EXHIBIT 10.1
EXECUTION COPY
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$600,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
among
RENT-A-CENTER, INC.,
as Borrower,
The Several Lenders from Time to Time Parties
Hereto, CALYON NEW YORK BRANCH, SUNTRUST
BANK
and UNION BANK OF CALIFORNIA, N.A.
as Documentation Agents,
XXXXXX COMMERCIAL PAPER INC.,
as Syndication Agent,
and
JPMORGAN CHASE BANK,
as Administrative Agent
Dated as of May 28, 2003,
as Amended and Restated as of July 14, 2004
X.X. XXXXXX SECURITIES INC. and XXXXXX BROTHERS INC.,
as Joint Bookrunners and Co-Lead Arrangers
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS.....................................................................................1
1.1. Defined Terms...................................................................................1
1.2. Other Definitional Provisions...................................................................23
Section 2. AMOUNT AND TERMS OF FACILITIES..................................................................23
2.1. Term Loans......................................................................................23
2.2. Revolving Commitments...........................................................................24
2.3. Swingline Commitment............................................................................25
2.4. Procedure for Term Loan Borrowing...............................................................25
2.5. Procedure for Revolving Loan Borrowing..........................................................25
2.6. Procedure for Swingline Borrowing; Refunding of Swingline Loans.................................26
2.7. Repayment of Loans..............................................................................27
2.8. Commitment Fees, Etc............................................................................28
2.9. Termination or Reduction of Commitments.........................................................28
2.10. Optional Prepayments............................................................................28
2.11. Mandatory Prepayments...........................................................................29
2.12. Conversion and Continuation Options.............................................................29
2.13. Limitations on Eurodollar Tranches..............................................................30
2.14. Interest Rates and Payment Dates................................................................30
2.15. Computation of Interest and Fees................................................................30
2.16. Inability to Determine Interest Rate............................................................31
2.17. Pro Rata Treatment and Payments.................................................................31
2.18. Requirements of Law.............................................................................32
2.19. Taxes...........................................................................................33
2.20. Indemnity.......................................................................................35
2.21. Change of Lending Office........................................................................35
2.22. Replacement of Lenders..........................................................................35
2.23. Illegality......................................................................................36
SECTION 3. LETTERS OF CREDIT...............................................................................36
3.1. LC Commitments..................................................................................36
3.2. Procedure for Issuance of Letter of Credit......................................................37
3.3. Fees and Other Charges..........................................................................37
3.4. LC Participations...............................................................................37
3.5. Reimbursement Obligation of the Borrower........................................................38
3.6. Obligations Absolute............................................................................39
3.7. Letter of Credit Payments.......................................................................39
3.8. Applications....................................................................................39
SECTION 4. REPRESENTATIONS AND WARRANTIES..................................................................40
4.1. Financial Condition.............................................................................40
4.2. No Change.......................................................................................40
4.3. Existence; Compliance with Law..................................................................40
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4.4. Power; Authorization; Enforceable Obligations...................................................40
4.5. No Legal Bar....................................................................................41
4.6. Litigation......................................................................................41
4.7. No Default......................................................................................41
4.8. Ownership of Property; Liens....................................................................41
4.9. Intellectual Property...........................................................................41
4.10. Taxes...........................................................................................41
4.11. Federal Regulations.............................................................................42
4.12. Labor Matters...................................................................................42
4.13. ERISA...........................................................................................42
4.14. Investment Company Act; Other Regulations.......................................................42
4.15. Subsidiaries....................................................................................42
4.16. Use of Proceeds.................................................................................42
4.17. Environmental Matters...........................................................................43
4.18. Accuracy of Information, etc....................................................................43
4.19. Security Documents..............................................................................44
4.20. Solvency........................................................................................45
4.21. Senior Indebtedness.............................................................................45
4.22. Regulation H....................................................................................45
4.23. Insurance.......................................................................................45
4.24. Lease Payments..................................................................................45
SECTION 5. CONDITIONS PRECEDENT............................................................................45
5.1. Conditions to Effectiveness.....................................................................45
5.2. Conditions to Each Extension of Credit..........................................................46
SECTION 6. AFFIRMATIVE COVENANTS...........................................................................47
6.1. Financial Statements............................................................................47
6.2. Certificates; Other Information.................................................................47
6.3. Payment of Obligations..........................................................................48
6.4. Maintenance of Existence; Compliance............................................................48
6.5. Maintenance of Property; Insurance..............................................................49
6.6. Inspection of Property; Books and Records; Discussions..........................................49
6.7. Notices.........................................................................................49
6.8. Environmental Laws..............................................................................50
6.9. Additional Collateral, etc......................................................................50
6.10. Permitted Acquisitions and Permitted Foreign Acquisitions.......................................51
6.11. Further Assurances..............................................................................51
SECTION 7. NEGATIVE COVENANTS..............................................................................52
7.1. Financial Condition Covenants...................................................................52
7.2. Indebtedness....................................................................................52
7.3. Liens...........................................................................................54
7.4. Fundamental Changes.............................................................................55
7.5. Disposition of Property.........................................................................55
7.6. Restricted Payments.............................................................................56
7.7. Capital Expenditures............................................................................58
7.8. Investments.....................................................................................58
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7.9. Payments and Modifications of Certain Debt Instruments and Preferred Stock......................59
7.10. Transactions with Affiliates....................................................................59
7.11. Sales/Leaseback Transactions....................................................................60
7.12. Changes in Fiscal Periods.......................................................................60
7.13. Negative Pledge Clauses.........................................................................60
7.14. Clauses Restricting Subsidiary Distributions....................................................60
7.15. Lines of Business...............................................................................60
SECTION 8. EVENTS OF DEFAULT...............................................................................61
SECTION 9. THE AGENTS......................................................................................64
9.1. Appointment.....................................................................................64
9.2. Delegation of Duties............................................................................64
9.3. Exculpatory Provisions..........................................................................64
9.4. Reliance by Administrative Agent................................................................65
9.5. Notice of Default...............................................................................65
9.6. Non-Reliance on Agents and Other Lenders........................................................65
9.7. Indemnification.................................................................................66
9.8. Agent in Its Individual Capacity................................................................66
9.9. Successor Administrative Agent..................................................................66
9.10. Authorization to Release Guarantees and Liens...................................................66
9.11. Documentation Agents and Syndication Agent......................................................67
SECTION 10. MISCELLANEOUS...................................................................................67
10.1. Amendments and Waivers..........................................................................67
10.2. Notices.........................................................................................68
10.3. No Waiver; Cumulative Remedies..................................................................69
10.4. Survival of Representations and Warranties......................................................69
10.5. Payment of Expenses and Taxes...................................................................69
10.6. Successors and Assigns; Participations and Assignments..........................................70
10.7. Adjustments; Setoff.............................................................................72
10.8. Counterparts....................................................................................73
10.9. Severability....................................................................................73
10.10. Integration.....................................................................................73
10.11. GOVERNING LAW...................................................................................73
10.12. Submission To Jurisdiction; Waivers.............................................................73
10.13. Acknowledgements................................................................................74
10.14. Confidentiality.................................................................................74
10.15. WAIVERS OF JURY TRIAL...........................................................................75
10.16. USA PATRIOT Act.................................................................................75
10.17. No Novation, etc. ..............................................................................75
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ANNEX:
A Pricing Grid
B Commitments
SCHEDULES:
1.1 Existing Letters of Credit
4.4 Consents, Authorizations, Filings and Notices
4.6 Litigation
4.15 Subsidiaries
4.19(a) UCC and Other Filings / Jurisdictions and Offices
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.14 Existing Restrictions
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Assumption
E Form of Legal Opinion of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
F Form of Exemption Certificate
G Form of Increased Revolving Facility Activation Notice
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AMENDED AND RESTATED
CREDIT AGREEMENT, dated as of May 28,
2003, as amended and restated as of July 14, 2004, among RENT-A-CENTER, INC., a
Delaware corporation (the "Borrower"), the several banks and other financial
institutions or entities from time to time parties to this Agreement (the
"Lenders"), CALYON
NEW YORK BRANCH, SUNTRUST BANK and UNION BANK OF CALIFORNIA,
N.A., as documentation agents (in such capacity, the "Documentation Agents"),
XXXXXX COMMERCIAL PAPER INC., as syndication agent (in such capacity, the
"Syndication Agent"), and JPMORGAN CHASE BANK, as administrative agent.
WITNESSETH :
WHEREAS, the Borrower entered into the
Credit Agreement, dated
as of May 28, 2003, as amended by a First Amendment dated as of May 28, 2003
(the "Existing
Credit Agreement"), among the Borrower, the several banks and
other financial institutions or entities party thereto and the agents named
therein;
WHEREAS, the parties hereto have agreed to amend and restate
the Existing
Credit Agreement as provided in this Agreement, which Agreement
shall become effective upon the satisfaction of the conditions precedent set
forth in Section 5.1 hereof; and
WHEREAS, it is the intent of the parties hereto that this
Agreement not constitute a novation of the obligations and liabilities existing
under the Existing
Credit Agreement or evidence repayment of any of such
obligations and liabilities and that this Agreement amend and restate in its
entirety the Existing
Credit Agreement and re-evidence the obligations of the
Borrower outstanding thereunder;
NOW, THEREFORE, in consideration of the above premises, the
parties hereto hereby agree that on the Restatement Effective Date (as defined
below), the Existing
Credit Agreement shall be amended and restated in its
entirety as follows:
SECTION 1. DEFINITIONS
1.1. Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof: "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by JPMorgan Chase Bank as its prime rate in effect
at its principal office in
New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by JPMorgan Chase Bank in connection with
extensions of credit to debtors); "Base CD Rate" shall mean the sum of (a) the
product of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the CD
Reserve Percentage and (b) the CD Assessment Rate; and "Three-Month Secondary CD
Rate" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if such day
shall not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve Bank of
New
York (which rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in
New York City
received at approximately 10:00 A.M.,
New York City time, on such day (or, if
such day shall
not be a Business Day, on the next preceding Business Day) by JPMorgan Chase
Bank from three
New York City negotiable certificate of deposit dealers of
recognized standing selected by it. Any change in the ABR due to a change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective
Rate shall be effective as of the opening of business on the effective day of
such change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal
Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": JPMorgan Chase Bank, together with its
affiliates, as the administrative agent for the Lenders under this Agreement and
the other Loan Documents, together with any of its successors.
"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent,
the Documentation Agents and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to, without duplication, the sum of (a) the aggregate then
unpaid principal amount of such Lender's Term Loans together with such Lender's
Term Commitments then in effect and (b) the amount of such Lender's Revolving
Commitment then in effect or, if the Revolving Commitments have been terminated,
the amount of such Lender's Revolving Extensions of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": this
Credit Agreement, as amended, supplemented,
restated or otherwise modified from time to time.
"Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:
ABR Eurodollar
Loans Loans
----- ----------
Revolving Loans and
Swingline Loans 0.75% 1.75%
Term Loans 0.75% 1.75%
provided, that on and after the first Adjustment Date occurring after the
Restatement Effective Date, the Applicable Margin with respect to Revolving
Loans and Swingline Loans will be determined pursuant to the Pricing Grid.
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"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"Approved Fund": as defined in Section 10.6(b).
"Asset Sale": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clause
(a), (b), (c), (d), (f), (g), (h), (i), (j) or (k) of Section 7.5 and any
Disposition of Cash Equivalents) that yields gross proceeds to the Borrower or
any of its Subsidiaries (valued at the initial principal amount thereof in the
case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value in the case of other non-cash proceeds) in excess of
$500,000.
"Assignee": as defined in Section 10.6(b).
"Assignment and Assumption": an Assignment and Assumption,
substantially in the form of
Exhibit D.
"Assumed Indebtedness": Indebtedness assumed in connection
with a Permitted Acquisition or Permitted Foreign Acquisition provided that (a)
such Indebtedness is outstanding at the time of such acquisition and was not
incurred in connection therewith or in contemplation thereof and (b) in the
event that such Permitted Acquisition or Permitted Foreign Acquisition
constitutes an acquisition of property other than Capital Stock, such
Indebtedness was incurred in order to acquire or improve such property.
"Attributable Indebtedness": in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate implicit in such transaction determined in
accordance with GAAP) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has been extended).
"Available Revolving Commitment": as to any Revolving Lender
at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Commitment then in effect over (b) such Lender's Revolving Extensions
of Credit then outstanding; provided, that in calculating any Lender's Revolving
Extensions of Credit for the purpose of determining such Lender's Available
Revolving Commitment pursuant to Section 2.8(a), the aggregate principal amount
of Swingline Loans then outstanding shall be deemed to be zero.
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Business": as defined in Section 4.17(b).
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in
New York City are authorized or required by law
to close, provided, that with respect to notices
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and determinations in connection with, and payments of principal and interest
on, Eurodollar Loans, such day is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures (other than those made pursuant to
Permitted Acquisitions or Permitted Foreign Acquisitions) by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of
fixed or capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period but excluding
merchandise inventory acquired during such period) that should be capitalized
under GAAP on a consolidated balance sheet of such Person and its Subsidiaries.
"Capital Expenditures (Expansion)": for any period, with
respect to any Person, any Capital Expenditures made by such Person in
connection with the opening of new stores to be operated by such Person.
"Capital Expenditures (Maintenance)": for any period, with
respect to any Person, any Capital Expenditures which do not constitute Capital
Expenditures (Expansion) of such Person.
"Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash/Debt Consideration": with respect to any Permitted
Acquisition or any Permitted Foreign Acquisition, the portion of the Purchase
Price with respect thereto that is payable in the forms referred to in clauses
(a) and (d) of the definition of "Purchase Price" set forth in Section 1.1.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-2 by Standard & Poor's Ratings Services ("S&P") or P-2 by Xxxxx'x
Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from
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the date of acquisition backed by standby letters of credit issued by any Lender
or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) short term investments (not exceeding 35 days) in loans made to
obligors having an investment grade rating from each of S&P and Xxxxx'x; or (h)
shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (g) of this
definition.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Commitment": as to any Lender, the sum of the Term Commitment
and the Revolving Commitment of such Lender.
"Commitment Fee Rate": 0.375% per annum; provided, that on and
after the first Adjustment Date occurring after the Restatement Effective Date,
the Commitment Fee Rate will be determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Conduit Lender": any special purpose corporation organized
and administered by any Lender for the purpose of making Loans otherwise
required to be made by such Lender and designated by such Lender in a written
instrument; provided, that the designation by any Lender of a Conduit Lender
shall not relieve the designating Lender of any of its obligations to fund
promptly a Loan under this Agreement if, for any reason, its Conduit Lender
fails to fund promptly any such Loan, and the designating Lender (and not the
Conduit Lender) shall have the sole right and responsibility to deliver all
consents and waivers required or requested under this Agreement with respect to
its Conduit Lender, and provided, further, that no Conduit Lender shall (a) be
entitled to receive any greater amount pursuant to Section 2.18, 2.19, 2.20 or
10.5 than the designating Lender would have been entitled to receive in respect
of the extensions of credit made by such Conduit Lender or (b) be deemed to have
any Commitment.
"Consolidated Current Assets": at any date, (a) all amounts
(other than cash and Cash Equivalents) that would, in conformity with GAAP, be
set forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date and
(b) without duplication of clause (a) above, the book value of all rental
merchandise inventory of the Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
the Borrower and its Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of the Borrower and its Subsidiaries and (b) without
duplication of clause (a) above, all Indebtedness consisting of Revolving Loans
or Swingline Loans to the extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income
for such period plus, without duplication and to the extent reflected as a
charge or reduction in the statement of such
5
Consolidated Net Income for such period, the sum of (a) income tax expense, (b)
interest expense, amortization or writeoff of debt discount and debt issuance
costs and commissions and other fees and charges associated with Indebtedness
(including the Loans), (c) depreciation (excluding depreciation of rental
merchandise) and amortization expense, including, without limitation,
amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (d) any extraordinary, unusual or non-recurring non-cash
expenses or losses (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period, non-cash
losses on sales of assets outside of the ordinary course of business) and (e)
any other non-cash charges, and minus, to the extent included in the statement
of such Consolidated Net Income for such period, the sum of (a) interest income,
(b) any extraordinary, unusual or non-recurring income or gains (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business) and (c) any other non-cash income earned
outside the ordinary course of business, all as determined on a consolidated
basis. For the purposes of calculating Consolidated EBITDA for any Reference
Period pursuant to any determination of the Consolidated Leverage Ratio, if
during such Reference Period the Borrower or any Subsidiary shall have made a
Material Disposition or Material Acquisition, Consolidated EBITDA for such
Reference Period shall be calculated after giving pro forma effect thereto as if
such Material Disposition or Material Acquisition (including any indebtedness
incurred or acquired in connection therewith) occurred on the first day of such
Reference Period. As used in this definition, "Material Acquisition" means any
acquisition of property or series of related acquisitions of property that (a)
constitutes assets comprising all or substantially all of an operating unit of a
business or constitutes all or substantially all of the common stock of a Person
and (b) involves the payment of consideration by the Borrower and its
Subsidiaries in excess of $15,000,000 (or such lesser amount as the Borrower may
determine in its discretion); and "Material Disposition" means any Disposition
of property or series of related Dispositions of property that yields gross
proceeds to the Borrower or any of its Subsidiaries in excess of $15,000,000 (or
such lesser amount as the Borrower may determine in its discretion).
"Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) the sum of Consolidated EBITDA for such period and, to the
extent reducing Consolidated Net Income for such period, Consolidated Lease
Expense for such period, less the aggregate amount actually paid by the Borrower
and its Subsidiaries during such period on account of Capital Expenditures
(Maintenance) to (b) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b)
Consolidated Lease Expense for such period, (c) regular, scheduled payments made
during such period on account of principal of Indebtedness of the Borrower or
any of its Subsidiaries (including scheduled principal payments in respect of
the Term Loans but excluding prepayments thereof) and (d) cash dividend payments
made during such period in respect of the Preferred Stock.
"Consolidated Funded Debt": at any date, the aggregate
principal amount of all Funded Debt (which, for purposes of the calculation of
Consolidated Funded Debt, shall be deemed to exclude any unfunded portion of the
Letters of Credit) of the Borrower and its Subsidiaries at such date, determined
on a consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense": for any period, total cash
interest expense (including that attributable to Capital Lease Obligations), net
of cash interest income, of the Borrower and its Subsidiaries for such period
with respect to all outstanding Indebtedness of the Borrower and its
6
Subsidiaries (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing,
commitment fees payable pursuant to Section 2.8 and net costs under Hedge
Agreements in respect of such Indebtedness to the extent such net costs are
allocable to such period in accordance with GAAP).
