EXECUTION COPY
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CREDIT AGREEMENT
dated as of
March 23, 2005
among
ST. XXXX KNITS INTERNATIONAL, INCORPORATED,
The Lenders Party Hereto
and
JPMORGAN CHASE BANK, N.A.
as Administrative Agent
___________________________
X.X. XXXXXX SECURITIES INC.,
as Sole Lead Arranger and Sole Bookrunner
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms.................................................1
SECTION 1.02. Classification of Loans and Borrowings.......................25
SECTION 1.03. Terms Generally..............................................25
SECTION 1.04. Accounting Terms; GAAP.......................................26
ARTICLE II
The Credits
SECTION 2.01. Commitments..................................................26
SECTION 2.02. Loans and Borrowings.........................................26
SECTION 2.03. Requests for Borrowings......................................27
SECTION 2.04. Swingline Loans..............................................28
SECTION 2.05. Letters of Credit............................................29
SECTION 2.06. Funding of Borrowings........................................33
SECTION 2.07. Interest Elections...........................................34
SECTION 2.08. Termination and Reduction of Commitments.....................36
SECTION 2.09. Repayment of Loans; Evidence of Debt.........................36
SECTION 2.10. Amortization of Term Loans...................................37
SECTION 2.11. Prepayment of Loans..........................................39
SECTION 2.12. Fees.........................................................40
SECTION 2.13. Interest.....................................................42
SECTION 2.14. Alternate Rate of Interest...................................43
SECTION 2.15. Increased Costs..............................................43
SECTION 2.16. Break Funding Payments.......................................44
SECTION 2.17. Taxes........................................................45
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs..46
SECTION 2.19. Mitigation Obligations; Replacement of Lenders...............48
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers.........................................49
SECTION 3.02. Authorization; Enforceability................................49
SECTION 3.03. Governmental Approvals; No Conflicts.........................49
SECTION 3.04. Financial Condition; No Material Adverse Change..............50
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SECTION 3.05. Properties...................................................50
SECTION 3.06. Litigation and Environmental Matters.........................50
SECTION 3.07. Compliance with Laws and Agreements..........................51
SECTION 3.08. Investment and Holding Company Status........................51
SECTION 3.09. Taxes........................................................51
SECTION 3.10. ERISA........................................................51
SECTION 3.11. Disclosure...................................................52
SECTION 3.12. Subsidiaries.................................................52
SECTION 3.13. Insurance....................................................52
SECTION 3.14. Labor Matters................................................52
SECTION 3.15. Solvency.....................................................53
SECTION 3.16. Senior Indebtedness..........................................53
ARTICLE IV
Conditions
SECTION 4.01. Effective Date...............................................53
SECTION 4.02. Each Credit Event............................................55
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information...................56
SECTION 5.02. Notices of Material Events...................................58
SECTION 5.03. Information Regarding Collateral.............................58
SECTION 5.04. Existence; Conduct of Business...............................59
SECTION 5.05. Payment of Obligations.......................................59
SECTION 5.06. Maintenance of Properties....................................59
SECTION 5.07. Insurance....................................................59
SECTION 5.08. Casualty and Condemnation....................................60
SECTION 5.09. Books and Records; Inspection Rights.........................60
SECTION 5.10. Compliance with Laws.........................................60
SECTION 5.11. Use of Proceeds and Letters of Credit........................60
SECTION 5.12. Additional Subsidiaries......................................60
SECTION 5.13. Further Assurances...........................................61
SECTION 5.14. Interest Rate Protection.....................................61
SECTION 5.15. Redemption; Redemption Reserve...............................61
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ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Certain Equity Securities......................62
SECTION 6.02. Liens........................................................64
SECTION 6.03. Fundamental Changes..........................................65
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions....66
SECTION 6.05. Asset Sales..................................................69
SECTION 6.06. Sale and Leaseback Transactions..............................71
SECTION 6.07. Swap Agreements..............................................71
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness........71
SECTION 6.09. Transactions with Affiliates.................................73
SECTION 6.10. Restrictive Agreements.......................................73
SECTION 6.11. Amendment of Material Documents..............................74
SECTION 6.12. Capital Expenditures.........................................74
SECTION 6.13. Leverage Ratio...............................................74
