Exhibit 10.26
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$406,760,406
AMENDED AND RESTATED CREDIT AGREEMENT
among
DEI SALES, INC.
(formerly known as Directed Electronics, Inc.)
as Borrower,
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF,
as Lenders,
and
CANADIAN IMPERIAL BANK OF COMMERCE, Acting through its New York Agency,
as Administrative Agent,
and
X.X. XXXXXX SECURITIES INC.,
as Syndication Agent
and
CITIBANK, N.A.,
WACHOVIA BANK, NATIONAL ASSOCIATION
and
XXXXX FARGO BANK, N.A.,
as Co-Documentation Agents
Dated as of September 22, 2006
CIBC WORLD MARKETS CORP.
and
X.X. XXXXXX SECURITIES INC.,
as Co-Lead Arrangers and Joint Book Runners
Xxxxxx Xxxxxx & Xxxxxxx LLP
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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TABLE OF CONTENTS
PAGE
SECTION 1 DEFINITIONS................................................................................ 2
1.1 Certain Defined Terms........................................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.................................................................... 31
1.3 Other Definitional Provisions and Rules of Construction......................... 32
1.4 Time References................................................................. 32
SECTION 2 AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................................................. 33
2.1 Revolving Loans................................................................. 33
2.2A [Reserved]...................................................................... 35
2.2B Term Loan....................................................................... 35
2.3 Letter of Credit Subfacility.................................................... 37
2.4 Swingline Loan Subfacility...................................................... 40
2.5 Incremental Loans............................................................... 41
2.6 Fees............................................................................ 43
2.7 Commitment Reductions........................................................... 43
2.8 Prepayments..................................................................... 44
2.9 Default Rate and Payment Dates.................................................. 47
2.10 Conversion Options.............................................................. 48
2.11 Computation of Interest and Fees................................................ 49
2.12 Pro Rata Treatment and Payments................................................. 50
2.13 Non-Receipt of Funds by Administrative Agent.................................... 52
2.14 Inability to Determine Interest Rate............................................ 53
2.15 Illegality...................................................................... 53
2.16 Requirements of Law............................................................. 54
2.17 Indemnity....................................................................... 55
2.18 Taxes........................................................................... 55
2.19 Indemnification; Nature of Issuing Lender's Duties.............................. 57
2.20 Replacement of Lenders.......................................................... 59
SECTION 3 [RESERVED]................................................................................. 59
SECTION 4 CONDITIONS PRECEDENT....................................................................... 59
4.1 Conditions to Amendment Effective Date.......................................... 59
4.2 Conditions to All Extensions of Credit.......................................... 60
SECTION 5 REPRESENTATIONS AND WARRANTIES............................................................. 61
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries... 61
5.2 Authorization of Borrowing, etc. ............................................... 62
5.3 Financial Condition............................................................. 63
5.4 No Material Adverse Change; No Restricted Payments.............................. 63
5.5 Title to Properties; Liens; Real Property....................................... 64
5.6 Litigation; Adverse Facts....................................................... 64
5.7 Payment of Taxes................................................................ 64
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PAGE
5.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts.... 65
5.9 Governmental Regulation......................................................... 65
5.10 Securities Activities........................................................... 65
5.11 Employee Benefit Plans.......................................................... 66
5.12 Certain Fees.................................................................... 66
5.13 Environmental Protection........................................................ 66
5.14 Employee Matters................................................................ 67
5.15 Solvency........................................................................ 67
5.16 Matters Relating to Collateral.................................................. 68
5.17 Disclosure...................................................................... 68
5.18 Use of Proceeds................................................................. 69
5.19 Foreign Assets Control Regulations, Etc. ....................................... 69
5.20 Insurance....................................................................... 69
SECTION 6 AFFIRMATIVE COVENANTS...................................................................... 70
6.1 Financial Statements and Other Reports.......................................... 70
6.2 Corporate Existence, etc. ...................................................... 74
6.3 Payment of Taxes and Claims; Tax Consolidation.................................. 74
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/Condemnation
Proceeds..................................................................... 75
6.5 Inspection Rights; Audits of Inventory and Accounts Receivable; Lender Meeting;
Books and Records............................................................ 77
6.6 Compliance with Laws, etc. ..................................................... 77
6.7 Environmental Review and Investigation, Disclosure, Etc.; Borrower's Actions
Regarding Hazardous Materials Activities, Environmental Claims and Violations
of Environmental Laws........................................................ 78
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents by
Certain Subsidiaries and Future Subsidiaries................................. 80
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real Property
Collateral................................................................... 81
6.10 Deposit Accounts and Cash Management Systems.................................... 83
6.11 Interest Rate Cap............................................................... 84
6.12 Intellectual Property........................................................... 84
6.13 Post-Closing Covenants.......................................................... 86
SECTION 7 NEGATIVE COVENANTS......................................................................... 86
7.1 Indebtedness.................................................................... 86
7.2 Liens and Related Matters....................................................... 87
7.3 Investments; Joint Ventures..................................................... 88
7.4 Contingent Obligations.......................................................... 89
7.5 Restricted Payments............................................................. 90
7.6 Financial Covenants............................................................. 91
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions................ 92
7.8 Consolidated Capital Expenditures............................................... 93
7.9 Restriction on Leases........................................................... 93
7.10 Sales and Lease-Backs........................................................... 93
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PAGE
7.11 Sale or Discount of Receivables................................................. 94
7.12 Transactions with Shareholders and Affiliates................................... 94
7.13 Disposal of Subsidiary Stock.................................................... 94
7.14 Conduct of Business............................................................. 95
7.15 Amendments or Waivers of Related Agreements..................................... 95
7.16 Fiscal Year; Accounting Policies................................................ 95
7.17 No Acquisition of Real Estate................................................... 95
SECTION 8 EVENTS OF DEFAULT.......................................................................... 96
8.1 Failure to Make Payments When Due............................................... 96
8.2 Default in Other Agreements..................................................... 96
8.3 Breach of Certain Covenants..................................................... 96
8.4 Breach of Warranty.............................................................. 96
8.5 Other Defaults Under Loan Documents............................................. 97
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. .......................... 97
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. ............................ 97
8.8 Judgments and Attachments....................................................... 98
8.9 Dissolution..................................................................... 98
8.10 Employee Benefit Plans.......................................................... 98
8.11 Change in Control............................................................... 98
8.12 Invalidity of Subsidiary Guaranty or Holdings Guaranty; Failure of Security;
Repudiation of Obligations................................................... 99
8.13 Hedge Agreements................................................................ 99
SECTION 9 ADMINISTRATIVE AGENT....................................................................... 100
9.1 Appointment..................................................................... 100
9.2 Delegation of Duties............................................................ 100
9.3 Exculpatory Provisions.......................................................... 101
9.4 Reliance by Administrative Agent................................................ 101
9.5 Notice of Default............................................................... 102
9.6 Non-Reliance on Administrative Agent and Other Lenders.......................... 102
9.7 Indemnification................................................................. 103
9.8 Administrative Agent in Its Individual Capacity................................. 103
9.9 Successor Administrative Agent.................................................. 103
9.10 Other Agents.................................................................... 104
SECTION 10 MISCELLANEOUS............................................................................. 104
10.1 Successors and Assigns; Participations; Purchasing Lenders...................... 104
10.2 Expenses........................................................................ 107
10.3 Indemnity....................................................................... 108
10.4 Set-Off; Security Interest in Deposit Accounts.................................. 109
10.5 Ratable Sharing................................................................. 110
10.6 Amendments and Waivers.......................................................... 110
10.7 Independence of Covenants....................................................... 112
10.8 Notices......................................................................... 112
10.9 Survival of Representations, Warranties and Agreements.......................... 114
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative........................... 114
10.11 Marshalling; Payments Set Aside................................................. 114
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PAGE
10.12 Severability.................................................................... 115
10.13 Obligations Several; Independent Nature of Lenders' Rights...................... 115
10.14 Headings........................................................................ 115
10.15 Applicable Law.................................................................. 115
10.16 Successors and Assigns.......................................................... 115
10.17 Consent to Jurisdiction and Service of Process.................................. 116
10.18 Waiver of Jury Trial............................................................ 116
10.19 Confidentiality................................................................. 117
10.20 Lead Arranger, Bookrunner, Documentation Agent and Syndication Agent............ 118
10.21 Counterparts; Effectiveness..................................................... 118
10.22 Patriot Act Notice.............................................................. 118
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EXHIBITS
Exhibit I FORM OF ACCOUNT DESIGNATION LETTER
Exhibit II FORM OF NOTICE OF BORROWING
Exhibit III FORM OF NOTICE OF CONVERSION/CONTINUATION
Exhibit IV FORM OF SECRETARY'S CERTIFICATE
Exhibit V FORM OF REVOLVING NOTE
Exhibit VI FORM OF TERM LOAN NOTE
Exhibit VII FORM OF SWINGLINE NOTE
Exhibit VIII FORM OF COMPLIANCE CERTIFICATE
Exhibit XI FORM OF COMMITMENT TRANSFER SUPPLEMENT
Exhibit XII FORM OF TAX EXEMPT CERTIFICATE
Exhibit XIII FORM OF SOLVENCY CERTIFICATE
Exhibit XIV FORM OF PLEDGE AGREEMENT
Exhibit XV FORM OF SECURITY AGREEMENT
Exhibit XVI FORM OF HOLDINGS GUARANTY
Exhibit XVII FORM OF SUBSIDIARY GUARANTY
Exhibit XVIII FORM OF COLLATERAL ACCESS AGREEMENT
Exhibit XIX FORM OF ADMINISTRATIVE QUESTIONNAIRE
Exhibit XX FORM OF NOTICE OF PREPAYMENT
SCHEDULES
Schedule 1.1(a) EBITDA ADDBACKS
Schedule 2.1(a) LENDERS' COMMITMENTS
Schedule 5.1 SUBSIDIARIES OF BORROWER
Schedule 5.5A INTELLECTUAL PROPERTY
Schedule 5.5B REAL PROPERTY
Schedule 5.8 MATERIAL CONTRACTS
Schedule 5.11 CERTAIN EMPLOYEE BENEFIT PLANS
Schedule 5.13 ENVIRONMENTAL MATTERS
Schedule 5.20 INSURANCE
Schedule 6.10 DEPOSIT ACCOUNTS
Schedule 7.2 CERTAIN EXISTING LIENS
Schedule 7.3 CERTAIN EXISTING INVESTMENTS
Schedule 7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
Schedule 10.8 LENDERS' LENDING OFFICES
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DEI SALES, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of September
22, 2006 and entered into by and among DEI SALES, INC., a Florida corporation
(formerly known as Directed Electronics, Inc., a California corporation)
("Borrower"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
(each individually referred to herein as a "Lender" and collectively as
"Lenders"), and CANADIAN IMPERIAL BANK OF COMMERCE, acting through its New York
Agency ("CIBC"), as administrative agent for Lenders (in such capacity,
"Administrative Agent").
R E C I T A L S
WHEREAS, Borrower, Holdings, the Subsidiary Guarantors, certain
lenders party thereto (the "Original Lenders"), Wachovia Bank, National
Association, as the administrative agent, CIBC World Markets Corp., as
syndication agent, Antares Capital Corporation, General Electric Capital
Corporation and Xxxxx Fargo Bank, N.A., as co-documentation agents, and the
other agents and lenders named therein entered into that certain Credit
Agreement, dated as of June 17, 2004 (the "Original Credit Agreement") (as
amended from time to time pursuant to the terms thereof) pursuant to which the
Original Lenders made certain loans and certain other extensions of credit to
Borrower (the "Original Loans");
WHEREAS, the Obligations (as defined in the Original Credit
Agreement, hereinafter the "Original Obligations") of Borrower and the other
Loan Parties under the Original Credit Agreement and the Collateral Documents
(as defined in the Original Credit Agreement, such Collateral Documents
hereinafter the "Original Collateral Documents") are secured by certain
collateral (hereinafter the "Original Collateral") and are guaranteed or
supported or otherwise benefited by the Original Collateral Documents;
WHEREAS, immediately prior to the Amendment Effective Date, Term
Loans (as defined in the Original Credit Agreement) in the aggregate principal
amount of $165,760,406 were outstanding under the Original Credit Agreement (the
"Original Term Loans") and no Revolving Loans (as defined in the Original Credit
Agreement) were outstanding under the Original Credit Agreement (the "Original
Revolving Loans");
WHEREAS, the parties hereto wish to amend and restate the Original
Credit Agreement in its entirety to allow for transactions (collectively, the
"Amendment Transactions") which (a) provide for new Term Loans (the "New Term
Loans") to Borrower in an aggregate principal amount of $306,760,406 (a portion
of which shall be applied to the repayment of the Original Term Loans), (b)
provide for new Revolving Loans (the "New Revolving Loans") to Borrower in an
aggregate principal amount of up to $100,000,000 (a portion of which shall be
applied to the repayment of the Original Revolving Loans and all prepayment
premiums thereon), (c) allow for the acquisition by Borrower of all of the
outstanding capital stock of Polk Holding Corp. and repay certain indebtedness
related thereto, (d) extend the Revolving Commitment Termination Date (as
defined in the Original Credit Agreement) to the sixth anniversary of the
Amendment Effective Date and (e) extend the Term Loan Maturity Date (as defined
in the
Original Credit Agreement) to the seventh anniversary of the Amendment Effective
Date, in each case, on and subject to the terms and conditions of this Agreement
and the Amendment Agreement dated as of the date hereof (the "Amendment
Agreement");
WHEREAS, the Borrower intends to consummate the Polk Acquisition
concurrently herewith; and
WHEREAS, the parties hereto intend that (a) the Original Obligations
which remain unpaid and outstanding as of the Amendment Effective Date (which
shall include, without limitation, any revolving loans outstanding on the
Amendment Effective Date under the Original Credit Agreement) shall continue to
exist under this Agreement on the terms set forth herein, (b) the loans under
the Original Credit Agreement (other than the Original Term Loans repaid on the
Amendment Effective Date) outstanding as of the Amendment Effective Date shall
be Loans under and as defined in this Agreement on the terms set forth herein,
(c) any letters of credit outstanding under the Original Credit Agreement as of
the Amendment Effective Date shall be Letters of Credit under this Agreement and
(d) the Original Collateral Documents shall continue to secure, guarantee,
support and otherwise benefit the Original Obligations as well as the other
Obligations of Borrower and the other Obligors under this Agreement and the
other Loan Documents;
NOW, THEREFORE, the Original Credit Agreement is hereby amended and
restated to read in its entirety as follows:
SECTION 1
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ABR Default Rate" shall have the meaning set forth in Section 2.9.
"Account Designation Letter" shall mean the Notice of Account
Designation Letter dated the Closing Date from Borrower to Administrative Agent
in substantially the form attached hereto as Exhibit I.
"Accounts" shall mean all present and future rights of Borrower to
payment for goods sold or leased or for services rendered (including any such
rights evidenced by instruments or chattel paper), whether due or to become due,
whether now existing or hereinafter arising and wherever arising, and whether or
not they have been earned by performance.
"Acquisition Agreement" means the stock purchase agreement dated as
of August 21, 2006 by and among Holdings, Polk Holding Corp., Xxxxxx X. Xxxxxxx,
as the seller representative as named therein and the stockholders and
optionholder named therein, as amended or modified from time to time in
accordance with the terms thereof.
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"Additional Term Lender" shall have the meaning set forth in Section
2.5.
"Administrative Agent" shall have the meaning assigned to that term
in the introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to Section 9.9.
"Affiliate", as applied to any Person, shall mean any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to (i) direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities
or by contract or otherwise or (ii) vote twenty-five percent (25%) or more of
the securities having ordinary voting power for the election of directors of
such Person.
"Agents" shall mean, collectively, the Administrative Agent,
Syndication Agent and the Documentation Agents.
"Agreement" shall mean this Amended and Restated Credit Agreement
dated as of September 22, 2006, as amended, amended modified or supplemented
from time to time in accordance with its terms.
"Alternate Base Rate" shall mean, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes
hereof: "Prime Rate" shall mean, at any time, the rate of interest per annum
publicly announced or otherwise identified from time to time by CIBC at its
principal office in New York, New York as its prime rate. The parties hereto
acknowledge that the rate announced publicly by CIBC as its Prime Rate is an
index or base rate and shall not necessarily be its lowest or best rate charged
to its customers or other banks; and "Federal Funds Effective Rate" shall mean,
for any day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published on the next
succeeding Business Day, the average of the quotations for the day of such
transactions received by Administrative Agent from three federal funds brokers
of recognized standing selected by it. If for any reason Administrative Agent
shall have determined (which determination shall be conclusive in the absence of
manifest error) that it is unable to ascertain the Federal Funds Effective Rate,
for any reason, including the inability or failure of Administrative Agent to
obtain sufficient quotations in accordance with the terms thereof, the Alternate
Base Rate shall be determined without regard to clause (b) of the first sentence
of this definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
opening of business on the date of such change.
"Alternate Base Rate Loans" shall mean Loans that bear interest at
an interest rate based on the Alternate Base Rate.
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"Amendment Agreement" shall have the meaning assigned to such term
in the recitals hereto.
"Amendment Effective Date" shall mean September 22, 2006.
"Applicable Percentage" shall mean, for any day, the rate per annum
set forth below opposite the applicable level then in effect, it being
understood that the Applicable Percentage for (a) Revolving Loans that are LIBOR
Rate Loans and for the Letter of Credit Fee shall be the percentage set forth
under the column "LIBOR Rate Margin for Revolving Loans and Letter of Credit
Fee", (b) Revolving Loans that are Alternate Base Rate Loans shall be the
percentage set forth under the column "Alternate Base Rate Margin for Revolving
Loans", (c) Term Loans that are LIBOR Rate Loans shall be the percentage set
forth under the column "LIBOR Rate Margin for Term Loans", (d) Term Loans that
are Alternate Base Rate Loans shall be the percentage set forth under the column
"Alternate Base Rate Margin for Term Loans", and (e) the Commitment Fee shall be
the percentage set forth under the column "Commitment Fee":
LIBOR RATE
MARGIN FOR ALTERNATE
REVOLVING BASE RATE ALTERNATE
CONSOLIDATED LOANS AND MARGIN FOR LIBOR RATE BASE RATE
TOTAL LEVERAGE LETTER OF REVOLVING MARGIN FOR MARGIN FOR COMMITMENT
LEVEL RATIO CREDIT FEE LOANS TERM LOANS TERM LOANS FEE
----- ----------------- ---------- ---------- ---------- ---------- ----------
I < 2.50 to 1.0 1.75% 0.75% 2.50% 1.50% 0.375%
II > 2.50 to 1.0 but 2.00% 1.00% 2.50% 1.50% 0.375%
< 3.50 to 1.0
III > 3.50 to 1.0 2.50% 1.50% 2.50% 1.50% 0.375%
The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the date five (5) Business Days after the date on which
Administrative Agent has received from Borrower the quarterly financial
information and certifications required to be delivered to Administrative Agent
and Lenders in accordance with the provisions of Sections 6.1(i) and 6.1(iii)
(each an "Interest Determination Date"). Subject to the last sentence of this
definition, such Applicable Percentage shall be effective from such Interest
Determination Date until the next such Interest Determination Date.
Notwithstanding the foregoing, the initial Applicable Percentages shall be set
at Level III until the first Interest Determination Date to occur after March
31, 2007. If Borrower shall fail to provide the quarterly financial information
and certifications in accordance with the provisions of Sections 6.1(i) and
6.1(iii), the Applicable Percentage shall, on the date five (5) Business Days
after the date by which Borrower was so required to provide such financial
information and certifications to Administrative Agent and Lenders, be based on
Level III until such time as such information and certifications are provided,
whereupon the Level shall be determined by the then current Consolidated Total
Leverage Ratio.
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"Approved Fund" shall mean, with respect to any Lender that is a
fund that invests in bank loans, any other fund that invests in bank loans and
is managed by the same investment advisor as such Lender or by an affiliate of
such investment advisor.
"Asset Sale" shall mean the sale by the Loan Parties or any of their
Subsidiaries to any Person other than a Loan Party or any of its wholly-owned
Subsidiaries of (i) any of the capital stock of any of Loan Parties'
Subsidiaries, (ii) substantially all of the assets of any division or line of
business of any Loan Party or any of its Subsidiaries, or (iii) any other assets
(whether tangible or intangible) of the Loan Parties or any of their
Subsidiaries (other than (a) inventory sold in the ordinary course of business
and (b) any such other assets in an aggregate amount not to exceed $200,000 in
any fiscal year).
"Available Revolving Committed Amount" shall mean (x) with respect
to the period from March 1 to October 1 of each year, $50,000,000 and (y) at all
other times, $100,000,000. Any reduction to the Available Revolving Committed
Amount will reduce both the $50,000,000 and the $100,000,000 amounts referenced
in this definition.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"Bankruptcy Event" shall mean any of the events described in Section
8.6 or 8.7.
"Borrower" shall mean DEI.
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized or
required by law to close; provided, however, that when used in connection with a
rate determination, borrowing or payment in respect of a LIBOR Rate Loan, the
term "Business Day" shall also exclude any day on which banks in London, England
are not open for dealings in Dollar deposits in the London interbank market.
"Capital Lease", as applied to any Person, shall mean any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Cash" shall mean money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" shall mean, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or Xxxxx'x
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no
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more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's.
"Class" shall mean, as applied to Lenders, each of the following two
classes of Lenders: (i) Lenders having Term Loan Exposure and (iii) Lenders
having Revolving Loan Exposure.
"Co-Lead Arrangers" shall mean CIBC World Markets Corp. and X.X.
Xxxxxx Securities Inc., as co-lead arrangers and joint book runners.
"Collateral" shall mean, collectively, all of the real, personal and
mixed property (including capital stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
"Collateral Access Agreement" shall mean any landlord waiver,
mortgagee waiver, bailee letter or any similar acknowledgement or agreement of
any landlord or mortgagee in respect of any Real Property Asset where any
Collateral is located or any warehouseman or processor in possession of any
Inventory of any Loan Party, substantially in the form of Exhibit XVIII annexed
hereto with such changes thereto as may be agreed to by Administrative Agent in
the reasonable exercise of its discretion.
"Collateral Account" shall have the meaning assigned to that term in
the Security Agreement.
"Collateral Documents" shall mean the Pledge Agreement, the Security
Agreement and all other instruments or documents delivered by any Loan Party
pursuant to this Agreement or any of the other Loan Documents in order to grant
to Administrative Agent, on behalf of the Secured Parties, a Lien on any real,
personal or mixed property of that Loan Party as security for the Obligations.
"Commitment" shall mean the Revolving Commitment, the LOC
Commitment, the Term Loan Commitment and the Swingline Commitment, individually
or collectively, as appropriate.
"Commitment Fee" shall have the meaning set forth in Section 2.6(a).
"Commitment Percentage" shall mean the Revolving Commitment
Percentage and/or the Term Loan Commitment Percentage, as appropriate.
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"Commitment Period" shall mean (a) with respect to Revolving Loans,
the period from and including the Amendment Effective Date to but excluding the
Revolving Commitment Termination Date and (b) with respect to Letters of Credit,
the period from and including the Amendment Effective Date to but excluding the
date that is 5 days prior to the Revolving Commitment Termination Date.
"Commitment Transfer Supplement" shall mean a Commitment Transfer
Supplement, in substantially the form of Exhibit XI.
"Compliance Certificate" shall mean a certificate substantially in
the form of Exhibit VIII annexed hereto delivered to Administrative Agent and
Lenders by Borrower pursuant to subsection 6.1(iii).
"Confidential Information Memorandum" shall mean that certain
Confidential Information Memorandum relating to Borrower dated August 23, 2006.
"Conforming Leasehold Interest" shall mean any Leasehold Property as
to which the lessor has agreed in writing for the benefit of Administrative
Agent (which writing has been delivered to Administrative Agent), whether under
the terms of the applicable lease, under the terms of a Landlord Consent and
Estoppel, or otherwise, to the matters described in the definition of "Landlord
Consent and Estoppel," which interest, if a subleasehold or sub-subleasehold
interest, is not subject to any contrary restrictions contained in a superior
lease or sublease.
"Consolidated Capital Expenditures" shall mean, for any period, the
sum of (i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of the Loan
Parties and their Subsidiaries) by the Loan Parties and their Subsidiaries
during that period that, in conformity with GAAP, are included in "additions to
property, plant or equipment" or comparable items reflected in the consolidated
statement of cash flows of the Loan Parties and their Subsidiaries plus (ii) to
the extent not covered by clause (i) of this definition, the aggregate of all
expenditures by the Loan Parties and their Subsidiaries during that period to
acquire (by purchase or otherwise) the business, property or fixed assets of any
Person, or the capital stock or other evidence of beneficial ownership of any
Person that, as a result of such acquisition, becomes a Subsidiary of a Loan
Party.
"Consolidated Current Assets" shall mean, as at any date of
determination, the total assets of the Loan Parties and their Subsidiaries on a
consolidated basis that may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash Equivalents.
"Consolidated Current Liabilities" shall mean, as at any date of
determination, the total liabilities of the Loan Parties and their Subsidiaries
on a consolidated basis that may properly be classified as current liabilities
in conformity with GAAP, excluding the current portions of Funded Debt and
Capital Leases.
"Consolidated EBITDA" shall mean, for any period, the sum of the
amounts for such period of (a) Consolidated Net Income plus to the extent
deducted in determining Consolidated
-7-
Net Income, without duplication, (i) Consolidated Interest Expense, (ii)
provisions for taxes based on income, (iii) total depreciation expense, (iv)
total amortization expense, (v) other non-recurring and non-cash items reducing
Consolidated Net Income in an aggregate amount not to exceed $3,000,000 (other
than any non-recurring and non-cash charges reducing Consolidated Net Income
related to stock-based compensation, which shall not be subject to such
$3,000,000 cap) and (vi) one-time charges set forth on Schedule 1.1(a) attached
hereto (it being understood that such charges shall roll off on a quarterly
basis and shall not affect Consolidated EBITDA after one-year following the
fiscal quarter end occurring after the Amendment Effective Date), less (b)
interest income and any non-operating, non-recurring and non-operating, non-cash
items increasing Consolidated Net Income, all of the foregoing as determined on
a consolidated basis for the Loan Parties and their Subsidiaries in conformity
with GAAP; provided that in calculating any such items for such period, any
Asset Sales or other acquisitions or dispositions of assets during such period
shall have been deemed to have occurred on the first day of such period.
"Consolidated Excess Cash Flow" shall mean, for any period, an
amount (if positive) equal to (i) the sum, without duplication, of the amounts
for such period of (a) Consolidated EBITDA and (b) the Consolidated Working
Capital Adjustment minus (ii) the sum, without duplication, of the amounts for
such period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans except to the extent the Revolving
Commitments are permanently reduced in connection with such repayments), (b)
Consolidated Capital Expenditures, (c) Consolidated Interest Expense, and (d)
the provision for current taxes based on income of the Loan Parties and their
Subsidiaries and payable in cash with respect to such period.
"Consolidated Fixed Charges" shall mean, for any period, the sum
(without duplication) of the amounts for such period of (i) Consolidated
Interest Expense to the extent payable in cash, (ii) cash payments for taxes
based on income, and (iii) all scheduled principal payments to be made by the
Loan Parties or any of their Subsidiaries (whether or not such payments are
actually made) on all Indebtedness of the Loan Parties and their Subsidiaries
(including, without limitation, the principal component of all Capital Leases),
all of the foregoing as determined on a consolidated basis for the Loan Parties
and their Subsidiaries in conformity with GAAP.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of the Loan Parties and their
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of the Loan Parties and their Subsidiaries, including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Interest Rate
Agreements.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss) of the Loan Parties and their Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of any
Person (other than a Subsidiary of any Loan Party) in which any other Person
(other than any Loan Party or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to a Loan Party or any
-8-
of its Subsidiaries by such Person during such period, (ii) the income of any
Subsidiary of a Loan Party to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iii) any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan, and (iv) (to the
extent not included in clauses (i) through (iii) above) any net extraordinary
gains or net non-cash extraordinary losses.
"Consolidated Net Worth" shall mean, as at any date of
determination, the sum of the capital stock and additional paid-in capital plus
retained earnings (or minus accumulated deficits) of the Loan Parties and their
Subsidiaries on a consolidated basis determined in conformity with GAAP.
"Consolidated Total Debt" shall mean, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
the Loan Parties and their Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Total Leverage Ratio" shall mean, as at the last day
of any Fiscal Quarter, the ratio of (a) Consolidated Total Debt as of the last
day of such Fiscal Quarter, to (b) Consolidated EBITDA for the four Fiscal
Quarter period then ended. "Consolidated Working Capital" shall mean, as at any
date of determination, the excess (or deficit) of Consolidated Current Assets
over Consolidated Current Liabilities.
"Consolidated Working Capital Adjustment" shall mean, for any period
on a consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"Contingent Obligation", as applied to any Person, shall mean any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Hedge Agreements. Contingent Obligations shall include
(a) the direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the solvency
or any
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balance sheet item, level of income or financial condition of another if, in the
case of any agreement described under subclause (X) or (Y) of this sentence, the
primary purpose or intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if less, the amount to which
such Contingent Obligation is specifically limited.
"Contractual Obligation", as applied to any Person, shall mean any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"Currency Agreement" shall mean any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement to which Borrower or any of its
Subsidiaries is a party.
"Defaulting Lender" shall mean, at any time, any Lender that, at
such time (a) has failed to make a Loan required pursuant to the term of this
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof or (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Agreement.
"DEI International" shall mean DEI International, Inc., a Florida
corporation.
"DEI Headquarters" shall mean DEI Headquarters, Inc., a Florida
corporation.
"Deposit Account" shall mean a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DEI" shall mean DEI Sales, Inc., a Florida corporation (formerly
known as Directed Electronics, Inc., a California corporation).
"Documentation Agents" shall mean Citibank, N.A., Wachovia Bank,
National Association and Xxxxx Fargo Bank, N.A.
"Dollars" and the sign "$" shall mean the lawful money of the United
States of America.
"Domestic Lending Office" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on Schedule
10.8; and thereafter, such other office of such Lender (within the United
States) as such Lender may from time to time specify to Administrative Agent and
Borrower as the office of such Lender at which Alternate Base Rate Loans of such
Lender are to be made.