"Consolidated Lease Expense": for any period, the aggregate
amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries for such period with respect to leases of real and personal
property, determined on a consolidated basis in accordance with GAAP.
"Consolidated Leverage Ratio": as at the last day of any
period, the ratio of (a) Consolidated Funded Debt on such day to (b)
Consolidated EBITDA for such period.
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Net Income Amount": at any date of
determination, an amount equal to cumulative Consolidated Net Income from April
1, 2004 through the last day of the most recent fiscal quarter for which
financial statements have been delivered pursuant to Section 6.1.
"Consolidated Net Worth": at any date, all amounts that would,
in conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' equity at such date.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
"Continuing Directors": the directors of the Borrower on the
Restatement Effective Date, and each other director of the Borrower, if, in each
case, such other director's nomination for election to the board of directors of
the Borrower is recommended by at least 66-2/3% of the then Continuing
Directors.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
7
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied (including, in any event, a "Default" under and as defined in the
Senior Subordinated Note Indenture).
"Disposition": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms "Dispose" and "Disposed of" shall have correlative meanings.
"Disqualified Stock": any Capital Stock or other ownership or
profit interest of any Loan Party that any Loan Party is or, upon the passage of
time or the occurrence of any event, may become obligated to redeem, purchase,
retire, defease or otherwise make any payment in respect of in consideration
other than Capital Stock (other than Disqualified Stock).
"Documentation Agents": as defined in the preamble hereto.
"Dollars" and "$": dollars in lawful currency of the United
States.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan (other than any Eurodollar Loan
having a seven-day Interest Period), the rate per annum determined on the basis
of the rate for deposits in Dollars for a period equal to such Interest Period
commencing on the first day of such Interest Period appearing on Page 3750 of
the British Bankers Association Telerate screen as of 11:00 A.M., London time,
two Business Days prior to the beginning of such Interest Period, provided that
if such rate does not appear on Page 3750 of the British Bankers Association
Telerate screen (or otherwise on such screen) the "Eurodollar Base Rate" shall
be determined by reference to such other comparable publicly available service
for displaying eurodollar rates as may be selected by the Administrative Agent.
If no such rate is available or if the Eurodollar Base Rate is being determined
in connection with any Eurodollar Loan having a seven-day Interest Period, such
rate shall be determined by reference to the rate at which the Administrative
Agent is offered Dollar deposits at or about 10:00 A.M.,
New York City time, two
Business Days prior to the beginning of such Interest Period in the interbank
eurodollar market where its eurodollar and foreign currency and exchange
operations are
8
then being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied (including, in any event, an "Event of Default" under
and as defined in the Senior Subordinated Note Indenture).
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) an amount equal to the amount of all non-cash
charges (including depreciation (other than depreciation of rental merchandise)
and amortization) deducted in arriving at such Consolidated Net Income, (iii)
decreases in Consolidated Working Capital for such fiscal year, (iv) an amount
equal to the aggregate net non-cash loss on the Disposition of property by the
Borrower and its Subsidiaries during such fiscal year (other than Dispositions
of (x) rental merchandise otherwise included in changes in Consolidated Working
Capital and (y) inventory in the ordinary course of business), to the extent
deducted in arriving at such Consolidated Net Income and (v) amounts paid or
invested by the Insurance Subsidiary in the Borrower and its Subsidiaries as
permitted by this Agreement (other than reimbursement of insurance claims to the
Borrower or its Subsidiaries), over (b) the sum, without duplication, of (i) an
amount equal to the amount of all non-cash credits included in arriving at such
Consolidated Net Income, (ii) the aggregate amount actually paid by the Borrower
and its Subsidiaries in cash during such fiscal year on account of Capital
Expenditures (excluding the principal amount of Indebtedness incurred in
connection with such expenditures and any such expenditures financed with the
proceeds of any Reinvestment Deferred Amount), (iii) the aggregate amount
actually paid by the Borrower and its Subsidiaries in cash during such fiscal
year on account of Permitted Acquisitions or Permitted Foreign Acquisitions
(excluding the principal amount of Indebtedness incurred in connection with such
expenditures and any such expenditures financed with the proceeds of any
Reinvestment Deferred Amount), (iv) the aggregate amount of all prepayments of
Revolving Loans and Swingline Loans during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Commitments and all
optional prepayments of the Term Loans during such fiscal year (including
prepayments of the Term Loans required by Section 7.5(e)), (v) the aggregate
amount of all regularly scheduled principal payments of Funded Debt (including
the Term Loans) of the Borrower and its Subsidiaries made during such fiscal
year (other than any such payment of a facility that may thereafter be
reborrowed), (vi) increases in Consolidated Working Capital for such fiscal
year, (vii) an amount equal to the aggregate net non-cash gain on the
Disposition of property by the Borrower and its Subsidiaries during such fiscal
year (other than sales of inventory in the ordinary course of business), to the
extent included in arriving at such Consolidated Net Income and (viii) the
aggregate amount of cash paid to the Insurance Subsidiary by the
9
Borrower and its Subsidiaries as insurance premiums and in additional capital
contributions, to the extent the same are required to meet regulatory capital
guidelines, policies or rules.
"Excess Cash Flow Application Date": as defined in Section
2.11(c).
"Excluded Foreign Subsidiary": any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the
Obligations, would, in the good faith judgment of the Borrower, result in
adverse tax consequences to the Borrower.
"Existing
Credit Agreement": as defined in the recitals
hereto.
"Existing Letter of Credit": each letter of credit issued
under the Existing Credit Agreement identified on Schedule 1.1 hereto that is
outstanding on the Restatement Effective Date and each renewal of such letter of
credit, each of which shall be deemed, on and after the Restatement Effective
Date, to have been issued hereunder.
"Existing Senior Subordinated Notes": the subordinated notes
of the Borrower outstanding on the Restatement Effective Date.
"Existing Term Loans": Term Loans outstanding under and as
defined in the Existing Credit Agreement.
"Facility": the credit facility consisting of, as applicable,
(a) the Term Loans and Term Commitments (the "Term Facility") and (b) the
Revolving Commitments and the extensions of credit made thereunder (the
"Revolving Facility").
"Federal Funds Effective Rate": 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 for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Funded Debt": as to any Person, on any date, (a) all
Indebtedness of such Person that matures more than one year from the date of its
creation or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year from such
date or arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year from
such date, including all current maturities and current sinking fund payments in
respect of such Indebtedness whether or not required to be paid within one year
from the date of its creation and, in the case of the Borrower, Indebtedness in
respect of the Loans and the Reimbursement Obligations (but excluding, in the
case of the Borrower, any Guarantee Obligations of the Borrower in respect of
Indebtedness of franchisees, to the extent permitted by Section 7.2(h)), minus
(b) the aggregate amount of cash and Cash Equivalents on the consolidated
balance sheet of the Borrower and its Subsidiaries on such date, but in no event
exceeding $75,000,000.
"Funding Office": the office of the Administrative Agent
specified in Section 10.2 or such other office as may be specified from time to
time by the Administrative Agent as its funding office by written notice to the
Borrower and the Lenders.
10
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 7.1,
GAAP shall be determined on the basis of such principles in effect on the
Restatement Effective Date and consistent with those used in the preparation of
the most recent audited financial statements delivered pursuant to Section
4.1(b). In the event that any "Accounting Change" (as defined below) shall occur
and such change results in a change in the method of calculation of financial
covenants, standards or terms in this Agreement, then the Borrower and the
Administrative Agent agree to enter into negotiations in order to amend such
provisions of this Agreement so as to equitably reflect such Accounting Change
with the desired result that the criteria for evaluating the Borrower's
financial condition shall be the same after such Accounting Change as if such
Accounting Change had not been made. Until such time as such an amendment shall
have been executed and delivered by the Borrower, the Administrative Agent and
the Required Lenders, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such Accounting
Change had not occurred. "Accounting Change" refers to changes in accounting
principles required by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants or, if applicable, the SEC.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Amended and Restated
Guarantee and Collateral Agreement executed and delivered by the Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit A, as the same
may be amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of which
the guaranteeing person has issued or incurred a reimbursement, counterindemnity
or similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
11
"Hedge Agreements": all swaps, caps, collars or similar
arrangements providing for protection against fluctuations in interest rates
(whether from floating to fixed or from fixed to floating), currency exchange
rates or commodities prices or the exchange of nominal interest obligations,
either generally or under specific contingencies.
"Increased Revolving Facility Activation Notice": a notice
substantially in the form of Exhibit G.
"Increased Revolving Facility Closing Date": any Business Day
designated as such in an Increased Revolving Facility Activation Notice.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
such Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar facilities, (g) the
liquidation value of all redeemable preferred Capital Stock of such Person
(other than any such preferred Capital Stock that is not redeemable until a date
that is no earlier than one year and one day after the final maturity of the
Loans and the Preferred Stock) and all obligations of such Person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value any
Capital Stock of such Person, (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g) above;
(i) all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such obligation; (j) all
Attributable Indebtedness of such Person and (k) for the purposes of Section
8(e) only, all obligations of such Person in respect of Hedge Agreements (which,
for purposes of such Section 8(e), will be deemed to have an outstanding
principal amount equal to the net amount which would be payable (or would permit
the counterparty thereto to cause to become payable) by the Borrower or
Subsidiary party thereto (including any net termination payment) upon the
occurrence of any default, event or condition specified in such Section 8(e)).
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Insurance Subsidiary": Legacy Insurance Co., Ltd., a Bermuda
company and a Wholly Owned Subsidiary of the Borrower formed for the sole
purpose of writing insurance only for the risks of the Borrower and its
Subsidiaries.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, technology, know-how and processes, and all rights to xxx at
law or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
12
"Intellectual Property Security Agreement": the Intellectual
Property Security Agreements between certain Loan Parties and the Administrative
Agent, substantially in the form of Exhibit B-1 to the Guarantee and Collateral
Agreement.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan (other than any Revolving Loan that is an ABR Loan
and any Swingline Loan), the date of any repayment or prepayment made in respect
thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending seven days (in the case of
Revolving Loans only) or one, two, three or six months thereafter, as selected
by the Borrower in its notice of borrowing or notice of conversion, as the case
may be, given with respect thereto; and (b) thereafter, each period commencing
on the last day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending seven days (in the case of Revolving Loans only) or
one, two, three or six months thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three Business Days
prior to the last day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period 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;
(ii) the Borrower may not select an Interest Period for a
particular Facility that would extend beyond the final maturity date
applicable thereto;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
Notwithstanding the foregoing, clause (iii) above shall not apply to Eurodollar
Loans having a seven-day Interest Period.
"Investments": as defined in Section 7.8.
"Issuing Lender": JPMorgan Chase Bank (or any of its
Affiliates), in its capacity as issuer of any Letter of Credit.
"LC Fee Payment Date": (a) each date that is three Business
Days after the last day of each March, June, September and December and (b) the
last day of the Revolving Commitment Period.
"LC Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of
13
drawings under Letters of Credit that have not then been reimbursed by the
Borrower pursuant to Section 3.6.
"LC Participants": the collective reference to all Revolving
Lenders (including the Issuing Lender), as participants in each Letter of
Credit.
"Legacy Trust": Legacy Drive Trust, a trust formed under the
laws of the State of Texas pursuant to, and operating in accordance with, the
Trust Agreement.
"Lenders": as defined in the preamble hereto.
"Letters of Credit": the letters of credit issued pursuant to
Section 3.1, which shall be deemed to include the Existing Letters of Credit.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing) or any purchase
option, call option, right of first refusal or similar right.
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents and
the Notes.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower that is a party to a Loan Document.
"Majority Facility Lenders": (a) with respect to the Term Loan
Facility, the holders of more than 50% of the aggregate unpaid principal amount
of the Term Loans and aggregate Term Commitments outstanding under such facility
and (b) with respect to the Revolving Facility, the holders of more than 50% of
the Total Revolving Extensions of Credit (or, prior to any termination of the
Revolving Commitments, the holders of more than 50% of the Total Revolving
Commitments) outstanding under such Facility.
"Margin Capital Stock": Capital Stock issued by the Borrower
that (i) constitutes "margin stock" within the meaning of such term under
Regulation U as now or from time to time hereafter in effect and (ii) would,
taking into account all other "margin stock" (within the meaning of such term
under Regulation U as now or from time to time hereafter in effect) held by the
Borrower or any of its Subsidiaries, cause the value of all such "margin stock"
to exceed 25% of the value of all assets of the Borrower and its Subsidiaries
that directly or indirectly secure (within the meaning of Regulation U) the
Obligations.
"Material Adverse Effect": a material adverse effect on (a)
the business, property, operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Secured Parties hereunder
or thereunder or (c) the validity, enforceability or priority of the Liens
intended to be created by the Security Documents taken as a whole.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes,
14
defined or regulated as such in or under any Environmental Law, including
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Mortgaged Property": any real property of any Loan Party as
to which the Administrative Agent for the benefit of the Secured Parties has
been granted a Lien pursuant to any Mortgage.
"Mortgage": any mortgage or deed of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Secured Parties, in form and substance reasonably acceptable to
the Administrative Agent.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such Asset
Sale or Recovery Event, net of reasonable attorneys' fees, accountants' fees,
investment banking fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset that
is the subject of such Asset Sale or Recovery Event (other than any Lien
pursuant to a Security Document) and other customary fees and expenses actually
incurred in connection therewith and net of taxes paid or reasonably estimated
to be payable currently as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements) and (b) in
connection with any issuance or sale of equity securities or debt securities or
instruments or the incurrence of loans, the cash proceeds received from such
issuance or incurrence, net of reasonable attorneys' fees, investment banking
fees, accountants' fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith.
"New Revolving Lender": as defined in Section 2.2(c).
"New Revolving Lender Supplement": as defined in Section
2.2(c).
"Non-Excluded Taxes": as defined in Section 2.19(a).
"Non-U.S. Lender": as defined in Section 2.19(d).
"Notes": the collective reference to any promissory note
evidencing Loans.
"Obligations": the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to any Loan Party, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of any Loan Party to the Administrative Agent or to
any Secured Party, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any other Loan Document, the Letters
of Credit, any Specified Hedge Agreement or any other document made, delivered
or given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including all fees, charges and disbursements of counsel to the Administrative
Agent or to any Lender that are required to be paid by the Borrower pursuant
hereto) or otherwise; provided, that (i) Obligations of the Borrower or any
15
other Loan Party under any Specified Hedge Agreement shall be secured and
guaranteed pursuant to the Security Documents only to the extent that, and for
so long as, the other Obligations are so secured and guaranteed, (ii) any
release of Collateral or Guarantors effected in the manner permitted by this
Agreement shall not require the consent of holders of obligations under
Specified Hedge Agreements and (iii) the amount of secured Obligations under any
Specified Hedge Agreements shall not exceed the net amount, including any net
termination payments, that would be required to be paid to the counterparty to
such Specified Hedge Agreement on the date of termination of such Specified
Hedge Agreement.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": any acquisition, consisting of a
single transaction or a series of related transactions, by the Borrower or any
one or more of its Wholly Owned Subsidiary Guarantors (or Subsidiaries who will
concurrently with such acquisition become Wholly Owned Subsidiary Guarantors) of
all of the Capital Stock of, or all or a substantial part of the assets of, or
of a business, unit or division of, any Person organized under the laws of the
United States or any state thereof (or a business, unit or division of any
Person organized under the laws of any governmental instrumentality other than
the United States or any state thereof, which business unit or division operates
entirely within the United States) (such business, unit or division, the
"Acquired Business"), provided that (a) the consideration paid by the Borrower
or such Subsidiary or Subsidiaries pursuant to such acquisition shall be solely
in a form referred to in clause (a), (b), (c) or (d) of the definition of
"Purchase Price" (or some combination thereof), (b) the requirements of Section
6.10 have been satisfied with respect to such acquisition, (c) the Borrower
shall be in compliance, on a pro forma basis after giving effect to such
acquisition, with the covenants contained in Section 7.1, in each case
recomputed as at the last day of the most recently ended fiscal quarter of the
Borrower as if such acquisition had occurred on the first day of each relevant
period for testing such compliance, (d) no Default or Event of Default shall
have occurred and be continuing, or would occur after giving effect to such
acquisition, (e) all actions required to be taken with respect to any acquired
or newly formed Subsidiary or otherwise with respect to the Acquired Business in
such acquisition under Section 6.9 and 6.10 shall have been taken, (f) the
aggregate Purchase Price in respect of such acquisition and all other Permitted
Acquisitions consummated in accordance with this Agreement shall not exceed, in
any fiscal year of the Borrower, the sum of (i) $100,000,000 (or, if the
Consolidated Leverage Ratio as of the last day of any fiscal quarter during such
fiscal year is less than 2.25 to 1.00, $225,000,000) and (ii) an additional up
to $50,000,000 to the extent not expended as Capital Expenditures (Expansion)
during such fiscal year pursuant to Section 7.7, (g) the Cash/Debt Consideration
in respect of such acquisition and all other Permitted Acquisitions consummated
in accordance with this Agreement shall not exceed, in any fiscal year of the
Borrower, $225,000,000 (plus any amounts available pursuant to the foregoing
clause (f)(ii)), and (h) any such acquisition shall have been approved by the
Board of Directors or such comparable governing body of the Person (or whose
business, unit or division is, as the case may be) being acquired.