SECTION 6.14. Fixed Charge Coverage Ratio..................................74
SECTION 6.15. Interest Expense Coverage Ratio..............................75
SECTION 6.16. Fiscal Year..................................................75
ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices......................................................80
SECTION 9.02. Waivers; Amendments..........................................81
SECTION 9.03. Expenses; Indemnity; Damage Waiver...........................83
SECTION 9.04. Successors and Assigns.......................................84
SECTION 9.05. Survival.....................................................87
SECTION 9.06. Counterparts; Integration; Effectiveness.....................88
SECTION 9.07. Severability.................................................88
SECTION 9.08. Right of Setoff..............................................88
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process...88
SECTION 9.10. WAIVER OF JURY TRIAL.........................................89
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SECTION 9.11. Headings.....................................................89
SECTION 9.12. Confidentiality..............................................89
SECTION 9.13. Interest Rate Limitation.....................................90
SECTION 9.14. USA Patriot Act..............................................91
SECTION 9.15. Waiver Under Existing Credit Agreement.......................91
SCHEDULES:
Schedule 1.01 -- Mortgaged Property
Schedule 2.01 -- Commitments
Schedule 3.03 -- Cross Defaults and Other Matters
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Investments
Schedule 6.10 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Assumption
Exhibit B -- Form of Guarantee and Collateral Agreement
Exhibit C -- Form of Perfection Certificate
Exhibit D -- Forms of Opinions
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CREDIT AGREEMENT dated as of March 23, 2005,
among ST. XXXX KNITS INTERNATIONAL,
INCORPORATED, the LENDERS party hereto, and JPMORGAN
CHASE BANK, N.A., as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Acquisition Consideration" means all consideration paid or otherwise
delivered in connection with Permitted Acquisitions (including the principal
amount of any Indebtedness and the aggregate liquidation preference of any
Permitted Acquisition Preferred Stock issued as deferred purchase price and
the fair market value of any other non-cash consideration, but excluding
common stock issued by the Borrower), plus the aggregate principal amount of
all unsecured Indebtedness otherwise incurred and all secured or unsecured
Indebtedness otherwise assumed, in each case in connection with, or resulting
from, Permitted Acquisitions (including Indebtedness of any acquired Persons
outstanding at the time of Permitted Acquisitions).
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means JPMorgan Chase Bank, N.A., in its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or
is Controlled by or is under common Control with the Person specified.
"Aircraft JV" means the joint venture owned 50% by St. Xxxx Knits,
Inc. and 50% by Ocean Air Charters, a corporation owned by Xxxxxx X. Xxxx and
Xxxxx Xxxx.
"Alternate Base Rate" means, 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
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Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Revolving Lender,
the percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day (a) with respect to any ABR Loan
or Eurodollar Loan that is a Term Loan, the applicable rate per annum set
forth in the table below under the caption "Term Loan ABR Spread" or "Term
Loan Eurodollar Spread", as the case may be, and (b) with respect to any ABR
Loan or Eurodollar Loan that is a Revolving Loan, the applicable rate per
annum set forth in the table below under the caption "Revolving ABR Spread" or
"Revolving Eurodollar Spread", as the case may be, in each case based upon the
Leverage Ratio as of the most recent determination date; provided that, until
delivery of the Borrower's consolidated financial statements for the fiscal
quarter ending April 30, 2005, the Applicable Rate in respect of each Class of
Loans shall be determined by reference to Category 1 in the relevant table
below:
Term Loan
Term Loan Term Loan
ABR Eurodollar
Leverage Ratio: Spread Spread
--------------- --------- ----------
Category 1
Ratio is greater than 2.75 to 1.00 1.50% 2.50%
Category 2
Ratio is less than or equal to 2.75 to 1.00 1.25% 2.25%
Revolving Loan
Term Loan Term Loan
ABR Eurodollar
Leverage Ratio: Spread Spread
--------------- --------- ----------
Category 1
Ratio is greater than 2.75 to 1.00 1.50% 2.50%
Category 2
Ratio is less than or equal to 2.75 to 1.00 1.25% 2.25%
Category 3
Ratio is less than or equal to 2.50 to 1.00 1.00% 2.00%
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For purposes of the foregoing, (i) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Borrower's fiscal year
based upon the Borrower's consolidated financial statements delivered pursuant
to Section 5.01(a) or (b) and (ii) each change in the Applicable Rate
resulting from a change in the Leverage Ratio shall be effective during the
period commencing on and including the date that is three Business Days after
the date of delivery to the Administrative Agent of such consolidated
financial statements indicating such change and ending on the date immediately
preceding the effective date of the next such change; provided that the
Leverage Ratio shall be deemed to be in Category 1 of each table above (A) at
any time that an Event of Default has occurred and is continuing or (B) if the
Borrower fails to deliver the consolidated financial statements required to be
delivered pursuant to Section 5.01(a) or (b), during the period from the
expiration of the time for delivery thereof until such consolidated financial
statements are delivered.
