxes then due and owing, franchise taxes
and other similar licensing expenses incurred in the ordinary course of
business; provided that the amount of such distributions shall not be
greater, nor the receipt by Borrower of tax benefits less, than they would
have been had Borrower not filed a consolidated income tax return with
Holdings;
(iv) Borrower may make Restricted Payments to Holdings to enable the
payment of out-of-pocket expenses of members of the board of directors of
Holdings who are not otherwise employees or consultants to Holdings or any
of its Subsidiaries, Trivest, or any of their respective Affiliates,
provided that the aggregate amount of such fees shall not exceed $50,000
during any period of 12 consecutive months; and
(v) so long as no Potential Event of Default or Event of Default
shall have occurred and be continuing or would arise as a result of such
Restricted Payment, the Borrower may make any prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement,
defeasance (including in-substance or legal defeasance), sinking fund or
similar payment with respect to, any Indebtedness permitted hereunder
(other than Subordinated Indebtedness).
7.6 FINANCIAL COVENANTS.
A. Maximum Consolidated Total Leverage Ratio. Borrower shall not permit
the Consolidated Total Leverage Ratio as of the last day of any Fiscal Quarter
ending during any of the periods set forth below to exceed the correlative ratio
indicated:
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MAXIMUM CONSOLIDATED
PERIOD TOTAL LEVERAGE RATIO
----------------------------- --------------------
Closing Date to June 30, 2005 5.5 to 1.0
July 1, 2005 to June 30, 2006 5.0 to 1.0
July 1, 2006 to June 30, 2007 4.5 to 1.0
July 1, 2007 to June 30, 2008 3.5 to 1.0
July 1, 2008 and thereafter 3.0 to 1.0
B. Maximum Consolidated Senior Leverage Ratio. Borrower shall not permit
the Consolidated Senior Leverage Ratio as of the last day of any Fiscal Quarter
ending during any of the periods set forth below to exceed the correlative ratio
indicated:
MAXIMUM CONSOLIDATED
PERIOD SENIOR LEVERAGE RATIO
----------------------------- ---------------------
Closing Date to June 30, 2005 3.5 to 1.0
July 1, 2005 to June 30, 2006 3.0 to 1.0
July 1, 2006 and thereafter 2.5 to 1.0
C. Minimum Fixed Charge Coverage Ratio. Borrower shall not permit the
ratio of (i) Consolidated EBITDA minus Consolidated Capital Expenditures to (ii)
Consolidated Fixed Charges for any four consecutive Fiscal Quarter period ending
during the term of this Agreement to be less than 1.25 to 1.0.
D. Test Dates. Notwithstanding anything herein to the contrary, each of
the Borrower and the Lenders acknowledge and agree that the Borrower's
compliance with the financial covenants set forth in this subsection 7.6 shall
be tested on a quarterly basis, commencing with the fiscal quarter ending
September 30, 2004.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Borrower shall not, and shall not permit any of its Subsidiaries to, alter
the corporate, capital or legal structure of Borrower or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person (other than purchases or other acquisitions of inventory,
materials and equipment in the ordinary course of Borrower's, or any of its
Subsidiary's, business), except:
(i) any Subsidiary of Borrower may be merged with or into Borrower
or any wholly-owned Subsidiary Guarantor, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or
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otherwise disposed of, in one transaction or a series of transactions, to
Borrower or any wholly-owned Subsidiary Guarantor; provided that, in the
case of such a merger, Borrower or such wholly-owned Subsidiary Guarantor
shall be the continuing or surviving corporation;
(ii) Borrower and its Subsidiaries may make Consolidated Capital
Expenditures permitted under subsection 7.8;
(iii) Borrower and its Subsidiaries may dispose of obsolete, worn
out or surplus property in the ordinary course of business;
(iv) Borrower and its Subsidiaries may sell or otherwise dispose of
(i) inventory sold in the ordinary course of business and (ii) any such
other assets in an aggregate amount not to exceed $200,000 in any fiscal
year; provided that the consideration received for such assets shall be in
an amount at least equal to the fair market value thereof;
(v) Borrower and its Subsidiaries may sell or discount, in each case
without recourse and in the ordinary course of business, Accounts arising
in the ordinary course of business, but only in connection with the
compromise or collection thereof and not as part of any financing
transaction;
(vi) Borrower and its Subsidiaries may grant leases and subleases to
other Persons in the ordinary course of business not materially
interfering with the conduct of the business of Borrower or any of its
Subsidiaries; and
(vii) Borrower and its Subsidiaries may make or enter into Permitted
Acquisitions.
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Borrower shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures in an aggregate amount in excess of
$3,500,000 in any Fiscal Year; provided that such permitted amount of
Consolidated Capital Expenditures may be increased in any Fiscal Year by
carrying forward 50% of any unused amount from the immediately preceding fiscal
year; provided further that with respect to any Fiscal Year, Consolidated
Capital Expenditures made during any such fiscal year shall be deemed to be made
first with respect to the applicable limitation for such Fiscal Year and then
with respect to any carry forward amount to the extent applicable.
7.9 RESTRICTION ON LEASES.
Borrower shall not, and shall not permit any of its Subsidiaries to,
become liable in any way, whether directly or by assignment or as a guarantor or
other surety, for the obligations of the lessee under any lease, whether an
Operating Lease or a Capital Lease (other than intercompany leases between
Borrower and its wholly-owned Subsidiaries, and other than
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Borrower's lease of its headquarters offices and warehouse space pursuant to the
Lease Agreement entered into as of July 14, 2003 between Borrower and Green
Properties, Inc., and any successor or replacement lease ("Headquarters
Lease")), unless, immediately after giving effect to the incurrence of liability
with respect to any such lease, the aggregate amount of all rental payments
under all such leases (excluding the Headquarters Lease any other leases of
Borrower or any of its Subsidiaries relating to a Permitted Acquisition) shall
not exceed $250,000 in any Fiscal Year.