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"Employee Benefit Plan" shall mean any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or contributed to by
a Loan Party, any of its Subsidiaries or any of their respective ERISA
Affiliates.
"Environmental Claim" shall mean any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"Environmental Laws" shall mean any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Borrower or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean
Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide
Act (7 U.S.C. Section 136 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et
seq.) and the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
Section 11001 et seq.), each as amended or supplemented, any analogous present
or future state or local statutes or laws, and any regulations promulgated
pursuant to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974.
"ERISA Affiliate" shall mean, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of a Loan Party or any
of its Subsidiaries shall continue to be considered an ERISA Affiliate of such
Loan Party or such Subsidiary within the meaning of this definition with respect
to the period such entity was an ERISA Affiliate of such Loan Party or such
Subsidiary and with respect to liabilities arising after such period for which
such Loan Party or such Subsidiary could be liable under the Internal Revenue
Code or ERISA.
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"ERISA Event" shall mean (i) a "reportable event" within the meaning
of Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice to
the PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by any Loan Party, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more contributing sponsors or
the termination of any such Pension Plan resulting in liability pursuant to
Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on any Loan Party, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of any Loan Party,
any of its Subsidiaries or any of their respective ERISA Affiliates in a
complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of
ERISA) from any Multiemployer Plan if there is any potential liability therefor,
or the receipt by any Loan Party, any of its Subsidiaries or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which could give rise to the
imposition on any Loan Party, any of its Subsidiaries or any of their respective
ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43
of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l),
or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against any Loan Party, any of its Subsidiaries or any of their respective
ERISA Affiliates in connection with any Employee Benefit Plan; (x) receipt from
the Internal Revenue Service of notice of the failure of any Pension Plan (or
any other Employee Benefit Plan intended to be qualified under Section 401(a) of
the Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension Plan to
qualify for exemption from taxation under Section 501(a) of the Internal Revenue
Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"Eurodollar Reserve Percentage" shall mean for any day, the
percentage (expressed as a decimal and rounded upwards, if necessary, to the
next higher 1/100th of 1%) which is in effect for such day as prescribed by the
Federal Reserve Board (or any successor) for determining the maximum reserve
requirement (including without limitation any basic, supplemental or emergency
reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of
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such Board as in effect from time to time, or any similar category of
liabilities for a member bank of the Federal Reserve System in New York City.
"Event of Default" shall mean each of the events set forth in
Section 8.
"Exchange Act" shall mean the Securities Exchange Act of 1934.
"Extension of Credit" shall mean, as to any Lender, the making of a
Loan by such Lender or the issuance of, or participation in, a Letter of Credit
by such Lender.
"Facilities" shall mean any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by the Loan Parties or any of their
Subsidiaries or any of their respective predecessors.
"Federal Funds Effective Rate" shall have the meaning set forth in
the definition of "Alternate Base Rate".
"Fee Letter" shall mean the letter agreement dated August 1, 2006,
addressed to Borrower from Agents and Co-Lead Arrangers, as amended, modified or
otherwise supplemented.
"Financial Plan" shall have the meaning assigned to that term in
subsection 6.1(x).
"First Priority" shall mean, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral and (ii) such Lien is
the only Lien (other than Liens permitted pursuant to subsection 7.2) to which
such Collateral is subject.
"Fiscal Quarter" shall mean a fiscal quarter of any Fiscal Year.
"Fiscal Year" shall mean the fiscal year of Holdings and its
Subsidiaries ending on December 31 of each calendar year.
"Flood Hazard Property" shall mean a Real Property Asset located in
an area designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.
"Fronting Fee" shall have the meaning set forth in Section 2.6(b).
"Funded Debt", as applied to any Person, shall mean all Indebtedness
of that Person (including any current portions thereof) which by its terms or by
the terms of any instrument or agreement relating thereto matures more than one
year from, or is directly renewable or extendable at the option of that Person
to a date more than one year from (including an option of that Person under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of one year or more from), the date of the creation
thereof.
-13-
"Funding Date" shall mean the date of the funding of a Loan.
"GAAP" shall mean, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"Government Acts" shall have the meaning set forth in Section 2.19.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Governmental Authorization" shall mean any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court. "Guaranties"
shall mean the Holdings Guaranty and the Subsidiary Guaranty.
"Hazardous Materials" shall mean (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or expression intended
to define, list or classify substances by reason of properties harmful to
health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could pose a hazard to
the health and safety of the owners, occupants or any Persons in the vicinity of
any Facility or to the indoor or outdoor environment.
"Hazardous Materials Activity" shall mean any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement,
-14-
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"Hedge Agreement" shall mean an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest rates or
currency values, respectively.
"Hedge Agreement Provider" shall mean any Person that enters into a
Secured Hedge Agreement with a Loan Party or any of its Subsidiaries that is
permitted by Section 7.1(v) to the extent such Person is a Lender, an Affiliate
of a Lender or any other Person that was a Lender (or an Affiliate of a Lender)
at the time it entered into the Secured Hedge Agreement but has ceased to be a
Lender (or whose Affiliate has ceased to be a Lender) under this Agreement.
"Holdings" shall mean Directed Electronics, Inc. (formerly known as
DEI Holdings, Inc., a Florida corporation).
"Holdings Guaranty" shall mean the Holdings Guaranty executed and
delivered by Holdings on the Closing Date, substantially in the form of Exhibit
XVI annexed hereto, as such Holdings Guaranty may hereafter be amended,
supplemented or otherwise modified from time to time.
"Incremental Facility Amendment" shall have the meaning set forth in
Section 2.5.
"Incremental Term Commitments" shall have the meaning set forth in
Section 2.5.
"Incremental Term Loans" shall have the meaning set forth in Section
2.5.
"Indebtedness", as applied to any Person, shall mean (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute (X) in the case of Hedge Agreements, Contingent
Obligations, and (Y) in all other cases, Investments, and in neither case
constitute Indebtedness.
"Indemnitee" shall have the meaning assigned to that term in
subsection 10.3.
-15-
"Intellectual Property" shall mean all patents, patent rights,
patent applications, licenses, inventions, trade secrets, trademarks,
tradenames, service marks, copyrights, technology, know-how and proprietary
techniques (including processes and substances) used in or necessary for the
conduct of the business of Borrower and its Subsidiaries as currently conducted
that are material to the condition (financial or otherwise), business or
operations of Borrower and its Subsidiaries, taken as a whole.
"Interest Payment Date" shall mean, commencing after September 30,
2006, (a) as to any Alternate Base Rate Loan, the last Business Day of each
March, June, September and December and on the applicable Maturity Date, (b) as
to any LIBOR Rate Loan having an Interest Period of three months or less, the
last day of such Interest Period, and (c) as to any LIBOR Rate Loan having an
Interest Period longer than three months, (i) each date that is three (3)
calendar months after the first day of such Interest Period and (ii) the last
day of such Interest Period.
"Interest Period" shall mean, with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate Loan
and ending one, two, three or six months (or nine or twelve months if
available to all Lenders) thereafter, as selected by Borrower in the
Notice of Borrowing or Notice of Conversion given with respect thereto;
and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate Loan
and ending one, two, three or six months (or nine or twelve months if
available to all Lenders) thereafter, as selected by Borrower by
irrevocable notice to Administrative Agent not less than three Business
Days prior to the last day of the then current Interest Period with
respect thereto; provided that the foregoing provisions are subject to the
following:
(A) if any Interest Period pertaining to a LIBOR Rate Loan
would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business
Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(B) any Interest Period pertaining to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the relevant calendar month;
(C) if Borrower shall fail to give notice as provided above,
Borrower shall be deemed to have selected an Alternate Base Rate
Loan to replace the affected LIBOR Rate Loan;
-16-
(D) no Interest Period in respect of any Loan shall extend
beyond the applicable Maturity Date and, further with regard to the
Term Loans, no Interest Period shall extend beyond any principal
amortization payment date unless the portion of such Term Loan
consisting of Alternate Base Rate Loans together with the portion of
such Term Loan consisting of LIBOR Rate Loans with Interest Periods
expiring prior to or concurrently with the date such principal
amortization payment date is due, is at least equal to the amount of
such principal amortization payment due on such date; and
(E) no more than six (6) LIBOR Rate Loans may be in effect at
any time. For purposes hereof, LIBOR Rate Loans with different
Interest Periods shall be considered as separate LIBOR Rate Loans,
even if they shall begin on the same date, although borrowings,
extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to
constitute a new LIBOR Rate Loan with a single Interest Period.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Borrower or any of its Subsidiaries is
a party.
"Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"Inventory" shall mean, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are then
held by such Person for sale or lease, including raw materials and work in
process.
"Investment" shall mean (i) any direct or indirect purchase or other
acquisition by any Loan Party or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of a
Loan Party), (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of a Loan Party from any Person
other than a Loan Party or any of its Subsidiaries, of any equity Securities of
such Subsidiary, (iii) any direct or indirect loan, advance (other than advances
to employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by a Loan Party or any of its Subsidiaries to any other Person (other than a
wholly-owned Subsidiary of a Loan Party), including all indebtedness and
accounts receivable from that other Person that are not current assets or did
not arise from sales to that other Person in the ordinary course of business, or
(iv) Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"IP Collateral" shall mean, collectively, the Collateral consisting
of rights in or to Intellectual Property under the Security Agreement.
-17-
"Issuing Lender" shall mean CIBC as the issuing lender of a standby
letter of credit hereunder, together with its permitted successors and assigns
in such capacity or, with respect to any other Letter of Credit, any other
Lender mutually acceptable to Borrower and Administrative Agent, which has
agreed in writing to act as Issuing Lender hereunder, including Wachovia Bank,
National Association, a national banking association with respect to any Letter
of Credit outstanding on the Amendment Effective Date.
"Issuing Lender Fees" shall have the meaning set forth in Section
2.6(c).
"Joint Venture" shall mean a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"Key-Man Insurance" shall have the meaning set forth in Section
6.13(a).
"Landlord Consent and Estoppel" shall mean, with respect to any
Leasehold Property, a letter, certificate or other instrument in writing from
the lessor under the related lease, satisfactory in form and substance to
Administrative Agent, pursuant to which such lessor agrees, for the benefit of
Administrative Agent, (i) that such lessor shall not terminate such lease as a
result of a default by such Loan Party thereunder without first giving
Administrative Agent notice of such default and at least 60 days (or, if such
default cannot reasonably be cured by Administrative Agent within such period,
such longer period as may reasonably be required) to cure such default, (ii) to
the matters contained in a Collateral Access Agreement, and (iii) to such other
matters relating to such Leasehold Property as the Administrative Agent may
reasonably request.
"Leasehold Property" shall mean any leasehold interest of any Loan
Party as lessee under any lease of real property, other than any leasehold
interest designated from time to time by Administrative Agent in its sole
discretion as not being required to be included in the Collateral.
"Lender" and "Lenders" shall mean the persons identified as
"Lenders" and listed on the signature pages of this Agreement, the Revolving
Lenders, Term Loan Lenders and any Person that becomes a Lender hereunder
pursuant to Section 10.1(c), together with their successors and permitted
assigns pursuant to Section 10.1, and the term "Lenders" shall include Swingline
Lender unless the context otherwise requires.
"Lender Commitment Letter" shall mean, with respect to any Lender,
the letter (or other correspondence) to such Lender from the Administrative
Agent, or on behalf of the Administrative Agent, notifying such Lender of its
Term Loan Commitment Percentage.
"Letter of Credit" shall mean any letter of credit issued by Issuing
Lender pursuant to the terms hereof (including any letters of credit issued and
outstanding under the Original Credit Agreement) as such letter of credit may be
amended, modified, extended, renewed or replaced from time to time.
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"Letter of Credit Fee" shall have the meaning set forth in Section
2.6(b).
"Letter of Credit Usage" shall mean, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by Issuing Lender and not theretofore reimbursed by Borrower
(including any such reimbursement out of the proceeds of Mandatory LOC
Borrowings).
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "LIBOR" shall mean, for any
LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%). If, for any reason, neither of such
rates is available, then "LIBOR" shall mean the rate per annum at which, as
reasonably determined by Administrative Agent, Dollars in an amount comparable
to the Loans then requested are being offered to leading banks at approximately
11:00 a.m. London time, two (2) Business Days prior to the commencement of the
applicable Interest Period for settlement in immediately available funds by
leading banks in the London interbank market for a period equal to the Interest
Period selected.
"LIBOR Lending Office" shall mean, initially, the office of each
Lender designated as such Lender's LIBOR Lending Office shown on Schedule 10.8;
and thereafter, such other office of such Lender as such Lender may from time to
time specify to Administrative Agent and Borrower as the office of such Lender
at which the LIBOR Rate Loans of such Lender are to be made.
"LIBOR Rate" shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by Administrative Agent
pursuant to the following formula:
LIBOR
LIBOR Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" shall mean Loans the rate of interest applicable
to which is based on the LIBOR Rate.
"Lien" shall mean any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
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"Loan" or "Loans" shall mean one or more of the Term Loans,
Revolving Loans, Incremental Term Loans (if any) or Swingline Loans or any
combination thereof.
"Loan Documents" shall mean this Agreement, the Notes, the Letters
of Credit (and any LOC Documents), the Guaranties and the Collateral Documents.
"Loan Party" shall mean each of Borrower, Holdings and any of
Holdings' or Borrower's Subsidiaries from time to time executing a Loan
Document, and "Loan Parties" means all such Persons, collectively.
"LOC Commitment" shall mean the commitment of Issuing Lender to
issue Letters of Credit and with respect to each Lender that has a Revolving
Commitment, the commitment of such Lender to purchase Participation Interests in
the Letters of Credit up to such Lender's LOC Committed Amount as specified in
Schedule 2.1(a), as such amount may be reduced from time to time in accordance
with the provisions hereof.
"LOC Committed Amount" shall have the meaning set forth in Section
2.3(a).
"LOC Documents" shall mean, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements, instruments,
guarantees or other documents (whether general in application or applicable only
to such Letter of Credit) governing or providing for (i) the rights and
obligations of the parties concerned or (ii) any collateral security for such
obligations.
"LOC Obligations" shall mean, at any time, the sum of (i) the
maximum amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding (including any Existing Letters
of Credit), assuming compliance with all requirements for drawings referred to
in such Letters of Credit plus (ii) the aggregate amount of all drawings under
Letters of Credit honored by Issuing Lender but not theretofore reimbursed.
"Mandatory LOC Borrowing" shall have the meaning set forth in
Section 2.3(e).
"Mandatory Swingline Borrowing" shall have the meaning set forth in
Section 2.4(b)(ii).
"Margin Determination Certificate" shall mean an Officer's
Certificate of Borrower delivered (a) with respect to each Fiscal Quarter (other
than each fourth Fiscal Quarter), together with the three most recent financial
statements required pursuant to subsection 6.1(i), and (b) with respect to each
fourth Fiscal Quarter, within 45 days of the last day of such fourth Fiscal
Quarter, setting forth in reasonable detail the Consolidated Total Leverage
Ratio that is applicable as of the last day of the fiscal period for which such
financial statements and Officer's Certificate are being delivered.
"Margin Stock" shall have the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
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"Material Adverse Effect" shall mean (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Loan Parties and their Subsidiaries, taken as a
whole, or (ii) the material impairment of the ability of the Borrower,
individually, or the Loan Parties, taken as a whole to perform, or of
Administrative Agent or Lenders to enforce, the Obligations.
"Material Contract" shall mean any contract or other arrangement to
which a Loan Party or any of its Subsidiaries is a party (other than the Loan
Documents) (i) for which breach, nonperformance, cancellation or failure to
renew could reasonably be expected to have a Material Adverse Effect or (ii)
involving stated monetary liability of a Loan Party or their Subsidiaries in an
amount in excess of $1,000,000 per annum.
"Maturity Date" shall mean (a) with respect to the New Term Loan,
the Term Loan Maturity Date and (b) with respect to the Revolving Loans,
Swingline Loans and Letters of Credit, the Revolving Commitment Termination
Date.
"Multiemployer Plan" shall mean any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"Net Asset Sale Proceeds" shall mean, with respect to any Asset
Sale, Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) received from such Asset Sale, net of any bona fide direct
costs (paid to non-Affiliates) incurred in connection with such Asset Sale,
including (i) income taxes reasonably estimated to be actually payable within
two years of the date of such Asset Sale as a result of any gain recognized in
connection with such Asset Sale and (ii) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness (other
than the Loans) that is secured by a Lien on the stock or assets in question and
that is required to be repaid under the terms thereof as a result of such Asset
Sale.
"Net Insurance/Condemnation Proceeds" shall mean any Cash payments
or proceeds received by a Loan Party or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of a Loan Party or
any of its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of (a)
any actual and reasonable documented costs incurred by a Loan Party or any of
its Subsidiaries in connection with the adjustment or settlement of any claims
of a Loan Party or such Subsidiary in respect thereof, and (b) any amounts
retained by or paid to parties having superior rights, permitted by this
Agreement, to such proceeds, awards or payments.
"Notes" shall mean one or more of the Term Loan Notes, Revolving
Notes or Swingline Notes or any combination thereof.
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"Notice of Borrowing" shall mean a request for a Revolving Loan
borrowing pursuant to Section 2.1(b)(i) or a Swingline Loan borrowing pursuant
to Section 2.4(b)(i), as appropriate. A Form of Notice of Borrowing is attached
as Exhibit II.
"Notice of Conversion" shall mean the written notice of extension or
conversion as referenced in Section 2.10.
"Obligations" shall mean (i) all obligations of every nature of each
Loan Party from time to time owed to Administrative Agent, Lenders or any of
them under the Loan Documents, whether for principal, interest (including any
interest accruing after commencement of any bankruptcy or insolvency proceeding
against any Loan Party whether or not such interest is allowed in such
proceeding), reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnification or otherwise and (ii) solely for purposes of the
Collateral Documents and the Guaranties, all liabilities and obligations,
whenever arising, owing from any Loan Party or any of its Subsidiaries to any
Hedge Agreement Provider arising under any Secured Hedge Agreement permitted
pursuant to Section 7.1(v).
"Officers' Certificate" shall mean, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents and by its chief
financial officer or its treasurer; provided that every Officers' Certificate
with respect to the compliance with a condition precedent to the making of any
Loans hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition and any
definitions or other provisions contained in this Agreement relating thereto,
(ii) a statement that, in the opinion of the signers, they have made or have
caused to be made such examination or investigation as is reasonably necessary
to enable them to express an informed opinion as to whether or not such
condition has been complied with, and (iii) a statement as to whether, in the
opinion of the signers, such condition has been complied with.
"Operating Lease" shall mean, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"Original Closing Date" shall mean June 17, 2004.
"Participant" shall have the meaning set forth in Section 10.1(b).
"Participation Interest" shall mean a participation interest
purchased by a Revolving Lender in LOC Obligations as provided in Section 2.3(c)
and in Swingline Loans as provided in Section 2.4.
"Patriot Act" shall have the meaning set forth in Section 10.22.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
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"Pension Plan" shall mean any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"Permitted Acquisition" shall mean (a) the Polk Acquisition and (b)
an acquisition or any series of related acquisitions by a Loan Party of (i) all
or substantially all of the assets or a majority of the outstanding voting stock
or economic interests of a Person that is incorporated, formed or organized in
the United States or Canada or (ii) any division, line of business or other
business unit of a Person that is incorporated, formed or organized in the
United States or Canada (such Person or such division, line of business or other
business unit of such Person shall be referred to herein as the "Target"), in
each case that is a type of business (or assets used in a type of business)
permitted to be engaged in by the Loan Parties and their Subsidiaries pursuant
to Section 7.14 hereof, so long as (A) no Event of Default or Potential Event of
Default shall then exist or would exist after giving effect thereto, (B)
Borrower shall demonstrate to the reasonable satisfaction of Administrative
Agent that, after giving effect to the acquisition on a pro forma basis (giving
effect to adjustments for owner compensation for such period, documented to the
reasonable satisfaction of the Administrative Agent, to the extent such
compensation does not continue after such acquisition) (I) the Consolidated
Total Leverage Ratio shall be less than or equal to the ratio that is 0.25 lower
than the Consolidated Total Leverage Ratio then required under Section 7.6A and
(II) Loan Parties are in compliance with each of the financial covenants set
forth in Section 7.6, (C) Administrative Agent, on behalf of Lenders, shall have
received (or shall receive in connection with the closing of such acquisition) a
First Priority perfected security interest in all property (including, without
limitation, capital stock) acquired with respect to the Target in accordance
with the terms of Sections 6.8 and 6.9 and the Target, if a Person, shall have
executed counterparts of the Subsidiary Guaranty and the Security Agreement and
take such further action as required under Sections 6.8 and 6.9, (D) the Target
shall have earnings before interest, taxes, depreciation and amortization for
the four fiscal quarter period prior to the acquisition date in an amount
greater than $0, as adjusted for owner compensation for such period, documented
to the reasonable satisfaction of the Administrative Agent, to the extent such
compensation does not continue after such acquisition (provided that the
aggregate consideration paid by the Loan Parties and their Subsidiaries shall
not exceed $5,000,000 for any Target which, but for such owner compensation
adjustment, would have negative earnings for such period), (E) such acquisition
shall not be a "hostile" acquisition and shall have been approved by the board
of directors and/or shareholders of the applicable Loan Party and the Target,
(F) the Borrower shall have provided at least ten (10) days prior written notice
of such acquisition to the Administrative Agent (which shall distribute such
notice to the Lenders), (G) after giving effect to such acquisition, there shall
be at least $5,000,000 of borrowing availability under the Revolving Commitment
and (H) the aggregate consideration (including without limitation equity
consideration, earn outs or deferred compensation or non-competition
arrangements and the amount of Indebtedness and other liabilities assumed by the
Loan Parties and their Subsidiaries) paid by the Loan Parties and their
Subsidiaries for all acquisitions (other than the Polk Acquisition) shall not
exceed $75,000,000.
"Permitted Encumbrances" shall mean the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or
-23-
by ERISA, any such Lien relating to or imposed in connection with any
Environmental Claim, and any such Lien expressly prohibited by any applicable
terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in
each case incurred in the ordinary course of business (a) for amounts not
yet overdue or (b) for amounts that are overdue and that (in the case of
any such amounts overdue for a period in excess of 5 days) are being
contested in good faith by appropriate proceedings, so long as (1) such
reserves or other appropriate provisions, if any, as shall be required by
GAAP shall have been made for any such contested amounts, and (2) in the
case of a Lien with respect to any portion of the Collateral, such
contested proceedings conclusively operate to stay the sale of any portion
of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the
Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance with
any applicable terms of the Collateral Documents and not interfering in
any material respect with the ordinary conduct of the business of the Loan
Parties or any of its Subsidiaries or resulting in a material diminution
in the value of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do not
and will not interfere in any material respect with the ordinary conduct
of the business of the Loan Parties or any of their Subsidiaries or result
in a material diminution in the value of any Collateral as security for
the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under any
lease permitted by subsection 7.9, (b) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such lease
to any restriction or encumbrance referred to in the preceding clause (b),
so long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under such lease;
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(viii) Liens arising from filing UCC financing statements relating
solely to leases permitted by this Agreement;
(ix) Liens securing Inventory financed through the issuance of
commercial letters of credit permitted pursuant to subsection 7.4(ii); and
(x) Liens in favor of a Hedge Agreement Provider in connection with
a Secured Hedge Agreement, but only if such Hedge Agreement Provider and
Administrative Agent, on behalf of Lenders, shall share pari passu in the
collateral subject to such Liens.
"Person" shall mean and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"Pledge Agreement" shall mean the Amended and Restated Pledge
Agreement executed and delivered by the Loan Parties on the Amendment Effective
Date, substantially in the form of Exhibit XIV annexed hereto.
"Pledged Collateral" shall mean, collectively, the "Pledged
Collateral" as defined in the Pledge Agreement or the Security Agreement.
"Polk Acquisition" shall mean the acquisition by Holdings of all of
the outstanding capital stock of Polk Holding Corp. ("Polk"), a Delaware
corporation, for an aggregate amount, including all related fees and expenses
and repayment of existing indebtedness of Polk and its subsidiaries, not
exceeding $141,000,000, consummated pursuant to the terms of the Acquisition
Agreement.
"Potential Event of Default" shall mean a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.
"Pro Rata Share" shall mean (i) with respect to all payments,
computations and other matters relating to the Term Loan Commitment or the Term
Loan of any Lender, the percentage obtained by dividing (x) the Term Loan
Exposure of that Lender by (y) the aggregate Term Loan Exposure of all Lenders,
(ii) with respect to all payments, computations and other matters relating to
the Revolving Commitment or the Revolving Loans of any Lender or any Letters of
Credit issued or participations therein purchased by any Lender, the percentage
obtained by dividing (x) the Revolving Loan Exposure of that Lender by (y) the
aggregate Revolving Loan Exposure of all Lenders, and (iii) for all other
purposes with respect to each Lender, the percentage obtained by dividing (x)
the Term Loan Exposure of that Lender plus the Revolving Loan Exposure of that
Lender by (y) the aggregate Term Loan Exposure of all Lenders plus the
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aggregate Revolving Loan Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant to
subsection 10.1. The initial Pro Rata Share of each Lender for purposes of each
of clauses (i), (ii), (iii) and (iv) of the preceding sentence is set forth
opposite the name of that Lender on Schedule 2.1(a) annexed hereto.
"PTO" shall mean the United States Patent and Trademark Office or
any successor or substitute office in which filings are necessary or, in the
opinion of Administrative Agent, desirable in order to create or perfect Liens
on any IP Collateral.
"Purchasing Lenders" shall have the meaning set forth in Section
10.1(c).
"Real Property Asset" shall mean, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Register" shall have the meaning set forth in Section 10.1(d).
"Related Agreements" shall mean Trivest Management Agreement.
"Release" shall mean any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"Requirement of Law" shall mean, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Requisite Lenders" shall mean Lenders holding in the aggregate
greater than 50% of (i) the Commitments (and Participation Interests therein) or
(ii) if the Commitments have been terminated, the outstanding Loans and
Participation Interests (including the Participation Interests of the Issuing
Lender in any Letters of Credit and of the Swingline Lender in Swingline Loans)
provided, however, that if any Lender shall be a Defaulting Lender at such time,
then there shall be excluded from the determination of Required Lenders,
Obligations (including Participation Interests) owing to such Defaulting Lender
and such Defaulting Lender's Commitments, or after termination of the
Commitments, the principal balance of the Obligations owing to such Defaulting
Lender.
"Restricted Payment" shall mean (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of a Loan Party or any of its Subsidiaries now or hereafter outstanding, except
a dividend payable solely in shares of that class of stock to the holders of
that class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of stock of a
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Loan Party or any of its Subsidiaries now or hereafter outstanding, (iii) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of a Loan Party
or any of its Subsidiaries now or hereafter outstanding, (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in substance or legal defeasance),
sinking fund or similar payment with respect to, any Subordinated Indebtedness
and (v) any prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in substance or legal
defeasance), sinking fund or similar payment with respect to, any other
Indebtedness.
"Revolving Commitment" shall mean as to any Revolving Lender, the
obligation of such Revolving Lender, if any, to make Revolving Loans and
participate in Swingline Loans and Letters of Credit in an aggregate principal
and/or face amount equal to the amount set forth opposite the heading "Revolving
Commitment" on Schedule 1 to the Lender Addendum delivered by such Revolving
Lender or, as the case may be, in the Commitment Transfer Supplement 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 initial aggregate amount of the Revolving
Commitments is $100,000,000, subject to the limitations in Section 2.1(a).
"Revolving Commitment Percentage" shall mean, for each Revolving
Lender, the percentage identified as its Revolving Commitment Percentage on
Schedule 2.1(a) or in the Register, as such percentage may be modified in
connection with any assignment made in accordance with the provisions of Section
10.1(c).
"Revolving Commitment Termination Date" shall mean the date that is
six (6) years from the Amendment Effective Date.
"Revolving Committed Amount" shall have the meaning set forth in
Section 2.1(a).
"Revolving Lender" shall mean, as of any date of determination, a
Lender holding a Revolving Commitment on such date.
"Revolving Loan" shall have the meaning set forth in Section 2.1.
"Revolving Loan Exposure" shall mean, with respect to any Lender as
of any date of determination (i) prior to the termination of the Revolving
Commitments, that Lender's Revolving Commitment and (ii) after the termination
of the Revolving Commitments, the sum of (a) the aggregate outstanding principal
amount of the Revolving Loans of that Lender plus (b) in the event that Lender
is an Issuing Lender, the aggregate Letter of Credit Usage in respect of all
Letters of Credit issued by that Lender (in each case net of any participations
purchased by other Lenders in such Letters of Credit or any unreimbursed
drawings thereunder) plus (c) the aggregate amount of all participations
purchased by that Lender in any outstanding Letters of Credit or any
unreimbursed drawings under any Letters of Credit.
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"Revolving Note" or "Revolving Notes" shall mean any promissory
notes of Borrower provided pursuant to Section 2.1(e) in favor of each of the
Revolving Lenders evidencing the Revolving Loans, individually or collectively,
as appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Secured Hedge Agreement" shall mean any Hedge Agreement between a
Loan Party and a Hedge Agreement Provider, as amended, modified, supplemented,
extended or restated from time to time.
"Secured Parties" shall mean, collectively, the Agents, the Lenders,
and the Hedge Agreement Providers.
"Securities" shall mean any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Security Agreement" shall mean the Amended and Restated Security
Agreement executed and delivered by Holdings, Borrower and Borrower's
Subsidiaries on the Amended Effective Date, substantially in the form of Exhibit
XV annexed hereto.
"Solvent" shall mean, with respect to any Person, that as of the
date of determination both (A) (i) the then fair saleable value of the property
of such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing alternatives
and potential asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
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"Subordinated Indebtedness" shall mean any Indebtedness of a Loan
Party subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules, covenants,
defaults, remedies, subordination provisions and other material terms in form
and substance reasonably satisfactory to Agent.
"Subsidiary" shall mean, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of Holdings.
"Subsidiary Guarantor" shall mean any domestic Subsidiary of a Loan
Party that executes and delivers a counterpart of the Subsidiary Guaranty on the
Closing Date or from time to time thereafter pursuant to subsection 6.8.