"Approved Fund" has the meaning assigned to such term in Section
9.04.
"Assignment and Assumption" means an Assignment and Assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative
Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means St. Xxxx Knits International, Incorporated, a
Delaware corporation.
"Borrowing" means (a) Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans,
as to which a single Interest Period is in effect, or (b) a Swingline Loan.
"Borrowing Request" means a request by the Borrower for a Borrowing
in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by
law to remain closed; provided that, when used in connection with a Eurodollar
Loan, the term "Business Day" shall also exclude any day on which banks are
not open for dealings in dollar deposits in the London interbank market.
"Capital Expenditures" means, for any period, (a) the additions to
property, plant and equipment and other capital expenditures of the Borrower
and its consolidated Subsidiaries that are (or would be) set forth in a
consolidated statement of cash flows of the Borrower for such period prepared
in accordance with GAAP and (b) Capital Lease Obligations incurred by the
Borrower and its consolidated Subsidiaries during such period.
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"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means, at any time, (a) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person,
other than the Borrower, of any Equity Interest in the Company, (b) prior to
an IPO, the failure by the Vestar Group to collectively own, directly or
indirectly, beneficially and of record, Equity Interests in the Borrower
representing at least 51% of each of the aggregate ordinary voting power and
the aggregate equity value represented by the issued and outstanding Equity
Interests in the Borrower, (c) after an IPO, the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of
the Securities and Exchange Commission thereunder as in effect on the
Effective Date) other than the Control Group, of Equity Interests representing
more than 30% of the aggregate ordinary voting power or the aggregate equity
value represented by the issued and outstanding Equity Interests in the
Borrower; or (d) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Borrower by Persons who were neither
(i) nominated by members of the Vestar Group or the board of directors of the
Borrower nor (ii) appointed by directors so nominated.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office
of such Lender or by such Lender's or the Issuing Bank's holding company, if
any) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made or issued after the date of this
Agreement.
"Class" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans, Term Loans or Swingline Loans and, when used in reference to any
Commitment, refers to whether such Commitment is a Revolving Commitment or a
Term Loan Commitment.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Collateral Agent" means JPMorgan Chase Bank, N.A., in its capacity
as collateral agent under the Security Documents for the Secured Parties. The
terms "Administrative Agent" and "Collateral Agent" are used interchangeably
in this
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Agreement and shall not be construed to distinguish separate roles, functions
or duties, or to deprive the "Collateral Agent" from any rights or immunities
accorded to the "Administrative Agent" hereunder.
"Collateral and Guarantee Requirement" means the requirement that:
(a) the Collateral Agent shall have received from each Loan
Party either (i) a counterpart of the Guarantee and Collateral
Agreement duly executed and delivered on behalf of such Loan Party or
(ii) in the case of any Person that becomes a Loan Party after the
Effective Date, a supplement to the Guarantee and Collateral
Agreement, in the form specified therein, duly executed and delivered
on behalf of such Loan Party;
(b) all outstanding Equity Interests of each Subsidiary
owned by or on behalf of any Loan Party shall have been pledged
pursuant to the Guarantee and Collateral Agreement (except that the
Loan Parties shall not be required to pledge (i) more than 65% of the
outstanding voting Equity Interests of any Foreign Subsidiary or (ii)
any Equity Interests of any Foreign Subsidiary if less than 80% of
the Equity Interests of such Foreign Subsidiary are owned by the Loan
Parties, to the extent that, and for so long as, such Loan Parties
are restricted from pledging such Equity Interests owned by them
pursuant to any contractual obligation among the holders of the
Equity Interests in such Foreign Subsidiary (but only to the extent
the restrictions in such contract are effective under applicable law
to restrict the pledging of such Equity Interests)) and the
Collateral Agent shall have received certificates or other
instruments representing all such Equity Interests, if any, together
with stock powers or other instruments of transfer with respect
thereto endorsed in blank;
(c) all Indebtedness of each of the Borrower and the
Subsidiaries that is owing to any Loan Party shall be evidenced by a
promissory note and shall have been pledged pursuant to the Guarantee
and Collateral Agreement and the Collateral Agent shall have received
all such promissory notes, together with instruments of transfer with
respect thereto endorsed in blank;
(d) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably
requested by the Collateral Agent to be filed, registered or recorded
to create the Liens intended to be created by the Guarantee and
Collateral Agreement and perfect such Liens to the extent required
by, and with the priority required by, the Guarantee and Collateral
Agreement, shall have been filed, registered or recorded or delivered
to the Collateral Agent for filing, registration or recording;
(e) the Collateral Agent shall have received (i)
counterparts of a Mortgage with respect to each Mortgaged Property
duly executed and delivered by the record owner of such Mortgaged
Property, (ii) a policy or policies of title insurance issued by a
nationally recognized title insurance company insuring the Lien of
each such Mortgage as a valid first Lien on the Mortgaged Property
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described therein, free of any other Liens except as expressly
permitted by Section 6.02, together with such endorsements,
coinsurance and reinsurance as the Collateral Agent or the Required
Lenders may reasonably request and (iii) such surveys, abstracts,
appraisals, legal opinions and other documents as the Collateral
Agent or the Required Lenders may reasonably request with respect to
any such Mortgage or Mortgaged Property;
(f) each Loan Party shall have obtained all material
consents and approvals required to be obtained by it in connection
with the execution and delivery of all Security Documents to which it
is a party, the performance of its obligations thereunder and the
granting by it of the Liens thereunder; and
(g) all warehousemen, bailees, agents or processors which
have in their possession or control any Inventory (as defined in the
Guarantee and Collateral Agreement) constituting Collateral (except
(i) Inventory located outside of the United States and (ii) other
Inventory with a book value not exceeding $5,000,000 in aggregate for
all such Inventory of the Loan Parties) at any one time shall have
been notified of the Liens created by the Security Documents in such
Inventory and shall have agreed in writing, in form and substance
reasonably satisfactory to the Collateral Agent, (i) that such
warehouseman, agent, bailee or processor holds the Inventory for the
benefit of the Collateral Agent subject to the Liens created by the
Security Documents and shall act upon the instructions of the
Collateral Agent without further consent from any Loan Party, and
(ii) to waive and release any Lien held by it with respect to such
Inventory, whether arising by operation of law or otherwise.
"Commitment" means a Revolving Commitment or a Term Loan Commitment,
or any combination thereof (as the context requires).
"Company" means St. Xxxx Knits, Inc., a California corporation.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
for such period, plus, without duplication and to the extent deducted from
revenues in determining Consolidated Net Income, the sum of (a) the aggregate
amount of consolidated interest expense for such period, (b) the aggregate
amount of letter of credit fees accrued during such period, (c) the aggregate
amount of income tax expense for such period, (d) all amounts attributable to
depreciation and amortization for such period, (e) all extraordinary charges
and non-cash, non-recurring charges during such period, (f) non-cash expenses
resulting from the grant of stock and stock options and other compensation to
management personnel of the Borrower or the Subsidiaries pursuant to a written
plan or agreement or the treatment of such options under variable plan
accounting, (g) step-up in inventory valuation as a result of purchase
accounting for Permitted Acquisitions, (h) non-cash write-offs and
amortization of financing costs by the Borrower and the Subsidiaries during
such period, (i) losses derived from the Company's partnership interest in the
Aircraft JV incurred, during the fiscal periods ending on or prior to April
30, 2006, and the write-off of such investment, (j) expenses related to the
Transactions (including redemption premiums in connection with the
Redemption), (k)
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restructuring costs related to the shutdown of the non-apparel wholesale
business, including inventory reserves, severance costs and facilities-related
charges incurred during the fiscal periods ending on or prior to October 31,
2005, in an aggregate amount not to exceed $5,000,000, (l) write-offs of
employee loans, including any accrued interest thereon, relating to severance
agreements, in an aggregate amount not to exceed $1,000,000, (m) restructuring
charges incurred in connection with the closing and restructuring of retail
stores, in an aggregate amount not to exceed $5,000,000, (n) rent expense, to
the extent that such rent expense is in respect of deferred rent payments that
are payable more than 12 months after the end of such period and (o) severance
payments in an aggregate amount not to exceed $2,000,000, and minus, without
duplication (i) to the extent added to revenues in determining Consolidated
Net Income for such period, all extraordinary gains during such period and
(ii) any rent paid during such period, to the extent the amount thereof was
(or would have been) eligible to add back in calculating Consolidated EBITDA
for the period expensed, as provided in clause (n) above, all as determined on
a consolidated basis with respect to the Borrower and the Subsidiaries in