7.10 SALES AND LEASE-BACKS.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Borrower or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Borrower
or any of its Subsidiaries) or (ii) which Borrower or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Borrower or any of its Subsidiaries
to any Person (other than Borrower or any of its Subsidiaries) in connection
with such lease; provided that Borrower and its Subsidiaries may become and
remain liable as lessee, guarantor or other surety with respect to any such
lease if and to the extent that Borrower or any of its Subsidiaries would be
permitted to enter into, and remain liable under, such lease under subsection
7.9.
7.11 SALE OR DISCOUNT OF RECEIVABLES.
Except for sales permitted pursuant to subsection 7.7(v), Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
sell with recourse, or discount or otherwise sell for less than the face value
thereof, any of its notes or accounts receivable.
7.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Borrower or with any Affiliate of Borrower or of any such holder, on terms that
are less favorable to Borrower or that Subsidiary, as the case may be, than
those that might be obtained at the time from Persons who are not such a holder
or Affiliate; provided that the foregoing restriction shall not apply to (i) any
transaction between Borrower and any of its wholly-owned domestic Subsidiaries
which are Guarantors hereunder or between any of its wholly-owned domestic
Subsidiaries which are Guarantors hereunder, (ii) reasonable and customary fees
paid to members of the Boards of Directors of Borrower and its Subsidiaries, or
(iii) the Trivest Management Agreement, or (iv) payment to Trivest of a
transaction fee of $1,500,000 in connection with the consummation of this Credit
Agreement; provided, that amounts payable under the Trivest Management Agreement
shall not be (a) increased from amounts payable under the Trivest Management
Agreement as in effect on the Closing Date, or (b) payable upon the occurrence
and during the continuation of an Event of Default under
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Section 8.1, Section 8.6 and Section 8.7 of this Agreement. Notwithstanding any
provision of this Agreement to the contrary, Borrower or any of its Subsidiaries
may reimburse Trivest for the reasonable and allocable charges in the ordinary
course of business (including the reimbursement of reasonable out-of-pocket
expenses) of the Trivest Legal Department for services rendered to Borrower and
its Subsidiaries; provided that such charges are incurred in the ordinary course
of business and at rates no less favorable to Borrower and its Subsidiaries than
rates that would be charged for similar services rendered by persons who are not
Affiliates of Borrower or its Subsidiaries.
7.13 DISPOSAL OF SUBSIDIARY STOCK.
(a) Except for any sale of 100% of the capital stock or other equity
Securities of any of its Subsidiaries in compliance with the provisions of
subsection 7.7, Borrower shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except to qualify directors
if required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any shares
of capital stock or other equity Securities of any of its
Subsidiaries (including such Subsidiary), except to Borrower,
another Subsidiary of Borrower, or to qualify directors if required
by applicable law.
(b) Borrower will not, nor will it permit any Subsidiary to, create,
form or acquire any Subsidiaries, except for domestic Subsidiaries which
become Subsidiary Guarantors in accordance with the terms of Section 6.8
and Canadian Subsidiaries acquired in, or formed to consummate, a
Permitted Acquisition.
7.14 CONDUCT OF BUSINESS.
From and after the Closing Date, Borrower shall not, and shall not permit
any of its Subsidiaries to, engage in any business other than (i) the businesses
engaged in by Borrower and its Subsidiaries on the Closing Date and similar or
related businesses and (ii) such other lines of business as may be consented to
by Requisite Lenders.
7.15 AMENDMENTS OR WAIVERS OF RELATED AGREEMENTS.
Unless the prior written consent of Requisite Lenders is obtained, neither
Borrower nor any of its Subsidiaries will (i) agree to any material amendment
to, or waive any of its material rights under, any Related Agreement in any
manner that is, in the reasonable opinion of Administrative Agent, adverse to
Administrative Agent or Lenders, (ii) incur any additional material obligations
or increase any payment obligations under any Related Agreement after the
Closing Date, (iii) amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws (or other
similar document) in any manner
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adverse to the interests of Lenders without the prior written consent of the
Requisite Lenders, (iv) amend, modify, waive or extend or permit the amendment,
modification, waiver or extension of any term of (A) except as expressly
permitted under Section 10 of the Subordination Agreement, the Subordinated
Notes or the subordination provisions related thereto in a manner that is
adverse to the interests of Lenders or (B) any other Subordinated Debt or the
other subordination provisions related thereto in a manner that is adverse to
the interests of Lenders.
7.16 FISCAL YEAR; ACCOUNTING POLICIES.
Borrower shall not change its Fiscal Year-end from December 31 or change
its accounting policies except as required by GAAP.
7.17 NO ACQUISITION OF REAL ESTATE.
Neither Borrower nor any of its Subsidiaries shall acquire any fee
interests in any Real Property Assets.
7.18 RESTRICTIONS ON HOLDINGS.
Holdings shall not engage in any operations, business or activity or incur
any liabilities other than (a) holding 100% of the capital stock of the Borrower
and (b) performing its obligations under (i) this Agreement and the other Loan
Documents and (ii) the Subordinated Note Documents. For the avoidance of doubt,
the phrase "operations, business, activity or liabilities" as used in the
preceding sentence does not include activities or liabilities involving the
capital stock of Holdings (including, without limitation, the issuance of
capital stock) or any matters relating to the corporate governance, existence or
payment of taxes of Holdings. In the event that all of the direct holders of the
capital stock of Holdings form one or more holding companies through which such
holders collectively own their equity interests in Holdings, Holdings shall
cause each such new holding company to comply with the requirements of this
Section 7.18 (except that the reference to capital stock of the Borrower in
subsection 7.18(a) shall be deemed to refer to capital stock of Holdings owned
by such new holding company).