"Subsidiary Guaranty" shall mean the Subsidiary Guaranty executed
and delivered by existing domestic Subsidiaries of each Loan Party on the
Closing Date and to be executed and delivered by additional domestic
Subsidiaries of the Loan Parties from time to time thereafter in accordance with
subsection 6.8, substantially in the form of Exhibit XVII annexed hereto, as
such Subsidiary Guaranty may hereafter be amended, supplemented or otherwise
modified from time to time.
"Swingline Commitment" shall mean the commitment of Swingline Lender
to make Swingline Loans in an aggregate principal amount at any time outstanding
up to the Swingline Committed Amount, and the commitment of the Revolving
Lenders to purchase participation interests in the Swingline Loans as provided
in Section 2.4(b)(ii), as such amounts may be reduced from time to time in
accordance with the provisions hereof.
"Swingline Committed Amount" shall mean the amount of Swingline
Lender's Swingline Commitment as specified in Section 2.4(a).
"Swingline Lender" shall mean CIBC and any successor swingline
lender.
"Swingline Loan" shall have the meaning set forth in Section 2.4(a).
"Swingline Note" shall mean the promissory note of Borrower in favor
of Swingline Lender evidencing the Swingline Loans provided pursuant to Section
2.4(d), as such promissory note may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
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"Syndication Agent" shall mean X.X. Xxxxxx Securities Inc., acting
through one or more of its agencies, branches or affiliates.
"Tax Exempt Certificate" shall have the meaning set forth in Section
2.18.
"Taxes" shall have the meaning set forth in Section 2.18.
"Term Loan" shall have the meaning set forth in Section 2.2B.
"Term Loan Commitment" shall mean as to any Term Loan Lender, the
obligation of such Term Loan Lender, if any, to make a Term Loan to the Borrower
on the Closing Date in a principal amount equal to the amount set forth opposite
such Lender's name under the heading "Term Loan Commitment" on Schedule 1 to the
Lender Addendum delivered by such Term Loan Lender or, as the case may be, in
the Commitment Transfer Supplement pursuant to which such Lender became a party
hereto. The initial aggregate amount of the Term Loan Commitments is
$306,760,406.
"Term Loan Commitment Percentage" shall mean, for any Term Loan
Lender, the percentage identified as its Term Loan Commitment Percentage on or
after the Amendment Effective Date in such Term Loan Lender's Lender Commitment
Letter, as such percentage may be modified in connection with any assignment
made in accordance with the provisions of Section 10.1.
"Term Loan Committed Amount" shall have the meaning set forth in
Section 2.2B.
"Term Loan Exposure" shall mean, with respect to any Lender as of
any date of determination (i) prior to the funding of the Term Loans, that
Lender's Term Loan Commitment and (ii) after the funding of the Term Loans, the
outstanding principal amount of the Term Loan of that Lender.
"Term Loan Lender" shall mean, as of any date of determination, any
Lender that holds a portion of the outstanding Term Loan on such date.
"Term Loan Maturity Date" shall mean the date that is seven (7)
years from the Amendment Effective Date.
"Term Note" or "Term Notes" shall mean any promissory notes of
Borrower in favor of each of the Term Loan Lenders evidencing the portion of the
Term Loan provided pursuant to Section 2.2B(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"Total Utilization of Revolving Commitments" shall mean, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
reimbursing the applicable Issuing Lender
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for any amount drawn under any Letter of Credit but not yet so applied) plus
(ii) the aggregate principal amount of all outstanding Swingline Loans plus
(iii) the Letter of Credit Usage.
"Transactions" shall mean the borrowings under this Agreement on the
Amendment Effective Date and the Polk Acquisition.
"Transfer Effective Date" shall have the meaning set forth in each
Commitment Transfer Supplement.
"Type" shall mean, as to any Loan, its nature as an Alternate Base
Rate Loan or LIBOR Rate Loan, as the case may be.
"Trivest" shall mean Trivest Partners, L.P., a Florida limited
partnership.
"Trivest Management Agreement" means that certain Advisory Agreement
dated as of December 1, 2005, as amended and modified, by and between Trivest
and Holdings as in effect on the Amendment Effective Date.
"UCC" shall mean the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"Voting Securities" shall mean any class of Capital Stock of a
Person pursuant to which the holders thereof have, at the time of determination,
the general voting power under ordinary circumstances to vote for the election
of directors, managers, trustees or general partners of such Person
(irrespective of whether or not at the time any other class or classes will have
or might have voting power by reason of the happening of any contingency).
"Weighted Average Life to Maturity" shall mean, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by (ii) the then outstanding principal
amount of such Indebtedness.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by the Loan Parties to Lenders pursuant to clauses (i),
(ii) and (x) of subsection 6.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(iv)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and
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policies in conformity with those used to prepare the financial statements
referred to in subsection 5.3.
For purposes of computing the financial covenants set forth in
Sections 7.6 and 7.8 for any applicable test period, any Permitted Acquisition
or permitted sale of assets (including a stock sale) shall have been deemed to
have taken place as of the first day of such applicable test period.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
D. The parties hereto acknowledge that they have each been
represented by counsel and have each cooperated in the drafting and preparation
of this Agreement. Accordingly, the general rule of contract interpretation
requiring any ambiguity to be construed against the drafter in connection with
the interpretation of this Agreement or any Loan Document shall be disregarded
and shall not be applied to construe any portion of this Agreement or any Loan
Document.
E. (i) Any reference in this Agreement or any Loan Document to any
agreement means such agreement as it may be amended, supplemented or otherwise
modified from time to time; (ii) any reference in this Agreement or any Loan
Document to any law, statute, regulation, rule or other legislative action shall
mean such law, statute, regulation, rule or other legislative action as amended,
supplemented or otherwise modified from time to time, and shall include any rule
or regulation promulgated thereunder; and (iii) any reference in this Agreement
or any Loan Document to a Person shall include the successor or assignee of such
Person.
1.4 TIME REFERENCES.
Unless otherwise specified, all references herein to times of day
shall be references to Eastern time (daylight or standard, as applicable).
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SECTION 2
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 REVOLVING LOANS.
(a) Revolving Commitment. During the Commitment Period, subject to
the terms and conditions hereof, each Revolving Lender severally agrees to make
revolving credit loans ("Revolving Loans") to Borrower from time to time for the
purposes hereinafter set forth; provided, however, that (i) with regard to each
Revolving Lender individually, the sum of such Revolving Lender's share of
outstanding Revolving Loans plus such Revolving Lender's Revolving Commitment
Percentage of outstanding Swingline Loans plus such Revolving Lender's Revolving
Commitment Percentage of outstanding LOC Obligations shall not exceed such
Revolving Lender's Revolving Commitment and (ii) with regard to the Revolving
Lenders collectively, the sum of the aggregate amount of outstanding Revolving
Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall
not exceed the Revolving Committed Amount then in effect. For purposes hereof,
the aggregate maximum amount available hereunder shall be ONE HUNDRED MILLION
DOLLARS ($100,000,000) (as such aggregate maximum amount may be reduced from
time to time as provided in Section 2.7, the "Revolving Committed Amount");
provided, however, that during the period commencing on March 1 and ending on
October 1 of each year, no more than $50,000,000 of Revolving Loans may be
outstanding. Revolving Loans may consist of Alternate Base Rate Loans or LIBOR
Rate Loans, or a combination thereof, as Borrower may request, and may be repaid
and reborrowed in accordance with the provisions hereof. LIBOR Rate Loans shall
be made by each Revolving Lender at its LIBOR Lending Office and Alternate Base
Rate Loans at its Domestic Lending Office.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. Borrower may request a Revolving Loan
borrowing by delivering a written Notice of Borrowing (or telephone notice
promptly confirmed in writing by delivery of a written Notice of Borrowing,
which delivery may be by fax) to Administrative Agent not later than 1:00 P.M.
on the Business Day prior to the date of the requested borrowing in the case of
Alternate Base Rate Loans, and on the third Business Day prior to the date of
the requested borrowing in the case of LIBOR Rate Loans. Each such Notice of
Borrowing shall be irrevocable and shall specify (A) that a Revolving Loan is
requested, (B) the date of the requested borrowing (which shall be a Business
Day), (C) the aggregate principal amount to be borrowed and (D) whether the
borrowing shall be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a
combination thereof, and if LIBOR Rate Loans are requested, the Interest
Period(s) therefor. If Borrower shall fail to specify in any such Notice of
Borrowing (1) an applicable Interest Period in the case of a LIBOR Rate Loan,
then such notice shall be deemed to be a request for an Interest Period of one
month, or (2) the Type of Revolving Loan requested, then such notice shall be
deemed to be a request for an Alternate Base Rate Loan hereunder. Administrative
Agent shall give notice to each Revolving Lender promptly upon receipt of each
Notice of Borrowing, the contents thereof and each such Revolving Lender's share
thereof.
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(ii) Minimum Amounts. Each Revolving Loan that is made as an
Alternate Base Rate Loan shall be in a minimum aggregate amount of $250,000 and
integral multiples of $100,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less). Each Revolving Loan that is made as a
LIBOR Rate Loan shall be in a minimum aggregate amount of $1,000,000 and
integral multiples of $100,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less).
(iii)Advances. Each Revolving Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available to
Administrative Agent for the account of Borrower at the office of Administrative
Agent specified in Section 10.8, or at such other office as Administrative Agent
may designate in writing, upon reasonable advance notice by 1:00 P.M. on the
date specified in the applicable Notice of Borrowing, in Dollars and in funds
immediately available to Administrative Agent. Such borrowing will then be made
available to Borrower by Administrative Agent by crediting the account of
Borrower on the books of such office with the aggregate of the amounts made
available to Administrative Agent by the Revolving Lenders and in like funds as
received by Administrative Agent.
(c) Repayment. Revolving Loans may be borrowed, repaid and
reborrowed in accordance with the terms hereof. The principal amount of all
Revolving Loans shall be due and payable in full on the Revolving Commitment
Termination Date, unless accelerated sooner pursuant to Section 8.
(d) Interest. Subject to the provisions of Section 2.9, Revolving
Loans shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as Revolving
Loans shall be comprised of Alternate Base Rate Loans, each such Alternate
Base Rate Loan shall bear interest at a per annum rate equal to the sum of
the Alternate Base Rate plus the Applicable Percentage; and
(ii) LIBOR Rate Loans. During such periods as Revolving Loans shall
be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear
interest at a per annum rate equal to the sum of the LIBOR Rate plus the
Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each Interest Payment
Date occurring after September 30, 2006.
(e) Revolving Notes. At the request of any Revolving Lender,
Borrower's obligation to pay each Revolving Lender's Revolving Loans shall be
evidenced by a Revolving Note made payable to such Lender in substantially the
form of Exhibit V.
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2.2A [RESERVED]
2.2B TERM LOANS.
(a) Term Loans. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each Term
Loan Lender severally agrees to make available to Borrower on the Amendment
Effective Date such Term Loan Lender's Term Loan Commitment Percentage of a term
loan in Dollars (the "Term Loan") in the aggregate principal amount of THREE
HUNDRED SIX MILLION SEVEN HUNDRED SIXTY THOUSAND FOUR HUNDRED SIX DOLLARS
($306,760,406) (the "Term Loan Committed Amount") for the purposes hereinafter
set forth. The Term Loan may consist of Alternate Base Rate Loans or LIBOR Rate
Loans, or a combination thereof, as Borrower may request; provided that on the
Amendment Effective Date and on the two Business Days following the Amendment
Effective Date, the Term Loan shall bear interest at the Alternate Base Rate.
LIBOR Rate Loans shall be made by each Term Loan Lender at its LIBOR Lending
Office and Alternate Base Rate Loans at its Domestic Lending Office. Amounts
repaid or prepaid on the Term Loan may not be reborrowed.
(b) Repayment of Term Loan. The principal amount of the Term Loan
shall be repaid in consecutive quarterly installments (as reduced pursuant to
Section 2.8) as follows:
PRINCIPAL AMORTIZATION TERM LOAN
PAYMENT DATE PRINCIPAL AMORTIZATION PAYMENT
---------------------- ------------------------------
September 30, 2006 $766,901.02
December 31, 2006 $766,901.02
March 31, 2007 $766,901.02
June 30, 2007 $766,901.02
September 30, 2007 $766,901.02
December 31, 2007 $766,901.02
March 31, 2008 $766,901.02
June 30, 2008 $766,901.02
September 30, 2008 $766,901.02
December 31, 2008 $766,901.02
March 31, 2009 $766,901.02
June 30, 2009 $766,901.02
September 30, 2009 $766,901.02
December 31, 2009 $766,901.02
March 31, 2010 $766,901.02
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PRINCIPAL AMORTIZATION TERM LOAN
PAYMENT DATE PRINCIPAL AMORTIZATION PAYMENT
---------------------- ------------------------------
June 30, 2010 $766,901.02
September 30, 2010 $766,901.02
December 31, 2010 $766,901.02
March 31, 2011 $766,901.02
June 30, 2011 $766,901.02
September 30, 2011 $766,901.02
December 31, 2011 $766,901.02
March 31, 2012 $766,901.02
June 30, 2012 $766,901.02
September 30, 2012 $766,901.02
December 31, 2012 $766,901.02
March 31, 2013 $766,901.02
June 30, 2013 $766,901.02
Term Loan Maturity $286,054,078.46 or the
Date remaining principal amount
of the Term Loan
(c) Interest on the Term Loan. Subject to the provisions of Section
2.9, the Term Loan shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as the Term Loan
shall be comprised of Alternate Base Rate Loans, each such Alternate Base
Rate Loan shall bear interest at a per annum rate equal to the sum of the
Alternate Base Rate plus the Applicable Percentage; and
(ii) LIBOR Rate Loans. During such periods as the Term Loan shall be
comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear
interest at a per annum rate equal to the sum of the LIBOR Rate plus the
Applicable Percentage.
Interest on the Term Loan shall be payable in arrears on each
Interest Payment Date occurring after the Amendment Effective Date.
(d) Term Notes. At the request of any Term Loan Lender, Borrower's
obligation to pay each Term Loan Lender's Term Loan shall be evidenced, upon
such Term Loan Lender's request, by a Term Note made payable to such Lender in
substantially the form of Exhibit VI.
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2.3 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which Issuing Lender
may reasonably require, during the Commitment Period Issuing Lender shall issue,
and the Revolving Lenders shall participate in, Letters of Credit for the
account of the Borrower and any Subsidiary Guarantor from time to time upon
request in a form reasonably acceptable to Issuing Lender; provided, however,
that (i) the aggregate amount of LOC Obligations shall not at any time exceed
FIVE MILLION DOLLARS ($5,000,000) (the "LOC Committed Amount"), (ii) the sum of
the aggregate amount of outstanding Revolving Loans plus outstanding Swingline
Loans plus outstanding LOC Obligations shall not at any time exceed the
Available Revolving Committed Amount then in effect, (iii) all Letters of Credit
shall be denominated in U.S. Dollars and (iv) Letters of Credit shall be issued
for any lawful corporate purposes, including in connection with workers'
compensation and other insurance programs. Except as otherwise expressly agreed
upon by all the Revolving Lenders, no Letter of Credit shall have an original
expiry date more than twelve (12) months from the date of issuance; provided,
however, so long as no Event of Default or Potential Event of Default has
occurred and is continuing and subject to the other terms and conditions to the
issuance of Letters of Credit hereunder, the expiry dates of Letters of Credit
may be extended annually or periodically from time to time on the request of
Borrower or by operation of the terms of the applicable Letter of Credit to a
date not more than twelve (12) months from the date of extension; provided,
further, that no Letter of Credit, as originally issued or as extended, shall
have an expiry date extending beyond the date that is five (5) days prior to the
Available Revolving Commitment Termination Date. Each Letter of Credit shall
comply with the related LOC Documents. The issuance and expiry date of each
Letter of Credit shall be a Business Day. Any Letters of Credit issued hereunder
shall be in a minimum original face amount of $50,000.
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted to Issuing Lender at least three (3) Business Days
prior to the requested date of issuance. Issuing Lender may from time to time
provide to Administrative Agent for dissemination to the Revolving Lenders a
detailed report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have occurred since
the date of any prior report, and including therein, among other things, the
account party, the beneficiary, the face amount, expiry date as well as any
payments or expirations which may have occurred. Issuing Lender will further
provide to Administrative Agent promptly upon request copies of the Letters of
Credit. Issuing Lender will provide to Administrative Agent promptly upon
request a summary report of the nature and extent of LOC Obligations then
outstanding.
(c) Participations. Each Revolving Lender, upon issuance of any
Letter of Credit (or upon a Person becoming a Revolving Lender hereunder), shall
be deemed to have purchased without recourse a risk participation from Issuing
Lender in such Letter of Credit and the obligations arising thereunder and any
collateral relating thereto, in each case in an amount equal to its Revolving
Commitment Percentage of the obligations under such Letter of Credit and shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to Issuing Lender therefor and discharge when
due, its Revolving Commitment
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Percentage of the obligations arising under such Letter of Credit. Without
limiting the scope and nature of each Revolving Lender's participation in any
Letter of Credit, to the extent that Issuing Lender has not been reimbursed as
required hereunder or under any LOC Document, each such Revolving Lender shall
pay to Issuing Lender its Revolving Commitment Percentage of such unreimbursed
drawing in same day funds on the day of notification by Issuing Lender of an
unreimbursed drawing pursuant to and in accordance with the provisions of
subsection (d) hereof. The obligation of each Revolving Lender to so reimburse
Issuing Lender shall be absolute and unconditional and shall not be affected by
the occurrence of a Default, an Event of Default or any other occurrence or
event, provided that the Revolving Lenders shall have no obligation to so
reimburse the Issuing Lender in respect of any liability incurred by the Issuing
Lender arising out of the gross negligence or willful misconduct of the Issuing
Lender, as determined by a court of competent jurisdiction. Any such
reimbursement shall not relieve or otherwise impair the obligation of Borrower
to reimburse Issuing Lender under any Letter of Credit, together with interest
as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, Issuing Lender will promptly notify Borrower and Administrative Agent.
Borrower shall reimburse Issuing Lender on the day of drawing under any Letter
of Credit (either with the proceeds of a Revolving Loan obtained hereunder or
otherwise) in same day funds as provided herein or in the LOC Documents. If
Borrower shall fail to reimburse Issuing Lender as provided herein, the
unreimbursed amount of such drawing shall bear interest at a per annum rate
equal to the ABR Default Rate. Unless Borrower shall immediately notify Issuing
Lender and Administrative Agent of its intent to otherwise reimburse Issuing
Lender, Borrower shall be deemed to have requested a Mandatory LOC Borrowing in
the amount of the drawing as provided in subsection (e) hereof, the proceeds of
which will be used to satisfy the reimbursement obligations. Borrower's
reimbursement obligations hereunder shall be absolute and unconditional under
all circumstances irrespective of any rights of set-off, counterclaim or defense
to payment Borrower may claim or have against Issuing Lender, Administrative
Agent, Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation any defense based on any failure of
Borrower to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. Issuing Lender will promptly notify
the other Revolving Lenders of the amount of any unreimbursed drawing and each
Revolving Lender shall promptly pay to Administrative Agent for the account of
Issuing Lender, in Dollars and in immediately available funds, the amount of
such Revolving Lender's Revolving Commitment Percentage of such unreimbursed
drawing. Such payment shall be made on the day such notice is received by such
Revolving Lender from Issuing Lender if such notice is received at or before
2:00 P.M., otherwise such payment shall be made at or before 12:00 Noon on the
Business Day next succeeding the day such notice is received. If such Revolving
Lender does not pay such amount to Issuing Lender in full upon such request,
such Revolving Lender shall, on demand, pay to Administrative Agent for the
account of Issuing Lender interest on the unpaid amount during the period from
the date of such drawing until such Revolving Lender pays such amount to Issuing
Lender in full at a rate per annum equal to, if paid within two (2) Business
Days of the date of drawing, the Federal Funds Effective Rate and thereafter at
a rate equal to the Alternate Base Rate. Each Revolving Lender's obligation to
make such payment to Issuing Lender, and the right of Issuing Lender to receive
the same, shall be absolute and unconditional, shall not be
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affected by any circumstance whatsoever and without regard to the termination of
this Agreement or the Commitments hereunder, the existence of a Event of Default
or Potential Event of Default or the acceleration of the Obligations hereunder
and shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Repayment with Revolving Loans. On any day on which Borrower
shall have requested, or been deemed to have requested, a Revolving Loan to
reimburse a drawing under a Letter of Credit, Administrative Agent shall give
notice to the Revolving Lenders that a Revolving Loan has been requested or
deemed requested in connection with a drawing under a Letter of Credit, in which
case a Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans
(each such borrowing, a "Mandatory LOC Borrowing") shall be immediately made
(without giving effect to any termination of the Commitments pursuant to Section
8) pro rata based on each Revolving Lender's respective Revolving Commitment
Percentage (determined before giving effect to any termination of the
Commitments pursuant to Section 8) and the proceeds thereof shall be paid
directly to Issuing Lender for application to the respective LOC Obligations.
Each Revolving Lender hereby irrevocably agrees to make such Revolving Loans on
the day such notice is received by the Revolving Lenders from Administrative
Agent if such notice is received at or before 2:00 P.M., otherwise such payment
shall be made at or before 12:00 Noon on the Business Day next succeeding the
day such notice is received, in each case notwithstanding (i) the amount of
Mandatory LOC Borrowing may not comply with the minimum amount for borrowings of
Revolving Loans otherwise required hereunder, (ii) whether any conditions
specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event
of Default then exists, (iv) failure for any such request or deemed request for
Revolving Loan to be made by the time otherwise required in Section 2.1(b), (v)
the date of such Mandatory LOC Borrowing, or (vi) any reduction in the Available
Revolving Committed Amount after any such Letter of Credit may have been drawn
upon. In the event that any Mandatory LOC Borrowing cannot for any reason be
made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code with
respect to Borrower), then each such Revolving Lender hereby agrees that it
shall forthwith fund (as of the date the Mandatory LOC Borrowing would otherwise
have occurred, but adjusted for any payments received from Borrower on or after
such date and prior to such purchase) its Participation Interests in the
outstanding LOC Obligations; provided, further, that in the event any Revolving
Lender shall fail to fund its Participation Interest on the day the Mandatory
LOC Borrowing would otherwise have occurred, then the amount of such Revolving
Lender's unfunded Participation Interest therein shall bear interest payable by
such Revolving Lender to Issuing Lender upon demand, at the rate equal to, if
paid within two (2) Business Days of such date, the Federal Funds Effective
Rate, and thereafter at a rate equal to the Alternate Base Rate.
(f) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit shall,
for purposes hereof, be treated in all respects the same as the issuance of a
new Letter of Credit hereunder.
(g) Uniform Customs and Practices. Issuing Lender shall have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published
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as of the date of issue by the International Chamber of Commerce (the "UCP"), in
which case the UCP may be incorporated therein and deemed in all respects to be
a part thereof.
(h) Designation of Subsidiaries as Account Parties. Notwithstanding
anything to the contrary set forth in this Agreement, including without
limitation Section 2.3(a), a Letter of Credit issued hereunder may contain a
statement to the effect that such Letter of Credit is issued for the account of
a Subsidiary of Borrower; provided that, notwithstanding such statement,
Borrower shall be the actual account party for all purposes of this Agreement
for such Letter of Credit and such statement shall not affect Borrower's
reimbursement obligations hereunder with respect to such Letter of Credit.
2.4 SWINGLINE LOAN SUBFACILITY.
(a) Swingline Commitment. During the Commitment Period, subject to
the terms and conditions hereof, Swingline Lender, in its individual capacity,
agrees to make certain revolving credit loans to Borrower (each a "Swingline
Loan" and, collectively, the "Swingline Loans") for the purposes hereinafter set
forth; provided, however, (i) the aggregate amount of Swingline Loans
outstanding at any time shall not exceed FIVE MILLION DOLLARS ($5,000,000) (the
"Swingline Committed Amount"), and (ii) the sum of the outstanding Revolving
Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall
not exceed the Available Revolving Committed Amount. Swingline Loans hereunder
may be repaid and reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Borrowings.
(i) Notice of Borrowing and Disbursement. Swingline Lender will make
Swingline Loans available to Borrower on any Business Day upon delivery of a
Notice of Borrowing by Borrower to Administrative Agent not later than 2:00 P.M.
on such Business Day. Swingline Loan borrowings hereunder shall be made in
minimum amounts of $100,000 and in integral amounts of $100,000 in excess
thereof.
(ii) Repayment of Swingline Loans. Swingline Loans may be borrowed,
repaid and reborrowed in accordance with the terms hereof. Each Swingline Loan
borrowing shall be due and payable on the Revolving Commitment Termination Date.
Swingline Lender may, at any time, in its sole discretion, by written notice to
Borrower and Administrative Agent, demand repayment of its Swingline Loans by
way of a Revolving Loan borrowing, in which case Borrower shall be deemed to
have requested a Revolving Loan borrowing comprised entirely of Alternate Base
Rate Loans in the amount of such Swingline Loans; provided, however, that, in
the following circumstances, any such demand shall also be deemed to have been
given one Business Day prior to each of (A) the Revolving Commitment Termination
Date, (B) the occurrence of any Bankruptcy Event, (C) upon acceleration of the
Obligations hereunder, whether on account of a Bankruptcy Event or any other
Event of Default, and (D) the exercise of remedies in accordance with the
provisions of Section 8 hereof (each such Revolving Loan borrowing made on
account of any such deemed request therefor as provided herein being hereinafter
referred to as "Mandatory Swingline Borrowing"). Each Revolving Lender hereby
irrevocably agrees to make such Revolving Loans promptly upon any such request
or deemed request on account of
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each Mandatory Swingline Borrowing in the amount and in the manner specified in
the preceding sentence and on the same such date notwithstanding (1) the amount
of Mandatory Swingline Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (2) whether any
conditions specified in Section 4.2 are then satisfied, (3) whether a Default or
an Event of Default then exists, (4) failure of any such request or deemed
request for Revolving Loans to be made by the time otherwise required in Section
2.1(b)(i), (5) the date of such Mandatory Swingline Borrowing, or (6) any
reduction in the Revolving Committed Amount or termination of the Revolving
Commitments immediately prior to such Mandatory Swingline Borrowing or
contemporaneously therewith. In the event that any Mandatory Swingline Borrowing
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code), then each Revolving Lender hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Swingline Borrowing would
otherwise have occurred, but adjusted for any payments received from Borrower on
or after such date and prior to such purchase) from Swingline Lender such
participations in the outstanding Swingline Loans as shall be necessary to cause
each such Revolving Lender to share in such Swingline Loans ratably based upon
its respective Revolving Commitment Percentage (determined before giving effect
to any termination of the Commitments pursuant to Section 8); provided that (x)
all interest payable on the Swingline Loans shall be for the account of
Swingline Lender until the date as of which the respective participation is
purchased, and (y) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing Revolving Lender shall be required to
pay to Swingline Lender interest on the principal amount of such participation
purchased for each day from and including the day upon which the Mandatory
Swingline Borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Swingline Borrowing, the Federal
Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions of
Section 2.9(b), Swingline Loans shall bear interest at a per annum rate equal to
the Alternate Base Rate plus the Applicable Percentage for Revolving Loans that
are Alternate Base Rate Loans. Interest on Swingline Loans shall be payable in
arrears on each Interest Payment Date occurring after September 30, 2006.
(d) Swingline Note. The Swingline Loans shall be evidenced by a duly
executed promissory note of Borrower to Swingline Lender in the original amount
of the Swingline Committed Amount and substantially in the form of Exhibit VII.
2.5 INCREMENTAL LOANS.
(a) Provided (x) there exists no Default or Event of Default and (y)
after giving effect to the making of Incremental Term Loans referred to below
and the use of proceeds therefrom, the Borrower would be in pro forma compliance
with each of the financial covenants set forth in Section 7.6, upon notice to
the Administrative Agent (which shall promptly notify each Term Loan Lender),
the Borrower may at any time on up to four (4) occasions, request additional
term loans (the "Incremental Term Loans" and the related commitments, the
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"Incremental Term Commitments") in an aggregate amount not exceeding
$75,000,000; provided that (i) other than amortization, pricing and maturity
date, the Incremental Term Loans shall have the same terms as the Term Loans
existing immediately prior to the effectiveness of the amendment creating such
Incremental Term Loans; provided that (x) the Incremental Term Loans shall not
have a final maturity date earlier than the Term Loan Maturity Date, and (y) the
Incremental Term Loans shall not have a Weighted Average Life to Maturity that
is shorter than the then Weighted Average Life to Maturity of the remaining Term
Loans. At the time of the sending of such notice, the Borrower (in consultation
with the Administrative Agent) shall specify the time period within which each
Lender is requested to respond (which shall in no event be less than five (5)
Business Days and no more than thirty (30) Business Days from the date of
delivery of such notice to the Lenders). Each Lender with a Term Loan shall
notify the Administrative Agent within such time period whether or not it agrees
to such Incremental Term Commitment and, if so, whether by an amount equal to,
greater than, or less than its pro rata share of the total Incremental Term
Loans so requested. Any Lender not responding within such time period shall be
deemed to have declined to provide an Incremental Term Commitment and, to the
extent any Term Loan Lender declines to make available its pro rata share of
such Incremental Term Commitments, the Borrower may also invite additional
persons to become Lenders. The Administrative Agent shall notify the Borrower
and each Term Loan Lender of the Lenders' responses to each request made
hereunder. Any Lender or additional bank or financial institution electing to
make available an Incremental Term Commitment (an "Additional Term Loan Lender")
shall become a Lender or make its Incremental Term Commitment available, as the
case may be, under this Agreement, pursuant to an amendment (an "Incremental
Facility Amendment") to this Agreement giving effect to the modifications
permitted by this Section 2.5 and, as appropriate, the other Loan Documents,
executed by the Loan Parties, each Additional Term Lender (to the extent
applicable) and the Administrative Agent. An Incremental Facility Amendment may,
without the consent of any other Lender and notwithstanding anything in Section
10.1 to the contrary, effect such amendments to this Agreement and the other
Loan Documents as may be reasonably necessary and which are not materially
adverse to the existing Lenders, in the opinion of the Administrative Agent, to
effect the provisions of this Section 2.5 (including appropriate amendments to
the definition of "Requisite Lenders" and to Section 2.11 in order to provide
the same treatment for such Incremental Term Loans as is applicable to the Term
Loans).