accordance with GAAP. Solely for purposes of calculating the Leverage Ratio,
if during any period (each, a "Reference Period") (or, in the case of pro
forma calculations, during the period from the last day of such Reference
Period to and including the date as of which such calculation is made) either
the Borrower or any Subsidiary shall have made a Material Disposition or
Material Acquisition, Consolidated EBITDA for such Reference Period shall be
calculated after giving pro forma effect thereto as if such Material
Disposition or Material Acquisition occurred on the first day of such
Reference Period; provided that such pro forma calculations shall give effect
to operating expense reductions and other cost savings only to the extent that
such reductions and savings would be permitted to be reflected in a pro forma
financial statement prepared in compliance with Article 11 of Regulation S-X
under the Securities Act of 1933, as amended, and the rules and regulations of
the SEC thereunder. As used in this definition, "Material Acquisition" means
any Permitted Acquisition or series of related Permitted Acquisitions that
involves consideration (including any non-cash consideration) with a fair
market value in excess of $2,500,000; and "Material Disposition" means any
disposition or series of related dispositions of assets (including the Equity
Interests of a Subsidiary) that involves consideration (including any non-cash
consideration) with a fair market value in excess of $2,500,000.
"Consolidated Interest Expense" means, for any period, the sum of (a)
the interest expense (including, without limitation, imputed interest expense
on account of Capital Lease Obligations, but excluding non-cash amortization
of financing costs), both expensed and capitalized, accrued or paid by the
Borrower and the Subsidiaries during such period (net of interest income), and
determined on a consolidated basis in accordance with GAAP, (b) the aggregate
dividends paid in cash with respect to any Xxxx Preferred Stock during such
period and (c) the aggregate dividends accrued or paid with respect to any
Permitted Acquisition Preferred Stock during such period.
"Consolidated Lease Expense" means, for any period, all rent payment
obligations (excluding any applicable property taxes) of the Borrower and the
Subsidiaries during such period under agreements for the lease, hire or use of
any real
7
property (other than Capital Lease Obligations), as determined on a
consolidated basis for the Borrower and the Subsidiaries in accordance with
GAAP.
"Consolidated Net Income" means, for any period, net income or loss
of the Borrower and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, provided that there shall be
excluded (a) the income of any Person in which any other Person (other than
the Borrower or any of the Subsidiaries or any director holding qualifying
shares in compliance with applicable law) has a joint interest, except income
shall be included to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any of the Subsidiaries by such
Person during such period and (b) the income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated
with the Borrower or any of the Subsidiaries or the date that Person's assets
are acquired by the Borrower or any of the Subsidiaries.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Control Group" means (a) Xxxxxx X. Xxxx, Xxxxx Xxxx and Xxxxx X.
Xxxx and any of their respective spouses, direct descendants and their
spouses, trusts solely for the benefit of the foregoing individuals and any
corporations or partnerships owned solely by any of the foregoing individuals
and (b) the Vestar Group.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"Disqualified Stock" means, with respect to any Person, any Equity
Interest which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event:
(a) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise prior to the date that is one
year after the Term Loan Maturity Date;
(b) is convertible or exchangeable for Indebtedness or
Disqualified Stock (excluding Equity Interests convertible or
exchangeable solely at the option of the Borrower or any Subsidiary;
provided that any such conversion or exchange shall be deemed an
issuance of Disqualified Stock, as applicable) prior to the date that
is one year after the Term Loan Maturity Date; or
8
(c) is redeemable, or subject to mandatory purchase by the
Borrower or any Subsidiary, at the option of the holder thereof, in
whole or in part prior to the date that is one year after the Term
Loan Maturity Date.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, or the management, release or threatened release of any
Hazardous Material.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any
Subsidiary directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043(c) of ERISA or the regulations issued thereunder with respect to a Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section
303(d) of ERISA of an application for a waiver of the minimum funding standard
with respect to any Plan; (d) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the
9
incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from the Borrower or
any ERISA Affiliate of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to
be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excess Cash Flow" means, for any period, the sum (without
duplication) of:
(a) the consolidated net income (or loss) of the Borrower