SECTION 8
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default") shall
occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Borrower to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Borrower to pay
when due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Borrower to pay any
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interest on any Loan or any fee or any other amount due under this Agreement
within five days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Borrower or any of its Subsidiaries to pay when due
any principal of or interest on or any other amount payable in respect of
one or more items of Indebtedness (other than Indebtedness referred to in
subsection 8.1) or Contingent Obligations having an aggregate principal
amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
agreement) of more than $500,000, in each case beyond the end of any grace
period provided therefor; or
(ii) default by Borrower or any of its Subsidiaries with respect to
any other material term of (a) one or more items of Indebtedness or
Contingent Obligations in the individual or aggregate principal amounts
referred to in clause (i) above or (b) any loan agreement, mortgage,
indenture or other agreement relating to such item(s) of Indebtedness or
Contingent Obligation(s), if the effect of such breach or default is to
cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or
holders) to cause, that Indebtedness or Contingent Obligation(s) to become
or be declared due and payable prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be (upon the giving
or receiving of notice, lapse of time, both, or otherwise); or
(iii) default by Borrower or any of its Subsidiaries of any Secured
Hedge Agreement; or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Borrower to perform or comply with any term or condition
contained in Section 6.1, 6.2, 6.5, 6.6, 6.11 or Section 7 of this Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
Borrower or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Borrower or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an officer of Borrower or such Loan
100
Party becoming aware of such default or (ii) receipt by Borrower and such Loan
Party of notice from Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a decree
or order for relief in respect of Borrower or any of its Subsidiaries in
an involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief
shall be granted under any applicable federal or state law; or
(ii) an involuntary case shall be commenced against Borrower or any
of its Subsidiaries under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over Borrower or
any of its Subsidiaries, or over all or a substantial part of its
property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian
of Borrower or any of its Subsidiaries for all or a substantial part of
its property; or a warrant of attachment, execution or similar process
shall have been issued against any substantial part of the property of
Borrower or any of its Subsidiaries, and any such event described in this
clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Borrower or any of its Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, or shall consent to the entry of
an order for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such law, or shall consent
to the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; or Borrower or
any of its Subsidiaries shall make any assignment for the benefit of
creditors; or
(ii) Borrower or any of its Subsidiaries shall be unable, or shall
fail generally, or shall admit in writing its inability, to pay its debts
as such debts become due; or the Board of Directors of Borrower or any of
its Subsidiaries (or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to
in clause (i) above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $500,000 or (ii) in
the aggregate at any time an amount in excess of $1,000,000 (in either case not
adequately covered by insurance as to which a
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solvent and unaffiliated insurance company has acknowledged coverage) shall be
entered or filed against Borrower or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Borrower or any of
its Subsidiaries decreeing the dissolution or split up of Borrower or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 60 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates in
excess of $500,000 during the term of this Agreement; or there shall exist an
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), which exceeds $500,000; or
8.11 CHANGE IN CONTROL.
(i) Affiliates of Trivest shall cease to beneficially own and
control, on a fully-diluted basis, at least a majority of the issued and
outstanding shares of capital stock of Holdings entitled to vote for the
election of members of the Board of Directors of Holdings; or
(ii) the initial public offering of securities by Holdings other
than an offering of securities for an employee benefit plan on SEC Form
S-8 or a successor form; or
(iii) Holdings shall cease to beneficially own and control, on a
fully-diluted basis, less than 100% of the issued and outstanding shares
of capital stock of Borrower entitled to vote for the election of members
of the Board of Directors of Borrower.
8.12 INVALIDITY OF SUBSIDIARY GUARANTY OR HOLDINGS GUARANTY; FAILURE OF
SECURITY; REPUDIATION OF OBLIGATIONS.
At any time after the execution and delivery thereof, (i) the Subsidiary
Guaranty or the Holdings Guaranty, for any reason other than the satisfaction in
full of all Obligations, shall cease to be in full force and effect (other than
in accordance with their terms) or shall be declared to be null and void, (ii)
any Collateral Document shall cease to be in full force and effect (other than
by reason of a release of Collateral thereunder in accordance with the terms
hereof or thereof, the satisfaction in full of the Obligations or any other
termination of such Collateral Document in accordance with the terms hereof or
thereof) or shall be declared null and void, or Administrative Agent shall not
have or shall cease to have a valid and perfected First Priority
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Lien in any Collateral purported to be covered thereby having a fair market
value, individually or in the aggregate, exceeding $250,000 (other than Deposit
Accounts and Inventory in transit to Borrower or from Borrower to customers), in
each case for any reason other than the failure of Administrative Agent or any
Lender to take any action within its control, or (iii) any Loan Party shall
contest the validity or enforceability of any Loan Document in writing or deny
in writing that it has any further liability, including with respect to future
advances by Lenders, under any Loan Document to which it is a party; or
8.13 HEDGE AGREEMENTS.
Any termination payment shall be due by a Loan Party under any Hedge
Agreement and such amount is not paid within the later to occur of five (5)
Business Days after the due date thereof or the expiration of grace periods, if
any, in such Hedge Agreement.
8.14 SUBORDINATED NOTES.
Borrower or Administrative Agent receives (a) notice from the required
holders of the Subordinated Notes of an intent to accelerate the Subordinated
Notes, (b) notice from any holder of the Subordinated Notes of an intent to
accelerate such holder's Subordinated Notes, or (c) notice from any holder of
the Subordinated Notes of acceptance of an offer from Borrower to repurchase
such Subordinated Notes:
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Borrower, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Borrower, declare all
or any portion of the amounts described in clauses (a) through (c) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
foregoing shall not affect in any way the obligations of Lenders under
subsection 2.3(c) or the obligations of Lenders to purchase participations in
any unpaid Swingline Loans as provided in subsection 2.4(b)(ii).
Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Administrative Agent pursuant to the terms of the
Security Agreement and shall be applied as therein provided.
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Notwithstanding anything contained in the second preceding paragraph, if
at any time within 60 days after an acceleration of the Loans pursuant to clause
(ii) of such paragraph Borrower shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Borrower, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Borrower, and such provisions shall not at
any time be construed so as to grant Borrower the right to require Lenders to
rescind or annul any acceleration hereunder or to preclude Administrative Agent
or Lenders from exercising any of the rights or remedies available to them under
any of the Loan Documents, even if the conditions set forth in this paragraph
are met.