"Permitted Foreign Acquisition": any acquisition, consisting
of a single transaction or a series of related transactions, by the Borrower or
any one or more of its Wholly Owned Subsidiary Guarantors (or Subsidiaries who
will concurrently with such acquisition become Wholly Owned Subsidiary
Guarantors) or Foreign Subsidiaries (that are Wholly Owned Subsidiaries) of all
of the Capital
16
Stock of, or all or a substantial part of the assets of, or of a business, unit
or division of, any Person organized under the laws of any governmental
instrumentality other than the United States or any state thereof (or a
business, unit or division of any Person organized under the laws of the United
States or any state thereof, which business unit or division operates entirely
outside of the United States) (such business, unit or division, the "Acquired
Foreign Business"), provided that (a) the consideration paid by the Borrower or
such Subsidiary or Subsidiaries pursuant to such acquisition shall be solely in
a form referred to in clause (a), (b), (c) or (d) of the definition of "Purchase
Price" (or some combination thereof), (b) the requirements of Section 6.10 have
been satisfied with respect to such acquisition, (c) the Borrower shall be in
compliance, on a pro forma basis after giving effect to such acquisition, with
the covenants contained in Section 7.1, in each case recomputed as at the last
day of the most recently ended fiscal quarter of the Borrower as if such
acquisition had occurred on the first day of each relevant period for testing
such compliance, (d) no Default or Event of Default shall have occurred and be
continuing, or would occur after giving effect to such acquisition, (e) all
actions required to be taken with respect to any acquired or newly formed
Subsidiary or otherwise with respect to the Acquired Foreign Business in such
acquisition under Section 6.9 and 6.10 shall have been taken, (f) the aggregate
Purchase Prices in respect of such acquisition and all other Permitted Foreign
Acquisitions consummated in accordance with this Agreement shall not exceed
$75,000,000 in any single fiscal year of the Borrower and shall not exceed
$150,000,000 during the term of this Agreement, (g) the Cash/Debt Consideration
in respect of such acquisition and all other Permitted Foreign Acquisitions
consummated in accordance with this Agreement shall not exceed in the aggregate,
$150,000,000, and (h) any such acquisition shall have been approved by the Board
of Directors or such comparable governing body of the Person (or whose business,
unit or division is, as the case may be) being acquired.
"Permitted Investors": the collective reference to (a) the
Sponsor and (b) the Xxxxxx Persons.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Preferred Stock": the Series A Preferred Stock, $0.01 par
value, of the Borrower and the Series C Preferred Stock, $0.01 par value, of the
Borrower to be issued pursuant to a certificate of designation in substantially
the form previously provided to the Administrative Agent (with changes thereto
reasonably acceptable to the Administrative Agent) in exchange for the
outstanding Series A Preferred Stock.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Projections": as defined in Section 6.2(c).
"Properties": as defined in Section 4.17(a).
"Purchase Price": with respect to any Permitted Acquisition or
Permitted Foreign Acquisition, the sum (without duplication) of (a) the amount
of cash paid by the Borrower and its Subsidiaries in connection with such
acquisition, (b) the value (as determined for purposes of such acquisition in
accordance with the applicable acquisition agreement) of all Capital Stock of
the Borrower
17
issued or given as consideration in connection with such acquisition, (c) the
Qualified Net Cash Equity Proceeds applied to finance such acquisition and (d)
the principal amount (or, if less, the accreted value) at the time of such
acquisition of all Assumed Indebtedness with respect thereto.
"Qualified Net Cash Equity Proceeds": the Net Cash Proceeds of
any offering of Capital Stock of the Borrower, provided that (a) such offering
was made in express contemplation of a Permitted Acquisition or Permitted
Foreign Acquisition, (b) such Capital Stock is not mandatorily redeemable and
(c) such Permitted Acquisition or Permitted Foreign Acquisition is consummated
within 90 days after receipt by the Borrower of such Net Cash Proceeds.
"RAC East": Rent-A-Center East, Inc., a Delaware corporation.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding relating
to any asset of the Borrower or any of its Subsidiaries.
"Reference Period": with respect to any date, the period of
four consecutive fiscal quarters of the Borrower immediately preceding such date
or, if such date is the last day of a fiscal quarter, ending on such date.
"Refunded Swingline Loans": as defined in Section 2.6(b).
"Refunding Date": as defined in Section 2.6(c).
"Register": as defined in Section 10.6(b).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 amounts paid under Letters
of Credit.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the Borrower or
any of its Subsidiaries in connection therewith that are not applied to prepay
the Term Loans pursuant to Section 2.11(c) as a result of the delivery of a
Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Subsidiary of
the Borrower other than a Specified Subsidiary (unless such Specified Subsidiary
was the recipient of such Net Cash Proceeds)) intends and expects to use all or
a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event
to acquire assets useful in the businesses of the Borrower or any of its
Subsidiaries.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire
assets useful in the Borrower's business.
18
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring twelve months after
such Reinvestment Event and (b) the date on which the Borrower (directly or
indirectly through a Subsidiary of the Borrower) shall have determined not to,
or shall have otherwise ceased to, acquire assets useful in the Borrower's
business with all or any portion of the relevant Reinvestment Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. Section 4043.
"Required Lenders": at any time, the holders of more than 50%
of the sum of (a) the aggregate unpaid principal amount of the Term Loans and
the aggregate Term Commitments then outstanding and (b) the Total Revolving
Commitments then in effect or, if the Revolving Commitments have been
terminated, the Total Revolving Extensions of Credit then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any 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.
"Responsible Officer": the chief executive officer, president,
chief financial officer or treasurer of the Borrower, but in any event, with
respect to financial matters, the chief financial officer or president of the
Borrower.
"Restatement Effective Date": the date on which the conditions
precedent set forth in Section 5.1 shall have been satisfied, which date is July
14, 2004.
"Restricted Payments": as defined in Section 7.6.
"Revolving Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Loans and participate in Swingline Loans
and Letters of Credit, in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading "Revolving Commitment" opposite
such Lender's name on Annex B, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof. The original
aggregate amount of the Revolving Commitments is $250,000,000.
"Revolving Commitment Period": the period ending on the
Revolving Scheduled Commitment Termination Date.
"Revolving Extensions of Credit": as to any Revolving Lender
at any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Loans held by such Lender then outstanding, (b) such Lender's
Revolving Percentage of the LC Obligations then outstanding and (c) such
Lender's Revolving Percentage of the aggregate principal amount of Swingline
Loans then outstanding.
"Revolving Lender": each Lender that has a Revolving
Commitment or that holds Revolving Loans.
19
"Revolving Loans": as defined in Section 2.2.
"Revolving Percentage": as to any Revolving Lender at any
time, the percentage which such Lender's Revolving Commitment then constitutes
of the Total Revolving Commitments (or, at any time after the Revolving
Commitments shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Loans then outstanding constitutes
of the aggregate principal amount of the Revolving Loans then outstanding).
"Revolving Scheduled Commitment Termination Date": July 14,
2009.
"Sale/Leaseback Transaction": any arrangement providing for
the leasing to the Borrower or any Subsidiary of real or personal property that
has been or is to be (a) sold or transferred by the Borrower or any Subsidiary
or (b) constructed or acquired by a third party in anticipation of a program of
leasing to the Borrower or any Subsidiary.
"SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.
"Secured Parties": collectively, the Arranger, the Agents, the
Lenders and, with respect to any Specified Hedge Agreement, any affiliate of any
Lender party thereto (or any Person that was a Lender or an affiliate thereof
when such Specified Hedge Agreement was entered into) that has agreed to be
bound by the provisions of Section 7.2 of the Guarantee and Collateral Agreement
as if it were a party thereto and by the provisions of Section 9 hereof as if it
were a Lender party hereto; provided that any counterparty to a Specified Hedge
Agreement that is not a Lender shall have no rights in connection with the
management or release of any Collateral or the obligations of any Guarantor
under the Loan Documents.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages, the Intellectual Property
Security Agreement and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.
"Senior Subordinated Note Indenture": the collective reference
to each Indenture entered into by the Borrower or any of its Subsidiaries in
connection with any issuance of Senior Subordinated Notes, together with all
instruments and other agreements entered into by the Borrower or any of its
Subsidiaries in connection therewith, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with Section 7.9.
"Senior Subordinated Notes": the collective reference to (a)
the Existing Senior Subordinated Notes and (b) any other subordinated notes of
the Borrower issued pursuant to Section 7.2(f).
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on
20
its debts as such debts become absolute and matured, (c) such Person will not
have, as of such date, an unreasonably small amount of capital with which to
conduct its business, and (d) the realization of the current assets of such
Person in the ordinary course of business will be sufficient for such Person to
pay recurring current debt, short-term debt and long-term debt service as such
debts mature. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control" or
similar event (however defined) as defined in any Senior Subordinated Note
Indenture.
"Specified Hedge Agreement": any Hedge Agreement (a) entered
into by (i) the Borrower or any of its Subsidiaries and (ii) any Lender or any
affiliate thereof, or any Person that was a Lender or an affiliate thereof when
such Hedge Agreement was entered into as counterparty and (b) which has been
designated by such Lender and the Borrower, by notice to the Administrative
Agent not later than 90 days after the execution and delivery thereof by the
Borrower or such Subsidiary, as a Specified Hedge Agreement; provided that the
designation of any Hedge Agreement as a Specified Hedge Agreement shall not
create in favor of any Lender or affiliate thereof that is a party thereto any
rights in connection with the management or release of any Collateral or of the
obligations of any Guarantor under the Guarantee and Collateral Agreement.
"Specified Subsidiaries": the collective reference to the
Insurance Subsidiary, Legacy Trust and any Excluded Foreign Subsidiary.
"Xxxxxx Persons": the collective reference to Xxxx X. Xxxxxx,
any person having a relationship with Xxxx X. Xxxxxx by blood, marriage or
adoption not more remote than first cousin and any trust established for the
benefit of any such person.
"Sponsor": Apollo Management IV, L.P., Apollo Investment Fund
IV, L.P., Apollo Overseas Partners IV, L.P., Apollo Management, L.P. and their
Control Investment Affiliates.
"Stock Payments": as defined in Section 7.6(d).
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower. Legacy Trust shall be
considered a Subsidiary of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than the Specified Subsidiaries.
21
"Swingline Commitment": the obligation of the Swingline Lender
to make Swingline Loans pursuant to Section 2.6 in an aggregate principal amount
at any one time outstanding not to exceed $30,000,000.
"Swingline Lender": JPMorgan Chase Bank, in its capacity as
the lender of Swingline Loans.
"Swingline Loans": as defined in Section 2.3.
"Swingline Participation Amount": as defined in Section
2.6(c).
"Syndication Agents": as defined in the preamble hereto.
"Term Commitment": as to any Term Lender at any time, the
obligation of such Lender, if any, to make Term Loans to the Borrower hereunder
in a principal amount not to exceed the amount set forth under the heading "Term
Commitment" opposite such Lender's name on Annex B delivered by such Lender, or,
as the case may be, in the Assignment and Acceptance pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The original aggregate amount of the Term
Commitments is $350,000,000.
"Term Commitment Percentage": as to any Term Lender at any
time, the percentage which such Term Lender's Term Commitment constitutes of the
aggregate Term Commitments of all Term Lenders.
"Term Lenders": each Lender that holds a Term Loan.
"Term Loans": any Loan converted or made pursuant to Section
2.1(a).
"Term Percentage": as to any Term Lender at any time, the
percentage which the aggregate principal amount of such Lender's Term Loans then
outstanding constitutes of the aggregate principal amount of the Term Loans then
outstanding.
"Total Revolving Commitments": at any time, the aggregate
amount of the Revolving Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"Transferee": any Assignee or Participant.
"Trust Agreement": the Trust Agreement, dated December 31,
2002, between the Borrower and JPMorgan Chase Bank, as trustee, as amended from
time to time in accordance with the terms hereof and thereof (and provided that
no Event of Default would occur hereunder as a result of such amendment).
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"United States": the United States of America.
22
"Voting Stock": with respect to any Person, any class or
series of Capital Stock of such Person that is ordinarily entitled to vote in
the election of directors thereof at a meeting of stockholders called for such
purpose, without the occurrence of any additional event or contingency.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2. Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP, (ii)
the words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation", (iii) the word "incur" shall be construed to
mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words "incurred" and "incurrence" shall have correlative
meanings), (iv) the words "asset" and "property" shall be construed to have the
same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights, and (v) references to
agreements or other Contractual Obligations shall, unless otherwise specified,
be deemed to refer to such agreements or Contractual Obligations as amended,
supplemented, restated or otherwise modified from time to time (subject to any
restrictions on such amendments, supplements, restatements or modifications set
forth herein).
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF FACILITIES
2.1. Term Loans.
(a) Subject to the terms and conditions set forth herein, each
Term Lender agrees, as applicable, (i) to convert all or a part of such Lender's
Existing Term Loan into a principal amount of Term Loan hereunder equal to the
principal amount so converted and/or (ii) pursuant to paragraph (b) below, to
make a Term Loan to the Borrower, in each case on the Restatement Effective
Date, in a principal amount equal to its Term Commitment. The Term Loans may
from time to time be Eurodollar Loans or ABR Loans, as determined by the
Borrower and notified to the Administrative Agent in accordance with Sections
2.4 and 2.12.
(b) Any Term Lender that is not a "Term Lender" under the
Existing Credit Agreement or that has a Term Commitment in excess of the amount
of its Existing Term Loan shall, and
23
each other Term Lender may elect to (by delivering notice to the Administrative
Agent as described below), make a Term Loan to the Borrower on the Restatement
Effective Date in a principal amount equal to its Term Commitment (or, if the
principal amount of its Existing Term Loan is less than its Term Commitment, the
excess of its Term Commitment over the principal amount of its Existing Term
Loan that is being converted into a Term Loan pursuant to clause (a)(i) above).
Any notice to the Administrative Agent delivered by an applicable Lender
pursuant to this Section shall specify (i) the amount of such Lender's Term
Commitment, (ii) the principal amount of the Term Loan to be made by such Lender
on the Restatement Effective Date and (iii) if applicable, the principal amount
of Existing Term Loan held by such Lender that is to be converted into a Term
Loan hereunder pursuant to clause (a)(i) above.
2.2. Revolving Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Lender severally agrees to make revolving
credit loans ("Revolving Loans") to the Borrower from time to time during the
Revolving Commitment Period in an aggregate principal amount at any one time
outstanding which, when added to such Lender's Revolving Percentage of the sum
of (i) the LC Obligations then outstanding and (ii) the aggregate principal
amount of the Swingline Loans then outstanding, does not exceed the amount of
such Lender's Revolving Commitment. During the Revolving Commitment Period the
Borrower may use the Revolving Commitments by borrowing, prepaying the Revolving
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.5 and 2.12.
(b) The Borrower and any one or more Revolving Lenders
(including New Revolving Lenders) may agree that each such Lender shall obtain a
Revolving Commitment or increase the amount of its existing Revolving
Commitment, as applicable, in each case by executing and delivering to the
Administrative Agent an Increased Revolving Facility Activation Notice
specifying (i) the amount of such increase and (ii) the Increased Revolving
Facility Closing Date. Notwithstanding the foregoing, without the consent of the
Required Lenders, (i) the aggregate amount of incremental Revolving Commitments
obtained pursuant to this paragraph shall not exceed $40,000,000 and (ii) no
more than three Increased Revolving Facility Closing Dates may be selected by
the Borrower during the term of this Agreement. No Lender shall have any
obligation to participate in any increase described in this paragraph unless it
agrees to do so in its sole discretion.
(c) Any additional bank, financial institution or other entity
which, with the consent of the Borrower and the Administrative Agent (which
consent shall not be unreasonably withheld), elects to become a "Revolving
Lender" under this Agreement in connection with any transaction described in
Section 2.2(b) shall execute a New Revolving Lender Supplement (each, a "New
Revolving Lender Supplement"), substantially in the form of Exhibit H, whereupon
such bank, financial institution or other entity (a "New Revolving Lender")
shall become a Revolving Lender for all purposes and to the same extent as if
originally a party hereto and shall be bound by and entitled to the benefits of
this Agreement.
(d) For the purpose of providing that the respective amounts
of Revolving Loans (and Eurodollar Tranches in respect thereof) held by the
Revolving Lenders are held by them on a pro rata basis according to their
respective Revolving Percentages, on each Increased Revolving Facility
Restatement Effective Date (i) all outstanding Revolving Loans shall be
converted into a single Revolving Loan that is a Eurodollar Loan (with an
interest period to be selected by the Borrower), and upon such conversion the
Borrower shall pay any amounts owing pursuant to Section 2.20, if any, (ii) any
new borrowings of Revolving Loans on such date shall also be part of such single
Revolving Loan and (iii) all Revolving Lenders (including the New Revolving
Lenders) shall hold a portion of such single Revolving
24
Loan equal to its Revolving Percentage thereof and any fundings on such date
shall be made in such a manner so as to achieve the foregoing.
2.3. Swingline Commitment. Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Commitments from time to time
during the Revolving Commitment Period by making swing line loans ("Swingline
Loans") to the Borrower; provided that (a) the aggregate principal amount of
Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender's other outstanding
Revolving Loans hereunder, may exceed the Swingline Commitment then in effect)
and (b) the Borrower shall not request, and the Swingline Lender shall not make,
any Swingline Loan if, after giving effect to the making of such Swingline Loan,
the aggregate amount of the Available Revolving Commitments would be less than
zero. During the Revolving Commitment Period, the Borrower may use the Swingline
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swingline Loans shall be ABR Loans only.
2.4. Procedure for Term Loan Borrowing. The Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 12:00 Noon, New York City time, one
Business Day prior to the anticipated Restatement Effective Date with respect to
ABR Loans and three Business Days prior to the anticipated Restatement Effective
Date with respect to Eurodollar Loans) requesting that the Term Lenders (other
than Term Lenders that are only converting Existing Term Loans) make Term Loans
on the Restatement Effective Date and specifying the amount to be borrowed. Upon
receipt of such notice the Administrative Agent shall promptly notify each Term
Lender thereof. Not later than 12:00 Noon, New York City time, on the
Restatement Effective Date each relevant Term Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the Term Loan to be made by such Lender. The Administrative Agent
shall make available to the Borrower the aggregate of the amounts made available
to the Administrative Agent by the Term Lenders in like funds.
2.5. Procedure for Revolving Loan Borrowing. (a) The
Borrower may borrow under the Revolving Commitments during the Revolving
Commitment Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 12:00 Noon, New York City time, (a) three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) one Business Day prior to the requested Borrowing Date, in the case of ABR
Loans), specifying (i) the amount and Type of Loans to be borrowed, (ii) the
requested Borrowing Date and (iii) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor. Each borrowing under the Revolving Commitments
shall be in an amount equal to (x) in the case of ABR Loans, $2,000,000 or a
whole multiple of $500,000 in excess thereof (or, if the then aggregate
Available Revolving Commitments are less than $2,000,000, such lesser amount)
and (y) in the case of Eurodollar Loans, $3,000,000 or a whole multiple of
$1,000,000 in excess thereof; provided, that the Swingline Lender may request,
on behalf of the Borrower, borrowings under the Revolving Commitments that are
ABR Loans in other amounts pursuant to Section 2.6 and the Borrower may request
borrowings under the Revolving Commitments that are ABR Loans in other amounts
pursuant to Section 3.5.