(b) If any Incremental Term Commitments are made in accordance with
this Section 2.5, the Administrative Agent and the Borrower shall determine the
effective date (the "Term Commitments Increase Effective Date") and the final
allocation of such increase. The Administrative Agent shall promptly notify the
Borrower and the Lenders of the final allocation of such increase and the Term
Commitments Increase Effective Date. As a condition precedent to such increase,
the Borrower shall deliver to the Administrative Agent such documents and
opinions as the Administrative Agent may reasonably request together with a
certificate of the Borrower dated as of the Term Commitments Increase Effective
Date signed by a financial officer of the Borrower (i) certifying and attaching
(A) the resolutions adopted by the Borrower approving or consenting to such
increase and (B) a certificate demonstrating that, upon after giving pro forma
effect to such increase, the Borrower would be in pro forma compliance with the
financial covenants set forth in Section 7.6 as of the end of the most recently
ended fiscal quarter for which appropriate financial information is available,
and (ii) certifying that, before and after
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giving effect to such increase, (A) the representations and warranties contained
in Section 5 and the other Loan Documents are true and correct in all material
respects on and as of the Term Commitments Increase Effective Date, except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct in all material respects
as of such earlier date and (B) no Default exists.
(c) The Borrower shall use the proceeds of the Incremental Term
Loans for general corporate purposes or Permitted Acquisitions.
2.6 FEES.
(a) Commitment Fee. In consideration of the Revolving Commitment,
Borrower agrees to pay to Administrative Agent, for the ratable benefit of the
Revolving Lenders, a commitment fee (the "Commitment Fee") in an amount equal to
the Applicable Percentage per annum on the average daily unused amount of the
Available Revolving Committed Amount available at such time. For purposes of
computation of the Commitment Fee, LOC Obligations shall be considered usage but
Swingline Loans shall not be considered usage of the Available Revolving
Committed Amount. The Commitment Fee shall be payable quarterly in arrears on
the last Business Day of each calendar quarter.
(b) Letter of Credit Fees. In consideration of the LOC Commitments,
Borrower agrees to pay to Administrative Agent, for the ratable benefit of the
Revolving Lenders, a fee (the "Letter of Credit Fee") equal to the Applicable
Percentage for Revolving Loans that are LIBOR Rate Loans per annum on the
average daily maximum amount available to be drawn under each Letter of Credit
from the date of issuance to the date of expiration. In addition to such Letter
of Credit Fee, Borrower agrees to pay to Issuing Lender, for its own account
without sharing by the other Lenders, an additional fronting fee (the "Fronting
Fee") of one-eighth of one percent (0.125%) per annum on the average daily
maximum amount available to be drawn under each such Letter of Credit issued by
it. The Letter of Credit Fee and the Fronting Fee shall each be payable
quarterly in arrears on the last Business Day of each calendar quarter.
(c) Issuing Lender Fees. In addition to the Letter of Credit Fees
and Fronting Fees payable pursuant to subsection (b) hereof, Borrower shall pay
to Issuing Lender for its own account without sharing by the other Lenders the
reasonable and customary charges from time to time of Issuing Lender with
respect to the amendment, transfer, administration, cancellation and conversion
of, and drawings under, such Letters of Credit (collectively, the "Issuing
Lender Fees").
(d) Administrative Fee. Borrower agrees to pay to Administrative
Agent the annual administrative fee as described in the Fee Letter.
2.7 COMMITMENT REDUCTIONS.
(a) Voluntary Reductions. Borrower shall have the right to terminate
or permanently reduce the unused portion of the Available Revolving Committed
Amount at any time or from time to time upon not less than five (5) Business
Days' prior written notice to
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Administrative Agent (which shall notify Lenders thereof as soon as practicable)
of each such termination or reduction, which notice shall specify the effective
date thereof and the amount of any such reduction which shall be in a minimum
amount of $1,000,000 or a whole multiple of $100,000 in excess thereof and shall
be irrevocable and effective upon receipt by Administrative Agent; provided that
no such reduction or termination shall be permitted if after giving effect
thereto, and to any prepayments of the Revolving Loans made on the effective
date thereof, the sum of the then outstanding aggregate principal amount of the
outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding
LOC Obligations would exceed the Revolving Committed Amount then in effect.
(b) Mandatory Reductions. On any date that the Revolving Loans are
required to be prepaid pursuant to the terms of Section 2.8(b) (i) - (v), the
Available Revolving Committed Amount shall be automatically permanently reduced
by the amount of such required prepayment and/or reduction.
(c) Maturity Date. The Revolving Commitment, the LOC Commitment and
the Swingline Commitment shall automatically terminate on the Revolving
Commitment Termination Date, unless terminated sooner pursuant to Section 8.
2.8 PREPAYMENTS.
(a) Optional Prepayments. Borrower shall have the right to prepay
Loans in whole or in part from time to time; provided, however, that each
partial prepayment of Term Loans (i) consisting of LIBOR Loans shall be in a
minimum principal amount of $1,000,000 and integral multiples of $100,000 in
excess thereof and (ii) consisting of Alternate Base Rate Loans shall be in a
minimum principal amount of $250,000 and integral multiples of $100,000 in
excess thereof. Borrower shall give three (3) Business Days' irrevocable notice
in the case of LIBOR Rate Loans and same-day irrevocable notice on any Business
Day in the case of Alternate Base Rate Loans, to Administrative Agent (which
shall notify Lenders thereof as soon as practicable) and, in each case, such
notice shall be received no later than 12:00 noon (New York time). To the extent
that Borrower elects to prepay the Term Loans, amounts prepaid under this
Section 2.8(a) shall be applied to the remaining amortization payments thereof
on a pro rata basis, first to Alternate Base Rate Loans and then to LIBOR Rate
Loans in direct order of Interest Period maturities. All prepayments under this
Section 2.8(a) shall be subject to Section 2.17, but otherwise shall be made
without premium or penalty. Interest on the principal amount prepaid shall be
payable on the next occurring Interest Payment Date that would have occurred had
such loan not been prepaid or, at the request of Administrative Agent, interest
on the principal amount prepaid shall be payable on any date that a prepayment
is made hereunder through the date of prepayment.
(b) Mandatory Prepayments and Mandatory Reductions of Revolving
Commitments. The Loans shall be prepaid and/or the Revolving Commitments shall
be permanently reduced in the amounts and under the circumstances set forth
below, all such prepayments and/or reductions to be applied as set forth below
or as more specifically provided in subsection 2.8(b)(ix):
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(i) Prepayments and Reductions From Net Asset Sale Proceeds. No
later than the first Business Day following the date of receipt by a Loan
Party or any of its Subsidiaries of any Net Asset Sale Proceeds in respect
of any Asset Sale, Borrower shall prepay the Loans and/or the Revolving
Commitments shall be permanently reduced in an aggregate amount equal to
such Net Asset Sale Proceeds. Notwithstanding the preceding sentence, such
prepayment shall not be required to the extent that a Loan Party or any of
its Subsidiaries reinvests the Net Asset Sale Proceeds within 180 days
after the date of such Net Asset Sale by making Consolidated Capital
Expenditures for productive fixed assets of a kind used or usable in the
business of the Loan Parties and their Subsidiaries.
(ii) Prepayments and Reductions from Net Insurance/Condemnation
Proceeds. No later than the first Business Day following the date of
receipt by Administrative Agent or by a Loan Party or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds that are required
to be applied to prepay the Loans and/or reduce the Revolving Commitments
pursuant to the provisions of subsection 6.4C, Borrower shall prepay the
Loans and/or the Revolving Commitments shall be permanently reduced in an
aggregate amount equal to the amount of such Net Insurance/Condemnation
Proceeds.
(iii) Prepayments and Reductions Due to Reversion of Surplus Assets
of Pension Plans. On the date of return to a Loan Party or any of its
Subsidiaries of any surplus assets of any pension plan of a Loan Party or
any of its Subsidiaries, Borrower shall prepay the Loans and/or the
Revolving Commitments shall be permanently reduced in an aggregate amount
(such amount being the "Net Pension Proceeds") equal to 100% of such
returned surplus assets, net of transaction costs and expenses incurred in
obtaining such return, including incremental taxes payable as a result
thereof.
(iv) Prepayments and Reductions Due to Issuance of Debt or Equity
Securities. On the date of receipt by a Loan Party or any of its
Subsidiaries of the Cash proceeds (any such proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses
associated therewith, in each case payable to non-Affiliates, including
reasonable legal fees and expenses, being "Net Securities Proceeds") from
the issuance after the Closing Date of any debt or equity Securities of a
Loan Party or any of its Subsidiaries (except for (A) the issuance of up
to $2,500,000 of debt or equity Securities to employees of Borrower and
its Subsidiaries and (B) the issuance of equity Securities to Persons who
are shareholders or warrant holders of Holdings as of the Closing Date, or
their successors and assigns, but only to the extent that the Net
Securities Proceeds of all issuances of equity Securities by Holdings to
such Persons hereafter do not exceed $5,000,000 in the aggregate
(excluding from such $5,000,000 limitation debt or equity issued as
consideration in connection with a Permitted Acquisition)), Borrower shall
prepay the Loans and/or the Revolving Commitments shall be permanently
reduced in an aggregate amount equal to 100% of such Net Securities
Proceeds in the case of debt Securities issuances and 50% of such Net
Securities Proceeds in the case of equity Securities issuances.
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(v) Prepayments and Reductions from Consolidated Excess Cash Flow.
On the 90th day after the end of each Fiscal Year, Borrower shall prepay
the Loans and/or the Revolving Commitments shall be permanently reduced in
an aggregate amount equal to (A) 75% of Consolidated Excess Cash Flow for
such year if the Consolidated Total Leverage Ratio as of the last day of
such Fiscal Year is greater than 3.50x, (B) 50% of Consolidated Excess
Cash Flow for such year if the Consolidated Total Leverage Ratio as of the
last day of such Fiscal Year is greater than 2.50x but less than or equal
to 3.50x or (C) 0% of Consolidated Excess Cash Flow for such year if the
Consolidated Total Leverage Ratio as of the last day of such Fiscal Year
is less than or equal to 2.50x.
(vi) Key-Man Insurance. No later than the first Business Day
following the date of receipt by Administrative Agent or by a Loan Party
or any of its Subsidiaries of any proceeds from the Key-Man Insurance,
Borrower shall prepay the Loans and/or the Revolving Commitments shall be
permanently reduced in an aggregate amount equal to 50% of the amount of
such proceeds.
(vii) Calculations of Net Proceeds Amounts; Additional Prepayments
and Reductions Based on Subsequent Calculations. Concurrently with any
prepayment of the Loans and/or reduction of the Revolving Commitments
pursuant to subsections 2.8(b)(i) - (vi), Borrower shall deliver to
Administrative Agent an Officers' Certificate demonstrating the
calculation of the amount (the "Net Proceeds Amount") of the applicable
Net Asset Sale Proceeds or Net Insurance/Condemnation Proceeds, the
applicable Net Pension Proceeds or Net Securities Proceeds (as such terms
are defined in subsections 2.8(b)(iii) and (iv), or the applicable
Consolidated Excess Cash Flow, as the case may be, that gave rise to such
prepayment and/or reduction. In the event that Borrower shall subsequently
determine that the actual Net Proceeds Amount was greater than the amount
set forth in such Officers' Certificate (including if any actual taxes to
be paid as a result of an Asset Sale is less than the estimated taxes to
be paid as a result of such Asset Sale), Borrower shall promptly make an
additional prepayment of the Loans (and/or, if applicable, the Revolving
Commitments shall be permanently reduced) in an amount equal to the amount
of such excess, and Borrower shall concurrently therewith deliver to
Administrative Agent an Officers' Certificate demonstrating the derivation
of the additional Net Proceeds Amount resulting in such excess.
(viii) Prepayments Due to Reductions or Restrictions of Revolving
Commitments. Borrower shall from time to time prepay first the Swingline
Loans, and second the Revolving Loans to the extent necessary so that the
Total Utilization of Revolving Commitments shall not at any time exceed
the Available Revolving Committed Amount.
(ix) Application of Prepayments.
(A) Application of Voluntary Prepayments by Type of Loans and Order
of Maturity. Any voluntary prepayments pursuant to subsection 2.8(a) shall
be applied as specified by Borrower in the applicable notice of
prepayment; provided that in the event Borrower fails to specify the Loans
to which any such prepayment shall be applied, such prepayment shall be
applied first to repay outstanding Term Loans to the full extent
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thereof, second to repay outstanding Swingline Loans to the full extent
thereof, and third to repay outstanding Revolving Loans to the full extent
thereof and permanently reduce the Available Revolving Committed Amount.
Any voluntary prepayments of the Term Loans pursuant to subsection 2.8(a)
shall be applied to prepay the Term Loans on a pro rata basis (in
accordance with the outstanding principal amounts thereof) and to reduce
the scheduled installments of principal of the Term Loans set forth in
subsection 2.2B(b) on a pro rata basis (in accordance with the outstanding
principal amounts thereof) to each scheduled installment of principal of
the Term Loans set forth in subsection 2.2B(b) that is unpaid at the time
of such prepayment; provided, however, that voluntary prepayments made by
Borrower during any calendar year may be applied in forward order of
maturity for the succeeding four quarterly payments.
(B) Application of Mandatory Prepayments by Type of Loans. Any
amount (the "Applied Amount") required to be applied as a mandatory
prepayment of the Loans and/or a reduction of the Revolving Commitments
pursuant to subsections 2.8(b) (i) - (v) shall be applied first to prepay
the Term Loans to the full extent thereof, second, to the extent of any
remaining portion of the Applied Amount, to prepay the Swingline Loans to
the full extent thereof and to permanently reduce the Revolving
Commitments by the amount of such prepayment, third, to the extent of any
remaining portion of the Applied Amount, to prepay the Revolving Loans to
the full extent thereof and to further permanently reduce the Revolving
Commitments by the amount of such prepayment, and fourth, to the extent of
any remaining portion of the Applied Amount, to further permanently reduce
the Revolving Commitments to the full extent thereof. Any mandatory
prepayments of the Term Loans pursuant to subsection 2.8(b) shall be
applied to prepay the Term Loans on a pro rata basis (in accordance with
the outstanding principal amounts thereof) and to reduce the scheduled
installments of principal of the Term Loans set forth in subsection
2.2B(b) on a pro rata basis (in accordance with the outstanding principal
amounts thereof) to each scheduled installment of principal of the Term
Loans set forth in subsection 2.2B(b) that is unpaid at the time of such
prepayment.
(C) Application of Prepayments to Base Rate Loans and LIBOR Rate
Loans. Considering Term Loans and Revolving Loans being prepaid
separately, any prepayment thereof shall be applied first to Base Rate
Loans to the full extent thereof before application to LIBOR Rate Loans,
in each case in a manner which minimizes the amount of any payments
required to be made by Borrower pursuant to subsection 2.17.
(c) Hedging Obligations Unaffected. Any repayment or prepayment made
pursuant to this Section 2.8 shall not affect any Loan Party's obligation to
continue to make payments under any Secured Hedge Agreement, which shall remain
in full force and effect notwithstanding such repayment or prepayment, subject
to the terms of such Secured Hedge Agreement.
2.9 DEFAULT RATE AND PAYMENT DATES.
(a) If all or a portion of the principal amount of any Loan which is
a LIBOR Rate Loan shall not be paid when due or continued as a LIBOR Rate Loan
in accordance with
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the provisions of Section 2.10 (whether at the stated maturity, by acceleration
or otherwise), such overdue principal amount of such Loan shall be converted to
an Alternate Base Rate Loan at the end of the Interest Period applicable
thereto.
(b) (i) If all or a portion of the principal amount of any LIBOR
Rate Loan shall not be paid when due, such overdue amount shall bear interest at
a rate per annum which is equal to the rate that would otherwise be applicable
thereto plus 2%, until the end of the Interest Period applicable thereto, and
thereafter at a rate per annum which is equal to the Alternate Base Rate plus
the sum of the Applicable Percentage then in effect for Alternate Base Rate
Loans and 2% (the "ABR Default Rate") or (ii) if any interest payable on the
principal amount of any Loan or any fee or other amount, including the principal
amount of any Alternate Base Rate Loan, payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum which is equal to the ABR Default
Rate, in each case from the date of such non-payment until such amount is paid
in full (after as well as before judgment). Upon the occurrence, and during the
continuance, of any other Event of Default hereunder, at the option of the
Requisite Lenders, the principal of and, to the extent permitted by law,
interest on the Loans and any other amounts owing hereunder or under the other
Loan Documents shall bear interest, payable on demand, at a per annum rate which
is (A) in the case of principal, the rate that would otherwise be applicable
thereto plus 2% or (B) in the case of interest, fees or other amounts, the ABR
Default Rate (after as well as before judgment).
(c) Interest on each Loan shall be payable in arrears on each
Interest Payment Date; provided that interest accruing pursuant to paragraph (b)
of this Section 2.9 shall be payable from time to time on demand.
2.10 CONVERSION OPTIONS.
(a) Borrower may, in the case of the Revolving Loans and the Term
Loan, elect from time to time to convert Alternate Base Rate Loans to LIBOR Rate
Loans by giving Administrative Agent at least three (3) Business Days' prior
irrevocable written notice of such election no later than 12:00 noon (New York
time). In addition, Borrower may elect from time to time to convert LIBOR Rate
Loans to Alternate Base Rate Loans by giving Administrative Agent irrevocable
written notice at least three (3) Business Days' prior to the proposed date of
conversion no later than 12:00 noon (New York time). A form of Notice of
Conversion is attached as Exhibit III. If the date upon which an Alternate Base
Rate Loan is to be converted to a LIBOR Rate Loan is not a Business Day, then
such conversion shall be made on the next succeeding Business Day. All or any
part of outstanding Alternate Base Rate Loans may be converted as provided
herein; provided that (i) no Loan may be converted into a LIBOR Rate Loan when
any Event of Default or Potential Event of Default has occurred and is
continuing and (ii) partial conversions shall be in an aggregate principal
amount of (A) in the case of LIBOR Rate Loans, $1,000,000 or a whole multiple of
$100,000 in excess thereof, and (B) in the case of Alternate Base Rate Loans,
$250,000 or a whole multiple of $100,000 in excess thereof. LIBOR Rate Loans may
only be converted to Alternate Base Rate Loans on the last day of the applicable
Interest Period. If the date upon which a LIBOR Rate Loan is to be converted to
an Alternate
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Base Rate Loan is not a Business Day, then such conversion shall be made on the
next succeeding Business Day and during the period from such last day of an
Interest Period to such succeeding Business Day such Loan shall bear interest as
if it were an Alternate Base Rate Loan.
(b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by Borrower
with the notice provisions contained in Section 2.10(a); provided that no LIBOR
Rate Loan may be continued as such when any Event of Default or Potential Event
of Default has occurred and is continuing, in which case such Loan shall be
automatically converted to an Alternate Base Rate Loan at the end of the
applicable Interest Period with respect thereto. If Borrower shall fail to give
timely notice of an election to continue a LIBOR Rate Loan, or the continuation
of LIBOR Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be
automatically converted to Alternate Base Rate Loans at the end of the
applicable Interest Period with respect thereto.
2.11 COMPUTATION OF INTEREST AND FEES.
(a) Interest payable hereunder with respect to any Alternate Base
Rate Loan based on the Prime Rate shall be calculated on the basis of a year of
365 days (or 366 days, as applicable) for the actual days elapsed. All fees,
interest and all other amounts payable hereunder shall be calculated on the
basis of a 360 day year for the actual days elapsed. Administrative Agent shall
as soon as practicable notify Borrower and Lenders of each determination of a
LIBOR Rate on the Business Day of the determination thereof. Any change in the
interest rate on a Loan resulting from a change in the Alternate Base Rate shall
become effective as of the opening of business on the day on which such change
in the Alternate Base Rate shall become effective. Administrative Agent shall as
soon as practicable notify Borrower and Lenders of the effective date and the
amount of each such change.
(b) Each determination of an interest rate by Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
Borrower and Lenders in the absence of manifest error. Administrative Agent
shall, at the request of Borrower, deliver to Borrower a statement showing the
computations used by Administrative Agent in determining any interest rate.
(c) It is the intent of Lenders and the Loan Parties to conform to
and contract in strict compliance with applicable usury law from time to time in
effect. All agreements between Lenders and the Loan Parties are hereby limited
by the provisions of this paragraph which shall override and control all such
agreements, whether now existing or hereafter arising and whether written or
oral. In no way, nor in any event or contingency (including but not limited to
prepayment or acceleration of the maturity of any Loans and LOC Obligations),
shall the interest taken, reserved, contracted for, charged, or received under
this Agreement, under the Notes or otherwise, exceed the maximum nonusurious
amount permissible under applicable law. If, from any possible construction of
any of the Loan Documents or any other document, interest would otherwise be
payable in excess of the maximum nonusurious amount, any such construction shall
be subject to the provisions of this paragraph and such interest shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value
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which is characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum nonusurious
amount, an amount equal to the amount which would have been excessive interest
shall, without penalty, be applied to the reduction of the principal amount
owing on the Loans and not to the payment of interest, or refunded to Borrower
or the other payor thereof if and to the extent such amount which would have
been excessive exceeds such unpaid principal amount of the Loans. The right to
demand payment of the Loans or any other Indebtedness evidenced by any of the
Loan Documents does not include the right to receive any interest which has not
otherwise accrued on the date of such demand, and Lenders do not intend to
charge or receive any unearned interest in the event of such demand. All
interest paid or agreed to be paid to Lenders with respect to the Loans shall,
to the extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full stated term (including any renewal or extension)
of the Loans so that the amount of interest on account of such indebtedness does
not exceed the maximum nonusurious amount permitted by applicable law.
2.12 PRO RATA TREATMENT AND PAYMENTS.
(a) Allocation of Payments Before Event of Default. Each borrowing
of Revolving Loans and any reduction of the Revolving Commitments shall be made
pro rata according to the respective Revolving Commitment Percentages of
Lenders. Each payment under this Agreement or any Note shall be applied, first,
to any fees then due and owing by Borrower pursuant to Section 2.6, second, to
interest then due and owing hereunder and under the Notes and, third, to
principal then due and owing hereunder and under the Notes. Each payment on
account of any fees pursuant to Section 2.6 shall be made pro rata in accordance
with the respective amounts due and owing (except as to the Fronting Fees and
Issuing Lender Fees). Each payment (other than prepayments) by Borrower on
account of principal of and interest on the Revolving Loans and on the Term Loan
shall be applied to such Loans as directed by Borrower or otherwise applied in
accordance with the terms of Section 2.8(a) hereof. Each optional prepayment on
account of principal of the Loans shall be applied in accordance with Section
2.8(a); provided that prepayments made pursuant to Section 2.17 shall be applied
in accordance with such Section. Each mandatory prepayment on account of
principal of the Loans shall be applied in accordance with Section 2.8(b). All
payments (including prepayments) to be made by Borrower on account of principal,
interest and fees shall be made without defense, set-off or counterclaim (except
as provided in Section 2.18(b)) and shall be made to Administrative Agent for
the account of Lenders at Administrative Agent's office specified on Section
10.8 in Dollars and in immediately available funds not later than 1:00 P.M. on
the date when due. Administrative Agent shall distribute such payments to
Lenders entitled thereto promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the LIBOR Rate Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a LIBOR Rate Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day.
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(b) Allocation of Payments After Exercise of Remedies.
Notwithstanding any other provisions of this Agreement to the contrary, after
the exercise of remedies (other than the invocation of default interest pursuant
to Section 2.9(b) by Administrative Agent or Lenders pursuant to Section 8 (or
after the Commitments shall automatically terminate and the Loans (with accrued
interest thereon) and all other amounts under the Loan Documents (including
without limitation the maximum amount of all contingent liabilities under
Letters of Credit) shall automatically become due and payable in accordance with
the terms of such Section), all amounts collected or received by Administrative
Agent or any Lender on account of the Obligations or any other amounts
outstanding under any of the Loan Documents or in respect of the Collateral
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out of pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
Administrative Agent in connection with enforcing the rights of Lenders
under the Loan Documents and any protective advances made by
Administrative Agent with respect to the Collateral under or pursuant to
the terms of the Collateral Documents;
SECOND, to the payment of any fees owed to Administrative Agent;
THIRD, to the payment of all reasonable out of pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of Lenders in connection with enforcing its rights under the Loan
Documents or otherwise with respect to the Obligations owing to such
Lender;
FOURTH, to the payment of all of the Obligations consisting of
accrued fees and interest, including, with respect to any Secured Hedge
Agreement, any fees, premiums and scheduled periodic payments due under
such Secured Hedge Agreement and any interest accrued thereon;
FIFTH, to the payment of the outstanding principal amount of the
Obligations and the payment or cash collateralization of the outstanding
LOC Obligations, including, with respect to any Secured Hedge Agreement,
any breakage, termination or other payments due under such Hedge Agreement
and any interest accrued thereon;
SIXTH, to all other Obligations and other obligations which shall
have become due and payable under the Loan Documents or otherwise and not
repaid pursuant to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of Lenders and any Hedge Agreement Providers
shall receive an amount equal to its pro rata share (based on the proportion
that the then outstanding Loans and LOC Obligations held by such Lender or the
outstanding obligations payable to such Hedge Agreement Provider bears to the
aggregate then
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outstanding Loans, LOC Obligations and obligations payable under all Secured
Hedge Agreements) of amounts available to be applied pursuant to clauses
"THIRD", "FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the extent that any
amounts available for distribution pursuant to clause "FIFTH" above are
attributable to the issued but undrawn amount of outstanding Letters of Credit,
such amounts shall be held by Administrative Agent in a cash collateral account
and applied (A) first, to reimburse Issuing Lender from time to time for any
drawings under such Letters of Credit and (B) then, following the expiration of
all Letters of Credit, to all other obligations of the types described in
clauses "FIFTH" and "SIXTH" above in the manner provided in this Section
2.12(b). Notwithstanding the foregoing terms of this Section 2.12(b), only
Collateral proceeds and payments under the Guaranties with respect to Secured
Hedge Agreements shall be applied to obligations under any Secured Hedge
Agreement.
2.13 NON-RECEIPT OF FUNDS BY ADMINISTRATIVE AGENT.
(a) Unless Administrative Agent shall have been notified in writing
by a Lender prior to the date a Loan is to be made by such Lender (which notice
shall be effective upon receipt) that such Lender does not intend to make the
proceeds of such Loan available to Administrative Agent, Administrative Agent
may assume that such Lender has made such proceeds available to Administrative
Agent on such date, and Administrative Agent may in reliance upon such
assumption (but shall not be required to) make available to Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to Administrative Agent, Administrative Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent will promptly notify Borrower, and Borrower shall
immediately pay such corresponding amount to Administrative Agent.
Administrative Agent shall also be entitled to recover from the Lender or
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by
Administrative Agent to Borrower to the date such corresponding amount is
recovered by Administrative Agent at a per annum rate equal to (i) from Borrower
at the applicable rate for the applicable borrowing pursuant to the Notice of
Borrowing and (ii) from a Lender at the Federal Effective Funds Rate, plus a
$200 administrative fee.
(b) Unless Administrative Agent shall have been notified in writing
by Borrower, prior to the date on which any payment is due from it hereunder
(which notice shall be effective upon receipt) that Borrower does not intend to
make such payment, Administrative Agent may assume that Borrower has made such
payment when due, and Administrative Agent may in reliance upon such assumption
(but shall not be required to) make available to each Lender on such payment
date an amount equal to the portion of such assumed payment to which such Lender
is entitled hereunder, and if Borrower has not in fact made such payment to
Administrative Agent, such Lender shall, on demand, repay to Administrative
Agent the amount made available to such Lender. If such amount is repaid to
Administrative Agent on a date after the date such amount was made available to
such Lender, such Lender shall pay to Administrative Agent on demand interest on
such amount in respect of each day from the date such amount was made available
by Administrative Agent to such Lender to the date such amount is recovered by
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Administrative Agent at a per annum rate equal to the Federal Funds Effective
Rate, plus a $200 administrative fee.
(c) A certificate of Administrative Agent submitted to Borrower or
any Lender with respect to any amount owing under this Section 2.13 shall be
conclusive in the absence of manifest error.
2.14 INABILITY TO DETERMINE INTEREST RATE.
Notwithstanding any other provision of this Agreement, if (i)
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Requisite Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that Borrower has requested be
outstanding during such Interest Period, Administrative Agent shall forthwith
give telephone notice of such determination, confirmed in writing, to Borrower,
and Lenders at least two Business Days prior to the first day of such Interest
Period. Unless Borrower shall have notified Administrative Agent upon receipt of
such telephone notice that it wishes to rescind or modify its request regarding
such LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate
Loans shall be made as Alternate Base Rate Loans and any Loans that were
requested to be converted into or continued as LIBOR Rate Loans shall remain as
or be converted into Alternate Base Rate Loans. Until any such notice has been
withdrawn by Administrative Agent, no further Loans shall be made as, continued
as, or converted into, LIBOR Rate Loans for the Interest Periods so affected.
2.15 ILLEGALITY.
Notwithstanding any other provision of this Agreement, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for such Lender or its LIBOR Lending Office to make or maintain
LIBOR Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly notify Administrative Agent and
Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR Rate
Loans or continue LIBOR Rate Loans as such shall forthwith be suspended until
Administrative Agent shall give notice that the condition or situation which
gave rise to the suspension shall no longer exist, and (c) such Lender's Loans
then outstanding as LIBOR Rate Loans, if any, shall be converted on the last day
of the Interest Period for such Loans or within such earlier period as required
by law as Alternate Base Rate Loans. Borrower hereby agrees promptly to pay any
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for actual and direct costs (but not including anticipated profits)
reasonably incurred by such Lender in making any repayment in accordance with
this Section including, but not limited to, any interest or fees payable by such
Lender to lenders of funds obtained by it in order to make or maintain its LIBOR
Rate Loans hereunder. A certificate as to any additional amounts payable
pursuant to this Section submitted by such Lender, through Administrative Agent,
to Borrower shall be conclusive in the
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absence of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its LIBOR Lending Office) to avoid or to
minimize any amounts which may otherwise be payable pursuant to this Section;
provided, however, that such efforts shall not cause the imposition on such
Lender of any additional costs or legal or regulatory burdens deemed by such
Lender in its reasonable discretion to be material.