SECTION 9
ADMINISTRATIVE AGENT
9.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints Wachovia as
Administrative Agent of such Lender under this Agreement, and each such Lender
irrevocably authorizes Wachovia, as Administrative Agent for such Lender, to
take such action on its behalf under the provisions of this Agreement and to
exercise such powers and perform such duties as are expressly delegated to
Administrative Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against Administrative Agent.
9.2 DELEGATION OF DUTIES.
Administrative Agent may execute any of its duties under this Agreement by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care. Without limiting the
foregoing, Administrative Agent may appoint one of its affiliates as its agent
to perform the functions of Administrative Agent hereunder relating to the
advancing of funds to Borrower and distribution of funds to Lenders and to
perform such other related functions of Administrative Agent hereunder as are
reasonably incidental to such functions.
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9.3 EXCULPATORY PROVISIONS.
Neither Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement (except for its or such Person's own
gross negligence or willful misconduct) or (b) responsible in any manner to any
of Lenders for any recitals, statements, representations or warranties made by
any Loan Party or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by Administrative Agent under or in connection with, this Agreement
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any of the Loan Documents or for any failure of any Loan Party to
perform its obligations hereunder or thereunder. Administrative Agent shall not
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance by any Loan Party of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of any Loan Party.
9.4 RELIANCE BY ADMINISTRATIVE AGENT.
(a) Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or
conversation believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation,
counsel to Loan Parties), independent accountants and other experts
selected by Administrative Agent. Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes unless an
executed Commitment Transfer Supplement has been filed with Administrative
Agent pursuant to Section 10.1(c) with respect to the Loans evidenced by
such Note. Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement unless it shall first
receive such advice or concurrence of the Requisite Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by
Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
Administrative Agent shall in all cases be fully protected in acting, or
in refraining from acting, under any of the Loan Documents in accordance
with a request of the Requisite Lenders or all of Lenders, as may be
required under this Agreement, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all Lenders and all
future holders of the Notes.
(b) For purposes of determining compliance with the conditions
specified in Section 4.1, 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.
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9.5 NOTICE OF DEFAULT.
Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Event of Default or Potential Event of Default hereunder
unless Administrative Agent has received notice from a Lender or Borrower
referring to this Agreement, describing such Event of Default or Potential Event
of Default and stating that such notice is a "notice of default". In the event
that Administrative Agent receives such a notice, Administrative Agent shall
give prompt notice thereof to Lenders. Administrative Agent shall take such
action with respect to such Event of Default or Potential Event of Default as
shall be reasonably directed by the Requisite Lenders; provided, however, that
unless and until Administrative Agent shall have received such directions,
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default or
Potential Event of Default as it shall deem advisable in the best interests of
Lenders except to the extent that this Agreement expressly requires that such
action be taken, or not taken, only with the consent or upon the authorization
of the Requisite Lenders, or all of Lenders, as the case may be.
9.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representation or warranty to it and that no act by
Administrative Agent hereinafter taken, including any review of the affairs of
any Loan Party, shall be deemed to constitute any representation or warranty by
Administrative Agent to any Lender. Each Lender represents to Administrative
Agent that it has, independently and without reliance upon Administrative Agent
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of Borrower or any other Loan Party and made its own decision
to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon Administrative
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 analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of Borrower and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to Lenders by
Administrative Agent hereunder, Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of Borrower or any other Loan Party
which may come into the possession of Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
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9.7 INDEMNIFICATION.
Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by Borrower and without limiting the
obligation of Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Loans or any LOC
Obligations) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of any Loan Document or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided,
however, that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting from (i) the
Administrative Agent's gross negligence or willful misconduct, as determined by
a court of competent jurisdiction or (ii) the Administrative Agent's role as a
Hedge Agreement Provider under this Agreement or in any other respect in
connection with any Secured Hedge Agreement. The agreements in this Section 9.7
shall survive the termination of this Agreement and payment of the Loans, any
LOC Obligations and all other amounts payable hereunder.
9.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
Administrative Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with Borrower and the other
Loan Parties as though Administrative Agent were not Administrative Agent
hereunder. With respect to the Loans made or renewed by it and any Note issued
to it, Administrative Agent shall have the same rights and powers under this
Agreement as any Lender and may exercise the same as though it were not
Administrative Agent, and the terms "Lender" and "Lenders" shall include
Administrative Agent in its individual capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENT.
Administrative Agent may resign as Administrative Agent upon 30 days'
prior written notice to Borrower and Lenders. If Administrative Agent shall
resign as Administrative Agent under this Agreement and the other Loan
Documents, then the Requisite Lenders shall appoint from among Lenders a
successor administrative agent for Lenders, which successor agent shall be
approved by Borrower (such approval not to be unreasonably withheld) so long as
no Event of Default has occurred and is continuing, whereupon such successor
administrative agent shall succeed to the rights, powers and duties of
Administrative Agent, and the term "Administrative Agent" shall mean such
successor administrative agent effective upon such appointment and approval, and
the former Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the parties to this Agreement or
any holders of the Notes. If no successor Administrative Agent has accepted
appointment as Administrative Agent within thirty (30) days after the retiring
Administrative Agent's giving notice of resignation, the retiring
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Administrative Agent shall have the right, on behalf of Lenders, to appoint a
successor administrative agent, which successor shall be subject to approval by
Borrower (such approval not to be unreasonably withheld) so long as no Event of
Default has occurred and is continuing; provided that such successor
administrative agent has minimum capital and surplus of at least $500,000,000.
If no successor administrative agent has accepted appointment as Administrative
Agent within sixty (60) days after the retiring Administrative Agent's giving
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless become effective and Lenders shall perform all duties of
Administrative Agent hereunder until such time, if any, as the Requisite Lenders
appoint a successor administrative agent as provided for above. After any
retiring Administrative Agent's resignation as Administrative Agent, the
indemnification provisions of this Agreement and the other Loan Documents and
the provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
9.10 OTHER AGENTS.
None of the Lenders or other Persons identified on the facing page or
signature pages of this Agreement as a "syndication agent," "documentation
agent," "co - agent," "book manager," "book runner," "lead manager," "arranger,"
"lead arranger" or "co - lead arranger" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than, in the case
of such Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of Lenders or
other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
SECTION 10
MISCELLANEOUS
10.1 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.