(b) Upon receipt of any such notice from the Borrower, the
Administrative Agent shall promptly notify each relevant Lender thereof. Each
relevant Lender will make the amount of its pro rata share of each such
borrowing available to the Administrative Agent for the account of the Borrower
at the Funding Office prior to 12:00 Noon, New York City time, on the Borrowing
Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent crediting the account of the Borrower on the books
25
of such office with the aggregate of the amounts made available to the
Administrative Agent by the relevant Lenders and in like funds as received by
the Administrative Agent or, if the borrowing was made pursuant to Section 3.5,
by paying the Issuing Bank the amounts funded by it with respect to the Letter
of Credit drawing which gave rise to such borrowing.
2.6. Procedure for Swingline Borrowing; Refunding of Swingline
Loans. (a) Whenever the Borrower desires that the Swingline Lender make
Swingline Loans it shall give the Swingline Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swingline Lender not later than 1:00 P.M., New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date (which shall be a Business Day during the Revolving Commitment
Period). Each borrowing under the Swingline Commitment shall be in an amount
equal to $500,000 or a whole multiple of $100,000 in excess thereof. Not later
than 3:00 P.M., New York City time, on the Borrowing Date specified in a notice
in respect of Swingline Loans, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the amount of the Swingline Loan to be made by the Swingline
Lender. The Administrative Agent shall make the proceeds of such Swingline Loan
available to the Borrower on such Borrowing Date by depositing such proceeds in
the account of the Borrower with the Administrative Agent on such Borrowing Date
in immediately available funds.
(b) The Swingline Lender, at any time and from time to time in
its sole and absolute discretion may (and, not later than 10 Business Days after
the making of a Swingline Loan, shall) on behalf of the Borrower (which hereby
irrevocably directs the Swingline Lender to act on its behalf), on one Business
Day's notice given by the Swingline Lender no later than 12:00 Noon, New York
City time (with a copy of such notice being provided to the Borrower), request
each Revolving Lender to make, and each Revolving Lender hereby agrees to make,
a Revolving Loan, in an amount equal to such Revolving Lender's Revolving
Percentage of the aggregate amount of the Swingline Loans (the "Refunded
Swingline Loans") outstanding on the date of such notice, to repay the Swingline
Lender. Each Revolving Lender shall make the amount of such Revolving Loan
available to the Administrative Agent at the Funding Office in immediately
available funds, not later than 10:00 A.M., New York City time, one Business Day
after the date of such notice. The proceeds of such Revolving Loans shall be
immediately made available by the Administrative Agent to the Swingline Lender
for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to
charge the Borrower's accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swingline Loans to the extent amounts received from the Revolving
Lenders are not sufficient to repay in full such Refunded Swingline Loans (with
notice of such charge being provided to the Borrower, provided that the failure
to give such notice shall not affect the validity of such charge).
(c) If prior to the time a Revolving Loan would have otherwise
been made pursuant to Section 2.6(b), one of the events described in Section
8(f) shall have occurred and be continuing with respect to the Borrower or if
for any other reason, as determined by the Swingline Lender in its sole
discretion, Revolving Loans may not be made as contemplated by Section 2.6(b),
each Revolving Lender shall, on the date such Revolving Loan was to have been
made pursuant to the notice referred to in Section 2.6(b) (the "Refunding
Date"), purchase for cash an undivided participating interest in the then
outstanding Swingline Loans by paying to the Swingline Lender an amount (the
"Swingline Participation Amount") equal to (i) such Revolving Lender's Revolving
Percentage times (ii) the sum of the aggregate principal amount of Swingline
Loans then outstanding that were to have been repaid with such Revolving Loans.
(d) Whenever, at any time after the Swingline Lender has
received from any Revolving Lender such Lender's Swingline Participation Amount,
the Swingline Lender receives any
26
payment on account of the Swingline Loans, the Swingline Lender will distribute
to such Revolving Lender its Swingline Participation Amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Revolving Lender's participating interest was outstanding and funded
and, in the case of principal and interest payments, to reflect such Revolving
Lender's pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.
(e) Each Revolving Lender's obligation to make the Loans
referred to in Section 2.6(b) and to purchase participating interests pursuant
to Section 2.6(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including (i) any setoff, counterclaim, recoupment, defense
or other right that such Revolving Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 5; (iii) any
adverse change in the condition (financial or otherwise) of the Borrower; (iv)
any breach of this Agreement or any other Loan Document by the Borrower, any
other Loan Party or any other Revolving Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
2.7. Repayment of Loans. (a) The Term Loan of each Term Lender
shall mature in 24 installments, each of which shall be in an amount equal to
such Term Lender's Term Percentage multiplied by an amount equal to (x) the
percentage set forth below opposite the applicable installment date multiplied
by (y) the aggregate principal amount of Term Loans borrowed on the Restatement
Effective Date less any amounts prepaid pursuant to Section 2.10 or 2.11 on or
prior to such installment date (provided that the aggregate amount of the final
installment shall in any event equal the aggregate then outstanding principal
amount of the Term Loans):
Installment Percentage of Principal Amount
----------- ------------------------------
September 30, 2004 0.25%
December 31, 2004 0.25%
March 31, 2005 0.25%
June 30, 2005 0.25%
September 30, 2005 0.25%
December 31, 2005 0.25%
March 31, 2006 0.25%
June 30, 2006 0.25%
September 30, 2006 0.25%
December 31, 2006 0.25%
March 31, 2007 0.25%
June 30, 2007 0.25%
September 30, 2007 0.25%
December 31, 2007 0.25%
March 31, 2008 0.25%
June 30, 2008 0.25%
September 30, 2008 0.25%
27
December 31, 2008 0.25%
March 31, 2009 0.25%
June 30, 2009 0.25%
September 30, 2009 23.75%
December 31, 2009 23.75%
March 31, 2010 23.75%
June 30, 2010 23.75%
Notwithstanding anything to the contrary in this Section 2.7(a), if more than
$20,000,000 aggregate principal amount of the Existing Senior Subordinated Notes
are outstanding on the date (the "Six-Month Date") that is six months prior to
the stated maturity thereof, then, on such Six-Month Date, all outstanding Term
Loans shall automatically become due and payable, together with accrued and
unpaid interest thereon. Any Existing Senior Subordinated Notes that have been
defeased in accordance with the terms thereof shall be deemed to be no longer
outstanding for the purposes of this paragraph.
(b) The Borrower shall repay all outstanding Revolving Loans
and Swingline Loans on the Revolving Scheduled Commitment Termination Date.
2.8. Commitment Fees, Etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Lender a commitment
fee accruing during the Revolving Commitment Period, computed at a per annum
rate equal to the Commitment Fee Rate on the average daily amount of the
Available Revolving Commitment of such Lender during the period for which
payment is made, payable on the last day of each March, June, September and
December and on the Revolving Scheduled Commitment Termination Date.
(b) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Administrative Agent.
2.9. Termination or Reduction of Commitments. (a) The Borrower
shall have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments; provided that no such
termination or reduction of Revolving Commitments shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit would exceed the Total Revolving Commitments. Any such
partial reduction shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall reduce permanently the Revolving Commitments then in effect.
(b) The aggregate amount of the unused Term Commitments shall
terminate immediately upon the making of Term Loans on the Restatement Effective
Date.
2.10. Optional Prepayments. Subject to Section 2.17, the
Borrower may at any time and from time to time prepay the Loans, in whole or in
part, without premium or penalty, upon irrevocable notice delivered to the
Administrative Agent at least three Business Days prior thereto in the case of
Eurodollar Loans and at least one Business Day prior thereto in the case of ABR
Loans, which notice shall specify the date and amount of prepayment and, if
applicable, whether the prepayment is of Eurodollar Loans or ABR Loans;
provided, that if a Eurodollar Loan is prepaid on any day other than the last
day of the Interest Period applicable thereto, the Borrower shall also pay any
amounts owing pursuant to Section 2.20. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
28
payable on the date specified therein, together with (except in the case of
Revolving Loans that are ABR Loans and Swingline Loans) accrued interest to such
date on the amount prepaid. Partial prepayments of Loans (other than Swingline
Loans) shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof. Partial prepayments of Swingline Loans shall be in an
aggregate principal amount of $100,000 or a whole multiple thereof.
2.11. Mandatory Prepayments. (a) If any Indebtedness shall be
incurred by the Borrower or any of its Subsidiaries (excluding any Indebtedness
incurred in accordance with Section 7.2), an amount equal to 100% of the Net
Cash Proceeds thereof shall be applied on the date of such incurrence toward the
prepayment of the Term Loans.
(b) If on any date the Borrower or any of its Subsidiaries
shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then,
unless a Reinvestment Notice shall be delivered in respect thereof, an amount
equal to 75% of such Net Cash Proceeds shall be applied within five Business
Days following such date toward the prepayment of the Term Loans; provided,
that, notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of
Asset Sales that may be excluded from the foregoing requirement pursuant to a
Reinvestment Notice shall not exceed $50,000,000 in any fiscal year of the
Borrower, and (ii) on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Term Loans; provided, further,
that, notwithstanding the foregoing, the Borrower shall not be required to
prepay the Term Loans in accordance with this paragraph (b) except to the extent
that the Net Cash Proceeds from all Asset Sales which have not been so applied
equals or exceeds $10,000,000 in the aggregate.
(c) If, for any fiscal year of the Borrower, commencing with
the fiscal year ending December 31, 2004, there shall be Excess Cash Flow and
the Consolidated Leverage Ratio as of the last day of such fiscal year is
greater than or equal to 2.25 to 1.00, the Borrower shall, on the relevant
Excess Cash Flow Application Date, apply 50% of such Excess Cash Flow toward the
prepayment of the Term Loans. Each such prepayment shall be made on a date (an
"Excess Cash Flow Application Date") no later than five Business Days after the
earlier of (i) the date on which the financial statements of the Borrower
referred to in Section 6.1(a), for the fiscal year with respect to which such
prepayment is made, are required to be delivered to the Lenders and (ii) the
date such financial statements are actually delivered.
(d) The application of any prepayment of Loans pursuant to
this Section 2.11 shall be made, first, to ABR Loans and, second, to Eurodollar
Loans. Each prepayment of the Loans under Section 2.11 (except in the case of
Revolving Loans that are ABR Loans and Swingline Loans) shall be accompanied by
accrued interest to the date of such prepayment on the amount prepaid.
2.12. Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such conversions. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.
29
(b) Any Eurodollar Loan may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Borrower giving irrevocable
notice to the Administrative Agent, in accordance with the applicable provisions
of the term "Interest Period", of the length of the next Interest Period to be
applicable to such Loans, provided that no Eurodollar Loan under a particular
Facility may be continued as such when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such continuations, and provided, further, that if the Borrower shall
fail to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans shall
be automatically converted to ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
2.13. Limitations on Eurodollar Tranches. Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions and
continuations of Eurodollar Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, (a) after giving effect thereto, the aggregate principal
amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal
to $3,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no
more than 15 Eurodollar Tranches shall be outstanding at any one time.
2.14. Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at a rate
per annum equal to (x) in the case of the Loans, the rate that would otherwise
be applicable thereto pursuant to the foregoing provisions of this Section 2.14
plus 2% or (y) in the case of Reimbursement Obligations, the rate applicable to
ABR Loans under the Revolving Facility plus 2% and (ii) if all or a portion of
any interest payable on any Loan or Reimbursement Obligation or any commitment
fee, Letter of Credit fee or other amount 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 equal to the rate then
applicable to ABR Loans under the relevant Facility plus 2% (or, in the case of
any such other amounts that do not relate to a particular Facility, the rate
then applicable to ABR Loans under the Revolving Facility plus 2%), in each
case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (after as well as before
judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.
2.15. Computation of Interest and Fees. (a) Interest and fees
payable pursuant hereto shall be calculated on the basis of a 360-day year for
the actual days elapsed, except that, with respect to ABR Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall
30
as soon as practicable notify the Borrower and the relevant Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.15(a).
2.16. Inability to Determine Interest Rate. If prior to the
first day of any Interest Period
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that
the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility
shall be converted, on the last day of the then-current Interest Period, to ABR
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans under the relevant Facility shall be made or continued
as such, nor shall the Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.
2.17. Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on account
of any commitment fee and any reduction of the Commitments of the Lenders shall
be made pro rata according to the Commitments in the relevant Facility held by
the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Term Loans shall be made pro rata
to the Term Lenders according to the respective outstanding principal amounts of
the Term Loans then held by the Term Lenders. The amount of each principal
prepayment of the Term Loans shall be applied to reduce the then remaining
installments of the Term Loans on a pro rata basis based upon the then remaining
principal amount thereof. Amounts repaid or prepaid on account of the Term Loans
may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Loans shall be made pro
rata to the Revolving Lenders according to the respective outstanding principal
amounts of the Revolving Loans then held by the Revolving Lenders.
31
(d) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar 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. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
(e) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans under the relevant Facility, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.18. 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 Restatement Effective Date:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
32
Taxes covered by Section 2.19 and 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 that is not
otherwise included in the determination of the Eurodollar 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,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, issuing or participating in Letters
of Credit, or to reduce any amount receivable hereunder in respect thereof,
then, in any such case, the Borrower shall promptly pay such Lender, upon its
demand, any additional amounts necessary to compensate such Lender for such
increased cost or reduced amount receivable. If any Lender becomes entitled to
claim any additional amounts pursuant to this paragraph, it shall promptly
notify (no more frequently than quarterly) the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have 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 Governmental
Authority made subsequent to the Restatement Effective Date 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 or under or in respect of
any Letter of Credit 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 corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor (which may be submitted
no more frequently than quarterly), the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction;
provided that the Borrower shall not be required to compensate a Lender pursuant
to this paragraph for any amounts incurred more than six months prior to the
date that such Lender notifies the Borrower of such Lender's intention to claim
compensation therefor; and provided further that, if the circumstances giving
rise to such claim have a retroactive effect, then such six-month period shall
be extended to include the period of such retroactive effect.
(c) In determining any additional amounts payable pursuant to
this Section 2.18, each Lender will act reasonably and in good faith and will
use averaging and attribution methods which are reasonable, provided that such
Lender's determination of compensation owing under this Section 2.18 shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Lender, upon determining that any additional amounts will be
payable pursuant to this Section 2.18, shall give prompt written notice of such
determination to the Borrower, which notice shall show the basis for calculation
of such additional amounts. The obligations of the Borrower pursuant to this
Section 2.18 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
2.19. Taxes(a) Subject to the last proviso of this paragraph
(a), all payments made by the Borrower under this Agreement shall be made free
and clear of, and without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts,
33
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes imposed on the Administrative Agent or any
Lender as a result of a present or former connection between the Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from the Administrative Agent or
such Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
the Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of America
(or any state thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "Non-U.S. Lender") shall
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 8-BEN or Form
8-ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit F and a Form 8-BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
request of the Borrower as a result of the obsolescence, inaccuracy or
invalidity of any form previously delivered by such Non-U.S. Lender. Each
Non-U.S. Lender shall promptly notify the Borrower at any time it determines
that it is no longer qualified to provide or capable of providing any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this
34
paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender's judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(f) If any Lender receives a refund of any Non-Excluded Taxes
or Other Taxes paid or indemnified by the Borrower under this Section 2.19, such
Lender shall pay the amount of such refund to the Borrower within 15 days of the
date it received such refund.
(g) The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.20. Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense that such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day that is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.21. Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.18,
2.19(a) or 2.23 with respect to such Lender, it will use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event with the object of avoiding
the consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and provided,
further, that nothing in this Section shall affect or postpone any of the
obligations of any Borrower or the rights of any Lender pursuant to Section
2.18, 2.19(a) or 2.23.
2.22. Replacement of Lenders. The Borrower shall be permitted
to replace any Lender that (a) requests reimbursement for amounts owing pursuant
to Section 2.18 or 2.19(a) or (b) defaults in
35
its obligation to make Loans hereunder, with a replacement financial
institution; provided that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall have taken no action under Section 2.21 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.18 or 2.19(a),
(iv) the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.20 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.18 or 2.19(a), as the case may
be, and (ix) any such replacement shall not be deemed to be a waiver of any
rights that the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.
2.23. Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to ABR Loans on the respective
last days of the then current Interest Periods with respect to such Loans or
within such earlier period as required by law. If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the then current
Interest Period with respect thereto, the Borrower shall pay to such Lender such
amounts, if any, as may be required pursuant to Section 2.20.
SECTION 3. LETTERS OF CREDIT
3.1. LC Commitments. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the LC Participants
set forth in this Section 3, agrees to issue, on any Business Day, Letters of
Credit for the account of the Borrower (including the account of the Borrower
acting on behalf of any of its Subsidiaries) in such form as may be approved
from time to time by the Issuing Lender; provided that the Issuing Lender shall
have no obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the LC Obligations would exceed the Total Revolving Commitments or
(ii) the aggregate amount of the Available Revolving Commitments would be less
than zero. It is understood that the Existing Letters of Credit shall be deemed
to constitute Letters of Credit hereunder. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date that is five Business
Days prior to the Revolving Scheduled Commitment Termination Date; provided that
any Letter of Credit with a one-year term may provide for the renewal thereof
for additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any LC Participant to exceed any limits imposed by,
any applicable Requirement of Law.
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3.2. Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at its address for notices specified herein
an Application therefor (and, with respect to Letters of Credit, delivery of a
copy of such Application to the Administrative Agent), completed to the
satisfaction of the Issuing Lender, and such other certificates, documents and
other papers and information as the Issuing Lender may request. Upon receipt of
any Application, the Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed to by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower (and, with
respect to Letters of Credit, to the Administrative Agent) promptly following
the issuance thereof. The Issuing Lender shall promptly furnish to the
Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Letter of Credit (including the amount and stated
maturity thereof).
3.3. Fees and Other Charges. (a) The Borrower will pay a
Letter of Credit fee calculated at a per annum rate equal to the Applicable
Margin then in effect with respect to Eurodollar Loans under the Revolving
Facility and payable on the face amount of all outstanding Letters of Credit,
shared ratably among the Revolving Lenders and payable quarterly in arrears on
each LC Fee Payment Date. In addition, the Borrower shall pay to the Issuing
Lender for its own account a fronting fee of 0.25% per annum on the undrawn and
unexpired amount of each Letter of Credit, payable quarterly in arrears on each
LC Fee Payment Date.