and its consolidated Subsidiaries for such period, adjusted to
exclude any gains or losses attributable to Prepayment Events; plus
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining such consolidated net income (or loss)
for such period; plus
(c) the sum of (i) the amount, if any, by which Net Working
Capital decreased during such period plus (ii) the amount, if any, by
which the consolidated deferred revenues of the Borrower and its
consolidated Subsidiaries increased during such period plus (iii) the
aggregate principal amount of Capital Lease Obligations and other
Long-Term Indebtedness incurred during such period to finance Capital
Expenditures, to the extent that mandatory principal payments in
respect of such Indebtedness would not be excluded from clause (f)
below when made; minus
(d) the sum of (i) any non-cash income or gains included in
determining such consolidated net income (or loss) for such period
plus (ii) the amount, if any, by which Net Working Capital increased
during such period plus (iii) the amount, if any, by which the
consolidated deferred revenues of the Borrower and its consolidated
Subsidiaries decreased during such period; minus
(e) Capital Expenditures for such period; minus
(f) the aggregate principal amount of Long-Term Indebtedness
repaid or prepaid by the Borrower and its consolidated Subsidiaries
during such period, excluding (i) Indebtedness in respect of
Revolving Loans and Letters of Credit to the extent not accompanied
by a reduction of the Revolving Credit Commitments, (ii) Term Loans
prepaid pursuant to Section 2.11(c) or (d), (iii) repayments or
prepayments of Long-Term Indebtedness financed by incurring other
Long-Term
10
Indebtedness, to the extent that mandatory principal payments in
respect of such other Long-Term Indebtedness would not be excluded
when made, (iv) Long-Term Indebtedness owed to the Borrower or a
Subsidiary, (v) Long-Term Indebtedness permitted by clause (viii) of
Section 6.01(a) and (vi) the Redemption; minus
(g) the aggregate amount of Restricted Payments under
clauses (iv) through (viii) of Section 6.08(a) made during such
period; minus
(h) for the first period for which Excess Cash Flow is
required to be calculated pursuant to Section 2.11(d), the excess, if
any, of (i) the sum of the aggregate amount of cash payments made in
order to effect the Redemption and the Share Repurchase and to prepay
on the Effective Date the principal of loans outstanding under the
Existing Credit Agreement, plus payments made by the Borrower to pay
fees and expenses (not exceeding $3,000,000) in connection with the
Transactions, minus (ii) the aggregate principal amount of the Term
Loans made during the Term Loan Availability Period.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United
States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar
tax imposed by any other jurisdiction in which the Borrower is located and (c)
in the case of a Foreign Lender (other than an assignee pursuant to a request
by the Borrower under Section 2.19(b)), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes
a party to this Agreement (or designates a new lending office) or is
attributable to such Foreign Lender's failure to comply with Section 2.17(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment),
to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 2.17(a).
"Existing Credit Agreement" means the Amended and Restated Credit
Agreement dated as of July 7, 1999, as amended and restated as of May 30,
2003, among the Borrower, the lenders party thereto, and JPMorgan Chase Bank,
N.A., as Administrative Agent.
"Existing Letters of Credit" means the letters of credit issued
pursuant to the Existing Credit Agreement that are outstanding thereunder on
the Effective Date.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) 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
11
Reserve Bank of New York, or, if such rate is not so published for any day
that is a Business Day, the average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (a)
Consolidated EBITDA for such period plus Consolidated Lease Expense for such
period minus Capital Expenditures for such period to (b) Fixed Charges for
such period.
"Fixed Charges" means, for any period, the sum of (a) Consolidated
Lease Expense for such period, (b) Consolidated Interest Expense for such
period, (c) scheduled principal payments of Long-Term Indebtedness of the
Borrower or any Subsidiary to any Person other than the Borrower or any wholly
owned Subsidiary, that became payable during such period (whether or not paid)
and (d) the aggregate liquidation preference of all Permitted Acquisition
Preferred Stock that matured or became subject to mandatory repurchase,
redemption, conversion or exchange during such period (whether or not
repurchased, redeemed, converted or exchanged).
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"Funded Indebtedness" means, as of any date of determination, an
amount equal to (a) Total Indebtedness outstanding on such date (excluding the
Subordinated Debt and Indebtedness in respect of the Revolving Exposure) plus
(b) the average Revolving Exposure for the twelve months ended on such date
(or, if such date is not the last day of a month, then for the twelve months
most recently ended) determined based on the daily average of the Revolving
Exposure; provided that, for purposes of clause (b), Letters of Credit are
deemed not to be part of the Revolving Exposure.
"GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
00
"Xxxx Xxxxxx Xxxxx" means common stock of the Borrower owned by
Xxxxxx X. Xxxx, Xxxxx Xxxx or Xxxxx X. Xxxx.
"Xxxx Preferred Stock" means preferred stock of the Borrower issued
pursuant to clause (i) of the proviso to Section 6.01(b), which preferred
stock shall not be Disqualified Stock; provided that Xxxx Preferred Stock may
mature or be mandatorily redeemable after September 30, 2012.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account
party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or obligation; provided that the term Guarantee
shall not include endorsements for collection or deposit in the ordinary
course of business.
"Guarantee and Collateral Agreement" means the Guarantee and
Collateral Agreement among the Loan Parties and the Administrative Agent,
substantially in the form of Exhibit B.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such
Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty, (j) all
obligations, contingent or
13
otherwise, of such Person in respect of bankers' acceptances, and (k) with
respect to the Borrower only, the aggregate liquidation preference of all
outstanding Permitted Acquisition Preferred Stock. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person's ownership interest in
or other relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information
Memorandum dated February 2005 relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan (other
than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and,
in the case of a Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months' duration after the first day of such
Interest Period and (c) with respect to any Swingline Loan, the day that such
Loan is required to be repaid.
"Interest Period" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, subject to the availability to each Lender participating in such
Borrowing, nine or twelve months) thereafter, as the Borrower may elect;
provided that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes of this definition, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter
shall be the effective date of the most recent conversion or continuation of
such Borrowing.
"IPO" means the issuance by the Borrower of shares of its common
stock to the public pursuant to a bona fide underwritten public offering,
resulting in at least 20% of the Borrower's outstanding shares of common stock
being held by the public.
"Irvine Facility JV" means St. Xxxx-Xxxxxx Development Company, the
partnership owned 50% by St. Xxxx Knits, Inc. and 50% by Varian Associates.
14
"Issuing Bank" means JPMorgan Chase Bank, N.A., in its capacity as
the issuer of Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.05(i). The Issuing Bank may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of the
Issuing Bank, in which case the term "Issuing Bank" shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.
"LC Disbursement" means a payment made by the Issuing Bank pursuant
to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn and unexpired amount of all outstanding Letters of Credit at such time
plus (b) the aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time. The LC Exposure of
any Revolving Lender at any time shall be its Applicable Percentage of the
total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Assumption. Unless the context otherwise
requires, the term "Lenders" includes the Swingline Lender.
"Letter of Credit" means any Standby LC or Trade LC issued pursuant
to this Agreement. As of the Effective Date, each Existing Letter of Credit
shall be deemed to be a Letter of Credit hereunder as though issued hereunder
on the Effective Date.
"Leverage Ratio" means, on any date, the ratio of (a) Funded
Indebtedness as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Borrower ended as of such date (or, if such
date is not the last day of a fiscal quarter, ended on the last day of the
fiscal quarter of the Borrower most recently ended prior to such date), all
determined on a consolidated basis in accordance with GAAP.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Market
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate
for dollar deposits with a maturity comparable to such Interest Period. In the
event that such rate is not available at such time for any reason, then the
"LIBO Rate" with respect to such Eurodollar Borrowing for such Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office
of the Administrative Agent in immediately available funds in
15
the London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the promissory notes, if any,
executed and delivered pursuant to Section 2.09(e), the Guarantee and
Collateral Agreement and the other Security Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan Parties.
"Loans" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
"Long-Term Indebtedness" means any Indebtedness that, in accordance
with GAAP, constitutes (or, when incurred, constituted) a long-term liability.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the
Borrower and the Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform any of its material obligations under any Loan Document or
(c) the material rights of, or material benefits available to, the Lenders
under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or exposure in respect of one or more Swap Agreements, of
any one or more of the Borrower and its Subsidiaries in an aggregate principal
amount exceeding $7,500,000. For purposes of determining Material
Indebtedness, the "principal amount" of the exposure of the Borrower or any
Subsidiary in respect of any Swap Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower
or such Subsidiary would be required to pay if such Swap Agreement were
terminated at such time.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations. Each Mortgage shall be
reasonably satisfactory in form and substance to the Collateral Agent.