(a) This Agreement shall be binding upon and inure to the benefit of
Borrower, Lenders, Administrative Agent, all future holders of the Notes
and their respective successors and assigns, except that Borrower may not
assign or transfer any of its rights or obligations under this Agreement
or the other Loan Documents without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or
other entities ("Participants") participating interests in any Loan owing
to such Lender, any Note held by such Lender, any Commitment of such
Lender, or any other interest of such Lender hereunder, in each case in
minimum amounts of $1,000,000 (or, if less, the entire amount of such
Lender's Obligations, Commitments or other interests). In the event of any
such sale by a Lender of participating interests to a Participant, such
Lender's obligations
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under this Agreement to the other parties to this Agreement shall remain
unchanged, such Lender shall remain solely responsible for the performance
thereof, such Lender shall remain the holder of any such Note for all
purposes under this Agreement, and Borrower and Administrative Agent shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. No Lender shall
transfer or grant any participation under which the Participant shall have
rights to approve any amendment to or waiver of this Agreement or any
other Loan Document except to the extent such amendment or waiver would
(i) extend the scheduled maturity of any Loan or Note or any installment
thereon in which such Participant is participating, or reduce the stated
rate or extend the time of payment of interest or fees thereon (except in
connection with a waiver of interest at the increased post-default rate)
or reduce the principal amount thereof, or increase the amount of the
Participant's participation over the amount thereof then in effect (it
being understood that a waiver of any Event of Default or Potential Event
of Default shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be
permitted without consent of a Participant if such Participant's
participation is not increased as a result thereof), (ii) release
Borrower, Holdings or any material Subsidiary Guarantor from its
obligations under the Guaranties, (iii) release any material portion of
the Collateral, or (iv) consent to the assignment or transfer by Borrower
of any of its rights and obligations under this Agreement. In the case of
any such participation, the Participant shall not have any rights under
this Agreement or any of the other Loan Documents (the Participant's
rights against such Lender in respect of such participation to be those
set forth in the agreement executed by such Lender in favor of the
Participant relating thereto) and all amounts payable by Borrower
hereunder shall be determined as if such Lender had not sold such
participation; provided that each Participant shall be entitled to the
benefits of Sections 2.14, 2.15, 2.16, 2.17 and 10.2 with respect to its
participation in the Commitments and the Loans outstanding from time to
time; provided, that no Participant shall be entitled to receive any
greater amount pursuant to such Sections than the transferor Lender would
have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time, sell or assign to any Lender
or any Affiliate or Approved Fund thereof or to one or more additional
banks, financial institutions, other funds or entities (each such Lender,
Affiliate, Approved Fund, bank, financial institution, other fund or
entity, a "Purchasing Lender"), all or any part of its rights and
obligations under this Agreement and the Notes in minimum amounts of (i)
$2,500,000 with respect to its Revolving Commitment and its Revolving
Loans (or, if less, the entire amount of such Lender's Revolving
Commitment and Revolving Loans) and (ii) $1,000,000 (or any lesser amount
as approved by Administrative Agent) with respect to its Term Loans (or,
if less, the entire amount of such Lender's Term Loans), pursuant to a
Commitment Transfer Supplement, executed by such Purchasing Lender, such
transferor Lender, Administrative Agent (to the extent required) and, so
long as no Event of Default or Potential Event of Default has occurred and
is continuing, Borrower, and delivered to Administrative Agent for its
acceptance and recording in the Register; provided,
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however, that (A) any sale or assignment to an existing Lender, or
Affiliate or Approved Fund thereof, shall not require the consent of
Borrower or the Administrative Agent nor shall any such sale or assignment
be subject to the minimum assignment amounts specified herein and (B) any
sale or assignment of a portion of the Term Loan and a Term Loan
Commitment shall not require the consent of Borrower. Upon such execution,
delivery, acceptance and recording, from and after the Transfer Effective
Date specified in such Commitment Transfer Supplement, (x) the Purchasing
Lender thereunder shall be a party hereto and, to the extent provided in
such Commitment Transfer Supplement, have the rights and obligations of a
Lender hereunder with a Commitment as set forth therein, and (y) the
transferor Lender thereunder shall, to the extent provided in such
Commitment Transfer Supplement, be released from its obligations under
this Agreement (and, in the case of a Commitment Transfer Supplement
covering all or the remaining portion of a transferor Lender's rights and
obligations under this Agreement, such transferor Lender shall cease to be
a party hereto) other than accrued liabilities under this Agreement. Such
Commitment Transfer Supplement shall be deemed to amend this Agreement to
the extent, and only to the extent, necessary to reflect the addition of
such Purchasing Lender and the resulting adjustment of Commitment
Percentages arising from the purchase by such Purchasing Lender of all or
a portion of the rights and obligations of such transferor Lender under
this Agreement and the Notes. On or prior to the Transfer Effective Date
specified in such Commitment Transfer Supplement, Borrower, at its own
expense, shall execute and deliver to Administrative Agent in exchange for
the Notes delivered to Administrative Agent pursuant to such Commitment
Transfer Supplement new Notes to the order of such Purchasing Lender in an
amount equal to the Commitment assumed by it pursuant to such Commitment
Transfer Supplement and, unless the transferor Lender has not retained a
Commitment hereunder, new Notes to the order of the transferor Lender in
an amount equal to the Commitment retained by it hereunder. Such new Notes
shall be dated the Closing Date and shall otherwise be in the form of the
Notes replaced thereby.