2.16 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject such Lender to any tax of any kind whatsoever with
respect to any Letter of Credit, any participation therein or any
application relating thereto, any LIBOR Rate Loan made by it, or change
the basis of taxation of payments to such Lender in respect thereof
(except for changes in the rate of tax on the overall net income of such
Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining LIBOR Rate Loans or the Letters of Credit or the
participations therein or to reduce any amount receivable hereunder or under any
Note, then, in any such case, Borrower shall promptly pay such Lender, upon its
demand, any additional amounts necessary to compensate such Lender for such
additional cost or reduced amount receivable which such Lender reasonably deems
to be material as determined by such Lender with respect to its LIBOR Rate Loans
or Letters of Credit. A certificate as to any additional amounts payable
pursuant to this Section submitted by such Lender, through Administrative Agent,
to Borrower shall be conclusive in the absence of manifest error. Each Lender
agrees to use reasonable efforts (including reasonable efforts to change its
Domestic Lending Office or LIBOR Lending Office, as the case may be) to avoid or
to minimize any amounts which might otherwise be payable pursuant to this
paragraph of this Section; provided, however, that such efforts shall not cause
the imposition on such Lender of any additional costs or legal or regulatory
burdens deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any central bank
or Governmental Authority made subsequent to the date hereof does or shall have
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the effect of reducing the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount reasonably
deemed by such Lender to be material, then from time to time, within fifteen
(15) days after demand by such Lender, Borrower shall pay to such Lender such
additional amount as shall be certified by such Lender as being required to
compensate it for such reduction. Such a certificate as to any additional
amounts payable under this Section submitted by a Lender (which certificate
shall include a description of the basis for the computation), through
Administrative Agent, to Borrower shall be conclusive absent manifest error.
(c) The agreements in this Section 2.16 shall survive the
termination of this Agreement and payment of the Notes and all other amounts
payable hereunder.
2.17 INDEMNITY.
Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) the failure by Borrower to pay the principal
amount of or interest on any Loan by such Lender in accordance with the terms
hereof, (b) the failure of Borrower to accept a borrowing after Borrower has
given a notice in accordance with the terms hereof, (c) the failure of Borrower
to make any prepayment after Borrower has given a notice in accordance with the
terms hereof, and/or (d) the making by Borrower of a prepayment of a Loan, or
the conversion thereof, on a day which is not the last day of the Interest
Period with respect thereto, in each case including, but not limited to, any
such loss or expense arising from interest or fees payable by such Lender to
lenders of funds obtained by it in order to maintain its Loans hereunder. A
certificate as to any additional amounts payable pursuant to this Section
submitted by any Lender, through Administrative Agent, to Borrower (which
certificate must be delivered to Administrative Agent within thirty days
following such default, prepayment or conversion) shall be conclusive in the
absence of manifest error. The agreements in this Section shall survive
termination of this Agreement and payment of the Notes and all other amounts
payable hereunder.
2.18 TAXES.
(a) All payments made by Borrower hereunder or under any Note will
be, except as provided in Section 2.18(c), made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any Governmental Authority or by any political subdivision or taxing
authority thereof or therein with respect to such payments (but excluding any
tax imposed on or measured by the net income or profits of a Lender) and all
interest, penalties or similar liabilities with respect thereto (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or in
such Note. Borrower will furnish to Administrative
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Agent as soon as practicable after the date the payment of any Taxes is due
pursuant to applicable law certified copies (to the extent reasonably available
and required by law) of tax receipts evidencing such payment by Borrower.
Borrower agrees to indemnify and hold harmless each Lender, and reimburse such
Lender upon its written request, for the amount of any Taxes so levied or
imposed and paid by such Lender.
(b) Borrower shall timely pay all present or future stamp or
documentary taxes or any other excise or property taxes, or similar charges or
levies arising from any payment made hereunder or under any Note or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any Note ("Other Taxes") to the relevant governmental authority in
accordance with applicable law.
(c) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver, to the extent it
may lawfully do so, to Borrower and Administrative Agent on or prior to the
Closing Date, or in the case of a Lender that is an assignee or transferee of an
interest under this Agreement pursuant to Section 10.1(d) (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such Lender, (i) if the
Lender is a "bank" within the meaning of Section 881(c)(3)(A) of the Code, two
accurate and complete original signed copies of Internal Revenue Service Form
X-0XXX, X-0XXX or W-8IMY (or successor forms) certifying such Lender's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or (ii)
if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code, Internal Revenue Service Form X-0XXX, X-0XXX or W-8IMY as set forth in
clause (i) above, or (x) a certificate in substantially the form of Exhibit XII
(any such certificate, a "Tax Exempt Certificate") and (y) two accurate and
complete original signed copies of Internal Revenue Service Form W-8BEN (or
successor form) certifying such Lender's entitlement to an exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement and under any Note. In addition, each Lender agrees that it will
deliver, to the extent it may lawfully do so, upon Borrower's request updated
versions of the foregoing, as applicable, whenever the previous certification
has become obsolete or inaccurate in any material respect, together with such
other forms as may be required in order to confirm or establish the entitlement
of such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note.
Notwithstanding anything to the contrary contained in Section 2.18(a), but
subject to the immediately succeeding sentence, (x) Borrower shall be entitled,
to the extent it is required to do so by law, to deduct or withhold Taxes
imposed by the United States (or any political subdivision or taxing authority
thereof or therein) from interest, fees or other amounts payable hereunder for
the account of any Lender which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. federal income tax purposes
to the extent that such Lender has not provided to Borrower U.S. Internal
Revenue Service Forms that establish a complete exemption from such deduction or
withholding and (y) Borrower shall not be obligated pursuant to Section 2.18(a)
hereof to gross-up payments to be made to a Lender in respect of Taxes imposed
by the United States if (I) such Lender has not provided to Borrower the
Internal Revenue Service Forms required to be provided to Borrower pursuant to
this Section 2.18(c) or (II) in the case of a payment, other than
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interest, to a Lender described in clause (ii) above, to the extent that such
Forms do not establish a complete exemption from withholding of such Taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 2.18, Borrower agrees to pay additional amounts and to
indemnify each Lender in the manner set forth in Section 2.18(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the Closing Date
in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of Taxes.
(d) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR Lending
Office, as the case may be) to avoid or to minimize any amounts which might
otherwise be payable pursuant to this Section; provided, however, that such
efforts shall not cause the imposition on such Lender of any additional costs or
legal or regulatory burdens deemed by such Lender in its reasonable discretion
to be material.
(e) If any Lender reasonably determines that it has received a
refund of any Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section, it shall pay to the Borrower an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section 2.18 with respect to the Taxes giving rise to such
refund), net of all out-of-pocket expenses of such Lender, and without interest
(other than any interest paid by the relevant governmental authority with
respect to such refund); provided that the Borrower, upon the request of such
Lender, agrees to repay the amount paid over to the Borrower (plus any
penalties, interest or other charges imposed by the relevant governmental
authority) to such Lender in the event such Lender is required to repay such
amount to such governmental authority. This subsection shall not be construed to
require any Lender to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrower or any other
Person. Notwithstanding anything to the contrary, in no event will any Lender be
required to pay any amount to Borrower the payment of which would place such
Lender in a less favorable net after-tax position than such Lender would have
been in if the additional amounts or indemnification payments giving rise to
such refund of any Taxes had never been paid.
(f) The agreements in this Section 2.18 shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder.
2.19 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other obligations under Section 2.3 and other
than as a result of the gross negligence or willful misconduct of the Issuing
Lender, Borrower hereby agrees to protect, indemnify, pay and save Issuing
Lender and each Revolving Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that Issuing Lender or such Revolving Lender may
incur or be subject to as a consequence, direct or indirect, of (i) the issuance
of any Letter of
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Credit or (ii) the failure of Issuing Lender to honor a drawing under a Letter
of Credit as a result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto government or governmental authority
(all such acts or omissions, herein called "Government Acts").
(b) As between Borrower and Issuing Lender and each Revolving
Lender, Borrower shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. Neither Issuing Lender nor any
Revolving Lender shall be responsible: (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of Credit, even
if it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, that may prove to be invalid or ineffective for any reason;
(iii) for failure of the beneficiary of a Letter of Credit to comply fully with
conditions required in order to draw upon a Letter of Credit; (iv) for errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) for errors in interpretation of technical terms; (vi) for any loss or delay
in the transmission or otherwise of any document required in order to make a
drawing under a Letter of Credit or of the proceeds thereof; and (vii) for any
consequences arising from causes beyond the control of Issuing Lender or any
Revolving Lender, including, without limitation, any Government Acts. None of
the above shall affect, impair, or prevent the vesting of Issuing Lender's
rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
Issuing Lender or any Revolving Lender, under or in connection with any Letter
of Credit or the related certificates, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not put such Issuing Lender or
such Revolving Lender under any resulting liability to Borrower. It is the
intention of the parties that this Agreement shall be construed and applied to
protect and indemnify Issuing Lender and each Revolving Lender against any and
all risks involved in the issuance of the Letters of Credit, all of which risks
are hereby assumed by Borrower, including, without limitation, any and all risks
of the acts or omissions, whether rightful or wrongful, of any Government
Authority. Issuing Lender and the Revolving Lenders shall not, in any way, be
liable for any failure by Issuing Lender or anyone else to pay any drawing under
any Letter of Credit as a result of any Government Acts or any other cause
beyond the control of Issuing Lender and the Revolving Lenders.
(d) Nothing in this Section 2.19 is intended to limit the
reimbursement obligation of Borrower contained in Section 2.3(d) hereof. The
obligations of Borrower under this Section 2.19 shall survive the termination of
this Agreement. No act or omissions of any current or prior beneficiary of a
Letter of Credit shall in any way affect or impair the rights of Issuing Lender
and the Revolving Lenders to enforce any right, power or benefit under this
Agreement.
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(e) Notwithstanding anything to the contrary contained in this
Section 2.19, Borrower shall have no obligation to indemnify Issuing Lender or
any Revolving Lender in respect of any liability incurred by Issuing Lender or
such Revolving Lender arising out of the gross negligence or willful misconduct
of Issuing Lender (including action not taken by Issuing Lender or such
Revolving Lender), as determined by a court of competent jurisdiction or
pursuant to arbitration.
2.20 REPLACEMENT OF LENDERS.
The Borrower shall be permitted to replace with a replacement
financial institution any Lender that (a) requests reimbursement for amounts
owing pursuant to Section 2.16 or 2.18, (b) defaults in its obligation to make
Loans hereunder, or (c) is a Non-Consenting Lender under Section 10.6; 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 (other than, in the case of clause (c), an Event of Default in
respect of which Borrower has requested an amendment or waiver, if the
Non-Consenting Lender is a Non-Consenting Lender in connection with such
proposed amendment or waiver), (iii) 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, (iv) the Borrower shall be liable to such
replaced Lender under Section 2.17 if any LIBOR Loan owing to such replaced
Lender shall be purchased other than on the last day of the Interest Period
relating thereto, (v) the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative Agent, (vi) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of Section 10.1 (provided that the Borrower shall be obligated to
pay the registration and processing fee referred to therein), (vii) until such
time as such replacement shall be consummated, the Borrower shall pay all
additional amounts (if any) required pursuant to Section 2.16 or 2.18, as the
case may be, and (viii) 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.
SECTION 3
[RESERVED]
SECTION 4
CONDITIONS PRECEDENT
4.1 CONDITIONS TO AMENDMENT EFFECTIVE DATE.
The obligation of each Lender and, if applicable, each Issuing
Lender to make any Extension of Credit requested to be made by it on the
Amendment Effective Date is subject to the satisfaction of all conditions
precedent set forth in Section 3 of the Amendment Agreement.
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4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
on the date of making such Extension of Credit:
(a) Representations and Warranties. The representations and
warranties made by the Loan Parties herein, in the Collateral Documents or
which are contained in any certificate furnished at any time under or in
connection herewith shall be true and correct on and as of the date of
such Extension of Credit as if made on and as of such date (except for
those that expressly related to an earlier date).
(b) No Event of Default or Potential Event of Default. No Event of
Default or Potential Event of Default shall have occurred and be
continuing on such date or after giving effect to the Extension of Credit
to be made on such date unless such Event of Default or Potential Event of
Default shall have been waived in accordance with this Agreement.
(c) Compliance with Commitments. Immediately after giving effect to
the making of any such Extension of Credit (and the application of the
proceeds thereof), (i) the sum of outstanding Revolving Loans plus
outstanding Swingline Loans plus LOC Obligations shall not exceed the
Available Revolving Committed Amount, (ii) the LOC Obligations shall not
exceed the LOC Committed Amount and (iii) the Swingline Loans shall not
exceed the Swingline Committed Amount.
(d) Additional Conditions to Revolving Loans. If a Revolving Loan is
requested, all conditions set forth in Section 2.1 shall have been
satisfied.
(e) Additional Conditions to Term Loan. If the Term Loan is
requested, all conditions set forth in Section 2.2 shall have been
satisfied.
(f) Additional Conditions to Letters of Credit. If the issuance of a
Letter of Credit is requested, all conditions set forth in Section 2.3
shall have been satisfied.
(g) Additional Conditions to Swingline Loans. If a Swingline Loan is
requested, all conditions set forth in Section 2.4 shall have been
satisfied.
Each request for an Extension of Credit and each acceptance by
Borrower of any such Extension of Credit shall be deemed to constitute
representations and warranties by the Loan Parties as of the date of such
Extension of Credit that the conditions set forth above in paragraphs (a)
through (c) and in paragraph (d), (e), (f) or (g), as applicable, have been
satisfied.
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SECTION 5
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce Issuing Lender to issue Letters of Credit and to induce
other Lenders to purchase participations therein, each Loan Party represents and
warrants to each Lender, on the date of this Agreement, on each Funding Date and
on the date of issuance of each Letter of Credit, that the following statements
are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS
AND SUBSIDIARIES.
A. Organization and Powers. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 5.1 annexed hereto. Each
Loan Party has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents and Related Agreements to which it
is a party and to carry out the transactions contemplated thereby.
B. Qualification and Good Standing. Each Loan Party is qualified to
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
in jurisdictions where the failure to be so qualified or in good standing has
not had and would not reasonably be expected to have a Material Adverse Effect.
C. Conduct of Business. The Loan Parties and their Subsidiaries are
engaged only in the businesses permitted to be engaged in pursuant to subsection
7.14.
D. Subsidiaries. All of the Subsidiaries of the Loan Parties are
identified in Schedule 5.1 annexed hereto, as said Schedule 5.1 may be
supplemented from time to time pursuant to the provisions of subsection
6.1(xiii). The capital stock of each of the Subsidiaries of the Loan Parties
identified in Schedule 5.1 annexed hereto (as so supplemented) is duly
authorized, validly issued, fully paid and nonassessable and none of such
capital stock constitutes Margin Stock. Each of the Subsidiaries of the Loan
Parties identified in Schedule 5.1 annexed hereto (as so supplemented) is a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation set forth therein, has all
requisite corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted, and is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, in each case except where failure to be so qualified or in good
standing or a lack of such corporate power and authority has not had and would
not reasonably be expected to have a Material Adverse Effect. Schedule 5.1
annexed hereto (as so supplemented) correctly sets forth the ownership interest
of each Loan Party and each of their Subsidiaries in each of the Subsidiaries
identified therein.
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5.2 AUTHORIZATION OF BORROWING, ETC.
A. Authorization of Borrowing. The execution, delivery and
performance of the Loan Documents and the Related Agreements, and the
Transactions, have been duly authorized by all necessary corporate action on the
part of each Loan Party that is a party thereto.
B. No Conflict. The execution, delivery and performance by the Loan
Parties of the Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents (including the Transactions) and such Related Agreements do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to the Loan Parties or any of their Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of the Loan Parties or any of
their Subsidiaries or any order, judgment or decree of any court or other agency
of government binding on the Loan Parties or any of their Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of the Loan Parties or
any of their Subsidiaries, (iii) result in or require the creation or imposition
of any Lien upon any of the properties or assets of the Loan Parties or any of
their Subsidiaries (other than any Liens created under any of the Loan Documents
in favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of the Loan Parties or any of their Subsidiaries, except
for such approvals or consents which will be obtained on or before the Amendment
Effective Date and disclosed in writing to Lenders.
C. Governmental Consents. The execution, delivery and performance by
the Loan Parties of the Loan Documents and the Related Agreements to which they
are parties and the consummation of the transactions contemplated by the Loan
Documents (including the Transactions) and such Related Agreements do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body. Each Loan Party (i) (x) has all governmental approvals
required by law for it to conduct its business, each of which is in full force
and effect, (y) each such governmental approval is final and not subject to
review on appeal and (z) each such governmental approval is not the subject of
any pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, and (ii) is in compliance with each governmental approval
applicable to it and in compliance with all other requirements of law relating
to it or any of its respective properties, in each case except to the extent the
failure to obtain such governmental approval or failure to comply with such
governmental approval or requirement of law could not reasonably be expected to
have a Material Adverse Effect. Each Loan Party possesses or has the right to
use, all leaseholds, licenses, easements and franchises and all authorizations
and other rights that are necessary for the conduct of its business, except to
the extent the failure to possess or have the right to use such leaseholds,
licenses, easements and franchises and all authorizations and other rights could
not reasonably be expected to have a Material Adverse Effect. Except to the
extent noncompliance with the foregoing leaseholds, easements and franchises
could not reasonably be expected to have a Material Adverse Effect, all of the
foregoing are in full force and effect, and the Loan Parties are in substantial
compliance with the foregoing without any known conflict with the valid rights
of others. No event has occurred which permits, or
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after notice or lapse of time or both would permit, the revocation or
termination of any such governmental approval, leasehold, license, easement,
franchise or other right, which termination or revocation could, individually or
in the aggregate, reasonably be expected to have Material Adverse Effect.
D. Binding Obligation. Each of the Loan Documents and Related
Agreements has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
5.3 FINANCIAL CONDITION.
Borrower has heretofore delivered to Lenders, at Lenders' request,
the following financial statements and information: (i) the audited consolidated
balance sheet of the Loan Parties and their Subsidiaries as at the Fiscal Years
ended December 31, 2003, 2004 and 2005 and the related consolidated statements
of income, stockholders' equity and cash flows of the Loan Parties and their
Subsidiaries for such Fiscal Year then ended and (ii) the unaudited consolidated
balance sheet of the Loan Parties and their Subsidiaries as at the month ended
June 30, 2006 and the related unaudited consolidated statements of income,
stockholders' equity and cash flows of the Loan Parties and their Subsidiaries
for the six months then ended. All such statements were prepared in conformity
with GAAP and fairly present, in all material respects, the financial position
(on a consolidated basis) of the entities described in such financial statements
as at the respective dates thereof and the results of operations and cash flows
(on a consolidated basis) of the entities described therein for each of the
periods then ended, subject, in the case of any such unaudited financial
statements, to the absence of footnotes and to changes resulting from audit and
normal year-end adjustments. Each Loan Party does not (and will not following
the funding of the initial Loans) have any Contingent Obligation, contingent
liability or liability for taxes, long-term lease or unusual forward or
long-term commitment that is not reflected in the foregoing financial statements
or the notes thereto and which in any such case is material in relation to the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of the Loan Parties or any of their Subsidiaries. The projections of
the Loan Parties and their Subsidiaries delivered to Lenders on or prior to the
Closing Date (consisting of balance sheets and statements of income and cash
flows prepared on a quarterly basis through the first four complete fiscal
quarters after the Amendment Effective Date and thereafter on an annual basis
through 2011) have been prepared in good faith based upon reasonable
assumptions.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED PAYMENTS.
Since December 31, 2005, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Neither any Loan Party nor any of its Subsidiaries has directly or
indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Payment or agreed to do so except as permitted by subsection
7.5.
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5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
A. Title to Properties; Liens. The Loan Parties and their
Subsidiaries have (i) valid leasehold interests in (in the case of leasehold
interests in real or personal property), and (ii) good title to (in the case of
all other personal property), all of their respective properties and assets
reflected in the financial statements referred to in subsection 5.3 or in the
most recent financial statements delivered pursuant to subsection 6.1, in each
case except for assets disposed of since the date of such financial statements
in the ordinary course of business or as otherwise permitted under subsection
7.7. Except as permitted by this Agreement, all such properties and assets are
free and clear of Liens, other than Permitted Encumbrances. The Loan Parties and
their Subsidiaries have the right to use all of the Intellectual Property
necessary to their business as presently conducted or as was necessary, all of
which Intellectual Property is set forth in Schedule 5.5A annexed hereto, and,
to the best knowledge of the Loan Parties, the Loan Parties' and each of their
Subsidiaries' use of the Intellectual Property does not infringe the rights of
any other Person, where such infringement could reasonably be expected to result
in a Material Adverse Effect. Except as set forth in Schedule 5.5A annexed
hereto, the Loan Parties and their Subsidiaries owe no royalties, honoraria or
fees to any Person by reason of their use of the Intellectual Property.
B. Real Property. As of the Amendment Effective Date, Borrower and
its Subsidiaries own no Real Property Assets except as set forth in Schedule
5.5B annexed hereto.
5.6 LITIGATION; ADVERSE FACTS.
There are no actions, suits, proceedings, arbitrations or
governmental investigations (whether or not purportedly on behalf of the Loan
Parties or any of their Subsidiaries) at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign (including any
Environmental Claims) that are pending or, to the knowledge of the Loan Parties,
threatened against or affecting any Loan Party or any of its Subsidiaries or any
property of any Loan Party or any of its Subsidiaries and that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect. Neither any Loan Party nor any of its Subsidiaries (i) is in violation
of any applicable laws (including Environmental Laws) that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect, or (ii) is subject to or in default with respect to any final judgments,
writs, injunctions, decrees, rules or regulations of any court or any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all tax returns
and reports of the Loan Parties and their Subsidiaries required to be filed by
any of them have been timely filed, and all taxes shown on such tax returns to
be due and payable and all assessments, fees and other governmental charges upon
the Loan Parties and their Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid
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when due and payable. Each Loan Party knows of no proposed tax assessment
against any Loan Party or any of its Subsidiaries which is not being actively
contested by such Loan Party or such Subsidiary in good faith and by appropriate
proceedings; provided that such reserves or other appropriate provisions, if
any, as shall be required in conformity with GAAP shall have been made or
provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS;
MATERIAL CONTRACTS.
A. Neither any Loan Party nor any of its Subsidiaries is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a Material Adverse
Effect.
B. Neither any Loan Party nor any of its Subsidiaries is a party to
or is otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
C. Schedule 5.8 contains a true, correct and complete list of all
the Material Contracts in effect on the Closing Date. Except as described on
Schedule 5.8, all such Material Contracts are in full force and effect and no
defaults currently exist thereunder, except for defaults which, individually or
in the aggregate, could not reasonably be deemed to have a Material Adverse
Effect.
5.9 GOVERNMENTAL REGULATION.
Neither any Loan Party nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither any Loan Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. No part of the proceeds of any Loan hereunder will be used
directly or indirectly for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect. No Loan Party owns any Margin Stock in an amount that would cause any
Loan Document to violate the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect.
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5.11 EMPLOYEE BENEFIT PLANS.
A. Each of the Loan Parties, each of their Subsidiaries and each of
their respective ERISA Affiliates are in compliance in all material respects
with all applicable provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Employee Benefit Plan,
and have performed all their obligations under each Employee Benefit Plan in all
material respects. Each Employee Benefit Plan which is intended to qualify under
Section 401(a) of the Internal Revenue Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code or except as set forth in Schedule 5.11 annexed hereto, no Employee
Benefit Plan provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of the Loan Parties,
any of their Subsidiaries or any of their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed $500,000.
E. As of the most recent valuation date for each Multiemployer Plan
(if any) for which the actuarial report is available, the potential liability of
the Loan Parties, their Subsidiaries and their respective ERISA Affiliates for a
complete withdrawal from such Multiemployer Plan (within the meaning of Section
4203 of ERISA), when aggregated with such potential liability for a complete
withdrawal from all Multiemployer Plans, based on information available pursuant
to Section 4221(e) of ERISA, does not exceed $1,000,000.
5.12 CERTAIN FEES.
Except for (x) a transaction fee of $1,712,500 payable to Trivest
and (y) an advisory fee of $500,000 payable to Xxxxxxx, Xxxxx & Co., in each
case, in connection with the consummation of the Transactions, no broker's or
finder's fee or commission will be payable with respect to the Transactions or
any of the transactions contemplated hereby, and the Loan Parties hereby
indemnify Lenders against, and agrees that they will hold Lenders harmless from,
any claim, demand or liability for any such broker's or finder's fees alleged to
have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 5.13 annexed hereto:
(i) neither the Loan Parties nor their Subsidiaries or Facilities or
operations are subject to any outstanding written order, consent decree or
settlement agreement with
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any Person relating to (a) any Environmental Law, (b) any Environmental
Claim, or (c) any Hazardous Materials Activity that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect;
(ii) neither any Loan Party nor any of its Subsidiaries has received
any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. Section 9604) or any comparable state law;
(iii)there are and, to the Loan Parties' knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim against
any Loan Party or any of its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect;
(iv) neither any Loan Party nor any of its Subsidiaries nor, to the
Loan Parties' knowledge, any predecessor of any Loan Party or any of its
Subsidiaries has filed any notice under any Environmental Law indicating
past or present treatment of Hazardous Materials at any Facility, and none
of the Loan Parties' or any of their Subsidiaries' operations involves the
generation, transportation, treatment, storage or disposal of hazardous
waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent;
and
(v) compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the contrary, no
event or condition has occurred or is occurring with respect to any Loan Party
or any of its Subsidiaries relating to any Environmental Law, any Release of
Hazardous Materials, or any Hazardous Materials Activity, including any matter
disclosed on Schedule 5.13 annexed hereto, which individually or in the
aggregate has had or could reasonably be expected to have a Material Adverse
Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving any Loan Party or any of its Subsidiaries that could reasonably be
expected to have a Material Adverse Effect.
5.15 SOLVENCY.
The Borrower individually is, and the Loan Parties and their
Subsidiaries taken as a whole are, and, upon the incurrence of any Obligations
by the Borrower or the Loan Parties and their Subsidiaries taken as a whole
(after giving effect to any rights of contribution) on any date on which this
representation is made, will be, Solvent.
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5.16 MATTERS RELATING TO COLLATERAL.
A. Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by the Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 6.8 and 6.9
and Section 3.1 of the Amendment Agreement and (ii) the delivery to
Administrative Agent of any Pledged Collateral not delivered to Administrative
Agent at the time of execution and delivery of the applicable Collateral
Document (all of which Pledged Collateral has been so delivered) are effective
to create in favor of Administrative Agent for the benefit of Secured Parties,
as security for the respective Secured Obligations (as defined in the applicable
Collateral Document in respect of any Collateral), a valid and perfected First
Priority Lien on all of the Collateral, and all filings and other actions
necessary or desirable to perfect and maintain the perfection and First Priority
status of such Liens have been duly made or taken and remain in full force and
effect, other than the filing of any UCC financing statements delivered to
Administrative Agent for filing (but not yet filed) and the periodic filing of
UCC continuation statements in respect of UCC financing statements filed by or
on behalf of Administrative Agent.
B. Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Administrative Agent pursuant
to any of the Collateral Documents or (ii) the exercise by Administrative Agent
of any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for filings or recordings contemplated
by subsection 5.16A and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.
C. Absence of Third-Party Filings. Except such as may have been
filed in favor of Administrative Agent as contemplated by subsection 5.16A, (i)
no effective UCC financing statement, fixture filing or other instrument similar
in effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
D. Margin Regulations. The pledge of the Pledged Collateral pursuant
to the Collateral Documents does not violate Regulation T, U or X of the Board
of Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
5.17 DISCLOSURE.
No representation or warranty of Trivest or any Loan Party or any of
its Subsidiaries contained in the Confidential Information Memorandum or in any
Loan Document or
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Related Agreement or in any other document, certificate or written statement
furnished to Lenders by or on behalf of Trivest or any Loan Party or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state a
material fact (known to any Loan Party, in the case of any document not
furnished by it) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by each
Loan Party to be reasonable at the time made, it being recognized by Lenders
that such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There are no facts known (or which should
upon the reasonable exercise of diligence be known) to any Loan Party (other
than matters of a general economic nature) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
5.18 USE OF PROCEEDS.
The proceeds of the Extensions of Credit shall be used (i) to
refinance certain existing Indebtedness of Polk Holding Corp. and its
subsidiaries on the Closing Date, (ii) to finance the Polk Acquisition, (iii) to
pay transaction costs and expenses associated with the Transactions on the
Amendment Effective Date and (iv) after the Amendment Effective Date, to provide
for the working capital and general corporate requirements of the Loan Parties
and their Subsidiaries, including capital expenditures and Permitted
Acquisitions. A portion of the proceeds of the Term Loan shall be used to
refinance the Original Term Loans.
5.19 FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither any Loan Party nor any of its Subsidiaries is an "enemy" or
an "ally of the enemy" within the meaning of Section 2 of the Trading with the
Enemy Act of the United States of America (50 U.S.C. App. Sections 1 et seq.),
as amended. Neither any Loan Party nor any of its Subsidiaries is in violation
of (a) the Trading with the Enemy Act, as amended, (b) any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto or (c) the Patriot Act. No Loan Party (i) is a blocked person
described in section 1 of the Anti-Terrorism Order or (ii) to the best of its
knowledge, engages in any dealings or transactions, or is otherwise associated,
with any such blocked person.
5.20 INSURANCE.
The present insurance coverage of the Loan Parties and their
Subsidiaries is outlined as to carrier, policy number, expiration date, type and
amount on Schedule 5.20 and such insurance coverage complies the requirements
set forth in Section 6.4A.