(b) In addition to the foregoing fees, the Borrower shall pay
or reimburse the Issuing Lender for such normal and customary costs and expenses
as are incurred or charged by the Issuing Lender in issuing, negotiating,
effecting payment under, amending or otherwise administering any Letter of
Credit.
3.4. LC Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each LC Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each LC Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such LC
Participant's own account and risk an undivided interest equal to such LC
Participant's Revolving Percentage in the Issuing Lender's obligations and
rights under each Letter of Credit (including, for the avoidance of doubt, any
portion of an Existing Letter of Credit deemed to be a Letter of Credit in
accordance with Section 3.1 and as indicated on Schedule 1.1) issued hereunder
and the amount of each draft paid by the Issuing Lender thereunder. Each LC
Participant unconditionally and irrevocably agrees with the Issuing Lender that,
if a draft is paid under any Letter of Credit for which the Issuing Lender is
not reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such LC Participant shall pay to the Administrative Agent for the
account of the Issuing Lender upon demand at the Administrative Agent's address
for notices specified herein (and thereafter the Administrative Agent shall
promptly pay to the Issuing Lender) an amount equal to such LC Participant's
Revolving Percentage of the amount of such draft, or any part thereof, that is
not so reimbursed.
(b) If any amount required to be paid by any LC Participant to
the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, the Issuing Lender shall so notify the Administrative Agent, who
shall promptly notify the LC Participants, and each such LC Participant shall
pay to the Administrative Agent, for the
37
account of the Issuing Lender, on demand (and thereafter the Administrative
Agent shall promptly pay to the Issuing Lender) an amount equal to the product
of (i) such amount, times (ii) the daily average Federal Funds Effective Rate
during the period from and including the date such payment is required to the
date on which such payment is immediately available to the Issuing Lender, times
(iii) a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. If any such amount required to
be paid by any LC Participant pursuant to Section 3.4(a) is not made available
to the Administrative Agent for the account of the Issuing Lender by such LC
Participant within three Business Days after the date such payment is due, the
Administrative Agent on behalf of the Issuing Lender shall be entitled to
recover from such LC Participant, on demand, such amount with interest thereon
calculated from such due date at the rate per annum applicable to ABR Loans
under the Revolving Facility. A certificate of the Administrative Agent
submitted on behalf of the Issuing Lender to any LC Participant with respect to
any amounts owing under this Section shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from the Administrative
Agent any LC Participant's pro rata share of such payment in accordance with
Section 3.4(a), the Issuing Lender receives any payment related to such Letter
of Credit (whether directly from the Borrower or otherwise, including proceeds
of collateral applied thereto by the Issuing Lender), or any payment of interest
on account thereof, the Issuing Lender will distribute to the Administrative
Agent for the account of such LC Participant (and thereafter the Administrative
Agent will promptly distribute to such LC Participant) its pro rata share
thereof; provided, however, that in the event that any such payment received by
the Issuing Lender shall be required to be returned by the Issuing Lender, such
LC Participant shall return to the Administrative Agent for the account of the
Issuing Lender (and thereafter the Administrative Agent shall promptly return to
the Issuing Lender) the portion thereof previously distributed by the Issuing
Lender.
(d) Each LC Participant's obligation to purchase participating
interests pursuant to Section 3.4(a) shall be absolute and unconditional and
shall not be affected by any circumstance, including (i) any setoff,
counterclaim, recoupment, defense or other right that such LC Participant or the
Borrower may have against the Issuing Lender, the Borrower or any other Person
for any reason whatsoever; (ii) the occurrence or continuance of a Default or an
Event of Default or the failure to satisfy any of the other conditions specified
in Section 5; (iii) any adverse change in the condition (financial or otherwise)
of the Borrower; (iv) any breach of this Agreement or any other Loan Document by
the Borrower, any other Loan Party or any other Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
3.5. Reimbursement Obligation of the Borrower. (a) The
Borrower agrees to reimburse the Issuing Lender in accordance with this Section
upon notification to the Borrower of the date and amount of a draft presented
under any Letter of Credit and paid by the Issuing Lender for the amount of (i)
such draft so paid and (ii) any taxes, fees, charges or other reasonable costs
or expenses incurred by the Issuing Lender in connection with such payment.
(b) If the Borrower is notified as provided in the immediately
preceding sentence by 2:00 P.M., New York City time, on any day, then the
Borrower shall so reimburse the Issuing Lender by 12:00 Noon, New York City
time, on the next succeeding Business Day, and, if so notified after 2:00 P.M.,
New York City time, on any day, the Borrower shall so reimburse the Issuing
Lender by 12:00 Noon, New York City time, on the second succeeding Business Day.
(c) Each drawing under an Letter of Credit shall (unless an
event of the type described in Section 8(f) shall have occurred and be
continuing with respect to the Borrower, in which case the procedures set forth
in Section 3.4 for the funding of participations shall apply) constitute a
38
request by the Borrower to the Administrative Agent for a borrowing, in the
amount of such drawing of ABR Revolving Loans pursuant to Section 2.5 (or, at
the option of the Administrative Agent and the Swingline Lender in their sole
discretion, a borrowing of Swingline Loans pursuant to Section 2.6). The
Borrowing Date with respect to any such borrowing shall be the first date on
which a borrowing of Revolving Loans (or, if applicable, Swingline Loans) could
be made pursuant to Section 2.5 (or, if applicable, Section 2.7) if the
Administrative Agent had received a notice of such borrowing at the time of such
drawing under such Letter of Credit.
(d) Each payment under this Section 3.5 shall be made to the
Issuing Lender at its address for notices specified herein in lawful money of
the United States and in immediately available funds. Interest shall be payable
on any and all amounts remaining unpaid by the Borrower under this Section from
the date such amounts become payable (whether at stated maturity, by
acceleration or otherwise) until payment in full, at the rate set forth in (i)
until the second Business Day following the date of payment of the applicable
drawing, Section 2.14(b) and (ii) thereafter, Section 2.14(c), in each case
payable on demand.
3.6. Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Borrower may have or have had against the Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with the Issuing Lender that the Issuing Lender shall not be responsible for,
and the Borrower's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions constituting gross negligence or willful misconduct of the Issuing
Lender. The Borrower agrees that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Customs and,
to the extent not inconsistent therewith, the Uniform Commercial Code of the
State of New York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender to the Borrower.
3.7. Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Borrower and the Administrative Agent of the date and amount
thereof. The responsibility of the Issuing Lender to the Borrower in connection
with any draft presented for payment under any Letter of Credit shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are
substantially in conformity with such Letter of Credit.
3.8. Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and each Lender that:
4.1. Financial Condition. The audited consolidated balance
sheet of the Borrower as at December 31, 2003, and the related consolidated
statements of operations, stockholder's equity and cash flows for the fiscal
year ended on such date, reported on by and accompanied by an unqualified report
from Xxxxx Xxxxxxxx LLP, present fairly the consolidated financial condition of
the Borrower as at such date, and the consolidated results of its operations and
its consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheet of the Borrower as at March 31, 2004, and the related
unaudited consolidated and consolidating statements of income and cash flows for
the three-month period ended on such date, present fairly the consolidated
financial condition of the Borrower as at such date, and the consolidated
results of its operations and its consolidated and consolidating cash flows for
the three-month period then ended (subject to normal year-end audit adjustments
and the absence of footnotes). Such financial statements have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the aforementioned firm of accountants and disclosed
therein). The Borrower and its Subsidiaries do not have any material Guarantee
Obligations, contingent liabilities or liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate
or foreign currency swap or exchange transaction or other obligation in respect
of derivatives, that are not reflected in the financial statements referred to
in this paragraph. During the period from March 31, 2004 to and including the
date hereof there has been no Disposition by the Borrower or any Subsidiary of
any material part of its business or property.
4.2. No Change. Since December 31, 2003 there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
4.3. Existence; Compliance with Law. Each of the Borrower and
its Subsidiaries (a) is duly organized, validly existing and in good standing,
if applicable, under the laws of the jurisdiction of its organization, (b) has
the power (corporate or otherwise) and authority, and the legal right, to own
and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation or other entity and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, except to the extent that
the failure to be so qualified and in good standing could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect, and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.4. Power; Authorization; Enforceable Obligations. Each Loan
Party has the power (corporate or otherwise) and authority, and the legal right,
to make, deliver and perform the Loan Documents to which it is a party and, in
the case of the Borrower, to borrow hereunder. Each Loan Party has taken all
necessary action (corporate or otherwise) to authorize the execution, delivery
and performance of the Loan Documents to which it is a party and, in the case of
the Borrower, to authorize the borrowings on the terms and conditions of this
Agreement. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the Loan
Documents, except (i) consents, authorizations, filings and notices described in
Schedule 4.4, which consents, authorizations, filings and notices have been
obtained or made and are in full force and effect and (ii) the filings referred
to in
40
Section 4.19. Each Loan Document has been duly executed and delivered on behalf
of each Loan Party party thereto. This Agreement constitutes, and each other
Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
4.5. No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or any material Contractual Obligation of the Borrower or
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
4.6. Litigation. Except as set forth on Schedule 4.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of their respective properties or revenues (a) with respect to any of the Loan
Documents or any of the transactions contemplated hereby or thereby, or (b) that
could reasonably be expected to have a Material Adverse Effect.
4.7. No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.8. Ownership of Property; Liens. Each of the Borrower and
its Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all its material real property, and good title to, or a valid leasehold interest
in, all its other material property, and none of such property is subject to any
Lien except as permitted by Section 7.3.
4.9. Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted. No material claim has
been asserted and is pending by any Person challenging or questioning the use of
any Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does the Borrower know of any valid basis for any such claim. The
use of Intellectual Property by the Borrower and its Subsidiaries does not
infringe on the rights of any Person in any material respect.
4.10. Taxes. The Borrower and each of its Subsidiaries has
filed or caused to be filed all Federal, state and other material tax returns
that are required to be filed and has paid all taxes shown to be due and payable
on said returns or on any assessments made against it or any of its property and
all other taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority to the extent due and payable (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Borrower or its Subsidiaries, as the
case may be); no material tax Lien has been filed, and, to the knowledge of the
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge, except to the extent that the validity thereof is being contested in
good faith pursuant to appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the Borrower
or its Subsidiaries, as the case may be.
41
4.11. Federal Regulations. No part of the proceeds of any
Loans will be used for "buying" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect except in compliance with the provisions
of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.
4.12. Labor Matters. Except as set forth on Schedule 4.6 and
as, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect: (a) there are no strikes or other labor disputes against the
Borrower or any of its Subsidiaries pending or, to the knowledge of the
Borrower, threatened; (b) hours worked by and payment made to employees of the
Borrower and its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from the Borrower or any of its Subsidiaries
on account of employee health and welfare insurance have been paid or accrued as
a liability on the books of the Borrower or the relevant Subsidiary.
4.13. ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien against the Borrower or any Commonly Controlled Entity and in favor
of the PBGC or a Plan has arisen, during such five-year period. The present
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
by a material amount. Neither the Borrower nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan that has
resulted or could reasonably be expected to result in a material liability under
ERISA, and neither the Borrower nor any Commonly Controlled Entity would become
subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
4.14. Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
4.15. Subsidiaries. Except as disclosed to the Administrative
Agent by the Borrower in writing from time to time, (a) Schedule 4.15 sets forth
the name and jurisdiction of incorporation of each Subsidiary and, as to each
such Subsidiary, the percentage of each class of Capital Stock owned by any Loan
Party and (b) there are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees, independent contractors or directors and directors' qualifying
shares) of any nature relating to any Capital Stock of the Borrower or any
Subsidiary, except as created by the Loan Documents or as set forth on Schedule
4.15.
4.16. Use of Proceeds. The proceeds of the Term Loans (other
than Term Loans constituting a conversion of Existing Term Loans) shall be used
to refinance Indebtedness of the Borrower under the Existing Credit Agreement
and for general corporate purposes, and the proceeds of
42
the Revolving Loans and the Swingline Loans, and the Letters of Credit, shall be
used for general corporate purposes.
4.17. Environmental Matters. Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by
the Borrower or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation by Borrower or
its Subsidiaries of, or could give rise to liability of Borrower or its
Subsidiaries under, any Environmental Law;
(b) neither the Borrower nor any of its Subsidiaries has
received any notice of, or is otherwise aware of, any violation,
alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws
with regard to any of the Properties or the business presently or
formerly operated by the Borrower or any of its Subsidiaries (the
"Business"), nor does the Borrower have knowledge or reason to believe
that any such notice will be received or is being threatened;
(c) Materials of Environmental Concern have not been
transported or disposed of by or on behalf of the Borrower or its
Subsidiaries from the Properties or otherwise in connection with the
Business, in violation of, or in a manner or to a location that could
give rise to liability under, any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored, or
disposed of, or have otherwise come to be located at, on or under any
of the Properties in violation of, or in a manner that could give rise
to liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which the Borrower or any Subsidiary is
or will be named as a party with respect to the Properties or the
Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business;
(e) there has been no release or threat of release of
Materials of Environmental Concern at, to, on, under or from the
Properties or arising from or related to the operations of the Borrower
or any Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability of Borrower or its
Subsidiaries under Environmental Laws;
(f) the Borrower, its Subsidiaries, the Business, the
Properties and all operations at the Properties are in compliance and
have in the last five years been in compliance with all applicable
Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any Environmental Law with respect to
the Properties or the Business; and
(g) neither the Borrower nor any of its Subsidiaries has, by
contract or by operation of law, assumed any liability of any other
Person or agreed to indemnify any other person for liability under
Environmental Laws.
4.18. Accuracy of Information, etc. (a) No statement or
information contained in this Agreement, any other Loan Document or any other
document, certificate or statement furnished by or on
43
behalf of any Loan Party to the Administrative Agent or the Lenders, or any of
them, for use in connection with the transactions contemplated by this Agreement
or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished, any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not misleading. The projections and pro
forma financial information contained in the materials referenced above are
based upon good faith estimates and assumptions believed by management of the
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount. There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements furnished to the Administrative Agent and
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
(b) The Borrower's Annual Report on Form 10-K for the year
ended December 31, 2003 and the Borrower's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2004 (collectively the "Borrower's SEC Reports") as of
their respective filing dates complied in all material respects with the
applicable requirements of the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder applicable to the Borrower's
SEC Reports. None of the Borrower's SEC Reports at the time of filing contained
any untrue statements of material fact or omitted a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Forward looking
statements and other statements contained in the Borrower's SEC Reports are
subject to the cautionary language and risk factors contained in the Borrower's
SEC Reports.
4.19. Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral described in Section 3 thereof and proceeds of such
Collateral. In the case of (i) the Pledged Equity Interests described in the
Guarantee and Collateral Agreement, when stock certificates representing such
certificated Pledged Equity Interests are delivered to the Administrative Agent
or when financing statements in appropriate form are filed in the offices
specified on Schedule 4.19(a) and (ii) the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements and other filings
specified on Schedule 4.19(a) (or otherwise notified to the Administrative
Agent) in appropriate form are filed in the offices specified on Schedule
4.19(a) (or otherwise notified to the Administrative Agent), the Guarantee and
Collateral Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral (other than motor vehicles, aircraft, Deposit Accounts (as defined in
the Guarantee and Collateral Agreement), and leasehold estates in real property)
and the proceeds thereof, as security for the Obligations (as defined in the
Guarantee and Collateral Agreement), in each case prior and superior in right to
any other Person (except, in the case of Collateral other than Pledged Equity
Interests, Liens permitted by Section 7.3).
(b) Each of the Mortgages is effective to create in favor of
the Administrative Agent, for the benefit of the Secured Parties, a legal, valid
and enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof and constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in such Mortgaged Properties and
the proceeds thereof, as security for the Obligations (as defined in the
relevant Mortgage), in each case prior and superior in right to any other Person
except Liens permitted by Section 7.3.
44
4.20. Solvency. Each Loan Party is on the Restatement
Effective Date (after giving effect to the transactions contemplated by this
Agreement), and will continue to be, Solvent.
4.21. Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" of the Borrower under and as defined in each Senior Subordinated
Note Indenture. The obligations of each Subsidiary Guarantor under the Guarantee
and Collateral Agreement constitute "Guarantor Senior Indebtedness" of such
Subsidiary Guarantor under and as defined in each Senior Subordinated Note
Indenture.
4.22. Regulation H. No Mortgage encumbers improved real
property that is located in an area that has been identified by the Secretary of
Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968.
4.23. Insurance. Each of the Borrower and its Subsidiaries is
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in
which it is engaged; and none of the Borrower or any of its Subsidiaries (i) has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other material expenditures will have to be made in
order to continue such insurance or (ii) has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers at a cost that could
not reasonably be expected to have a Material Adverse Effect.
4.24. Lease Payments. Each of the Borrower and its
Subsidiaries has paid all payments required to be made by it within any
specified grace periods under leases of real property where any of the
Collateral is or may be located from time to time (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the Borrower or such Subsidiary, as the case may be),
except as could not reasonably be expected to have a Material Adverse Effect; no
landlord Lien has been filed, and, to the knowledge of the Borrower, no claim is
being asserted, with respect to any such payments, in each case that could, when
taken together with any other such liens or claims, reasonably be expected to
have a Material Adverse Effect. As of the Restatement Effective Date, neither
the Borrower nor any Subsidiary owns any real property in fee simple.
SECTION 5. CONDITIONS PRECEDENT
5.1. Conditions to Effectiveness. The effectiveness of this
Agreement is subject to the satisfaction, prior to or concurrently with the
making of the Term Loans on the Restatement Effective Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower and (ii) the Guarantee and
Collateral Agreement and the Intellectual Property Security Agreement,
executed and delivered by a duly authorized officer of each relevant
Loan Party.
(b) Closing Certificate. The Administrative Agent shall have
received a certificate of the Borrower and each Subsidiary Guarantor,
dated the Restatement Effective Date, substantially in the form of
Exhibit C, with appropriate insertions and attachments.