(d) Administrative Agent shall maintain at its address referred to
in Section 10.8 a copy of each Commitment Transfer Supplement delivered to
it and a register (the "Register") for the recordation of the names and
addresses of Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and Borrower,
Administrative Agent and Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loan recorded therein for all
purposes of this Agreement. The Register shall be available for inspection
by Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to Administrative Agent by the
transferor Lender or the Purchasing Lender (except for any assignment by a
Lender to an Affiliate or an Approved Fund of such Lender), as agreed
between them, of a registration and processing fee of $3,500 for each
Purchasing Lender listed in such Commitment Transfer Supplement and the
Notes subject to such Commitment Transfer Supplement, Administrative Agent
shall
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(i) accept such Commitment Transfer Supplement and (ii) record the
information contained therein in the Register.
(f) Borrower authorizes each Lender to disclose to any Participant
or Purchasing Lender (each, a "Transferee") and any prospective Transferee
any and all financial information in such Lender's possession concerning
Loan Parties and their Affiliates which has been delivered to such Lender
by or on behalf of a Loan Party pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of a Loan Party in
connection with such Lender's credit evaluation of Loan Parties and their
Affiliates prior to becoming a party to this Agreement, in each case
subject to Section 10.19.
(g) At the time of each assignment pursuant to this Section 10.1 to
a Person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code)
for federal income tax purposes, the respective assignee Lender shall
provide to Borrower and Administrative Agent the appropriate Internal
Revenue Service Forms (and, if applicable, a Tax Exempt Certificate)
described in Section 2.18.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Agreement (including, without
limitation, any right to payment of principal and interest under any Note)
to secure obligations of such Lender, including without limitation, (i)
any pledge or assignment to secure obligations to a Federal Reserve Bank
and (ii) in the case of any Lender that is a fund or trust or entity that
invests in commercial bank loans in the ordinary course of business, any
pledge or assignment to any holders of obligations owed, or securities
issued, by such Lender including to any trustee for, or any other
representative of, such holders; it being understood that the requirements
for assignments set forth in this Section 10.1 shall not apply to any such
pledge or assignment of a security interest, except with respect to any
foreclosure or similar action taken by such pledgee or assignee with
respect to such pledge or assignment; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto and no such pledgee or assignee shall have any
voting rights under this Agreement unless and until the requirements for
assignments set forth in this Section 10.1 are complied with in connection
with any foreclosure or similar action taken by such pledgee or assignee.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be consummated,
Borrower agrees to pay promptly (i) all the actual and reasonable costs and
expenses of preparation of the Loan Documents and any consents, amendments,
waivers or other modifications thereto; (ii) all the costs of furnishing all
opinions by counsel for Borrower (including any opinions requested by Lenders as
to any legal matters arising hereunder) and of Borrower's performance of and
compliance with all agreements and conditions on its part to be performed or
complied with under this Agreement and the other Loan Documents including with
respect to confirming
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compliance with environmental, insurance and solvency requirements; (iii) the
reasonable fees, expenses and disbursements of Xxxxx & Xxx Xxxxx, PLLC, counsel
to Agents, in connection with the negotiation, preparation, execution and
administration of the Loan Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by
Borrower; (iv) all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of Administrative Agent on behalf of Lenders pursuant
to any Collateral Document, including filing and recording fees, expenses and
taxes, stamp or documentary taxes, search fees, title insurance premiums, and
reasonable fees, expenses and disbursements of counsel to Agents and of counsel
providing any opinions that Agents or Requisite Lenders may request in respect
of the Collateral Documents or the Liens created pursuant thereto; (v) all the
actual costs and reasonable expenses (including the reasonable fees, expenses
and disbursements of any auditors, accountants or appraisers and any
environmental or other consultants, advisors and agents employed or retained by
Agents or their counsel) of obtaining and reviewing any environmental audits or
reports provided for under subsection 4.1(e) or 6.7B and any audits or reports
provided for under subsection 6.5B with respect to Inventory and accounts
receivable of Borrower and its Subsidiaries; (vi) the custody or preservation of
any of the Collateral; (vii) all other actual and reasonable costs and expenses
incurred by Agents in connection with the syndication of the Commitments and the
negotiation, preparation and execution of the Loan Documents and any consents,
amendments, waivers or other modifications thereto and the transactions
contemplated thereby; and (viii) after the occurrence of an Event of Default,
all costs and expenses, including reasonable attorneys' fees (including
allocated costs of internal counsel) and costs of settlement, incurred by Agents
and Lenders in enforcing any Obligations of or in collecting any payments due
from any Loan Party hereunder or under the other Loan Documents by reason of
such Event of Default (including in connection with the sale of, collection
from, or other realization upon any of the Collateral or the enforcement of the
Subsidiary Guaranty) or in connection with any refinancing or restructuring of
the credit arrangements provided under this Agreement in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy proceedings.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Borrower agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Agents and Lenders, and the officers,
directors, employees, counsel, agents, representatives, advisors and affiliates
of Agents and Lenders (collectively called the "Indemnitees"), from and against
any and all Indemnified Liabilities (as hereinafter defined); provided that
Borrower shall not have any obligation to any Indemnitee hereunder with respect
to any Indemnified Liabilities to the extent such Indemnified Liabilities arise
solely from the gross negligence or willful misconduct of that Indemnitee as
determined by a final judgment of a court of competent jurisdiction; and
provided further, that Borrower shall be obligated to pay the fees, expenses or
disbursements of counsel of only one counsel for all Indemnitees hereunder
(other than any special local counsel or counsel for specific purposes which
represents the Indemnitees) unless in any Indemnitee's reasonable judgment a
conflict of interest between such Indemnitee and any other Indemnitee exists, in
which case Borrower shall indemnify such Indemnitee for the fees, expenses or
disbursements of its own separate counsel.