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SECTION 6
AFFIRMATIVE COVENANTS
Each Loan Party covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations, unless Requisite Lenders shall otherwise give
prior written consent, each Loan Party shall perform, and shall cause each of
its Subsidiaries to perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Each Loan Party will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP; provided that quarterly financial statements shall not be
required to have footnote disclosure. The Loan Parties will deliver to
Administrative Agent and Lenders:
(i) Quarterly Financials: as soon as available after the end of each
Fiscal Quarter of Holdings, but in any event on or before the earlier of
(a) the date Holdings is required to file its quarterly financial
statements on Form 10-Q with the SEC and (b) the date that is forty-five
(45) days after the end of such Fiscal Quarter, a copy of (y) Holdings'
quarterly financial statements on Form 10-Q as filed with the SEC, all in
reasonable detail and certified by the chief financial officer or chief
executive officer of Holdings that they fairly present, in all material
respects, the financial condition of Holdings and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from audit
and normal year-end adjustments, and (z) financial statements concerning
the joint ventures of Holdings and its Subsidiaries, if any;
(ii) Year-End Financials: as soon as available after the end of each
fiscal year of Holdings, but in any event on or before the earlier of (a)
the date Holdings is required to file its annual financial statements on
Form 10-K with the SEC and (b) the date that is 120 days after the end of
such fiscal year, a copy of (x) Holdings' annual financial statements on
Form 10-K as filed with the SEC, (y) in the case of such consolidated
financial statements, a report thereon of a nationally recognized
accounting firm or other independent certified public accountants of
recognized national standing selected by Holdings and satisfactory to
Administrative Agent, which report shall be unqualified, shall express no
doubts about the ability of Holdings and its Subsidiaries to continue as a
going concern, and shall state that such consolidated financial statements
fairly present, in all material respects, the consolidated financial
position of Holdings and its Subsidiaries as at the dates indicated and
the results of their operations and their cash flows for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years (except as otherwise disclosed in such financial statements) and
that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with
generally accepted auditing standards, and (z) an updated Schedule 5.8 to
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this Agreement setting forth all of the data required to be set forth in
Schedule 5.8 annexed hereto with respect to any Material Contracts entered
into during such Fiscal Year;
(iii)[Reserved];
(iv) Officers' and Compliance Certificates: together with each
delivery of financial statements of the Loan Parties and their
Subsidiaries pursuant to subdivisions (i) and (ii) above, (a) an Officers'
Certificate of Borrower stating that the signers have reviewed the terms
of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of the Loan Parties and their Subsidiaries during the accounting
period covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at the date
of such Officers' Certificate, of any condition or event that constitutes
an Event of Default or Potential Event of Default, or, if any such
condition or event existed or exists, specifying the nature and period of
existence thereof and what action Borrower has taken, is taking and
proposes to take with respect thereto; and (b) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of the
applicable accounting periods with the restrictions contained in Section
7, in each case to the extent compliance with such restrictions is
required to be tested at the end of the applicable accounting period;
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3 (other than
an immaterial change in GAAP), the consolidated financial statements of
the Loan Parties and their Subsidiaries delivered pursuant to subdivisions
(i), (ii) or (xi) of this subsection 6.1 will differ in any material
respect from the consolidated financial statements that would have been
delivered pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (i), (ii) or (xi)
of this subsection 6.1 following such change, consolidated financial
statements of the Loan Parties and their Subsidiaries for (y) the current
Fiscal Year to the effective date of such change and (z) the two full
Fiscal Years immediately preceding the Fiscal Year in which such change is
made, in each case prepared on a pro forma basis as if such change had
been in effect during such periods, and (b) together with each delivery of
financial statements pursuant to subdivision (i), (ii) or (xi) of this
subsection 6.1 following such change, a written statement of the chief
accounting officer or chief financial officer of Borrower setting forth
the differences (including any differences that would affect any
calculations relating to the financial covenants set forth in subsection
7.6) which would have resulted if such financial statements had been
prepared without giving effect to such change;
(vi) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Borrower or Holdings by independent certified public
accountants in connection with each annual, interim
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or special audit of the financial statements of the Loan Parties and their
Subsidiaries made by such accountants, including any comment letter
submitted by such accountants to management in connection with their
annual audit;
(vii)Events of Default, etc.: promptly upon any officer of any Loan
Party obtaining knowledge (a) of any condition or event that constitutes
an Event of Default or Potential Event of Default, or becoming aware that
any Lender has given any notice (other than to Administrative Agent) or
taken any other action with respect to a claimed Event of Default or
Potential Event of Default, (b) that any Person has given notice to any
Loan Party or any of its Subsidiaries or taken any other action with
respect to a claimed default or event or condition of the type referred to
in subsection 8.2, (c) of any condition or event that would be required to
be disclosed in a current report filed by Holdings or Borrower with the
Securities and Exchange Commission on Form 8-K (Items 1, 2, 4 and 6 of
such Form as in effect on the date hereof) if Holdings or Borrower were
required to file such reports under the Exchange Act, or (d) of the
occurrence of any event or change that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect, an Officers'
Certificate specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action taken
by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action
Borrower has taken, is taking and proposes to take with respect thereto;
(viii) Litigation or Other Proceedings: (a) promptly upon any
officer of Borrower obtaining knowledge of (X) the institution of, or (in
the good faith judgment of Borrower) non-frivolous threat of, any action,
suit, proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting the Loan
Parties or any of their Subsidiaries or any property of the Loan Parties
or any of their Subsidiaries (collectively, "Proceedings") not previously
disclosed in writing by Borrower to Lenders or (Y) any material
development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to uninsured liability in excess of $500,000; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to any Loan Party to enable Lenders and their counsel
to evaluate such matters; and (b) within twenty days after the end of each
Fiscal Quarter, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, the Loan Parties or any of
their Subsidiaries equal to or greater than $500,000, and promptly after
request by Administrative Agent such other information as may be
reasonably requested by Administrative Agent to enable Administrative
Agent and its counsel to evaluate any of such Proceedings;
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(ix) ERISA Events: promptly upon becoming aware of the occurrence of
or forthcoming occurrence of any ERISA Event, a written notice specifying
the nature thereof, what action any Loan Party, any of its Subsidiaries or
any of its ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto;
(x) ERISA Notices: with reasonable promptness, copies of (a) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by any Loan Party, any of its Subsidiaries or any of its ERISA
Affiliates with the Internal Revenue Service with respect to each Pension
Plan; (b) all notices received by any Loan Party, any of its Subsidiaries
or any of its ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event; and (c) copies of such other documents or
governmental reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(xi) Financial Plans: as soon as practicable and in any event no
later than 60 days after the beginning of each Fiscal Year, a consolidated
plan and financial forecast for such Fiscal Year (the "Financial Plan" for
such Fiscal Year), including (a) a forecasted consolidated balance sheet
and forecasted consolidated statements of income and cash flows of the
Loan Parties and their Subsidiaries for such Fiscal Year, prepared on a
quarterly basis, together with a pro forma Compliance Certificate for such
Fiscal Year and an explanation of the assumptions on which such forecasts
are based, (b) the Intellectual Property disclosures required by Section
6.12 and (c) such other information and projections as any Lender may
reasonably request;
(xii)Insurance: as soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance reasonably
satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by the Loan Parties and
their Subsidiaries and all material insurance coverage planned to be
maintained by the Loan Parties and their Subsidiaries in the immediately
succeeding Fiscal Year to the extent that such coverage is a material
change to the coverage maintained by the Loan Parties from the prior
Fiscal Year;
(xiii) Board of Directors: with reasonable promptness, written
notice of any change in the composition of the Board of Directors of
Borrower or Holdings;
(xiv)New Subsidiaries: promptly upon any Person becoming a
Subsidiary of a Loan Party, a written notice setting forth with respect to
such Person (a) the date on which such Person became a Subsidiary of a
Loan Party and (b) all of the data required to be set forth in Schedule
5.1 annexed hereto with respect to all Subsidiaries of the Loan Parties
(it being understood that such written notice shall be deemed to
supplement Schedule 5.1 annexed hereto for all purposes of this
Agreement);
(xv) Margin Determination Certificate: together with each delivery
of financial statements for each Fiscal Quarter (other than each fourth
Fiscal Quarter) pursuant to
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subdivision (ii) above, and within 45 days of the last day of each fourth
Fiscal Quarter, a Margin Determination Certificate demonstrating in
reasonable detail the calculation of the Consolidated Total Leverage Ratio
for the four consecutive Fiscal Quarters ending on the day of the
accounting period covered by such financial statements;
(xvi)Deposit Accounts: promptly upon the opening of any Deposit
Account by the Loan Parties or any of their Subsidiaries, a written notice
setting forth all of the data required to be set forth in Schedule 6.10
annexed hereto with respect to such Deposit Account;
(xvii) Public Filings: promptly upon their becoming available,
copies of (i) all Securities and Exchange Commission reports, if any, of
the Loan Parties and their Subsidiaries, (ii) all financial statements,
reports, notices and proxy statements sent or made available by any Loan
Party to its security holders, (iii) all regular and periodic reports and
all registration statements and prospectuses, if any, filed by any of the
Loan Parties and their Subsidiaries with any securities exchange or with
the Securities and Exchange Commission or any governmental or private
regulatory authority, and (iv) all press releases and other statements
made available by any of the Loan Parties and their Subsidiaries to the
public concerning material developments in the business of any of the Loan
Parties and their Subsidiaries; and
(xviii) Other Information: with reasonable promptness, such other
information and data with respect to the Loan Parties or any of their
Subsidiaries as from time to time may be reasonably requested by any
Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, each of the Loan Parties
will, and will cause each of its Subsidiaries to, at all times preserve and keep
in full force and effect its corporate existence and all rights and franchises
material to its business; provided, however, that neither any Loan Party nor any
of its Subsidiaries shall be required to preserve any such right or franchise if
the Board of Directors of such Loan Party or such Subsidiary shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of such Loan Party or such Subsidiary, as the case may be, and that the
loss thereof is not disadvantageous in any material respect to such Loan Party,
such Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Each of the Loan Parties will, and will cause each of its
Subsidiaries to, pay all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or in respect of any of its
income, businesses or franchises before any penalty accrues thereon, and all
claims (including claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
need be paid if it is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as (1) such
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reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and (2) in the case of a
charge or claim which has or may become a Lien against any of the Collateral,
such contest proceedings conclusively operate to stay the sale of any portion of
the Collateral to satisfy such charge or claim.
B. The Loan Parties will not, nor will they permit any of their
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than the Loan Parties or any of their
Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
INSURANCE/CONDEMNATION PROCEEDS.
A. Maintenance of Properties. Each of the Loan Parties will, and
will cause each of its Subsidiaries to, maintain or cause to be maintained in
good repair, working order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of the Loan Parties and their
Subsidiaries (including all Intellectual Property) and from time to time will
make or cause to be made all appropriate repairs, renewals and replacements
thereof.
B. Insurance. The Loan Parties will maintain or cause to be
maintained, with financially sound and reputable insurers, such public liability
insurance, third party property damage insurance, business interruption
insurance and casualty insurance with respect to liabilities, losses or damage
in respect of the assets, properties and businesses of the Loan Parties and
their Subsidiaries as may customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for corporations similarly situated in the industry.
Without limiting the generality of the foregoing, the Loan Parties will maintain
or cause to be maintained (i) flood insurance with respect to each Flood Hazard
Property that is located in a community that participates in the National Flood
Insurance Program, in each case in compliance with any applicable regulations of
the Board of Governors of the Federal Reserve System, and (ii) replacement value
casualty insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times satisfactory to Administrative Agent in its
commercially reasonable judgment. Each such policy of insurance shall (a) name
Administrative Agent for the benefit of Lenders as an additional insured
thereunder as its interests may appear and (b) in the case of each business
interruption and casualty insurance policy, contain a loss payable clause or
endorsement, satisfactory in form and substance to Administrative Agent, that
names Administrative Agent for the benefit of Lenders as the loss payee
thereunder for any covered loss in excess of $500,000 and provides for at least
30 days prior written notice to Administrative Agent of any modification or
cancellation of such policy.
C. Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by any Loan Party
or any of its Subsidiaries of any business interruption insurance proceeds
constituting Net Insurance/Condemnation Proceeds, (a) so long as no Event of
Default, and no Potential Event of
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Default under subsections 8.1, 8.6, 8.7 or 8.9, shall have occurred and be
continuing, such Loan Party or such Subsidiary may retain and apply such Net
Insurance/Condemnation Proceeds for working capital purposes, and (b) if an
Event of Default, or a Potential Event of Default under subsections 8.1, 8.6,
8.7 or 8.9, shall have occurred and be continuing, Borrower shall apply an
amount equal to such Net Insurance/Condemnation Proceeds to prepay the Loans
(and/or the Revolving Commitments shall be reduced) as provided in subsection
2.8(b)(ix)(B);
(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by any
Loan Party or any of its Subsidiaries of any Net Insurance/Condemnation Proceeds
other than from business interruption insurance, (a) so long as no Event of
Default, and no Potential Event of Default under subsections 8.1, 8.6, 8.7 or
8.9, shall have occurred and be continuing, the Loan Parties shall, or shall
cause one or more of their Subsidiaries to, promptly and diligently apply all
Net Insurance/Condemnation Proceeds in excess of $250,000 to pay or reimburse
the costs of repairing, restoring or replacing the assets in respect of which
such Net Insurance/Condemnation Proceeds were received or, to the extent not so
applied, to prepay the Loans (and/or the Revolving Commitments shall be reduced)
as provided in subsection 2.8(b)(ix)(B), and (b) if an Event of Default, or a
Potential Event of Default under subsections 8.1, 8.6, 8.7 or 8.9, shall have
occurred and be continuing, Borrower shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving
Commitments shall be reduced) as provided in subsection 2.8(b)(ix)(B).
(iii)Net Insurance/Condemnation Proceeds Received by Administrative
Agent. Upon receipt by Administrative Agent of any Net Insurance/Condemnation
Proceeds as loss payee, (a) if the aggregate amount of Net
Insurance/Condemnation Proceeds received (and reasonably expected to be
received) by Administrative Agent in respect of any covered loss exceeds
$500,000, and if and to the extent Borrower would have been required to apply
such Net Insurance/Condemnation Proceeds (if it had received them directly) to
prepay the Loans and/or reduce the Revolving Commitments pursuant to the terms
of subsection (ii) above, Administrative Agent shall, and Borrower hereby
authorizes Administrative Agent to, apply such Net Insurance/Condemnation
Proceeds to prepay the Loans (and/or the Revolving Commitments shall be reduced)
as provided in subsection 2.8(b)(ix)(B), and (b) if and to the extent Borrower
would not have been required to apply such Net Insurance/Condemnation Proceeds
(if it had received them directly) to prepay the Loans and/or reduce the
Revolving Commitments pursuant to the terms of subsection (ii) above and (1) the
aggregate amount of such Net Insurance/Condemnation Proceeds received (and
reasonably expected to be received) by Administrative Agent in respect of any
covered loss does not exceed $500,000, Administrative Agent shall deliver such
Net Insurance/Condemnation Proceeds to Borrower, and the Loan Parties shall, or
shall cause one or more of their Subsidiaries to, promptly apply such Net
Insurance/Condemnation Proceeds to the costs of repairing, restoring, or
replacing the assets in respect of which such Net Insurance/Condemnation
Proceeds were received, and (2) if the aggregate amount of Net
Insurance/Condemnation Proceeds received (and reasonably expected to be
received) by Administrative Agent in respect of any covered loss exceeds
$500,000, Administrative Agent shall hold such Net Insurance/Condemnation
Proceeds pursuant to the terms of the Security Agreement and, so long as any
Loan Party or any of its Subsidiaries proceeds diligently to repair, restore or
replace the assets of such Loan Party or such Subsidiary in respect of which
such Net
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Insurance/Condemnation Proceeds were received, Administrative Agent shall from
time to time disburse to Borrower or such Subsidiary from the Collateral
Account, to the extent of any such Net Insurance/Condemnation Proceeds remaining
therein in respect of the applicable covered loss, amounts necessary to pay the
cost of such repair, restoration or replacement after the receipt by
Administrative Agent of invoices or other documentation reasonably satisfactory
to Administrative Agent relating to the amount of costs so incurred and the work
performed (including, if required by Administrative Agent, lien releases and
architects' certificates); provided, however that if at any time Administrative
Agent reasonably determines (A) that such Loan Party or such Subsidiary is not
proceeding diligently with such repair, restoration or replacement or (B) that
such repair, restoration or replacement cannot be completed with the Net
Insurance/Condemnation Proceeds then held by Administrative Agent for such
purpose, together with funds otherwise available to Borrower for such purpose,
or that such repair, restoration or replacement cannot be completed within 180
days after the receipt by Administrative Agent of such Net
Insurance/Condemnation Proceeds, Administrative Agent shall, and Borrower hereby
authorizes Administrative Agent to, apply such Net Insurance/Condemnation
Proceeds to prepay the Loans (and/or the Revolving Commitments shall be reduced)
as provided in subsection 2.8(b)(ix)(B).
6.5 INSPECTION RIGHTS; AUDITS OF INVENTORY AND ACCOUNTS
RECEIVABLE; LENDER MEETING; BOOKS AND RECORDS.
A. Inspection Rights. The Loan Parties shall, and shall cause each
of their Subsidiaries to, permit any authorized representatives designated by
any Lender to visit and inspect any of the properties of the Loan Parties or of
any of their Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants
(provided that Borrower may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
B. Lender Meeting. Borrower will, upon the request of Administrative
Agent, participate in a meeting of Administrative Agent and Lenders once during
each Fiscal Year to be held at Borrower's corporate offices (or at such other
location as may be agreed to by Borrower and Administrative Agent) at such time
as may be agreed to by Borrower and Administrative Agent.
C. Books and Records. The Loan Parties shall, and shall cause each
of their Subsidiaries to, keep proper books of records and account in which
full, true and correct entries in conformity with GAAP.
6.6 COMPLIANCE WITH LAWS, ETC.
The Loan Parties shall comply, and shall cause each of their
Subsidiaries and all other Persons on or occupying any Facilities to comply,
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority (including all Environmental
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Laws), noncompliance with which could reasonably be expected to cause,
individually or in the aggregate, a Material Adverse Effect.
6.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.;
BORROWER'S ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES,
ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
A. Environmental Review and Investigation. The Loan Parties agree
that Administrative Agent may, from time to time and in its reasonable
discretion, if (i) Administrative Agent reasonably believes that a Loan Party
has breached any representation, warranty or covenant contained in subsection
5.6, 5.13, 6.6 or 6.7 or that there has been a material violation of
Environmental Laws at any Facility or by any Loan Party or any of its
Subsidiaries at any other location or (ii) an Event of Default has occurred and
is continuing, retain, at Borrower's expense, an independent professional
consultant to review any environmental audits, investigations, analyses and
reports relating to Hazardous Materials prepared by or for the Loan Parties or
conduct its own investigation of any Facility; provided that, in the case of any
Facility no longer owned, leased, operated or used by any Loan Party or any of
its Subsidiaries, the Loan Parties shall only be obligated to use its reasonable
commercial efforts to obtain permission for Administrative Agent's professional
consultant to conduct an investigation of such Facility. For purposes of
conducting such a review and/or investigation, the Loan Parties hereby grant to
Administrative Agent and its agents, employees, consultants and contractors the
right to enter into or onto any Facilities currently owned, leased, operated or
used by the Loan Parties or any of their Subsidiaries and to perform such tests
on such property (including taking samples of soil, groundwater and suspected
asbestos-containing materials) as are reasonably necessary in connection
therewith. Any such investigation of any Facility shall be conducted, unless
otherwise agreed to by Borrower and Administrative Agent, during normal business
hours and, to the extent reasonably practicable, shall be conducted so as not to
interfere with the ongoing operations at such Facility or to cause any damage or
loss to any property at such Facility. The Loan Parties and Administrative Agent
hereby acknowledge and agree that any report of any investigation conducted at
the request of Administrative Agent pursuant to this subsection 6.7A will be
obtained and shall be used by Administrative Agent and Lenders for the purposes
of Lenders' internal credit decisions, to monitor and police the Loans and to
protect Lenders' security interests, if any, created by the Loan Documents.
Administrative Agent agrees to deliver a copy of any such report to Borrower
with the understanding that Borrower acknowledges and agrees that (x) it will
indemnify and hold harmless Administrative Agent and each Lender from any costs,
losses or liabilities relating to Borrower's use of or reliance on such report,
(y) neither Administrative Agent nor any Lender makes any representation or
warranty with respect to such report, and (z) by delivering such report to
Borrower, neither Administrative Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report.
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B. Environmental Disclosure. The Loan Parties will deliver to
Administrative Agent and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of a Loan Party or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility which,
individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect or with respect to any Environmental Claims
which, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
upon the occurrence thereof, written notice describing in reasonable
detail (a) any Release required to be reported to any federal, state or
local governmental or regulatory agency under any applicable Environmental
Laws which Release would reasonably be expected to have a Material Adverse
Effect, and (b) any remedial action taken by Borrower or any other Person
in response to (1) any Hazardous Materials Activities the existence of
which has a reasonable possibility of resulting in one or more
Environmental Claims having, individually or in the aggregate, a Material
Adverse Effect, or (2) any Environmental Claims that, individually or in
the aggregate, would reasonably be expected to have a Material Adverse
Effect.
(iii)Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof by any Loan Party or any of its Subsidiaries, a copy of any and
all written communications with respect to (a) any Environmental Claims
that, individually or in the aggregate, have a reasonable possibility of
giving rise to a Material Adverse Effect, (b) any Release required to be
reported to any federal, state or local governmental or regulatory agency,
and (c) any request for information from any governmental agency that
suggests such agency is investigating whether a Loan Party or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by any Loan Party or any of its
Subsidiaries that could reasonably be expected to (1) expose any Loan
Party or any of its Subsidiaries to, or result in, Environmental Claims
that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or (2) affect the ability of any Loan
Party or any of its Subsidiaries to maintain in full force and effect all
material Governmental Authorizations required under any Environmental Laws
for their respective operations and (b) any proposed action to be taken by
any Loan Party or any of its Subsidiaries to modify current operations in
a manner that could reasonably be expected to subject any Loan Party or
any of its Subsidiaries to any additional obligations or requirements
under any
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Environmental Laws that could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 6.7.
C. The Loan Parties' Actions Regarding Hazardous Materials
Activities, Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities. The
Loan Parties shall promptly undertake, and shall cause each of their
Subsidiaries promptly to undertake, any and all investigations, studies,
sampling, testing, abatement, cleanup, removal, remediation or other response
actions necessary to remove, remediate, clean up or xxxxx any Hazardous
Materials Activity on, under or about any Facility that is in violation of any
Environmental Laws or that presents a material risk of giving rise to an
Environmental Claim. In the event the Loan Parties or any of their Subsidiaries
undertake any such action with respect to any Hazardous Materials, the Loan
Parties and their Subsidiaries shall conduct and complete such action in
compliance with all applicable Environmental Laws and in accordance with the
policies, orders and directives of all federal, state and local governmental
authorities except when, and only to the extent that, the Loan Parties' or their
Subsidiaries' liability with respect to such Hazardous Materials Activity is
being contested in good faith by the Loan Parties or their Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
Environmental Laws. The Loan Parties shall promptly take, and shall cause each
of their Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws by any Loan Party or its
Subsidiaries that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and (ii) make an appropriate response to
any Environmental Claim against any Loan Party or any of its Subsidiaries and
discharge any obligations it may have to any Person thereunder where failure to
do so could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
6.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY
COLLATERAL DOCUMENTS BY CERTAIN SUBSIDIARIES AND FUTURE
SUBSIDIARIES.
A. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. If any Person organized under the laws of the United States or any
State thereof or the District of Columbia becomes a Subsidiary of a Loan Party
after the date hereof, Borrower will promptly notify Administrative Agent of
that fact and cause such Subsidiary to execute and deliver to Administrative
Agent a counterpart of the Subsidiary Guaranty and the Security Agreement or a
supplement to the Security Agreement and to take all such further actions and
execute all such further documents and instruments (including actions, documents
and instruments comparable to those described in subsections 4.19(d) and (e)) as
may be necessary or, in the opinion of Administrative Agent, desirable to create
in favor of Administrative Agent, for the
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benefit of Lenders, a valid and perfected First Priority Lien on all of the
personal and mixed property assets of such Subsidiary described in the
applicable forms of Collateral Documents.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Borrower shall
deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its incorporation and each other state in which such Person is
qualified as a foreign corporation to do business and, to the extent generally
available, a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority of
each of such jurisdictions, each to be dated a recent date prior to their
delivery to Administrative Agent, (ii) a copy of such Subsidiary's Bylaws,
certified by its corporate secretary or an assistant secretary as of a recent
date prior to their delivery to Administrative Agent, (iii) a certificate
executed by the secretary or an assistant secretary of such Subsidiary as to (a)
the fact that the attached resolutions of the Board of Directors of such
Subsidiary approving and authorizing the execution, delivery and performance of
such Loan Documents are in full force and effect and have not been modified or
amended and (b) the incumbency and signatures of the officers of such Subsidiary
executing such Loan Documents, and (iv) a favorable opinion of counsel to such
Subsidiary, in form and substance satisfactory to Administrative Agent and its
counsel, as to (a) the due organization and good standing of such Subsidiary,
(b) the due authorization, execution and delivery by such Subsidiary of such
Loan Documents, (c) the enforceability of such Loan Documents against such
Subsidiary, (d) such other matters (including matters relating to the creation
and perfection of Liens in any Collateral pursuant to such Loan Documents) as
Administrative Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to Administrative Agent and its counsel.
6.9 CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO ADDITIONAL
REAL PROPERTY COLLATERAL.
A. Conforming Leasehold Interests. If any Loan Party or any of its
Subsidiaries acquires any Leasehold Property, such Loan Party shall, or shall
cause such Subsidiary to, use commercially reasonable efforts (without requiring
such Loan Party or such Subsidiary to relinquish any material rights or incur
any material obligations or to expend more than a nominal amount of money over
and above the reimbursement, if required, of the landlord's out-of-pocket costs,
including attorneys fees) to cause such Leasehold Property to be a Conforming
Leasehold Interest.
B. Landlord Consent and Estoppel, Etc. From and after the Original
Closing Date, in the event that (i) any Loan Party acquires any Leasehold
Property or Real Property Asset or (ii) at the time any Person becomes a
Subsidiary Guarantor, such Person owns or holds any Leasehold Property or Real
Property Asset (excluding any such Leasehold Property the encumbrancing of which
requires the consent of any applicable lessor or then-existing senior lien
holder where the Loan Parties and their Subsidiaries are unable to obtain such
lessor's or senior xxxx xxxxxx'x consent) after using commercially reasonable
efforts to obtain the same (any such non-excluded Real Property Asset described
in the foregoing clauses (i) or (ii) being an "Additional Mortgaged Property"),
such Loan Party shall use its commercially reasonable effects to
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deliver to Administrative Agent, as soon as practicable and in form and
substance satisfactory to the Administrative Agent and Lenders , after such
Person acquires such Additional Mortgaged Property or becomes a Subsidiary
Guarantor, as the case may be, the following:
(i) Landlord Consent and Estoppel. In the case of an Additional
Mortgaged Property consisting of a Leasehold Property, a Landlord Consent
and Estoppel;
(ii) Real Property Assets. In the case of fee interests in Real
Property Assets:
(a) fully executed and notarized mortgages, deeds of trust or
deeds to secure debt (each, as the same may be amended, modified,
restated or supplemented from time to time, a "Mortgage Instrument"
and collectively the "Mortgage Instruments") encumbering the fee
interest in the material Properties owned by the Loan Parties (each
a "Mortgaged Property" and collectively the "Mortgaged Properties");
(b) a title report obtained by the Loan Parties in respect of
each of the Mortgaged Properties;
(c) with respect to each Mortgaged Property, an ALTA mortgagee
title insurance policy (the "Mortgage Policies"), in amounts not
less than the respective amounts designated in Schedule 5.5(B) with
respect to any particular Mortgaged Property, assuring
Administrative Agent that each of the Mortgage Instruments creates a
valid and enforceable First Priority mortgage lien on the applicable
Mortgaged Property, free and clear of all defects and encumbrances
except Permitted Encumbrances, which Mortgage Policies shall be in
form and substance reasonably satisfactory to Agents and shall
provide for affirmative insurance and such reinsurance as any Agent
may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to Agents;
(d) evidence as to (A) whether any Mortgaged Property is in an
area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards (a "Flood Hazard Property") and
(B) if any Mortgaged Property is a Flood Hazard Property, (1)
whether the community in which such Mortgaged Property is located is
participating in the National Flood Insurance Program, (2) the
applicable Loan Party's written acknowledgment of receipt of written
notification from Administrative Agent (a) as to the fact that such
Mortgaged Property is a Flood Hazard Property and (b) as to whether
the community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program and (3) copies
of insurance policies or certificates of insurance of Borrower and
their Subsidiaries evidencing flood insurance reasonably
satisfactory to Agents and naming Administrative Agent as sole loss
payee on behalf of Lenders;
(e) maps or plats of an as built survey of the sites of the
Mortgaged Properties certified to Administrative Agent and the Title
Insurance Company in a
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manner reasonably satisfactory to them, dated a date satisfactory to
each of Agents and the Title Insurance Company by an independent
professional licensed land surveyor reasonably satisfactory to each
of Administrative Agent and the Title Insurance Company, which maps
or plats and the surveys on which they are based shall be sufficient
to delete any standard printed survey exception contained in the
applicable title policy and be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Land Title Association and
the American Congress on Surveying and Mapping in 1992, and, without
limiting the generality of the foregoing, there shall be surveyed
and shown on such maps, plats or surveys the following: (A) the
locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (B) the
lines of streets abutting the sites and width thereof; (C) all
access and other easements appurtenant to the sites necessary to use
the sites; (D) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar encumbrances
affecting the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building structures
and improvements on the sites; and (F) if the site is described as
being on a filed map, a legend relating the survey to said map;
(f) opinions of counsel to the Loan Parties for each
jurisdiction in which the Mortgaged Properties are located;
(g) zoning letters from each municipality or other
Governmental Authority for each jurisdiction in which the Mortgaged
Properties are located; and
(h) environmental reviews certified by a firm of surveyors
reasonably satisfactory to Agents of all real property owned by
Borrower and its Subsidiaries; and
(iii)Environmental Audit. If required by Administrative Agent,
reports and other information, in form, scope and substance satisfactory
to Administrative Agent and prepared by environmental consultants
satisfactory to Administrative Agent, concerning any environmental hazards
or liabilities to which the Loan Parties or any of their Subsidiaries may
be subject with respect to such Additional Mortgaged Property
6.10 DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS.
Loan Parties shall, and shall cause each of their Subsidiaries to, use
and maintain its Deposit Accounts and cash management systems solely with one or
more of the Lenders hereunder and in a manner reasonably satisfactory to
Administrative Agent. Information regarding these Deposit Accounts, including
(a) the name and address of the financial institutions maintaining the Deposit
Accounts, and (b) the Deposit Account numbers, shall be set forth on Schedule
6.10 annexed hereto. The Loan Parties shall not permit any of such Deposit
Accounts
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at any time to have a principal balance in excess of $2,000,000 unless such
Deposit Account is with Administrative Agent or such Loan Party or such
Subsidiary, as the case may be, has (i) delivered to Administrative Agent an
agreement, satisfactory in form and substance to Administrative Agent and
executed by the financial institution at which such Deposit Account is
maintained, pursuant to which such financial institution confirms and
acknowledges Administrative Agent's security interest in, and sole dominion and
control over, such Deposit Account and waives its rights to setoff with respect
to amounts in such Deposit Account (such agreements, "Deposit Account Control
Agreements") and (ii) taken all other steps necessary or, in the opinion of
Administrative Agent, desirable to ensure that Administrative Agent has sole
dominion and control over such Deposit Account; provided that if such Loan Party
or such Subsidiary is unable to obtain such agreement from such financial
institution such Loan Party shall, or shall cause such Subsidiary to, within 30
days after receiving a written request by Administrative Agent to do so,
transfer all amounts in the applicable Deposit Account to a Deposit Account
maintained at a financial institution from which such Loan Party or such
Subsidiary has obtained such an agreement.