(c) Fees. The Lenders, the Joint Bookrunners and Co-Lead
Arrangers and each Agent shall have received all fees required to be
paid, and all expenses for which invoices have
45
been presented (including, without limitation, the reasonable fees,
disbursements and other charges of counsel to the Agents), on or before
the Restatement Effective Date. All such amounts will be paid with
proceeds of Loans made on the Restatement Effective Date and will be
reflected in the funding instructions given by the Borrower to the
Administrative Agent on or before the Restatement Effective Date.
(d) Legal Opinions. The Administrative Agent shall have
received the executed legal opinion of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.,
counsel to the Borrower and its Subsidiaries, substantially in the form
of Exhibit E.
(e) Pledged Equity Interests; Stock Power; Pledged Notes. The
Administrative Agent shall have received (i) all originals of the
certificates representing the shares of Capital Stock pledged pursuant
to the Guarantee and Collateral Agreement, together with an undated
stock power or other power of transfer for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof
and (ii) all originals of each promissory note, if any, pledged to the
Administrative Agent pursuant to the Guarantee and Collateral Agreement
endorsed (without recourse) in blank (or accompanied by an executed
transfer form in blank satisfactory to the Administrative Agent) by the
pledgor thereof.
(f) Filings, Registrations and Recordings. Each document
(including, without limitation, any UCC financing statement) required
by the Security Documents or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the
Secured Parties, a perfected Lien on, and security interest in, the
Collateral described therein, prior and superior in right to any other
Person (other than Liens permitted by Section 7.3), shall have been
duly prepared for filing, registration or recordation, as applicable,
and delivered to the Administrative Agent and shall be in form and
substance reasonably satisfactory to the Administrative Agent.
(g) Financial Information. The Borrower shall have delivered
(i) audited consolidated financial statements of the Borrower for the
2003 fiscal year, (ii) unaudited interim consolidated financial
statements of the Borrower for the quarterly period ended March 31,
2004 and (iii) projections through the 2009 fiscal year.
(h) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.3 of
the Guarantee and Collateral Agreement.
(i) Miscellaneous. The Administrative Agent shall have
received such other documents, agreements, certificates and information
as it shall reasonably request.
5.2. Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including its initial extension of credit) is subject to the satisfaction
of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date (unless such
representations expressly relate to an earlier date, in which case they
shall be true and correct in all material respects on and as of such
earlier date).
46
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any Commitment
remains in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall and shall cause each of its Subsidiaries to:
6.1. Financial Statements. Furnish to the Administrative Agent
(and the Administrative Agent shall promptly provide to each Lender, by posting
to Intralinks or otherwise):
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by Xxxxx Xxxxxxxx LLP or other independent certified
public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments and the absence of notes
thereto).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2. Certificates; Other Information. Furnish to the
Administrative Agent:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and
(ii) (x) a Compliance Certificate containing all information and
calculations necessary for determining compliance by the Borrower and
its Subsidiaries with the provisions of this Agreement referred to
47
therein as of the last day of the fiscal quarter or fiscal year of the
Borrower, and (y) to the extent not previously disclosed to the
Administrative Agent, a report describing each new Subsidiary of any
Loan Party, any change in the name or jurisdiction of organization of
any Loan Party and any new fee owned real property or material
Intellectual Property acquired by any Loan Party since the date of the
most recent report delivered pursuant to this clause (y);
(c) as soon as available, and in any event no later than 45
days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of the following fiscal year, the related
consolidated statements of projected cash flow, projected changes in
financial position and projected income, resulting applicable financial
covenant ratios and a description of the underlying assumptions
applicable thereto), and, as soon as available, significant revisions,
if any, of such budget and projections with respect to such fiscal year
(collectively, the "Projections"), which Projections shall in each case
be accompanied by a certificate of a Responsible Officer stating that
such Projections are based on reasonable estimates, information and
assumptions and that such Responsible Officer has no reason to believe
that such Projections are incorrect or misleading in any material
respect;
(d) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, a narrative
discussion and analysis of the financial condition and results of
operations of the Borrower and its Subsidiaries for such fiscal quarter
and for the period from the beginning of the then current fiscal year
to the end of such fiscal quarter, as compared to the portion of the
Projections covering such periods and to the comparable periods of the
previous year; provided that delivery of the Report on Form 10-Q filed
with the SEC with respect to such fiscal quarter shall be deemed to
satisfy the foregoing requirement;
(e) no later than five Business Days prior to the
effectiveness thereof, copies of substantially final drafts of any
proposed amendment, supplement, waiver or other modification with
respect to the Senior Subordinated Note Indenture if the effectiveness
thereof requires the approval of any percentage of the holders of
Indebtedness thereunder;
(f) within five Business Days after the same are sent, copies
of all financial statements and reports that the Borrower sends to the
holders of any class of its debt securities or public equity securities
and, within five Business Days after the same are filed, copies of all
financial statements and reports that the Borrower may make to, or file
with, the SEC; and
(g) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3. Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be.
6.4. Maintenance of Existence; Compliance. (a) (i) Preserve,
renew and keep in full force and effect its corporate (or other) existence and
(ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Section 7.4 and except, in the case of
clause (ii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with
48
all Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
6.5. Maintenance of Property; Insurance. Keep all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption expense coverage) as are
usually insured against in the same general area by companies engaged in the
same or a similar business.
6.6. Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
subject to the provisions of Section 10.14, permit representatives of any
Lender, upon reasonable prior notice, to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
6.7. Notices. Promptly give notice to the Administrative Agent
(and the Administrative Agent shall promptly provide such notice to each Lender,
by posting to Intralinks or otherwise) of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding that may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, that in either case, if not cured or if reasonably expected
to be adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any
of its Subsidiaries in which (x) the amount claimed is (i) $20,000,000
or more and (ii) not covered by insurance or (y) injunctive or similar
relief is sought which could reasonably be expected to be granted and
which, if granted, could reasonably be expected to have a Material
Adverse Effect;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of
any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action
by the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Single Employer Plan
or Multiemployer Plan; and
(e) any development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
49
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.
6.8. Environmental Laws. Except as could not reasonably be
expected to have a Material Adverse Effect:
(a) comply with, and contractually require compliance by all
tenants and subtenants, if any, with, all applicable Environmental
Laws, and obtain and comply with and maintain, and contractually
require that all tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws; and
(b) conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and
directives of all Governmental Authorities regarding Environmental
Laws.
6.9. Additional Collateral, etc. (a) With respect to any
property acquired after the Restatement Effective Date by the Borrower or any of
its Subsidiaries (other than (v) Capital Stock issued by the Borrower, (w) any
vehicles, aircraft and any immaterial inventory and equipment, (x) any property
described in paragraph (b), (c) or (d) below, (y) any property subject to a Lien
expressly permitted by Section 7.3(g) or (j) and (z) property acquired by any
Specified Subsidiary) as to which the Administrative Agent, for the benefit of
the Secured Parties, does not have a perfected Lien, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement or such other documents as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Secured Parties, a security interest in such property and (ii) take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
such property, including the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative
Agent.
(b) With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least $750,000
acquired after the Restatement Effective Date by the Borrower or any of its
Subsidiaries (other than (x) any such real property subject to a Lien expressly
permitted by Section 7.3(g) or (j) and (z) real property acquired by any
Specified Subsidiary), promptly (i) execute and deliver a first priority
Mortgage, in favor of the Administrative Agent, for the benefit of the Secured
Parties, covering such real property, (ii) if requested by the Administrative
Agent, provide the Lenders with (x) title and extended coverage insurance
covering such real property in an amount at least equal to the purchase price of
such real property (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
Mortgage, each of the foregoing in form and substance reasonably satisfactory to
the Administrative Agent and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Restatement Effective Date by
the Borrower or any of its Subsidiaries (which, for the purposes of this
paragraph (c), shall include any existing Subsidiary that ceases to be an
Excluded Foreign Subsidiary but shall exclude Legacy Trust and the Insurance
Subsidiary), promptly
50
(i) execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement as the Administrative Agent deems necessary
or advisable to grant to the Administrative Agent, for the benefit of the
Secured Parties, a perfected first priority security interest in the Capital
Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries (except Capital Stock constituting Investments permitted under
Section 7.8(g) or (j)), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock (or
other transfer) powers, in blank, executed and delivered by a duly authorized
officer of the Borrower or such Subsidiary, as the case may be, and (iii) cause
such new Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement, (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Secured Parties a perfected first
priority security interest in the Collateral described in the Guarantee and
Collateral Agreement with respect to such new Subsidiary, including the filing
of Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent and (C) to deliver to the Administrative
Agent a certificate of such Subsidiary, substantially in the form of Exhibit C,
with appropriate insertions and attachments.
(d) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Restatement Effective Date by the Borrower or any
of its Subsidiaries, promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement as the
Administrative Agent deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Secured Parties, a perfected first priority
security interest in the Capital Stock of such new Subsidiary that is owned by
the Borrower or any of its Subsidiaries (provided that in no event shall more
than 65% of the total outstanding voting Capital Stock of any such new
Subsidiary be required to be so pledged), and (ii) deliver to the Administrative
Agent the certificates representing such Capital Stock, together with undated
stock (or other transfer) powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or such Subsidiary, as the case may be, and
take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Administrative Agent's security
interest therein.
6.10. Permitted Acquisitions and Permitted Foreign
Acquisitions. Deliver to the Lenders, within 30 Business Days after the closing
date of any Permitted Acquisition or Permitted Foreign Acquisition involving a
Purchase Price greater than or equal to $75,000,000, each of the following: (a)
a description of the property, assets and/or equity interest being purchased, in
reasonable detail; (b) a copy of the purchase agreement pursuant to which such
acquisition was or is to be consummated or a term sheet or other description
setting forth the essential terms and the basic structure of such acquisition;
(c) projected statements of income for the entity that is being acquired (or the
assets, if an acquisition of assets) for at least a two-year period following
such acquisition (including a summary of assumptions or pro forma adjustments
for such projections); (d) to the extent made available to the Borrower,
historical financial statements for the entity that is being acquired (or the
assets, if an acquisition of assets) (including balance sheets and statements of
income, retained earnings and cash flows for at least a two-year period prior to
such acquisition); and (e) confirmation, supported by detailed calculations,
that the Borrower and its Subsidiaries would have been in compliance with all
the covenants in Section 7.1 for the fiscal quarter ending immediately prior to
the consummation of such acquisition, with such compliance determined on a pro
forma basis as if such acquisition had been consummated on the first day of the
Reference Period ending on the last day of such fiscal quarter.
6.11. Further Assurances. From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take all such actions, as the Administrative
Agent may reasonably request, for the purposes of implementing or effectuating
the provisions of this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Administrative Agent and the Secured
Parties with respect to the Collateral (or with respect
51
to any additions thereto or replacements or proceeds or products thereof or with
respect to any other property or assets hereafter acquired by the Borrower or
any Subsidiary which may be deemed to be part of the Collateral) pursuant hereto
or thereto. Upon the exercise by the Administrative Agent or any Secured Party
of any power, right, privilege or remedy pursuant to this Agreement or the other
Loan Documents which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the
Administrative Agent or such Lender may be required to obtain from the Borrower
or any of its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
7.1. Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower ending on or after June 30, 2004 to exceed 2.75 to
1.00.
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending on or after June 30, 2004 to be less than 4.00
to 1.00.
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ending with any fiscal quarter set forth below
to be less than the ratio set forth below opposite such period:
Consolidated
Fixed Charge Coverage
Period Ratio
------ ---------------------
From and including June 30, 2004 through 1.50 to 1.00
and including June 30, 2009
September 30, 2009 1.25 to 1.00
December 31, 2009 and thereafter 1.00 to 1.00
7.2. Indebtedness. Create, issue, incur, assume, become liable
in respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) (i) Indebtedness of the Borrower to any Subsidiary and of
any Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary and (ii) Indebtedness of the Borrower and any Subsidiary to
the Insurance Subsidiary in an aggregate amount not to exceed
$50,000,000 at any time outstanding that cannot be subordinated to the
obligations of such Loan
52
Party under the Loan Documents for regulatory reasons or would cause
the carrying value for regulatory valuation purposes to be decreased;
(c) (i) Guarantee Obligations incurred in the ordinary course
of business by the Borrower or any of its Subsidiaries of obligations
of any Wholly Owned Subsidiary Guarantor or any Foreign Subsidiary;
(d) Indebtedness (other than the Indebtedness referred to in
Section 7.2(b), (e), (f) and (h)) outstanding on the Restatement
Effective Date and listed on Schedule 7.2(d) and any refinancings,
refundings, renewals or extensions thereof (without increasing, or
shortening the maturity of, the principal amount thereof);
(e) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an
aggregate principal amount not to exceed $15,000,000 at any one time
outstanding;
(f) (i) Indebtedness of the Borrower in respect of the
Existing Senior Subordinated Notes in an aggregate principal amount not
to exceed $300,000,000 and any refinancings thereof (without increasing
the principal amount thereof) with other unsecured subordinated notes
of the Borrower that (x) have no scheduled principal payments prior to
December 31, 2010, (y) have terms (including subordination terms, but
excluding the interest rate) no less favorable to the Borrower and its
Subsidiaries (taken as a whole) and, in the judgment of the
Administrative Agent, to the Lenders (taken as a whole) than the notes
being so refinanced and (z) an interest rate thereon not exceeding the
then applicable market interest rate, (ii) Guarantee Obligations of any
Subsidiary Guarantor in respect of Indebtedness incurred pursuant to
clause (i) above, provided that such Guarantee Obligations are
subordinated to the same extent as the obligations of the Borrower in
respect of the Existing Senior Subordinated Notes or any notes issued
pursuant to a refinancing permitted pursuant to clause (i) above, (iii)
subject to pro forma compliance with Section 7.1 (as demonstrated in a
written certificate delivered to the Administrative Agent prior to the
issuance thereof), additional unsecured subordinated notes of the
Borrower not permitted pursuant to clause (i) above that (x) have no
scheduled principal payments prior to December 31, 2010, (y) have terms
(including subordination terms, but excluding the interest rate) no
less favorable to the Borrower and its Subsidiaries (taken as a whole)
and, in the judgment of the Administrative Agent, to the Lenders (taken
as a whole) than the Existing Senior Subordinated Notes and (z) an
interest rate thereon not exceeding the then applicable market interest
rate and (iv) Guarantee Obligations of any Subsidiary Guarantor in
respect of Indebtedness incurred pursuant to clause (iii) above,
provided that such Guarantee Obligations are subordinated to the same
extent as the obligations of the Borrower in respect of the
subordinated notes issued pursuant to clause (iii) above;
(g) Assumed Indebtedness incurred pursuant to Permitted
Acquisitions or Permitted Foreign Acquisitions consummated after the
Restatement Effective Date in an aggregate amount not to exceed
$100,000,000 at any time outstanding;
(h) Guarantee Obligations of the Borrower or any Subsidiary in
respect of Indebtedness of franchisees not to exceed $75,000,000 at any
one time outstanding; and
(i) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $75,000,000 at any one time outstanding.
53
7.3. Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or that are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlords' or other like Liens arising in the ordinary
course of business that are not overdue for a period of more than 30
days or that are being contested in good faith by appropriate
proceedings and for which adequate reserves with respect thereto are
maintained on the books of the Borrower or its Subsidiaries, as the
case may be, in conformity with GAAP;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the Restatement Effective Date
listed on Schedule 7.3(f), securing Indebtedness permitted by Section
7.2(d), provided that no such Lien is spread to cover any additional
property after the Restatement Effective Date (other than "products"
and "proceeds" thereof, as each such term is defined in the Uniform
Commercial Code of the State of New York) and that the amount of
Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any of its
Subsidiaries incurred pursuant to Section 7.2(e) to finance the
acquisition of fixed or capital assets, provided that (i) such Liens
shall be created substantially simultaneously with the acquisition of
such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such
Indebtedness (including the "products" and "proceeds" thereof, as each
such term is defined in the Uniform Commercial Code of the State of New
York) and (iii) the amount of Indebtedness secured thereby is not
increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course of
its business and covering only the assets so leased;
(j) Liens on the property or assets of an Acquired Business or
Acquired Foreign Business occurring or arising after the Restatement
Effective Date and securing Assumed Indebtedness in an amount not to
exceed $50,000,000, provided that such Liens (i) were not incurred in
contemplation of the Permitted Acquisition or the Permitted Foreign
Acquisition consummated in conjunction with the assumption of such
Assumed Indebtedness and (ii) do not encumber any property other than
the property acquired pursuant to such acquisition;
54
(k) Liens of securities intermediaries and depository banks on
the accounts held by them to secure the payment of fees and expenses
payable to them in respect of the maintenance of such accounts;
(l) Liens on Margin Capital Stock that is held by the Borrower
as treasury stock or that is held by any of its Subsidiaries; and
(m) Liens not otherwise permitted by this Section so long as
neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined as of the date such Lien is incurred) of the assets subject
thereto exceeds (as to the Borrower and all Subsidiaries) $50,000,000
at any one time.
7.4. Fundamental Changes. Enter into any merger, consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) (i) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Wholly Owned Subsidiary Guarantor (provided that the Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving corporation)
and (ii) any Foreign Subsidiary may be merged or consolidated with or
into any other Foreign Subsidiary;
(b) (i) any Subsidiary of the Borrower may Dispose of any or
all of its assets (upon voluntary liquidation or otherwise) to the
Borrower or any Wholly Owned Subsidiary Guarantor and (ii) any Foreign
Subsidiary may Dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to any other Foreign Subsidiary; and
(c) (i) any Permitted Acquisition and any Permitted Foreign
Acquisition may be structured as a merger with or into the Borrower
(provided that the Borrower shall be the continuing or surviving
corporation) or with or into any Wholly Owned Subsidiary Guarantor
(provided that such Wholly Owned Subsidiary Guarantor shall be the
continuing or surviving corporation) and (ii) any Permitted Foreign
Acquisition may be structured as a merger with or into any Foreign
Subsidiary (provided that such Foreign Subsidiary shall be the
continuing or surviving corporation).