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Subject to the provisos contained in the preceding paragraph, as used
herein, "Indemnified Liabilities" means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
actions, judgments, suits, claims (including Environmental Claims), costs
(including the costs of any investigation, study, sampling, testing, abatement,
cleanup, removal, remediation or other response action necessary to remove,
remediate, clean up or xxxxx any Hazardous Materials Activity), expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Loan Documents or the Related Agreements or the transactions
contemplated hereby or thereby (including Lenders' agreement to make the Loans
hereunder or the use or intended use of the proceeds thereof or the issuance of
Letters of Credit hereunder or the use or intended use of any thereof, or any
enforcement of any of the Loan Documents (including any sale of, collection
from, or other realization upon any of the Collateral or the enforcement of the
Subsidiary Guaranty), (ii) the statements contained in the commitment letter
delivered by any Lender to Borrower with respect thereto, or (iii) any
Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, land
ownership, or practice of Borrower or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence and during
the continuance of any Event of Default each Lender is hereby authorized by
Borrower at any time or from time to time, without notice to Borrower or to any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender to or for the credit or the account of Borrower against and
on account of the obligations and liabilities of Borrower to that Lender under
this Agreement, the Letters of Credit and participations therein, the other Loan
Documents and any Hedge Agreement provided by such Lender pursuant to the terms
of this Agreement, including all claims of any nature or description arising out
of or connected with this Agreement, the Letters of Credit and participations
therein,
113
any other Loan Document or any Hedge Agreement provided by such Lender pursuant
to the terms of this Agreement, irrespective of whether or not (i) that Lender
shall have made any demand hereunder or (ii) the principal of or the interest on
the Loans or any amounts in respect of the Letters of Credit or any other
amounts due hereunder shall have become due and payable pursuant to Section 8
and although said obligations and liabilities, or any of them, may be contingent
or unmatured. Borrower hereby further grants to Administrative Agent and each
Lender a security interest in all deposits and accounts maintained with
Administrative Agent or such Lender as security for the Obligations.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall, whether
by voluntary payment (other than a voluntary prepayment of Loans made and
applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Borrower or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Borrower expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
10.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of this
Agreement or of the Notes, and no consent to any departure by Borrower
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any such amendment, modification, termination,
waiver or consent which:
(a) reduces the principal amount of any of the Loans;
114
(b) changes in any manner the definition of "Pro Rata Share", the
definition of "Class" or the definition of "Requisite Lenders";
(c) changes in any manner any provision of this Agreement which, by
its terms, expressly requires the approval or concurrence of all Lenders;
(d) increases the maximum duration of Interest Periods permitted
hereunder;
(e) releases any Lien granted in favor of Administrative Agent with
respect to all or substantially all of the Collateral;
(f) releases all or substantially all of the Subsidiary Guarantors
from their obligations under the Subsidiary Guaranty, in each case other
than in accordance with the terms of the Loan Documents;
(g) releases Holdings from its obligations under the Holdings
Guaranty other than in accordance with the terms of the Loan Documents;
(h) changes in any manner the provisions contained in subsection 8.1
or this subsection 10.6;
(i) changes in any manner the order in which Obligations are paid or
the pro rata payment of Obligations under Section 2.8(b) or Section
2.12(a); or
(j) amendments, modifications, terminations or waivers which (i)
release any Lien granted in favor of Administrative Agent with respect to
all or substantially all of the Collateral, (ii) release all or
substantially all of the Subsidiary Guarantors from their obligations
under the Subsidiary Guaranty other than in accordance with the terms of
the Loan Documents or (iii) release Holdings from its obligations under
the Holdings Guaranty other than in accordance with the terms of the Loan
Documents;
shall be effective only if evidenced by a writing signed by or on
behalf of all Lenders. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in Section 4
shall be effective only if evidenced by a writing signed by or on behalf
of Requisite Lenders, (ii) no amendment, modification, termination or
waiver of any provision of any Note shall be effective without the written
concurrence of the Lender which is the holder of that Note, (iii) no
amendment, modification, termination or waiver of any provision of
subsection 2.4 or of any other provision of this Agreement relating to the
Swingline Commitment or the Swingline Loans shall be effective without the
written concurrence of Swingline Lender, (iv) no amendment, modification,
termination or waiver of any provision of Section 9 or of any other
provision of this Agreement which, by its terms, expressly requires the
approval or concurrence of Administrative Agent shall be effective without
the written
115
concurrence of Administrative Agent, (v) no amendment, modification,
termination or waiver of any provision of subsection 2.1 which increases
the Commitment of any Lender shall be effective without the written
concurrence of the Lender whose Commitment is to be increased, (vi) no
amendment, modification or waiver of Section 2.12(b) shall be effective
without the written concurrence of each Lender and each Hedge Agreement
Provider directly affected thereby; and (vii) no amendment, modification,
termination or waiver which postpones the date or reduces the amount of
any scheduled payment (but not prepayment) of principal of any Class of
the Loans, postpones the date on which any interest or any fees are
payable with respect to any Class of the Loans, decreases the interest
rate borne by any Class of the Loans (other than any waiver of any
increase in the interest rate applicable to any of the Loans pursuant to
subsection 2.9(b)) or the amount of any fees payable hereunder with
respect to any Class of the Loans, reduces the amount or postpones the due
date of any amount payable in respect of, or extends the required
expiration date of, any Letter of Credit, or changes in any manner the
obligations of Lenders relating to the purchase of participations in
Letters of Credit shall be effective without the written concurrence of
all Lenders of the related Class. Administrative Agent may, but shall have
no obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on
Borrower in any case shall entitle Borrower to any other or further notice
or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this subsection
10.6 shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by Borrower, on Borrower.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES.
Except as otherwise provided in Section 2, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case, addressed
as follows in the case of Borrower and Administrative Agent, and as set
116
forth on Schedule 10.8 in the case of Lenders, or to such other address as may
be hereafter notified by the respective parties hereto and any future holders of
the Notes:
Borrower: Directed Electronics, Inc.