6.11 INTEREST RATE CAP.
Borrower shall, within ninety (90) days of the Amendment Effective
Date, enter into a Hedge Agreement protecting against fluctuations in interest
rates, in amounts and for periods of time reasonably satisfactory to
Administrative Agent, which agreements shall provide for coverage in a minimum
amount of at least 50% of the initial principal amount of the Term Loan made on
the Amendment Effective Date for a period of at least three (3) years.
6.12 INTELLECTUAL PROPERTY.
(a) Each Loan Party shall notify Administrative Agent promptly if it
knows or has reason to know that any application, letters patent or registration
relating to any material Patent, material Patent License, material Trademark or
material Trademark License of the Loan Parties or any of their Subsidiaries may
become abandoned, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark Office or any
court) regarding any Loan Party's or any of their Subsidiary's ownership of any
material Patent or material Trademark, its right to patent or register the same,
or to enforce, keep and maintain the same, or its rights under any material
Patent License or material Trademark License.
(b) Each Loan Party shall notify Administrative Agent promptly after
it knows or has reason to know of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in any court) regarding any material Copyright or
material Copyright License of the Loan Parties or any of their Subsidiaries,
whether (i) such material Copyright or material Copyright License may become
invalid or unenforceable prior to its expiration or termination, or (ii) any
Loan Party's or any of its Subsidiary's ownership of such material Copyright,
its right to register the same or to enforce, keep and maintain the same, or its
rights under such material Copyright License, may become affected.
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(c) (i) Borrower shall promptly notify Administrative Agent of any
filing by any Loan Party or any of its Subsidiaries, either itself or through
any agent, employee, licensee or designee (but in no event later than the
fifteenth day following such filing), of any application for registration of any
material Intellectual Property with the United States Copyright Office or United
States Patent and Trademark Office or any similar office or agency in any other
country or any political subdivision thereof.
(ii) Concurrently, with the delivery of quarterly and annual
financial statements of Holdings pursuant to Section 6.1 hereof, Borrower shall
provide Administrative Agent and its counsel a complete and correct list of all
registered Intellectual Property owned by or licensed to the Loan Parties or any
of their Subsidiaries that have not been set forth as annexes of such documents
and instruments showing all filings and recordings for the protection of the
security interest of the Administrative Agent therein pursuant to the agreements
of the United States Patent and Trademark Office or the United States Copyright
Office.
(iii) Upon request of Administrative Agent, the Loan Parties shall
execute and deliver any and all agreements, instruments, documents, and papers
as Administrative Agent may reasonably request to evidence Administrative
Agent's security interest in the Intellectual Property and the general
intangibles referred to in clauses (i) and (ii), including, without limitation,
the goodwill of the Loan Parties or their Subsidiaries, relating thereto or
represented thereby (or such other Intellectual Property or the general
intangibles relating thereto or represented thereby as Administrative Agent may
reasonably request).
(d) The Loan Parties and their Subsidiaries will take all necessary
actions, including, without limitation, in any proceeding before the United
States Patent and Trademark Office or the United States Copyright Office, to
maintain each item of Intellectual Property of the Loan Parties and their
Subsidiaries, including, without limitation, payment of maintenance fees, filing
of applications for renewal, affidavits of use, affidavits of incontestability
and opposition, interference and cancellation proceedings.
(e) In the event that any Loan Party becomes aware that any material
Intellectual Property is infringed, misappropriated or diluted by a third party
in any material respect, Borrower shall notify Administrative Agent promptly
after it learns thereof and shall, unless Holdings, Borrower or the relevant
Subsidiary, as the case may be, shall reasonably determine that such
Intellectual Property is not material to the business of the Loan Parties and
their Subsidiaries taken as a whole, (i) promptly and diligently take such
prudent actions as are necessary to protect such Intellectual Property (which
prudent actions may include, without limitation, suing for infringement,
misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution or pursuing settlement negotiations
with such third party), and (ii) take such other actions as Holdings, Borrower
or such Subsidiary, as the case may be, shall reasonably deem appropriate under
the circumstances to protect such Intellectual Property.
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6.13 POST-CLOSING COVENANTS.
(a) Within sixty (60) calendar days of the Amendment Effective Date,
obtain, and thereafter maintain, key-man insurance ("Key-Man Insurance") with
respect to Xx. Xxxxxxx on the following basis:
(i) such insurance shall be with respect to the death and disability
of Xx. Xxxxxxx;
(ii) such insurance shall be paid by the Loan Parties;
(iii)such insurance shall be issued by a carrier or carriers
reasonably acceptable to the Administrative Agent, and shall name the
Administrative Agent (on behalf of the Lenders) as beneficiary of the
proceeds of such insurance; and
(iv) such insurance shall be in such amounts up to (but not
exceeding) $5,000,000 with respect to both death and disability and
allocated between such death and disability benefits as the Administrative
Agent shall agree, provided that the Loan Parties shall not be required to
pay premiums in respect of such insurance in an amount in excess of the
lower of (A) $40,000 and (B) the premiums required to obtain insurance on
both death and disability of Xx. Xxxxxxx in the amount of $5,000,000.
(b) Within sixty (60) days of the Amendment Effective Date, the Loan
Parties shall, and shall cause each of their Subsidiaries to, have either
delivered to the Administrative Agent Deposit Account Control Agreements or
taken such other steps necessary with respect to the Deposit Accounts, in each
case, as contemplated by Section 6.10.
SECTION 7
NEGATIVE COVENANTS
Each Loan Party covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, each Loan Party shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 7.
7.1 INDEBTEDNESS.
The Loan Parties shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Borrower may become and remain liable with respect to the
Obligations;
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(ii) The Loan Parties and their Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection 7.4
and, upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished;
(iii)The Loan Parties and their Subsidiaries may become and remain
liable with respect to Indebtedness in respect of Capital Leases; provided
that such Capital Leases are permitted under the terms of subsection 7.9;
(iv) A Loan Party may become and remain liable with respect to
Indebtedness to another Loan Party or any of its wholly-owned domestic
Subsidiaries, and any wholly-owned domestic Subsidiary of a Loan Party may
become and remain liable with respect to Indebtedness to a Loan Party or
any other wholly-owned domestic Subsidiary of a Loan Party; provided that
(a) all such intercompany Indebtedness shall be evidenced by promissory
notes which are pledged to the Administrative Agent for the benefit of the
Lenders, (b) all such intercompany Indebtedness owed by a Loan Party to
any of its Subsidiaries shall be subordinated in right of payment to the
payment in full of the Obligations pursuant to the terms of the applicable
promissory notes or an intercompany subordination agreement on terms and
conditions reasonably satisfactory to the Administrative Agent, and (c)
any payment by any Subsidiary of a Loan Party under any guaranty of the
Obligations shall result in a pro rata reduction of the amount of any
intercompany Indebtedness owed by such Subsidiary to such Loan Party or to
any of its Subsidiaries for whose benefit such payment is made;
(v) Indebtedness and obligations owing under Secured Hedge
Agreements and other Hedge Agreements entered into in order to manage
existing or anticipated interest rate or exchange rate risks and not for
speculative purposes;
(vi) The Loan Parties and their Subsidiaries may become and remain
liable with respect to other Indebtedness in an aggregate principal amount
not to exceed $2,000,000 at any time outstanding;
(vii)The Loan Parties and their Subsidiaries may become and remain
liable with respect to trade letters of credit entered into in the
ordinary course of the Loan Parties' business; and
(viii) The Loan Parties may become and remain liable with respect to
the Subordinated Indebtedness so long as any Subordinated Indebtedness
incurred by a Loan Party shall be used to prepay the Obligations in
accordance with Section 2.8(b).
7.2 LIENS AND RELATED MATTERS.
A. Prohibition on Liens. No Loan Party shall, and no Loan Party
shall permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of any Loan Party or any of its Subsidiaries, whether
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now owned or hereafter acquired, or any income or profits therefrom, or file or
permit the filing of, or permit to remain in effect, any financing statement or
other similar notice of any Lien with respect to any such property, asset,
income or profits under the Uniform Commercial Code of any State or under any
similar recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii)Liens described in Schedule 7.2 annexed hereto; and
(iv) Other Liens on assets securing Indebtedness incurred to acquire
such assets pursuant to subsection 7.1(vi), in an aggregate amount not to
exceed the aggregate purchase price of such assets.
B. Equitable Lien in Favor of Lenders. If any Loan Party or any of
its Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither any
Loan Party nor any of its Subsidiaries shall enter into any agreement
prohibiting the creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Holdings or Other
Subsidiaries. Except as provided herein, the Loan Parties will not, and will not
permit any of their Subsidiaries to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by a Loan Party or
any other Subsidiary of Loan Party, (ii) repay or prepay any Indebtedness owed
by such Subsidiary to a Loan Party or any other Subsidiary of a Loan Party,
(iii) make loans or advances to a Loan Party or any other Subsidiary of a Loan
Party, or (iv) transfer any of its property or assets to a Loan Party or any
other Subsidiary of a Loan Party.
7.3 INVESTMENTS; JOINT VENTURES.
The Loan Parties shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
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(i) The Loan Parties and their Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) The Loan Parties and their Subsidiaries may continue to own the
Investments owned by them as of the Amendment Effective Date in any
Subsidiaries of the Loan Parties;
(iii)The Loan Parties and their Subsidiaries may make intercompany
loans to the extent permitted under subsection 7.1(iv);
(iv) The Loan Parties and their Subsidiaries may make Consolidated
Capital Expenditures permitted by subsection 7.8;
(v) The Loan Parties and their Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
(vi) The Loan Parties and their Subsidiaries may make prepayments in
the ordinary course of business to vendors for Inventory to be delivered
within 30 days following the date of such prepayment;
(vii)Borrower may make loans to its employees in an aggregate amount
not to exceed $675,000, for the purpose of assisting its employees in the
acquisition of certain common stock of Holdings;
(viii) The Loan Parties and their Subsidiaries may make Permitted
Acquisitions; and
(ix) and the Loan Parties and their Subsidiaries may make other
Investments in an aggregate amount not to exceed $400,000.
7.4 CONTINGENT OBLIGATIONS.
The Loan Parties shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Borrower may become and remain liable with respect to Contingent
Obligations in respect of Letters of Credit issued under this Agreement
and Subsidiaries of Holdings may become and remain liable with respect to
Contingent Obligations in respect of the Subsidiary Guaranty;
(ii) The Loan Parties and their Subsidiaries may become and remain
liable with respect to other Contingent Obligations (including letters of
credit and Contingent Obligations assumed in a Permitted Acquisition) in
an aggregate amount not to exceed $5,000,000 at any time;
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(iii)The Loan Parties and their Subsidiaries may become and remain
liable (A) with respect to Contingent Obligations under the Related
Agreements or (B) in respect of customary indemnification and purchase
price adjustment obligations incurred in connection with (x) Asset Sales
or other sales of assets, in each case, permitted under this Agreement,
and (y) Permitted Acquisitions;
(iv) The Loan Parties and their Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of any
Indebtedness of a Loan Party or any of its Subsidiaries permitted by
subsection 7.1;
(v) The Loan Parties and their Subsidiaries, as applicable, may
remain liable with respect to Contingent Obligations described in Schedule
7.4 annexed hereto;
(vi) The Loan Parties and their Subsidiaries may become and remain
liable with respect to Contingent Obligations incurred in the ordinary
course of business with respect to surety and appeal bonds, performance
bonds and other similar obligations; and
(vii)The Loan Parties and their Subsidiaries may become and remain
liable with respect to Contingent Obligations incurred in the ordinary
course of business under indemnity agreements to title insurers to cause
such title insurers to issue title insurance policies to Administrative
Agent and/or to the Loan Parties or any of their Subsidiaries.
7.5 RESTRICTED PAYMENTS.
The Loan Parties shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Payment; provided, however, that:
(i) [Reserved];
(ii) Holdings may redeem shares of its capital stock or warrants or
options to acquire any such shares from employees of a Loan Party and its
Subsidiaries upon the death or other termination of employment of such
employees, provided that all of the following conditions are satisfied:
(a) no Potential Event of Default or Event of Default shall
have occurred and be continuing or would arise as a result of such
Restricted Payment;
(b) after giving effect to such Restricted Payment (together
with all prior or concurrent Restricted Payments permitted under
this subsection 7.5(ii)(b)), Borrower shall be in compliance on a
pro forma basis with the covenants set forth in Section 7.6,
recomputed for the most recent month for which financial statements
have been delivered by Borrower pursuant to Section 6.1; and
(c) the aggregate amount of such Restricted Payments permitted
in any Fiscal Year of Borrower shall not exceed $500,000;
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(iii)The Loan Parties may make Restricted Payments to any Loan
Party;
(iv) Holdings may make payments of out-of-pocket expenses of members
of the board of directors of Holdings who are not otherwise employees or
consultants to Holdings or any of its Subsidiaries, Trivest, or any of
their respective Affiliates, provided that such payments are customary and
in the ordinary course of Holdings' business; and
(v) so long as no Potential Event of Default or Event of Default
shall have occurred and be continuing or would arise as a result of such
Restricted Payment, any Loan Party or Subsidiary thereof may make any
prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or
legal defeasance), sinking fund or similar payment with respect to, any
Indebtedness permitted hereunder (other than Subordinated Indebtedness).
7.6 FINANCIAL COVENANTS.
A. Maximum Consolidated Total Leverage Ratio. The Loan Parties shall
not permit the Consolidated Total Leverage Ratio as of the last day of any
Fiscal Quarter ending during any of the periods set forth below to exceed the
correlative ratio indicated:
MAXIMUM
CONSOLIDATED TOTAL
PERIOD LEVERAGE RATIO
----------------------------------- ------------------
September 30, 2006 - March 31, 2007 4.5:1.0
April 1, 2007 - March 31, 2008 4.25:1.0
April 1, 2008 - March 31, 2009 3.75:1.0
April 1, 2009 - March 31, 2010 3.5:1.0
April 1, 2010 - March 31, 2011 3.25:1.0
April 1, 2011 and thereafter 3.0:1.0
B. [Reserved.]
C. Minimum Fixed Charge Coverage Ratio. The Loan Parties shall not
permit the ratio of (i) Consolidated EBITDA minus Consolidated Capital
Expenditures to (ii) Consolidated Fixed Charges for any four consecutive Fiscal
Quarter period ending during the term of this Agreement to be less than 1.25 to
1.0.
D. Test Dates. Notwithstanding anything herein to the contrary, the
Loan Parties and the Lenders acknowledge and agree that the Loan Parties'
compliance with the financial covenants set forth in this subsection 7.6 shall
be tested on a quarterly basis, commencing with the fiscal quarter ending
September 30, 2006.
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7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND
ACQUISITIONS.
The Loan Parties shall not, and shall not permit any of their
Subsidiaries to, alter the corporate, capital or legal structure of the Loan
Parties or any of their Subsidiaries, or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person (other than purchases or other acquisitions of inventory,
materials and equipment in the ordinary course of any Loan Party's or any of its
Subsidiary's business), except:
(i) any Loan Party or Subsidiary of a Loan Party may be merged with
or into a Loan Party or any wholly-owned Subsidiary Guarantor, or be
liquidated, wound up or dissolved, or all or any part of its business,
property or assets may be conveyed, sold, leased, transferred or otherwise
disposed of, in one transaction or a series of transactions, to a Loan
Party or any wholly-owned Subsidiary Guarantor; provided that, (a) if the
Borrower is a party to such merger, the Borrower will be the surviving
corporation and (b) if a Loan Party is a party to such merge, a Loan Party
will be the surviving corporation;
(ii) The Loan Parties and their Subsidiaries may make Consolidated
Capital Expenditures permitted under subsection 7.8;
(iii)The Loan Parties and their Subsidiaries may dispose of
obsolete, worn out or surplus property in the ordinary course of business;
(iv) The Loan Parties and their Subsidiaries may sell or otherwise
dispose of (i) inventory sold in the ordinary course of business and (ii)
any such other assets in an aggregate amount not to exceed $200,000 in any
fiscal year; provided that the consideration received for such assets
shall be in an amount at least equal to the fair market value thereof;
(v) The Loan Parties and their Subsidiaries may sell or discount, in
each case without recourse and in the ordinary course of business,
Accounts arising in the ordinary course of business, but only in
connection with the compromise or collection thereof and not as part of
any financing transaction;
(vi) The Loan Parties and their Subsidiaries may grant leases and
subleases to other Persons in the ordinary course of business not
materially interfering with the conduct of the business of Holdings,
Borrower or any of their Subsidiaries; and
(vii)The Loan Parties and their Subsidiaries may make or enter into
Permitted Acquisitions.
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7.8 CONSOLIDATED CAPITAL EXPENDITURES.
The Loan Parties shall not, and shall not permit their Subsidiaries
to, make or incur Consolidated Capital Expenditures in an aggregate amount in
excess of $5,000,000 in any Fiscal Year; provided that such permitted amount of
Consolidated Capital Expenditures may be increased in any Fiscal Year by
carrying forward 50% of any unused amount from the immediately preceding fiscal
year; provided further that with respect to any Fiscal Year, Consolidated
Capital Expenditures made during any such fiscal year shall be deemed to be made
first with respect to the applicable limitation for such Fiscal Year and then
with respect to any carry forward amount to the extent applicable.
7.9 RESTRICTION ON LEASES.
The Loan Parties shall not, and shall not permit any of their
Subsidiaries to, become liable in any way, whether directly or by assignment or
as a guarantor or other surety, for the obligations of the lessee under any
lease, whether an Operating Lease or a Capital Lease (other than intercompany
leases between Holdings and its wholly-owned Subsidiaries, and other than (A)
Borrower's lease of its headquarters offices and warehouse space pursuant to the
Lease Agreement entered into as of July 14, 2003 between Borrower and Green
Properties, Inc., and any successor or replacement lease ("Headquarters Lease"),
(B) Polk Audio Inc.'s lease of the Baltimore facility pursuant to the lease
agreement entered into as of September 23, 1985, as amended from time to time
and any successor as replacement lease (the "Baltimore Lease"), (C) Polk Audio
Inc.'s lease of the San Diego facility pursuant to the lease agreement entered
into as of March 31, 2001, as amended from time to time and any successor as
replacement lease (the "San Diego Lease") and (D) Borrower's lease of the Owings
Mills, Maryland facility pursuant to the lease agreement entered into as of
August 25, 1998 (and assumed on September 17, 2004), as amended from time to
time and any successor as replacement lease (the "Maryland Lease")), unless,
immediately after giving effect to the incurrence of liability with respect to
any such lease, the aggregate amount of all rental payments under all such
leases (excluding the Headquarters Lease, the Baltimore Lease, the San Diego
Lease and the Maryland Lease any other leases of any Loan Party or any of its
Subsidiaries relating to a Permitted Acquisition) shall not exceed $250,000 in
any Fiscal Year.
7.10 SALES AND LEASE-BACKS.
The Loan Parties shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, become or remain liable as lessee or as
a guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) which any Loan Party or any of its
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than any Loan Party or any of its Subsidiaries) or (ii) which any
Loan Party or any of its Subsidiaries intends to use for substantially the same
purpose as any other property which has been or is to be sold or transferred by
any Loan Party or any of its Subsidiaries to any Person (other than any Loan
Party or any of its Subsidiaries) in connection with such lease; provided that
any Loan Party and its Subsidiaries may become and remain liable as lessee,
guarantor or other surety with
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respect to any such lease if and to the extent that such Loan Party or such
Subsidiary would be permitted to enter into, and remain liable under, such lease
under subsection 7.9.
7.11 SALE OR DISCOUNT OF RECEIVABLES.
Except for sales permitted pursuant to subsection 7.7(v), the Loan
Parties shall not, and shall not permit any of their Subsidiaries to, directly
or indirectly, sell with recourse, or discount or otherwise sell for less than
the face value thereof, any of their notes or accounts receivable.
7.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
The Loan Parties shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any holder of 5% or more of any class of
equity Securities of a Loan Party or with any Affiliate of a Loan Party or of
any such holder, on terms that are less favorable to such Loan Party or that
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such a holder or Affiliate; provided that the foregoing
restriction shall not apply to (i) any transaction between a Loan Party and any
other Loan Party or, (ii) reasonable and customary fees and compensation paid to
members of the Boards of Directors, executives or management of a Loan Party and
its Subsidiaries, or (iii) the Trivest Management Agreement, provided that
amounts payable under the Trivest Management Agreement shall not be (a)
increased from amounts payable under the Trivest Management Agreement as in
effect on the Amendment Effective Date, or (b) payable upon the occurrence and
during the continuation of an Event of Default under Section 8.1, Section 8.6
and Section 8.7 of this Agreement . Notwithstanding any provision of this
Agreement to the contrary, Borrower or any of its Subsidiaries may reimburse
Trivest for the reasonable and allocable charges in the ordinary course of
business (including the reimbursement of reasonable out-of-pocket expenses) of
the Trivest Legal Department for services rendered to Borrower and its
Subsidiaries; provided that such charges are incurred in the ordinary course of
business and at rates no less favorable to a Loan Party and its Subsidiaries
than rates that would be charged for similar services rendered by persons who
are not Affiliates of a Loan Party or its Subsidiaries.
7.13 DISPOSAL OF SUBSIDIARY STOCK.
(a) Except for any sale of 100% of the capital stock or other equity
Securities of any of its Subsidiaries in compliance with the provisions of
subsection 7.7, the Loan Parties shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of their Subsidiaries, except to qualify directors if
required by applicable law; or
(ii) permit any of their Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities
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of any of their Subsidiaries (including such Subsidiary), except to a Loan
Party, another Subsidiary of a Loan Party, or to qualify directors if
required by applicable law.
(b) The Loan Parties will not, nor will they permit any Subsidiary
to, create, form or acquire any Subsidiaries, except for domestic Subsidiaries
which become Subsidiary Guarantors in accordance with the terms of Section 6.8
and Canadian Subsidiaries acquired in, or formed to consummate, a Permitted
Acquisition.
7.14 CONDUCT OF BUSINESS.
From and after the Closing Date, the Loan Parties shall not, and
shall not permit any of their Subsidiaries to, engage in any business other than
(i) the businesses engaged in by the Loan Parties and their Subsidiaries on the
Closing Date and similar or related businesses and (ii) such other lines of
business as may be consented to by Requisite Lenders.
7.15 AMENDMENTS OR WAIVERS OF RELATED AGREEMENTS.
Unless the prior written consent of Requisite Lenders is obtained,
neither any Loan Party nor any of its Subsidiaries will (i) agree to any
material amendment to, or waive any of its material rights under, any Related
Agreement in any manner that is, in the reasonable opinion of Administrative
Agent, adverse to Administrative Agent or Lenders, (ii) incur any additional
material obligations or increase any payment obligations under any Related
Agreement after the Closing Date, (iii) amend, modify or change its articles of
incorporation (or corporate charter or other similar organizational document) or
bylaws (or other similar document) in any manner adverse to the interests of
Lenders without the prior written consent of the Requisite Lenders, (iv) amend,
modify, waive or extend or permit the amendment, modification, waiver or
extension of any term of any Subordinated Debt or the other subordination
provisions related thereto in a manner that is adverse to the interests of
Lenders.
7.16 FISCAL YEAR; ACCOUNTING POLICIES.
Holdings and Borrower shall not change their Fiscal Year-end from
December 31 or change its accounting policies except as required by GAAP.
7.17 NO ACQUISITION OF REAL ESTATE.
Neither any Loan Party nor any of its Subsidiaries shall acquire any
fee interests in any Real Property Assets.
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SECTION 8
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Borrower to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Borrower to pay
when due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Borrower to pay any interest on any Loan
or any fee or any other amount due under this Agreement within five days after
the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of any Loan Party or any of its Subsidiaries to pay when
due any principal of or interest on or any other amount payable in respect of
one or more items of Indebtedness (other than Indebtedness referred to in
subsection 8.1) or Contingent Obligations having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit agreement) of more than
$500,000, in each case beyond the end of any grace period provided therefor; or
(ii) default by any Loan Party or any of its Subsidiaries with
respect to any other material term of (a) one or more items of Indebtedness or
Contingent Obligations in the individual or aggregate principal amounts referred
to in clause (i) above or (b) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness or Contingent Obligation(s),
if the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf
of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may be
(upon the giving or receiving of notice, lapse of time, both, or otherwise); or
(iii)default by any Loan Party or any of its Subsidiaries of any
Secured Hedge Agreement; or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of any Loan Party to perform or comply with any term or
condition contained in Section 6.1, 6.2, 6.5, 6.6, 6.11 or Section 7 of this
Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made
by any Loan Party or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any
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time given by any Loan Party or any of its Subsidiaries in writing pursuant
hereto or thereto or in connection herewith or therewith shall be false in any
material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 8,
and such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Borrower or such Loan Party becoming aware of such
default or (ii) receipt by Borrower and such Loan Party of notice from
Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a decree
or order for relief in respect of any Loan Party or any of its Subsidiaries in
an involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or
(ii) An involuntary case shall be commenced against any Loan Party
or any of its Subsidiaries under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect; or
a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over any Loan Party or any of its Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of any Loan Party or any of its Subsidiaries for all
or a substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of any Loan Party or any of its Subsidiaries, and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Any Loan Party or any of its Subsidiaries shall have an order
for relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or any Loan Party or any of its Subsidiaries
shall make any assignment for the benefit of creditors; or
(ii) Any Loan Party or any of its Subsidiaries shall be unable, or
shall fail generally, or shall admit in writing its inability, to pay its debts
as such debts become due; or the
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Board of Directors of any Loan Party or any of its Subsidiaries (or any
committee thereof) shall adopt any resolution or otherwise authorize any action
to approve any of the actions referred to in clause (i) above or this clause
(ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $500,000 or (ii) in
the aggregate at any time an amount in excess of $1,000,000 (in either case not
adequately covered by insurance as to which a solvent and unaffiliated insurance
company has acknowledged coverage) shall be entered or filed against any Loan
Party or any of its Subsidiaries or any of its respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of 60 days (or
in any event later than five days prior to the date of any proposed sale
thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against any Loan
Party or any of its Subsidiaries decreeing the dissolution or split up of such
Loan Party or such Subsidiary and such order shall remain undischarged or
unstayed for a period in excess of 60 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in
the aggregate results in or might reasonably be expected to result in liability
of any Loan Party, any of its Subsidiaries or any of its respective ERISA
Affiliates in excess of $500,000 during the term of this Agreement; or there
shall exist an amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with respect to
which assets exceed benefit liabilities), which exceeds $500,000; or
8.11 CHANGE IN CONTROL.
(i) any "person" or "group" (as such terms are used in Section 13(d)
and 14(d) of the Exchange Act), is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of 30% or more of the then
outstanding Voting Securities of Holdings; or
(ii) any merger or consolidation involving Holdings if more than 50%
of the outstanding Voting Securities of Holdings after giving effect to such
merger or consolidation are held by Persons that were not shareholders of
Holdings prior to such merger or consolidation; or
(iii)the replacement of a majority of the Board of Directors of
Holdings over a two-year period from the directors who constituted the Board of
Directors at the beginning of such period, and such replacement shall not have
been approved by a vote of at least a majority
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of the Board of Directors of Holdings then still in office who either were
members of such Board of Directors at the beginning of such period or whose
election as a member of such Board of Directors was previously so approved; or
8.12 INVALIDITY OF SUBSIDIARY GUARANTY OR HOLDINGS GUARANTY;
FAILURE OF SECURITY; REPUDIATION OF OBLIGATIONS.
At any time after the execution and delivery thereof, (i) the
Subsidiary Guaranty or the Holdings Guaranty, for any reason other than the
satisfaction in full of all Obligations, shall cease to be in full force and
effect (other than in accordance with their terms) or shall be declared to be
null and void, (ii) any Collateral Document shall cease to be in full force and
effect (other than by reason of a release of Collateral thereunder in accordance
with the terms hereof or thereof, the satisfaction in full of the Obligations or
any other termination of such Collateral Document in accordance with the terms
hereof or thereof) or shall be declared null and void, or Administrative Agent
shall not have or shall cease to have a valid and perfected First Priority Lien
in any Collateral purported to be covered thereby having a fair market value,
individually or in the aggregate, exceeding $250,000 (other than Deposit
Accounts and Inventory in transit to Borrower or from Borrower to customers), in
each case for any reason other than the failure of Administrative Agent or any
Lender to take any action within its control, or (iii) any Loan Party shall
contest the validity or enforceability of any Loan Document in writing or deny
in writing that it has any further liability, including with respect to future
advances by Lenders, under any Loan Document to which it is a party; or
8.13 HEDGE AGREEMENTS.
Any termination payment shall be due by a Loan Party under any Hedge
Agreement and such amount is not paid within the later to occur of five (5)
Business Days after the due date thereof or the expiration of grace periods, if
any, in such Hedge Agreement.