7.5. Disposition of Property. Dispose of any of its property,
whether now owned or hereafter acquired, or, in the case of any Subsidiary of
the Borrower, issue or sell any shares of such Subsidiary's Capital Stock to any
Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions (i) by the Borrower of any of its assets to
any Wholly Owned Subsidiary Guarantor, (ii) by any Subsidiary of the
Borrower of any of its assets (upon voluntary liquidation or otherwise)
to the Borrower or any Wholly Owned Subsidiary Guarantor and (iii) by
any Foreign Subsidiary to any other Foreign Subsidiary;
55
(d) the sale or issuance of (i) any Subsidiary's Capital Stock
to the Borrower or any Wholly Owned Subsidiary Guarantor and (ii) any
Foreign Subsidiary's Capital Stock to any other Foreign Subsidiary;
(e) the Disposition of other property having a fair market
value not to exceed $50,000,000 for any fiscal year of the Borrower;
provided, that the requirements of Section 2.11(b) are complied with in
connection therewith; and
(f) Dispositions referred to in Sections 7.8(f), (g) and (h);
(g) Dispositions to or by Legacy Trust or the Insurance
Subsidiary of Capital Stock of the Borrower;
(h) Dispositions to or by Legacy Trust or the Insurance
Subsidiary of Indebtedness described in Section 7.2(b) to the Borrower
or any Wholly Owned Subsidiary Guarantor;
(i) Dispositions by the Borrower to Legacy Trust of cash in an
amount not to exceed (when taken together with the amount of Restricted
Payments made pursuant to Section 7.6(f)) the amount necessary to pay
operating costs and expenses of Legacy Trust incurred in the ordinary
course of business (not to exceed $150,000 per fiscal year of the
Borrower) and to make payments to Third Party Beneficiaries (as defined
in the Trust Agreement) pursuant to and in accordance with the Trust
Agreement as in effect on the date hereof and Dispositions by Legacy
Trust of such cash to such Third Party Beneficiaries;
(j) Dispositions by the Insurance Subsidiary effected solely
for the purpose of liquidating assets in order to permit the Insurance
Subsidiary to pay expenses and to make payments on insurance claims of
the Borrower and/or any of its Subsidiaries with the proceeds of such
Dispositions; and
(k) Dispositions of Margin Capital Stock that is held as
treasury stock by the Borrower or that is held by any of its
Subsidiaries.
7.6. Restricted Payments. Declare or pay any dividend (other
than dividends payable solely in (i) common stock of the Person making such
dividend or (ii) the same class of Capital Stock of the Person making such
dividend on which such dividend is being declared or paid, other than, in any
such case, Disqualified Stock) on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any Capital Stock of
the Borrower or any Subsidiary, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrower or any Subsidiary
(collectively, "Restricted Payments"), except that:
(a) (i) any Subsidiary may make Restricted Payments to the
Borrower or any Wholly Owned Subsidiary Guarantor and (ii) any Foreign
Subsidiary may make Restricted Payments to any other Foreign
Subsidiary;
(b) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may purchase or redeem any
shares of Capital Stock of the Borrower from employees of the Borrower
and its Subsidiaries pursuant to the repurchase provisions under
employee stock option or stock purchase agreements or other agreements
to compensate management employees in an aggregate amount after the
date of this Agreement not in excess of the sum of (i) $10,000,000 plus
(ii) $5,000,000 in any fiscal year commencing with the
56
Borrower's 2005 fiscal year, plus any unused amounts under this clause
(ii) from prior fiscal years;
(c) so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom, the Borrower may
declare and pay dividends on the Preferred Stock;
(d) (1) so long as (i) no Default or Event of Default shall
have occurred and be continuing or would result therefrom and (ii)
after giving effect thereto, the Consolidated Leverage Ratio is less
than 2.50 to 1.00, the Borrower may pay dividends on its Capital Stock
or repurchase the Borrower's Capital Stock or the Insurance Subsidiary
may repurchase the Borrower's Capital Stock (collectively, "Stock
Payments") so long as the aggregate amount of such Stock Payments, when
added to the aggregate amount expended to repurchase, repay or prepay
Senior Subordinated Notes pursuant to clause (1) of Section 7.9(a),
does not exceed the sum of (A) $158,580,000, (B) 50% of the
Consolidated Net Income Amount and (C) 100% of the aggregate Net Cash
Proceeds received by the Borrower since April 1, 2004 as a contribution
to its common equity capital or from the issue or sale of Capital Stock
of the Borrower (other than Disqualified Stock) or from the issue or
sale of convertible or exchangeable Disqualified Stock or convertible
or exchangeable debt securities of the Borrower that have been
converted into or exchanged for such Capital Stock (other than Capital
Stock (or Disqualified Stock or debt securities) sold to a Subsidiary
of the Borrower) and (2) so long as (i) no Default or Event of Default
shall have occurred and be continuing or would result therefrom and
(ii) after giving effect thereto, the Consolidated Leverage Ratio is
less than 2.00 to 1.00, the Borrower or the Insurance Subsidiary, as
applicable, may make Stock Payments in an aggregate amount, when added
to the aggregate amount expended to repurchase, repay or prepay Senior
Subordinated Notes pursuant to clause (2) of Section 7.9(a), not to
exceed $50,000,000 in any fiscal year commencing with the Borrower's
2005 fiscal year (with any unutilized amounts carried forward to the
next fiscal year, but no further);
(e) the Borrower may repurchase shares of its common stock
issued to finance all or part of a Permitted Acquisition, so long as
such repurchase is consummated within 180 days of such issuance;
(f) the Borrower may repurchase shares of its common stock
from Legacy Trust in an amount not to exceed (when taken together with
the amount of cash Dispositions made pursuant to Section 7.5(i)) the
amount necessary to pay operating costs and expenses of Legacy Trust
incurred in the ordinary course of business (not to exceed $150,000 per
fiscal year of the Borrower) and to make payments to Third Party
Beneficiaries (as defined in the Trust Agreement) pursuant to and in
accordance with the Trust Agreement as in effect on the date hereof;
(g) the Borrower may repurchase shares of its common stock
from the Insurance Subsidiary in an amount not to exceed (when taken
together with the amount of Dispositions made pursuant to Section
7.5(j)) the amount necessary to (i) pay operating costs and expenses of
the Insurance Subsidiary incurred in the ordinary course of business
(not to exceed $250,000 per fiscal year of the Borrower) and (ii)
permit the Insurance Subsidiary to make payments on insurance claims of
the Borrower and/or any of its Subsidiaries with the proceeds of such
repurchase; and
(h) the Insurance Subsidiary may purchase shares of the common
stock of the Borrower from the Borrower or any Subsidiary.
57
7.7. Capital Expenditures. Make or commit to make any Capital
Expenditure (Expansion), except (a) Capital Expenditures (Expansion) of the
Borrower and its Subsidiaries not exceeding in the aggregate for any fiscal year
$50,000,000; provided, that (i) up to $15,000,000 of such amount, if not so
expended in the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year and (ii) Capital Expenditures
(Expansion) made pursuant to this clause (a) during any fiscal year shall be
deemed made, first, in respect of the $50,000,000 initially permitted for such
fiscal year as provided above and, second, in respect of amounts carried over
from the prior fiscal year pursuant to subclause (i) above and (b) Capital
Expenditures (Expansion) made with the proceeds of any Reinvestment Deferred
Amount.
7.8. Investments. Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
other Person (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of the Borrower or any
Subsidiary of the Borrower in the ordinary course of business
(including for travel, entertainment and relocation expenses) in an
aggregate amount for the Borrower and its Subsidiaries not to exceed
$5,000,000 at any one time outstanding;
(e) intercompany Investments by the Borrower or any of its
Subsidiaries in the Borrower or any Person that, prior to and after
giving effect to such Investment and any related transactions, is a
Wholly Owned Subsidiary Guarantor;
(f) Investments made on or after the Restatement Effective
Date in the Insurance Subsidiary to the extent required to meet
regulatory capital guidelines, policies or rules in an amount not to
exceed $25,000,000 in the aggregate;
(g) Investments in the Insurance Subsidiary or Legacy Trust
consisting of the contribution of common stock of the Borrower and
Investments by the Insurance Subsidiary or Legacy Trust in the common
stock of the Borrower;
(h) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Borrower or any of its Subsidiaries
in an aggregate amount (valued at cost) not to exceed $75,000,000 at
any time outstanding (of which no more than $50,000,000 may be used to
make Investments in entities organized under, or assets located in,
jurisdictions other than those within the United States), in each case
determined net of the amount of any Net Cash Proceeds received by the
Borrower and its Subsidiaries in respect of a Disposition of any such
Investment; provided, that such amount shall be calculated from the
Restatement Effective Date and not exceed the original amount of such
Investment;
(i) additional Investments constituting Permitted Acquisitions
or Permitted Foreign Acquisitions;
58
(j) Investments by the Insurance Subsidiary or Legacy Trust in
indebtedness of the Borrower and the Wholly Owned Subsidiary Guarantors
described in Section 7.2(b);
(k) Investments in Legacy Trust described in Section 7.5(i);
and
(l) Investments in the Insurance Subsidiary in amounts not to
exceed, in any fiscal year of the Borrower, the lesser of (x)
$75,000,000 and (y) the amount that will appear as an expense for
self-insurance costs on the Borrower's consolidated income statement.
7.9. Payments and Modifications of Certain Debt Instruments
and Preferred Stock. (a) Make or offer to make any payment, prepayment,
repurchase or redemption of or otherwise defease or segregate funds with respect
to the Senior Subordinated Notes, other than interest payments expressly
required by the terms thereof and other than pursuant to prepayments or
repayments thereof with the proceeds of other Senior Subordinated Notes,
provided, that, (1) so long as (i) no Default or Event of Default shall have
occurred and be continuing or would result therefrom and (ii) after giving
effect thereto, the Consolidated Leverage Ratio is less than 2.50 to 1.00, the
Borrower may repurchase, repay or prepay Senior Subordinated Notes so long as
the aggregate amount expended in connection with such repurchase, repayment or
prepayment, when added to the aggregate amount expended in connection with Stock
Payments made pursuant to clause (1) of Section 7.6(d), does not exceed the sum
of (A) $158,580,000, (B) 50% of the Consolidated Net Income Amount and (C) 100%
of the aggregate Net Cash Proceeds received by the Borrower since April 1, 2004
as a contribution to its common equity capital or from the issue or sale of
Capital Stock of the Borrower (other than Disqualified Stock) or from the issue
or sale of convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Borrower that have been converted into or
exchanged for such Capital Stock (other than Capital Stock (or Disqualified
Stock or debt securities) sold to a Subsidiary of the Borrower) and (2) so long
as (i) no Default or Event of Default shall have occurred and be continuing or
would result therefrom and (ii) after giving effect thereto, the Consolidated
Leverage Ratio is less than 2.00 to 1.00, the Borrower may repurchase, repay or
prepay Senior Subordinated Notes in an aggregate amount expended in connection
with such repurchase, repayment or prepayment, when added to the aggregate
amount expended to make Stock Payments pursuant to (2) of Section 7.6(d), does
not exceed $50,000,000 in any fiscal year commencing with the Borrower's 2005
fiscal year (with any unutilized amounts carried forward to the next fiscal
year, but no further), (b) amend, modify, waive or otherwise change, or consent
or agree to any amendment, modification, waiver or other change to, any of the
terms of the Senior Subordinated Notes or the Senior Subordinated Note Indenture
(other than any such amendment, modification, waiver or other change that (i)
(x) would extend the maturity or reduce the amount of any payment of principal
thereof or reduce the rate or extend any date for payment of interest thereon or
(y) does not materially adversely affect the interests of the Lenders and (ii)
does not involve the payment of a consent fee, other than a consent fee not to
exceed 2.0% of the principal amount of Senior Subordinated Notes held by
consenting holders in connection with consents solicited in conjunction with the
prepayment of such Senior Subordinated Notes) (it being understood that
amendments designed to permit an additional issuance of Senior Subordinated
Notes incurred in accordance with Section 7.2(f) shall not be restricted by this
clause (b)), (c) amend, modify, waive or otherwise change, or consent or agree
to any amendment, modification, waiver or other change to, any of the terms of
the Preferred Stock if the effect thereof is to bring forward the scheduled
redemption date or increase the amount of any scheduled redemption payment or
increase the rate or bring forward any date for payment of dividends thereon or
(d) designate any Indebtedness (other than obligations of the Loan Parties
pursuant to the Loan Documents) as "Designated Senior Indebtedness" (howsoever
defined) for the purposes of the Senior Subordinated Note Indenture.
7.10. Transactions with Affiliates. Enter into any
transaction, including any purchase, sale, lease or exchange of property, the
rendering of any service or the payment of any management,
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advisory or similar fees, with any Affiliate (other than the Borrower or any
Wholly Owned Subsidiary) unless such transaction is (a) otherwise permitted
under this Agreement, (b) in the ordinary course of business of the Borrower or
such Subsidiary, as the case may be, and (c) upon fair and reasonable terms no
less favorable to the Borrower or such Subsidiary, as the case may be, than it
would obtain in a comparable arm's length transaction with a Person that is not
an Affiliate, provided that the foregoing limitation shall not apply to (i)
Investments, Dispositions or Restricted Payments involving the Insurance
Subsidiary or Legacy Trust to the extent expressly permitted by this Agreement
or (ii) Restricted Payments that are permitted by Section 7.6 hereof.
7.11. Sales/Leaseback Transactions. Enter into any
Sale/Leaseback Transaction other than with respect to assets disposed of
pursuant to Section 7.5(e).
7.12. Changes in Fiscal Periods. Permit the fiscal year of the
Borrower to end on a day other than December 31 or change the Borrower's method
of determining fiscal quarters.
7.13. Negative Pledge Clauses. Enter into or suffer to exist
or become effective any agreement that prohibits or limits the ability of the
Borrower or any of its Subsidiaries (other than the Insurance Subsidiary and
Legacy Trust) to create, incur, assume or suffer to exist any Lien upon any of
its property (other than Margin Capital Stock that is held by the Borrower as
treasury stock or that is held by any of its Subsidiaries) or revenues, whether
now owned or hereafter acquired, other than (a) this Agreement and the other
Loan Documents, (b) any agreement governing any purchase money Liens or Capital
Lease Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby) and (c)
any agreement acquired pursuant to a Permitted Acquisition or a Permitted
Foreign Acquisition that restricts assignment of such acquired agreement,
provided that such restrictions on assignment were not entered into in
contemplation of or in connection with such Permitted Acquisition or Permitted
Foreign Acquisition.
7.14. Clauses Restricting Subsidiary Distributions. Enter into
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Subsidiary of the Borrower to (a) make Restricted Payments
in respect of any Capital Stock of such Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary of the Borrower, (b)
make loans or advances to, or other Investments in, the Borrower or any other
Subsidiary of the Borrower or (c) transfer any of its assets to the Borrower or
any other Subsidiary of the Borrower, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing under
the Loan Documents, (ii) restrictions in effect on the Restatement Effective
Date and listed on Schedule 7.14, (iii) in the case of clause (c) above,
customary non-assignment clauses in leases and other contracts entered into in
the ordinary course of business, (iv) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement that has been entered into in
connection with the Disposition of all or substantially all of the Capital Stock
or assets of such Subsidiary, (v) restrictions with respect to a Subsidiary
acquired pursuant to a Permitted Acquisition (provided that such restrictions
were not entered into in contemplation of or in connection with such Permitted
Acquisition) and restrictions with respect to a Foreign Subsidiary arising under
applicable law and (vi) consensual arrangements with insurance regulators with
respect to the Insurance Subsidiary.
7.15. Lines of Business. (a) In the case of the Borrower and
its Subsidiaries (other than the Insurance Subsidiary and Legacy Trust), enter
into any business, either directly or through any Subsidiary, except for those
businesses in which the Borrower or any of its Subsidiaries are engaged on the
Restatement Effective Date, any business involved in or associated with
providing payday loans, money wires, payroll advances, check-cashing services or
other loans to consumers, any business involved in or associated with servicing
furniture, appliances, electronics, computers or other similar items or any
business reasonably related or incidental to any of the businesses described
above.
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(b) In the case of the Insurance Subsidiary, enter into any
business, except for providing insurance services to the Borrower and its
Subsidiaries and activities reasonably related thereto.
(c) In the case of Legacy Trust, enter into any activity not
expressly contemplated by the terms of the Trust Agreement as in effect on the
date hereof.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any Loan Party shall fail to pay any other
amount payable hereunder or under any other Loan Document, within five
days after any such interest or other amount becomes due in accordance
with the terms hereof; or
(b) any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that is contained in
any certificate, document or financial or other statement furnished by
it at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made; or
(c) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to the Borrower only), Section 6.7(a) or Section 7
of this Agreement or Section 5.8(b) of the Guarantee and Collateral
Agreement; or
(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days after notice to the Borrower from the Administrative
Agent or the Required Lenders; or
(e) the Borrower or any of its Subsidiaries shall (i) default
in making any payment of any principal of any Indebtedness (including
any Guarantee Obligation, but excluding the Loans) on the scheduled or
original due date with respect thereto; or (ii) default in making any
payment of any interest on any such Indebtedness beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case
of any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in
clause (i), (ii) or (iii) of this paragraph (e) shall not at any time
constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i),
(ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal
amount of which exceeds in the aggregate $20,000,000; or
(f) (i) the Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign,
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relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its
Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or any
of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above that (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets that results in the entry of
an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or any of its Subsidiaries shall
take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(g) (i) any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 and 408 of ERISA or Section
4975 of the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of
the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence under Title IV of ERISA to
have a trustee appointed, or a trustee shall be appointed under Title
IV of ERISA, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of
a trustee is, in the reasonable opinion of the Required Lenders, likely
to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate in a "distress
termination" or an "involuntary termination", as such terms are defined
in Title IV of ERISA, (v) the Borrower or any Commonly Controlled
Entity shall, or in the reasonable opinion of the Required Lenders is
likely to, incur any liability in connection with a withdrawal from, or
the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be
expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance as to which the
relevant insurance company has acknowledged coverage) of $20,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, satisfied, stayed or bonded pending appeal within 30 days
from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason,
to be in full force and effect, or any Loan Party or any Affiliate of
any Loan Party shall so assert, or any Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect
and priority purported to be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason (other than, with
respect to the guarantee of a Subsidiary, (i) as a result
62
of a merger of such Subsidiary into the Borrower in accordance with the
terms of this Agreement or (ii) as a result of a release pursuant to
Section 8.15(b) of the Guarantee and Collateral Agreement), to be in
full force and effect or any Loan Party or any Affiliate of any Loan
Party shall so assert; or
(k) (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), excluding the Permitted Investors, shall
at any time become, or obtain rights (whether by means of warrants,
options or otherwise) to become, the "beneficial owner" (as defined in
Rules 13(d) 3 and 13(d) 5 under the Exchange Act), directly or
indirectly, of a percentage equal to 35% or more of the Voting Stock of
the Borrower; (ii) the board of directors of the Borrower shall cease
to consist of a majority of Continuing Directors; (iii) a Specified
Change of Control shall occur or (iv) the Borrower shall cease to own,
directly or indirectly, 100% of the Voting Stock of RAC East or
Rent-A-Center West, Inc.; or
(l) the Senior Subordinated Notes or the guarantees thereof
shall cease, for any reason, to be validly subordinated to the
Obligations or the obligations of the Subsidiary Guarantors under the
Guarantee and Collateral Agreement, as the case may be, as provided in
the Senior Subordinated Note Indenture, or any Loan Party, any
Affiliate of any Loan Party, the trustee in respect of the Senior
Subordinated Notes or the holders of at least 25% in aggregate
principal amount of the Senior Subordinated Notes shall so assert; or
(m) the Trust Agreement shall be amended, modified or
supplemented without the prior written consent of the Required Lenders,
other than any such amendment, modification or supplement that the
Borrower is permitted to make in accordance with Section 8.3 of the
Trust Agreement as in effect on the date hereof and that does not
otherwise violate obligations of the Borrower and its Subsidiaries
under this Agreement;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Revolving Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including all amounts of LC
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the
Revolving Commitments shall immediately terminate; and (ii) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of LC Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Upon the occurrence and during the
continuation of an Event of Default, the Administrative Agent and the Lenders
shall be entitled to exercise any and all remedies available under the Security
Documents, including, without limitation, the Guarantee and Collateral Agreement
and the Mortgages, or otherwise available under applicable law or otherwise.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit, and the Borrower hereby
63
grants to the Administrative Agent, for the ratable benefit of the Secured
Parties, a continuing security interest in all amounts at any time on deposit in
such cash collateral account to secure the undrawn and unexpired amount of such
Letters of Credit and all other Obligations. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Loan Parties hereunder
and under the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Loan Parties hereunder and under the
other Loan Documents shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower (or such other Person
as may be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind (other
than notices expressly required pursuant to this Agreement and any other Loan
Document) are hereby expressly waived by the Borrower.