0 Xxxxx Xxx
Xxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxx
President and Chief Executive Officer
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Trivest Partners, L.P.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
Director & General Counsel
Telecopier: (000) 000-0000
Telephone: (305) 858-2200 ext. 244
with a copy to:
Xxxxxxxxx Traurig, LLP
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Administrative
Agent: Wachovia Bank, National Association
000 Xxxxx Xxxxxxx Xxxxxx
XX0000/XX0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Syndication Agency Services
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
117
with a copy to:
Wachovia Bank, National Association
Xxx Xxxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxx Xxxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
provided, that notices given by Borrower pursuant to Section 2.1 or
Section 2.10 hereof shall be effective only upon receipt thereof by
Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Borrower set forth in subsections 2.15, 2.16, 2.17,
2.19, 10.2 and 10.3 and the agreements of Lenders set forth in subsections 9.2C,
9.4 and 10.5 shall survive the payment of the Loans, the cancellation or
expiration of the Letters of Credit and the reimbursement of any amounts drawn
thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any Lender in
the exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any obligation
to marshal any assets in favor of Borrower or any other party or against or in
payment of any or all of the Obligations. To the extent that Borrower makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Administrative Agent or Lenders enforce
any security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related
118
thereto, shall be revived and continued in full force and effect as if such
payment or payments had not been made or such enforcement or setoff had not
occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Borrower's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Borrower without the prior written consent of all
Lenders.
119
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND
DELIVERING THIS AGREEMENT, BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO BORROWER AT ITS ADDRESS PROVIDED
IN ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWER IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING
TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE
120
SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT
IS BEING ESTABLISHED. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including contract claims,
tort claims, breach of duty claims and all other common law and statutory
claims. Each party hereto acknowledges that this waiver is a material inducement
to enter into a business relationship, that each has already relied on this
waiver in entering into this Agreement, and that each will continue to rely on
this waiver in their related future dealings. Each party hereto further warrants
and represents that it has reviewed this waiver with its legal counsel and that
it knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.19 CONFIDENTIALITY.
Administrative Agent and each of the Lenders agrees that, without the
prior consent of Borrower, it will use its best efforts not to disclose any
information with respect to Loan Parties which is furnished pursuant to this
Agreement, any other Loan Document or any documents contemplated by or referred
to herein or therein and which is designated by Borrower to Lenders in writing
as confidential or as to which it is otherwise reasonably clear such information
is not public, except that any Lender may disclose any such information (a) to
its employees, Affiliates, auditors and counsel or to another Lender, (b) as has
become generally available to the public other than by a breach of this Section
10.19, (c) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or federal regulatory body having or
claiming to have jurisdiction over such Lender or to the Federal Reserve Board
or the Federal Deposit Insurance Corporation or the OCC or the NAIC or similar
organizations (whether in the United States or elsewhere) or their successors,
(d) as may be required or appropriate in response to any summons or subpoena or
any law, order, regulation or ruling applicable to such Lender, (e) to any
prospective Participant or assignee in connection with any contemplated transfer
pursuant to Section 10.1; provided that such prospective transferee shall have
been made aware of this Section 10.19 and shall have agreed to be bound by its
provisions as if it were a party to this Agreement, (f) to Gold Sheets and other
similar bank trade publications; such information to consist of deal terms and
other information regarding the credit facilities evidenced by this Agreement
customarily found in such publications, (g) in connection with any suit, action
or proceeding for the purpose of defending itself, reducing its liability, or
protecting or exercising any of its claims, rights, remedies or interests under
or in connection with the Loan Documents or any Secured Hedge Agreement, (h) to
any direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees to
be bound by the provisions of this Section 10.19), (i) to the National
Association of Insurance Commissioners or
121
any similar organization or any nationally recognized rating agency that
requires access to information about a Lender's investment portfolio in
connection with ratings issued with respect to such Lender, (j) to a Person that
is an investor or prospective investor in a Securitization (as defined below)
that agrees that its access to information regarding the Borrower and the Loans
is solely for purposes of evaluating an investment in such Securitization;
provided that such Person shall have been made aware of this Section 10.19 and
shall have agreed to be bound by its provisions as if it were a party to this
Agreement, or (k) to a Person that is a trustee, collateral manager, servicer,
noteholder or secured party in a Securitization in connection with the
administration, servicing and reporting on the assets serving as collateral for
such Securitization; provided that such Person shall have been made aware of
this Section 10.19 and shall have agreed to be bound by its provisions as if it
were a party to this Agreement. For purposes of this Section "Securitization"
shall mean a public or private offering by a Lender or any of its affiliates or
their respective successors and assigns, of securities which represent an
interest in, or which are collateralized in whole or in part by, the Loans.
10.20 LEAD ARRANGER, BOOKRUNNER, DOCUMENTATION AGENT AND SYNDICATION
AGENT.
None of the institutions identified as "Co-Lead Arranger," "Bookrunner,"
"Documentation Agent" or "Syndication Agent" on the title page to this Agreement
shall have any obligations, liabilities or duties under this Agreement other
than those applicable to a Lender (but only if such institution is a Lender) as
such, and no such institution shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any such institution in deciding to enter into this
Agreement or in taking or not taking any action hereunder.
10.21 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed by fax and in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Borrower and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
10.22 PATRIOT ACT NOTICE.
Each Lender and Administrative Agent (for itself and not on behalf of any other
party) hereby notifies 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
"Patriot Act"), it is required to obtain, verify and record information that
identifies Borrower, which information includes the name and address of Borrower
and other information that will allow such Lender or Administrative Agent, as
applicable, to identify Borrower in accordance with the Patriot Act.
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123
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWER: DIRECTED ELECTRONICS, INC.
By: /s/ Xxx X. Xxxxx
-----------------------
Name: Xxx X. Xxxxx
Title: Vice President
1
ADMINISTRATIVE AGENT
AND LENDERS: WACHOVIA BANK, NATIONAL
ASSOCIATION,
as Administrative Agent and as a Lender
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
2
ANTARES CAPITAL CORPORATION,
as a Lender
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Director
3
CIBC INC., as a Lender
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Director
4
GENERAL ELECTRIC CAPITAL
CORPORATION, as a Lender
By: /s/ Xxxxxxx Xx
-----------------------------------
Name: Xxxxxxx Xx
Title: Duly Authorized Signatory
5
XXXXX FARGO BANK, N.A.,
as a Lender
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
6