THEN (i) upon the occurrence of any Event of Default described in
subsection 8.6 or 8.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans, (b) an amount equal to the maximum amount that may at any
time be drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit), and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Borrower, and the obligation of each Lender to make any
Loan, the obligation of Administrative Agent to issue any Letter of Credit and
the right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any other
Event of Default, Administrative Agent shall, upon the written request or with
the written consent of Requisite Lenders, by written notice to Borrower, declare
all or any portion of the amounts described in clauses (a) through (c) above to
be, and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
foregoing shall not affect in any way the
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obligations of Lenders under subsection 2.3(c) or the obligations of Lenders to
purchase participations in any unpaid Swingline Loans as provided in subsection
2.4(b)(ii).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Security Agreement and shall be applied as therein provided.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to clause (ii) of such paragraph Borrower shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified in
this Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then Requisite Lenders, by
written notice to Borrower, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders and
are not intended, directly or indirectly, to benefit Borrower, and such
provisions shall not at any time be construed so as to grant Borrower the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
SECTION 9
ADMINISTRATIVE AGENT
9.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints CIBC as
Administrative Agent of such Lender under this Agreement, and each such Lender
irrevocably authorizes CIBC, as Administrative Agent for such Lender, to take
such action on its behalf under the provisions of this Agreement and to exercise
such powers and perform such duties as are expressly delegated to Administrative
Agent by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against Administrative Agent.
9.2 DELEGATION OF DUTIES.
Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all
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matters pertaining to such duties. Administrative Agent shall not be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care. Without limiting the foregoing, Administrative Agent
may appoint one of its affiliates as its agent to perform the functions of
Administrative Agent hereunder relating to the advancing of funds to Borrower
and distribution of funds to Lenders and to perform such other related functions
of Administrative Agent hereunder as are reasonably incidental to such
functions.
9.3 EXCULPATORY PROVISIONS.
Neither Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement (except for its or such Person's own
gross negligence or willful misconduct) or (b) responsible in any manner to any
of Lenders for any recitals, statements, representations or warranties made by
any Loan Party or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by Administrative Agent under or in connection with, this Agreement
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any of the Loan Documents or for any failure of any Loan Party to
perform its obligations hereunder or thereunder. Administrative Agent shall not
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance by any Loan Party of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of any Loan Party.
9.4 RELIANCE BY ADMINISTRATIVE AGENT.
(a) Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Loan Parties), independent
accountants and other experts selected by Administrative Agent. Administrative
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless an executed Commitment Transfer Supplement has been filed with
Administrative Agent pursuant to Section 10.1(c) with respect to the Loans
evidenced by such Note. Administrative Agent shall be fully justified in failing
or refusing to take any action under this Agreement unless it shall first
receive such advice or concurrence of the Requisite Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under any
of the Loan Documents in accordance with a request of the Requisite Lenders or
all of Lenders, as may be required under this Agreement, and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
Lenders and all future holders of the Notes.
(b) For purposes of determining compliance with the conditions
specified in Section 4.1, each Lender that has signed this Agreement shall be
deemed to have consented to,
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approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender.
9.5 NOTICE OF DEFAULT.
Administrative Agent shall not be deemed to have knowledge or notice
of the occurrence of any Event of Default or Potential Event of Default
hereunder unless Administrative Agent has received notice from a Lender or
Borrower referring to this Agreement, describing such Event of Default or
Potential Event of Default and stating that such notice is a "notice of
default". In the event that Administrative Agent receives such a notice,
Administrative Agent shall give prompt notice thereof to Lenders. Administrative
Agent shall take such action with respect to such Event of Default or Potential
Event of Default as shall be reasonably directed by the Requisite Lenders;
provided, however, that unless and until Administrative Agent shall have
received such directions, Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Event of Default or Potential Event of Default as it shall deem advisable in the
best interests of Lenders except to the extent that this Agreement expressly
requires that such action be taken, or not taken, only with the consent or upon
the authorization of the Requisite Lenders, or all of Lenders, as the case may
be.
9.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representation or warranty to it and that no act by
Administrative Agent hereinafter taken, including any review of the affairs of
any Loan Party, shall be deemed to constitute any representation or warranty by
Administrative Agent to any Lender. Each Lender represents to Administrative
Agent that it has, independently and without reliance upon Administrative Agent
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of Borrower or any other Loan Party and made its own decision
to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon Administrative
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of Borrower and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to Lenders by
Administrative Agent hereunder, Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of Borrower or any other Loan Party
which may come into the possession of Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
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9.7 INDEMNIFICATION.
Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by Borrower and without limiting the
obligation of Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Loans or any LOC
Obligations) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of any Loan Document or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided,
however, that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting from (i) the
Administrative Agent's gross negligence or willful misconduct, as determined by
a court of competent jurisdiction or (ii) the Administrative Agent's role as a
Hedge Agreement Provider under this Agreement or in any other respect in
connection with any Secured Hedge Agreement. The agreements in this Section 9.7
shall survive the termination of this Agreement and payment of the Loans, any
LOC Obligations and all other amounts payable hereunder.
9.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with Borrower and the
other Loan Parties as though Administrative Agent were not Administrative Agent
hereunder. With respect to the Loans made or renewed by it and any Note issued
to it, Administrative Agent shall have the same rights and powers under this
Agreement as any Lender and may exercise the same as though it were not
Administrative Agent, and the terms "Lender" and "Lenders" shall include
Administrative Agent in its individual capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENT.
Administrative Agent may resign as Administrative Agent upon 30
days' prior written notice to Borrower and Lenders. If Administrative Agent
shall resign as Administrative Agent under this Agreement and the other Loan
Documents, then the Requisite Lenders shall appoint from among Lenders a
successor administrative agent for Lenders, which successor agent shall be
approved by Borrower (such approval not to be unreasonably withheld) so long as
no Event of Default has occurred and is continuing, whereupon such successor
administrative agent shall succeed to the rights, powers and duties of
Administrative Agent, and the term "Administrative Agent" shall mean such
successor administrative agent effective upon such appointment and approval, and
the former Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the parties to this Agreement or
any holders of the Notes. If no successor Administrative Agent has accepted
appointment as Administrative Agent within thirty (30) days after the retiring
Administrative Agent's giving notice of resignation, the
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retiring Administrative Agent shall have the right, on behalf of Lenders, to
appoint a successor administrative agent, which successor shall be subject to
approval by Borrower (such approval not to be unreasonably withheld) so long as
no Event of Default has occurred and is continuing; provided that such successor
administrative agent has minimum capital and surplus of at least $500,000,000.
If no successor administrative agent has accepted appointment as Administrative
Agent within sixty (60) days after the retiring Administrative Agent's giving
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless become effective and Lenders shall perform all duties of
Administrative Agent hereunder until such time, if any, as the Requisite Lenders
appoint a successor administrative agent as provided for above. After any
retiring Administrative Agent's resignation as Administrative Agent, the
indemnification provisions of this Agreement and the other Loan Documents and
the provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
9.10 OTHER AGENTS.
None of the Lenders or other Persons identified on the facing page
or signature pages of this Agreement as a "syndication agent," "documentation
agent," "co-agent," "book manager," "book runner," "lead manager," "arranger,"
"lead arranger" or "co-lead arranger" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than, in the case
of such Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of Lenders or
other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
SECTION 10
MISCELLANEOUS
10.1 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.
(a) This Agreement shall be binding upon and inure to the benefit of
Borrower, Lenders, Administrative Agent, all future holders of the Notes and
their respective successors and assigns, except that Borrower may not assign or
transfer any of its rights or obligations under this Agreement or the other Loan
Documents without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Commitment of such Lender, or any
other interest of such Lender hereunder, in each case in minimum amounts of
$1,000,000 (or, if less, the entire amount of such Lender's Obligations,
Commitments or other interests). In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the
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performance thereof, such Lender shall remain the holder of any such Note for
all purposes under this Agreement, and Borrower and Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. No Lender shall transfer
or grant any participation under which the Participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Loan Document
except to the extent such amendment or waiver would (i) extend the scheduled
maturity of any Loan or Note or any installment thereon in which such
Participant is participating, or reduce the stated rate or extend the time of
payment of interest or fees thereon (except in connection with a waiver of
interest at the increased post-default rate) or reduce the principal amount
thereof, or increase the amount of the Participant's participation over the
amount thereof then in effect (it being understood that a waiver of any Event of
Default or Potential Event of Default shall not constitute a change in the terms
of such participation, and that an increase in any Commitment or Loan shall be
permitted without consent of a Participant if such Participant's participation
is not increased as a result thereof), (ii) release Borrower, Holdings or any
material Subsidiary Guarantor from its obligations under the Guaranties, (iii)
release any material portion of the Collateral, or (iv) consent to the
assignment or transfer by Borrower of any of its rights and obligations under
this Agreement. In the case of any such participation, the Participant shall not
have any rights under this Agreement or any of the other Loan Documents (the
Participant's rights against such Lender in respect of such participation to be
those set forth in the agreement executed by such Lender in favor of the
Participant relating thereto) and all amounts payable by Borrower hereunder
shall be determined as if such Lender had not sold such participation; provided
that each Participant shall be entitled to the benefits of Sections 2.14, 2.15,
2.16, 2.17 and 10.2 with respect to its participation in the Commitments and the
Loans outstanding from time to time; provided that no Participant shall be
entitled to receive any greater amount pursuant to such Sections than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time, sell or assign to any Lender or any
Affiliate or Approved Fund thereof or to one or more additional banks, financial
institutions, other funds or entities (each such Lender, Affiliate, Approved
Fund, bank, financial institution, other fund or entity, a "Purchasing Lender"),
all or any part of its rights and obligations under this Agreement and the Notes
in minimum amounts of (i) $2,500,000 with respect to its Revolving Commitment
and its Revolving Loans (or, if less, the entire amount of such Lender's
Revolving Commitment and Revolving Loans) and (ii) $1,000,000 (or any lesser
amount as approved by Administrative Agent) with respect to its Term Loans (or,
if less, the entire amount of such Lender's Term Loans), pursuant to a
Commitment Transfer Supplement, executed by such Purchasing Lender, such
transferor Lender, Administrative Agent (to the extent required) and, so long as
no Event of Default or Potential Event of Default has occurred and is
continuing, Borrower, and delivered to Administrative Agent for its acceptance
and recording in the Register; provided, however, that (A) any sale or
assignment to an existing Lender, or Affiliate or Approved Fund thereof, shall
not require the consent of Borrower or the Administrative Agent nor shall any
such sale or assignment be subject to the minimum assignment amounts specified
herein and (B) any sale or assignment of a portion of the Term Loan and a Term
Loan Commitment shall not require the consent of
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Borrower. Upon such execution, delivery, acceptance and recording, from and
after the Transfer Effective Date specified in such Commitment Transfer
Supplement, (x) the Purchasing Lender thereunder shall be a party hereto and, to
the extent provided in such Commitment Transfer Supplement, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the transferor Lender thereunder shall, to the extent provided in such
Commitment Transfer Supplement, be released from its obligations under this
Agreement (and, in the case of a Commitment Transfer Supplement covering all or
the remaining portion of a transferor Lender's rights and obligations under this
Agreement, such transferor Lender shall cease to be a party hereto) other than
accrued liabilities under this Agreement. Such Commitment Transfer Supplement
shall be deemed to amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Lender and the resulting
adjustment of Commitment Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Notes. On or prior to the
Transfer Effective Date specified in such Commitment Transfer Supplement,
Borrower, at its own expense, shall execute and deliver to Administrative Agent
in exchange for the Notes delivered to Administrative Agent pursuant to such
Commitment Transfer Supplement new Notes to the order of such Purchasing Lender
in an amount equal to the Commitment assumed by it pursuant to such Commitment
Transfer Supplement and, unless the transferor Lender has not retained a
Commitment hereunder, new Notes to the order of the transferor Lender in an
amount equal to the Commitment retained by it hereunder. Such new Notes shall be
dated the Closing Date and shall otherwise be in the form of the Notes replaced
thereby.
(d) Administrative Agent shall maintain at its address referred to
in Section 10.8 a copy of each Commitment Transfer Supplement delivered to it
and a register (the "Register") for the recordation of the names and addresses
of Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and Borrower, Administrative Agent and Lenders
shall treat each Person whose name is recorded in the Register as the owner of
the Loan recorded therein for all purposes of this Agreement. The Register shall
be available for inspection by Borrower at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement and an Administrative Questionnaire, together with payment to
Administrative Agent by the transferor Lender or the Purchasing Lender of a
registration and processing fee of $3,500 (except for any assignment by a Lender
to an Affiliate or an Approved Fund of such Lender, in which case such fee shall
be $500) for each Purchasing Lender listed in such Commitment Transfer
Supplement and the Notes subject to such Commitment Transfer Supplement,
Administrative Agent shall (i) accept such Commitment Transfer Supplement and
(ii) record the information contained therein in the Register.
(f) Borrower authorizes each Lender to disclose to any Participant
or Purchasing Lender (each, a "Transferee") and any prospective Transferee any
and all financial information in such Lender's possession concerning the Loan
Parties and their Affiliates which has been delivered to such Lender by or on
behalf of a Loan Party pursuant to this Agreement or which
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has been delivered to such Lender by or on behalf of a Loan Party in connection
with such Lender's credit evaluation of the Loan Parties and their Affiliates
prior to becoming a party to this Agreement, in each case subject to Section
10.19.
(g) At the time of each assignment pursuant to this Section 10.1 to
a Person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
federal income tax purposes, the respective assignee Lender shall, to the extent
it may lawfully do so, provide to Borrower and Administrative Agent the
appropriate Internal Revenue Service Forms (and, if applicable, a Tax Exempt
Certificate) described in Section 2.18.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Agreement (including, without limitation,
any right to payment of principal and interest under any Note) to secure
obligations of such Lender, including without limitation, (i) any pledge or
assignment to secure obligations to a Federal Reserve Bank and (ii) in the case
of any Lender that is a fund or trust or entity that invests in commercial bank
loans in the ordinary course of business, any pledge or assignment to any
holders of obligations owed, or securities issued, by such Lender including to
any trustee for, or any other representative of, such holders; it being
understood that the requirements for assignments set forth in this Section 10.1
shall not apply to any such pledge or assignment of a security interest, except
with respect to any foreclosure or similar action taken by such pledgee or
assignee with respect to such pledge or assignment; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto and no such pledgee or assignee shall have any voting rights
under this Agreement unless and until the requirements for assignments set forth
in this Section 10.1 are complied with in connection with any foreclosure or
similar action taken by such pledgee or assignee.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Borrower (including any opinions
requested by Lenders as to any legal matters arising hereunder) and of
Borrower's performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including with respect to confirming compliance with
environmental, insurance and solvency requirements; (iii) the reasonable fees,
expenses and disbursements of Xxxxxx Xxxxxx & Xxxxxxx LLP, counsel to Agents, in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other documents or matters requested by Borrower; (iv) all the
actual costs and reasonable expenses of creating and perfecting Liens in favor
of Administrative Agent on behalf of Lenders pursuant to any Collateral
Document, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, title insurance premiums, and reasonable fees,
expenses and disbursements of
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counsel to Agents and of counsel providing any opinions that Agents or Requisite
Lenders may request in respect of the Collateral Documents or the Liens created
pursuant thereto; (v) all the actual costs and reasonable expenses (including
the reasonable fees, expenses and disbursements of any auditors, accountants or
appraisers and any environmental or other consultants, advisors and agents
employed or retained by Agents or their counsel) of obtaining and reviewing any
environmental audits or reports provided for under subsection 4.1(e) or 6.7B and
any audits or reports provided for under subsection 6.5B with respect to
Inventory and accounts receivable of Borrower and its Subsidiaries; (vi) the
custody or preservation of any of the Collateral; (vii) all other actual and
reasonable costs and expenses incurred by Agents in connection with the
syndication of the Commitments and the negotiation, preparation and execution of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and the transactions contemplated thereby; and (viii) after the
occurrence of an Event of Default, all costs and expenses, including reasonable
attorneys' fees (including allocated costs of internal counsel) and costs of
settlement, incurred by Agents and Lenders in enforcing any Obligations of or in
collecting any payments due from any Loan Party hereunder or under the other
Loan Documents by reason of such Event of Default (including in connection with
the sale of, collection from, or other realization upon any of the Collateral or
the enforcement of the Subsidiary Guaranty) or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Borrower agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Agents and Lenders, and the officers,
directors, employees, counsel, agents, representatives, advisors and affiliates
of Agents and Lenders (collectively called the "Indemnitees"), from and against
any and all Indemnified Liabilities (as hereinafter defined); provided that
Borrower shall not have any obligation to any Indemnitee hereunder with respect
to any Indemnified Liabilities to the extent such Indemnified Liabilities arise
solely from the gross negligence or willful misconduct of that Indemnitee as
determined by a final judgment of a court of competent jurisdiction; and
provided further, that Borrower shall be obligated to pay the fees, expenses or
disbursements of counsel of only one counsel for all Indemnitees hereunder
(other than any special local counsel or counsel for specific purposes which
represents the Indemnitees) unless in any Indemnitee's reasonable judgment a
conflict of interest between such Indemnitee and any other Indemnitee exists, in
which case Borrower shall indemnify such Indemnitee for the fees, expenses or
disbursements of its own separate counsel.
Subject to the provisos contained in the preceding paragraph, as
used herein, "Indemnified Liabilities" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or xxxxx any Hazardous Materials Activity), expenses
and disbursements of any
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kind or nature whatsoever (including the reasonable fees and disbursements of
counsel for Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened by any Person, whether or not any
such Indemnitee shall be designated as a party or a potential party thereto, and
any fees or expenses incurred by Indemnitees in enforcing this indemnity),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of (i) this Agreement or the other Loan Documents or the
Related Agreements or the transactions contemplated hereby or thereby (including
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds thereof or the issuance of Letters of Credit hereunder or the use or
intended use of any thereof, or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Subsidiary Guaranty), (ii) the statements
contained in the commitment letter delivered by any Lender to Borrower with
respect thereto, or (iii) any Environmental Claim or any Hazardous Materials
Activity relating to or arising from, directly or indirectly, any past or
present activity, operation, land ownership, or practice of Borrower or any of
its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this subsection 10.3 may be unenforceable in whole or
in part because they are violative of any law or public policy, Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuance of any Event of Default each Lender is hereby authorized
by Borrower at any time or from time to time, without notice to Borrower or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender to or for the credit or the account of Borrower against and
on account of the obligations and liabilities of Borrower to that Lender under
this Agreement, the Letters of Credit and participations therein, the other Loan
Documents and any Hedge Agreement provided by such Lender pursuant to the terms
of this Agreement, including all claims of any nature or description arising out
of or connected with this Agreement, the Letters of Credit and participations
therein, any other Loan Document or any Hedge Agreement provided by such Lender
pursuant to the terms of this Agreement, irrespective of whether or not (i) that
Lender shall have made any demand hereunder or (ii) the principal of or the
interest on the Loans or any amounts in respect of the Letters of Credit or any
other amounts due hereunder shall have become due and payable pursuant to
Section 8 and although said obligations and liabilities, or any of them, may be
contingent or unmatured. Borrower hereby further grants to Administrative Agent
and each Lender a security
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interest in all deposits and accounts maintained with Administrative Agent or
such Lender as security for the Obligations.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Borrower or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Borrower expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
10.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision
of this Agreement or of the Notes, and no consent to any departure by Borrower
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any such amendment, modification, termination,
waiver or consent which:
(a) reduces the principal amount of any of the Loans;
(b) changes in any manner the definition of "Pro Rata Share", the
definition of "Class" or the definition of "Requisite Lenders";
(c) changes in any manner any provision of this Agreement which, by
its terms, expressly requires the approval or concurrence of all Lenders;
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(d) increases the maximum duration of Interest Periods permitted
hereunder;
(e) releases any Lien granted in favor of Administrative Agent with
respect to all or substantially all of the Collateral;
(f) releases all or substantially all of the Subsidiary Guarantors
from their obligations under the Subsidiary Guaranty, in each case other
than in accordance with the terms of the Loan Documents;
(g) releases Holdings from its obligations under the Holdings
Guaranty other than in accordance with the terms of the Loan Documents;
(h) changes in any manner the provisions contained in subsection 8.1
or this subsection 10.6;
(i) changes in any manner the order in which Obligations are paid or
the pro rata payment of Obligations under Section 2.8(b) or Section
2.12(a); or
(j) amendments, modifications, terminations or waivers which (i)
release any Lien granted in favor of Administrative Agent with respect to
all or substantially all of the Collateral, (ii) release all or
substantially all of the Subsidiary Guarantors from their obligations
under the Subsidiary Guaranty other than in accordance with the terms of
the Loan Documents or (iii) release Holdings from its obligations under
the Holdings Guaranty other than in accordance with the terms of the Loan
Documents;
shall be effective only if evidenced by a writing signed by or on behalf of all
Lenders. In addition, (i) any amendment, modification, termination or waiver of
any of the provisions contained in Section 4 shall be effective only if
evidenced by a writing signed by or on behalf of Requisite Lenders, (ii) no
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the Lender which is the
holder of that Note, (iii) no amendment, modification, termination or waiver of
any provision of subsection 2.4 or of any other provision of this Agreement
relating to the Swingline Commitment or the Swingline Loans shall be effective
without the written concurrence of Swingline Lender, (iv) no amendment,
modification, termination or waiver of any provision of Section 9 or of any
other provision of this Agreement which, by its terms, expressly requires the
approval or concurrence of Administrative Agent shall be effective without the
written concurrence of Administrative Agent, (v) no amendment, modification,
termination or waiver of any provision of subsection 2.1 which increases the
Commitment of any Lender shall be effective without the written concurrence of
the Lender whose Commitment is to be increased, (vi) no amendment, modification
or waiver of Section 2.12(b) shall be effective without the written concurrence
of each Lender and each Hedge Agreement Provider directly affected thereby; and
(vii) no amendment, modification, termination or waiver which postpones the date
or reduces the amount of any scheduled payment (but not prepayment) of principal
of any Class of the Loans, postpones the date on which any interest or any fees
are payable with respect to any Class of the Loans, decreases the interest rate
borne by any Class of the Loans (other than any waiver of any increase in the
interest rate applicable to any of the Loans pursuant to subsection 2.9(b)) or
the amount of any fees payable
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hereunder with respect to any Class of the Loans, reduces the amount or
postpones the due date of any amount payable in respect of, or extends the
required expiration date of, any Letter of Credit, or changes in any manner the
obligations of Lenders relating to the purchase of participations in Letters of
Credit shall be effective without the written concurrence of all Lenders of the
related Class. Administrative Agent may, but shall have no obligation to, with
the concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on Borrower in any case shall entitle Borrower to any other
or further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
subsection 10.6 shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by Borrower, on Borrower.
Notwithstanding the foregoing, this Agreement may be amended (or
amended and restated) with the written consent of the Requisite 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 Commitments and the accrued interest and fees
in respect thereof and (b) to include appropriately the Lenders holding such
credit facilities in any determination of the Requisite Lenders.
If, in connection with any proposed change, waiver, discharge or
termination of the provisions of this Agreement as contemplated by this Section
10.6, the consent of the Requisite Lenders is obtained but the consent of one or
more of such other Lenders (each, a "Non-Consenting Lender") whose consent is
required is not obtained, then Borrower shall have the right to replace all, but
not less than all, of such Non-Consenting Lender or Lenders (so long as all
Non-Consenting Lenders are so replaced) with one or more persons pursuant to
Section 2.20 so long as at the time of such replacement each such replacement
Lender consents to the proposed change, waiver, discharge or termination.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if
a particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES.
Except as otherwise provided in Section 2, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
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number set out herein, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case, addressed
as follows in the case of Borrower and Administrative Agent, and as set forth on
Schedule 10.8 in the case of Lenders, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes:
Borrower: Directed Electronics, Inc.
0 Xxxxx Xxx
Xxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxx
President and Chief Executive Officer
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Trivest Partners, L.P.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
Director & General Counsel
Telecopier: (000) 000-0000
Telephone: (305) 858-2200 ext. 244
with a copy to:
Xxxxxxxxx Xxxxxxx, LLP
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxxxxx, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Administrative Agent: Canadian Imperial Bank of Commerce,
acting through its New York Agency
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Agency Services
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
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with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx LLP
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
provided that notices given by Borrower pursuant to Section 2.1 or Section 2.10
hereof shall be effective only upon receipt thereof by Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Borrower set forth in subsections 2.15, 2.16,
2.17, 2.19, 10.2 and 10.3 and the agreements of Lenders set forth in subsections
9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the cancellation or
expiration of the Letters of Credit and the reimbursement of any amounts drawn
thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Loan Document shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Borrower or any other party or
against or in payment of any or all of the Obligations. To the extent that
Borrower makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or
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related thereto, shall be revived and continued in full force and effect as if
such payment or payments had not been made or such enforcement or setoff had not
occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Borrower's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Borrower without the prior written consent of all
Lenders.
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10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND
DELIVERING THIS AGREEMENT, BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO BORROWER AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWER IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty
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claims and all other common law and statutory claims. Each party hereto
acknowledges that this waiver is a material inducement to enter into a business
relationship, that each has already relied on this waiver in entering into this
Agreement, and that each will continue to rely on this waiver in their related
future dealings. Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event
of litigation, this Agreement may be filed as a written consent to a trial by
the court.
10.19 CONFIDENTIALITY.
Administrative Agent and each of the Lenders agrees that, without
the prior consent of Borrower, it will use its best efforts not to disclose any
information with respect to the Loan Parties which is furnished pursuant to this
Agreement, any other Loan Document or any documents contemplated by or referred
to herein or therein and which is designated by Borrower to Lenders in writing
as confidential or as to which it is otherwise reasonably clear such information
is not public, except that any Lender may disclose any such information (a) to
its employees, Affiliates, auditors and counsel or to another Lender, (b) as has
become generally available to the public other than by a breach of this Section
10.19, (c) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or federal regulatory body having or
claiming to have jurisdiction over such Lender or to the Federal Reserve Board
or the Federal Deposit Insurance Corporation or the OCC or the NAIC or similar
organizations (whether in the United States or elsewhere) or their successors,
(d) as may be required or appropriate in response to any summons or subpoena or
any law, order, regulation or ruling applicable to such Lender, (e) to any
prospective Participant or assignee in connection with any contemplated transfer
pursuant to Section 10.1; provided that such prospective transferee shall have
been made aware of this Section 10.19 and shall have agreed to be bound by its
provisions as if it were a party to this Agreement, (f) to Gold Sheets and other
similar bank trade publications; such information to consist of deal terms and
other information regarding the credit facilities evidenced by this Agreement
customarily found in such publications, (g) in connection with any suit, action
or proceeding for the purpose of defending itself, reducing its liability, or
protecting or exercising any of its claims, rights, remedies or interests under
or in connection with the Loan Documents or any Secured Hedge Agreement, (h) to
any direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees to
be bound by the provisions of this Section 10.19), (i) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender, (j) to a Person that is an investor or prospective investor in a
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Securitization (as defined below) that agrees that its access to information
regarding the Borrower and the Loans is solely for purposes of evaluating an
investment in such Securitization; provided that such Person shall have been
made aware of this Section 10.19 and shall have agreed to be bound by its
provisions as if it were a party to this Agreement, or (k) to a Person that is a
trustee, collateral manager, servicer, noteholder or secured party in a
Securitization in connection with the administration, servicing and reporting on
the assets serving as collateral for such Securitization; provided that such
Person shall have been made aware of this Section 10.19 and shall have agreed to
be bound by its provisions as if it were a party to this Agreement. For purposes
of this Section "Securitization" shall mean a public or private offering by a
Lender or any of its affiliates or their respective successors and assigns, of
securities which represent an interest in, or which are collateralized in whole
or in part by, the Loans.
10.20 LEAD ARRANGER, BOOKRUNNER, DOCUMENTATION AGENT AND SYNDICATION
AGENT.
None of the institutions identified as "Co-Lead Arranger,"
"Bookrunner," "Documentation Agent" or "Syndication Agent" on the title page to
this Agreement shall have any obligations, liabilities or duties under this
Agreement other than those applicable to a Lender (but only if such institution
is a Lender) as such, and no such institution shall have or be deemed to have
any fiduciary relationship with any Lender. Each Lender acknowledges that it has
not relied, and will not rely, on any such institution in deciding to enter into
this Agreement or in taking or not taking any action hereunder.
10.21 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed by fax and in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Borrower and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
10.22 PATRIOT ACT NOTICE.
Each Lender and Administrative Agent (for itself and not on behalf
of any other party) hereby notifies Borrower that, pursuant to the requirements
of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26,
2001 (the "Patriot Act"), it is required to obtain, verify and record
information that identifies Borrower, which information includes the name and
address of Borrower and other information that will allow such Lender or
Administrative Agent, as applicable, to identify Borrower in accordance with the
Patriot Act.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWER: DEI SALES, INC. (FORMERLY KNOWN AS DIRECTED
ELECTRONICS, INC.)
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President and Chief
Financial Officer
ADMINISTRATIVE AGENT:
CANADIAN IMPERIAL BANK OF COMMERCE,
ACTING THROUGH ITS NEW YORK AGENCY,
as Administrative Agent
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
CIBC WORLD MARKETS CORP.,
as Co-Lead Arranger and Joint Book Runner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
X.X. XXXXXX SECURITIES INC.,
as Co-Lead Arranger, Joint Book Runner and
Syndication Agent
By: /s/ Xxxxx X. XxXxxx
--------------------------------------
Name: Xxxxx X. XxXxxx
Title: Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Documentation Agent
By: /s/ Xxxx Xxx
--------------------------------------
Xxxx Xxx
Vice President
CITIBANK, N.A.
as Co-Documentation Agent
By: /s/ Xxxx Xxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
XXXXX FARGO BANK, N.A.,
as Co-Documentation Agent
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