SECTION 9. THE AGENTS
9.1. Appointment. Each Lender hereby irrevocably designates
and appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
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 any other Loan Document or
otherwise exist against the Administrative Agent.
9.2. Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
9.3. Exculpatory Provisions. Neither any Agent nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
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9.4. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it 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 counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
9.5. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
9.6. Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any 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 the Loan Parties and their
affiliates and made its own decision to make its extensions of credit hereunder
and enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, 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 the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the 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 any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
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9.7. Indemnification. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents 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 such Agent
under or in connection with any of the foregoing; provided 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 that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful misconduct. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.
9.8. Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent was not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
9.9. Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor 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 Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
9.10. Authorization to Release Guarantees and Liens.
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the Administrative Agent is hereby irrevocably authorized by each of
the Lenders (without requirement of notice to or vote or consent of any Lender,
except as expressly required by Section 10.1, or any affiliate of any Lender
that is a party to any Specified Hedge Agreement) to take any action requested
by the Borrower having the effect of releasing any Collateral or guarantee
obligations to the extent necessary to permit consummation of any transaction
not
66
prohibited by any Loan Document or that has been consented to in accordance with
Section 10.1 and the Administrative Agent shall do so if so requested.
9.11. Documentation Agents and Syndication Agent. Neither the
Documentation Agents nor the Syndication Agent shall have any duties or
responsibilities hereunder in their respective capacities as such.
SECTION 10. MISCELLANEOUS
10.1. Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) forgive, reduce,
extend or waive the principal amount or extend or waive the final scheduled date
of maturity of any Loan or Reimbursement Obligation, extend or waive the
scheduled date of any amortization payment in respect of any Term Loan, reduce
the stated rate of any interest or fee payable hereunder or extend or waive the
scheduled date of any payment thereof, increase the amount or extend the
expiration date of any Lender's Commitment, in each case without the written
consent of each Lender directly affected thereby; (ii) amend, modify or waive
any provision of this Section 10.1 or reduce any percentage specified in the
definition of Required Lenders, consent to the assignment or transfer by any
Loan Party of any of its rights and obligations under this Agreement and the
other Loan Documents, or release all or substantially all of the Collateral or
all or substantially all of the Subsidiary Guarantors from their obligations
under the Guarantee and Collateral Agreement, in each case without the written
consent of all Lenders; (iii) reduce the percentage specified in the definition
of Majority Facility Lenders with respect to any Facility without the written
consent of all Lenders under such Facility; (iv) amend, modify or waive any
provision of Section 9 without the written consent of the Administrative Agent;
(v) amend, modify or waive any provision of Section 2.3 or 2.6 without the
written consent of the Swingline Lender; (vi) amend, modify or waive any
provision of Section 3 without the written consent of the Issuing Lender or
(vii) amend, modify or waive any provision of Section 2.17 without the written
consent of the Majority Facility Lenders in respect of each Facility adversely
affected thereby. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Loan Parties, the Lenders, the Administrative Agent and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders
and the Administrative Agent shall be restored to their former position and
rights hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
Notwithstanding the foregoing, this Agreement may be amended
(or amended and restated) with the written consent of the Required Lenders, the
Administrative Agent and the Borrower (a) to add one or more additional credit
facilities to this Agreement and to permit the extensions of credit from time to
time outstanding thereunder and the accrued interest and fees in respect thereof
to share ratably in the benefits of this Agreement and the other Loan Documents
with the Term Loans and Revolving Extensions of Credit and the accrued interest
and fees in respect thereof and (b) to include
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appropriately the Lenders holding such credit facilities in any determination of
the Required Lenders and Majority Facility Lenders.
In addition, notwithstanding the foregoing, this Agreement may
be amended with the written consent of the Administrative Agent, the Borrower
and the Lenders providing the relevant Replacement Term Loans (as defined below)
to permit the refinancing, replacement or modification of all (but not less than
all) outstanding Term Loans ("Refinanced Term Loans") with a replacement term
loan tranche hereunder ("Replacement Term Loans"), provided that (a) the
aggregate principal amount of such Replacement Term Loans shall not exceed the
aggregate principal amount of such Refinanced Term Loans, (b) the Applicable
Margin for such Replacement Term Loans shall not be higher than the Applicable
Margin for such Refinanced Term Loans, (c) the weighted average life to maturity
of such Replacement Term Loans shall not be shorter than the weighted average
life to maturity of such Refinanced Term Loans at the time of such refinancing
and (d) all other terms applicable to such Replacement Term Loans shall be
substantially identical to, or less favorable to the Lenders providing such
Replacement Term Loans than, those applicable to such Refinanced Term Loans,
except to the extent necessary to provide for covenants and other terms
applicable to any period after the latest final maturity of the Term Loans in
effect immediately prior to such refinancing. The election by any Lender to
provide or participate in the Replacement Term Loans shall not obligate any
other Lender to so provide or participate. The Borrower shall pay to any Lender
who elects not to provide or participate in any Replacement Term Loans an amount
equal to the outstanding Term Loans (plus any accrued and unpaid interest or
other amounts due in connection therewith) held by such Lender prior to or
simultaneously with any refinancing, replacement or modification of outstanding
Term Loans hereunder.
10.2. Notices. 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 when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent or Assignment and Acceptance (as
applicable) in the case of the Lenders, or to such other address as may be
hereafter notified by the respective parties hereto:
The Borrower: Rent-A-Center, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
0000 Xxx Xxxxxx
0000 Xxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Fulbright & Xxxxxxxx L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx
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Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent
and the Issuing Lender: JPMorgan Chase Bank
Loan and Agency Services
0000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
10.3. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4. Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5. Payment of Expenses and Taxes. The Borrower agrees (a)
to pay or reimburse the Administrative Agent and each Arranger for all its
out-of-pocket costs and expenses incurred in connection with the syndication of
the Facilities, the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including the reasonable fees and disbursements of counsel to the
Administrative Agent and filing and recording fees and expenses and the charges
of IntraLinks, in each case from time to time on a quarterly basis or such other
periodic basis as the Administrative Agent shall deem appropriate, (b) to pay or
reimburse each Lender and the Administrative Agent (in the case of each Lender,
after the occurrence and during the continuance of an Event of Default) for all
its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel (but not both
outside and in-house counsel)) to each Lender and of counsel to the
Administrative Agent, (c) to pay, indemnify, and hold each Lender and each Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, that may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the Administrative Agent and their respective officers,
directors, trustees, employees, affiliates, agents, controlling persons and
investment advisors who manage a Lender (each, an "Indemnitee") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits,
69
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including any
of the foregoing relating to the use of proceeds of the Loans or the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of the Borrower or any of its Subsidiaries or any of the
Properties or the use by unauthorized persons of information or other materials
sent through electronic, telecommunications or other information transmission
systems that are intercepted by such persons without the consent of the
Indemnitee and the reasonable fees and expenses of legal counsel in connection
with claims, actions or proceedings by any Indemnitee against any Loan Party
under any Loan Document (all the foregoing in this clause (d), collectively, the
"Indemnified Liabilities"), provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities arise from the gross negligence or willful
misconduct of such Indemnitee. Without limiting the foregoing, and to the extent
permitted by applicable law, the Borrower agrees not to assert and to cause its
Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries to so waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. All amounts due under this Section 10.5 shall
be payable not later than 10 Business Days after written demand therefor.
Statements payable by the Borrower pursuant to this Section 10.5 shall be
submitted to Xxxxxx X. Xxxxx (Telephone No. 000-000-0000) (Telecopy No.
972-943-0113), at the address of the Borrower set forth in Section 10.2, or to
such other Person or address as may be hereafter designated by the Borrower in a
written notice to the Administrative Agent. The agreements in this Section 10.5
shall survive repayment of the Loans and all other amounts payable hereunder.
10.6. Successors and Assigns; Participations and Assignments.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any affiliate of the Issuing Lender that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section.
(b)(i) Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more assignees (each, an
"Assignee") all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at the time owing
to it) with the prior written consent of:
(A) the Borrower (such consent not to be unreasonably
withheld), provided that no consent of the Borrower shall be required
for an assignment to a Lender, an Affiliate of a Lender, an Approved
Fund (as defined below) or, if an Event of Default has occurred and is
continuing, any other Person;
(B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment of all or any
portion of a Term Loan to a Lender, an Affiliate of a Lender or an
Approved Fund; and
(C) in the case of assignments of Revolving Commitments, the
Issuing Lender.
(ii) Assignments shall be subject to the following additional
conditions:
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(A) except in the case of an assignment to a Lender, an
Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender's Commitments or Loans
under any Facility, the amount of the Commitments or Loans of the
assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than
$5,000,000 in the case of the Revolving Facility or $1,000,000 in the
case of the Term Facility, in each case unless each of the Borrower and
the Administrative Agent otherwise consent, provided that (1) no such
consent of the Borrower shall be required if an Event of Default has
occurred and is continuing and (2) such amounts shall be aggregated in
respect of each Lender and its Affiliates or Approved Funds, if any;
(B) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500 (with only one such fee
payable in connection with multiple, simultaneous assignments); and
(C) the Assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an administrative questionnaire.
For the purposes of this Section 10.6, "Approved Fund" means any Person (other
than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
of its business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Assumption the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.18, 2.19, 2.20 and 10.5). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.
(iv) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amount of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent, the Issuing
Lender and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary.
(v) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an Assignee, the Assignee's
completed administrative questionnaire (unless the Assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
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(c)(i) Any Lender may, without the consent of the Borrower or
the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans owing to it); provided that (A) such Lender's obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Lender and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver that (1) requires the consent of each Lender directly affected thereby
pursuant to the proviso to the second sentence of Section 10.1 and (2) directly
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.18, 2.19 and 2.20 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.7(b) as though it were a Lender, provided such
Participant shall be subject to Section 10.7(a) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any
greater payment under Section 2.18 or 2.19 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent. Any Participant that is a Non-U.S.
Lender shall not be entitled to the benefits of Section 2.19 unless such
Participant complies with Section 2.19(d).
(d) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; 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.
(e) The Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (d) above.
(f) Notwithstanding the foregoing, any Conduit Lender may
assign any or all of the Loans it may have funded hereunder to its designating
Lender without the consent of the Borrower or the Administrative Agent and
without regard to the limitations set forth in Section 10.6(b). Each of the
Borrower, each Lender and the Administrative Agent hereby confirms that it will
not institute against a Conduit Lender or join any other Person in instituting
against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding under any state bankruptcy or similar law, for one
year and one day after the payment in full of the latest maturing commercial
paper note issued by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance.
10.7. Adjustments; Setoff. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility,
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if any Lender (a "Benefitted Lender") shall at any time receive any payment of
all or part of the Obligations owing to it, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by setoff, pursuant to events or
proceedings of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of the Obligations owing to such other Lender, such
Benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of the Obligations owing to each such other Lender, or
shall provide such other Lenders with the benefits of any such collateral, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8. Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrower and the Administrative Agent.
10.9. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10. Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Administrative Agent and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
10.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12. Submission To Jurisdiction; Waivers. The Borrower
hereby irrevocably and unconditionally:
73
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for
the Southern District of New York, and appellate courts from any
thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to it at its address set forth in Section 10.2 or at such
other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
10.13. Acknowledgements. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Administrative Agent and Lenders, on
one hand, and the Borrower, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
10.14. Confidentiality. Each of the Administrative Agent and
each Lender agrees to keep confidential all non-public information provided to
it by any Loan Party pursuant to this Agreement that is designated by such Loan
Party as confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent, any other Lender or any affiliate or Approved Fund of
any Lender, (b) to any participant or assignee or prospective participant or
assignee that agrees to comply with the provisions of this Section, (c) to its
employees, directors, trustees, agents, attorneys, accountants, investment
advisors and other professional advisors or those of any of its affiliates, (d)
upon the request or demand of any Governmental Authority, (e) in response to any
order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) if requested or required to do
so in connection with any litigation or similar proceeding, provided that in the
case of any such request or requirement, the Administrative Agent or Lender (as
applicable) so requested or required to make such disclosure shall as soon as
practicable notify the Borrower thereof, (g) that has been publicly disclosed,
(h) to the National
74
Association of Insurance Commissioners or 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, (i) in connection with the exercise of any remedy hereunder or
under any other Loan Document or (j) to any direct or indirect contractual
counterparty in swap agreements with the Borrower 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 10.14.
10.15. WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.16. USA PATRIOT Act. Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender to identify the Borrower in accordance with the Act.
10.17. No Novation, etc..
(a) The terms and conditions of the Existing Credit Agreement
are amended as set forth in, and restated in their entirety and superseded by,
this Agreement. Nothing in this Agreement shall be deemed to be a novation of
any of the Obligations as defined in the Existing Credit Agreement.
Notwithstanding any provision of this Agreement or any other Loan Document or
instrument executed in connection herewith, the execution and delivery of this
Agreement and the incurrence of Obligations hereunder shall be in substitution
for, but not in payment of, the Obligations owed by the Loan Parties under the
Existing Credit Agreement.
(b) From and after the Restatement Effective Date, each
reference to the "Agreement", "Credit Agreement" or other reference originally
applicable to the Existing Credit Agreement contained in any Loan Document shall
be a reference to this Agreement, as amended, supplemented, restated or
otherwise modified from time to time.
75
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
RENT-A-CENTER, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman of the Board and
Chief Executive Officer
JPMORGAN CHASE BANK,
as Administrative Agent and a Lender
By: /s/ D. Xxxxx Xxxxxx
--------------------------------------------
Name: D. Xxxxx Xxxxxx
Title: Vice President
XXXXXX COMMERCIAL PAPER INC.,
as Syndication Agent and a Lender
By: /s/ Xxxxxxx Xxxxx
--------------------------------------------
Name: /s/ Xxxxxxx Xxxxx
Title: Authorized Signatory
CALYON NEW YORK BRANCH,
as Documentation Agent and a Lender
By: /s/ Attila Coach
--------------------------------------------
Name: Attila Coach
Title: Senior Vice President
SUNTRUST BANK,
as Documentation Agent and a Lender
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
UNION BANK OF CALIFORNIA, N.A.,
as Documentation Agent and a Lender
By: /s/ Xxxxxxxx X. Xxx
--------------------------------------------
Name: Xxxxxxxx X. Xxx
Title: Assistant Vice President
Annex A
PRICING GRID
Applicable Applicable
Applicable Applicable Margin Margin for
Margin Margin for Eurodollar ABR
Consolidated for Eurodollar for ABR Term Revolving Revolving Commitment
Leverage Ratio Term Loans Loans Loans Loans Fee Rate
--------------------------- ------------------ ---------------- ---------------- -------------- ------------
greater than or equal to 2.0 to 1.0 1.75% 0.75% 2.00% 1.00% 0.500%
less than 2.0 to 1.0 and 1.75% 0.75% 1.75% 0.75% 0.375%
greater than or equal to 1.5 to 1.0
less than 1.5 to 1.0 and 1.50% 0.50% 1.50% 0.50% 0.300%
greater than or equal to 1.0 to 1.0
less than 1.0 to 1.0 and 1.50% 0.50% 1.25% 0.25% 0.250%
greater than or equal to 0.75 to 1.0
less than 0.75 to 1.0 1.50% 0.50% 1.00% 0% 0.200%
Changes in the Applicable Margin or in the Commitment Fee Rate resulting from
changes in the Consolidated Leverage Ratio shall become effective on the date
(the "Adjustment Date") on which financial statements are delivered to the
Lenders pursuant to Section 6.1 (but in any event not later than the 45th day
after the end of each of the first three quarterly periods of each fiscal year
or the 90th day after the end of each fiscal year, as the case may be) and shall
remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified above, then, until such financial statements
are delivered, the Consolidated Leverage Ratio as at the end of the fiscal
period that would have been covered thereby shall for the purposes of this
definition be deemed to be greater than 2.0 to 1.0. In addition, at all times
while an Event of Default shall have occurred and be continuing, the
Consolidated Leverage Ratio shall for the purposes of this definition be deemed
to be greater than 2.0 to 1.0. Each determination of the Consolidated Leverage
Ratio pursuant to this definition shall be made with respect to the period of
four consecutive fiscal quarters of the Borrower ending at the end of the period
covered by the relevant financial statements.