"Mortgaged Property" means, initially, each parcel of real property
and the improvements thereto owned by a Loan Party and identified on Schedule
16
1.01, andincludes each other parcel of real property and improvements thereto
with respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
received in respect of such event including (i) any cash received in respect
of any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or
similar event, condemnation awards and similar payments, net of (b) the sum of
(i) all reasonable fees and out-of-pocket expenses paid by the Borrower and
the Subsidiaries to third parties (other than Affiliates) in connection with
such event, (ii) in the case of a sale, transfer or other disposition of an
asset (including pursuant to a sale and leaseback transaction or a casualty or
other damage or condemnation or similar proceeding), the amount of all
payments required to be made by the Borrower and the Subsidiaries as a result
of such event to repay Indebtedness (other than Loans) secured by such asset
or otherwise subject to mandatory prepayment as a result of such event, and
(iii) the amount of all taxes paid (or reasonably estimated to be payable) by
the Borrower and the Subsidiaries, and the amount of any reserves established
by the Borrower and the Subsidiaries to fund contingent liabilities reasonably
estimated to be payable, in each case during the year that such event occurred
or the next succeeding year and that are directly attributable to such event
(as determined reasonably and in good faith by the chief financial officer of
the Borrower).
"Net Working Capital" means, at any date, (a) the sum of the
consolidated current assets and non-current deferred income tax assets of the
Borrower and its consolidated Subsidiaries as of such date (excluding cash and
Permitted Investments) minus (b) the sum of the consolidated current
liabilities and non-current deferred income tax liabilities of the Borrower
and its consolidated Subsidiaries as of such date (excluding current
liabilities in respect of Indebtedness). Net Working Capital at any date may
be a positive or negative number. Net Working Capital increases when it
becomes more positive or less negative and decreases when it becomes less
positive or more negative.
"Obligations" has the meaning assigned to such term in the Guarantee
and Collateral Agreement.
"Other Taxes" means any and all current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of Exhibit C
or any other form approved by the Administrative Agent.
17
"Permitted Acquisition" means any acquisition by the Borrower or a
Subsidiary of all or substantially all the assets of, or 80% or more of the
Equity Interests in, a Person or division or line of business of a Person if,
immediately after giving effect thereto, (a) no Default has occurred and is
continuing or would result therefrom, (b) all transactions related thereto are
consummated in accordance with applicable laws, (c) all the Equity Interests
in each Subsidiary formed for the purpose of or resulting from such
acquisition shall be owned directly by the Borrower or a Subsidiary of the
Borrower and all actions required to be taken with respect to such acquired or
newly formed Subsidiary under Sections 5.12 and 5.13, if any, have been taken,
(d) the Borrower and its Subsidiaries are in compliance, on a pro forma basis
after giving effect to such acquisition, with the covenants contained in
Sections 6.13, 6.14 and 6.15 recomputed as at the last day of the most
recently ended fiscal quarter of the Borrower for which financial statements
are available, as if such acquisition (and any related incurrence or repayment
of Indebtedness, with any new Indebtedness being deemed to be amortized over
the applicable testing period in accordance with its terms, and assuming that
any Revolving Loans borrowed in connection with such acquisition are repaid
with excess cash balances when available) had occurred on the first day of
each relevant period for testing such compliance and (e) the Borrower has
delivered to the Administrative Agent an officers' certificate to the effect
set forth in clauses (a), (b), (c) and (d) above, together with all relevant
financial information for the Person or assets to be acquired.
"Permitted Acquisition Preferred Stock" means preferred stock of the
Borrower which is Disqualified Stock and which is issued as non-cash
consideration in connection with a Permitted Acquisition.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or
are being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance
with Section 5.05;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each
case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or arising in
the ordinary course of business that
18
do not secure any monetary obligations and do not materially detract
from the value of the affected property or interfere with the
ordinary conduct of business of the Borrower or any Subsidiary; and
(g) landlords' and lessors' and other like Liens on assets
leased by the Borrower or any Subsidiary or assets located on
premises leased by the Borrower or any Subsidiary, in each case
arising under leases in respect of rent not in default;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United
States of America), in each case maturing within one year from the
date of acquisition thereof;
(b) investments in commercial paper maturing within 360 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Xxxxx'x;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date
of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the United
States of America or any State thereof which has a combined capital
and surplus and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term
of not more than 30 days for securities described in clause (a) above
and entered into with a financial institution satisfying the criteria
described in clause (c) above; and
(e) investments in money market or mutual funds
substantially all the assets of which are comprised of securities of
the types described in any of clauses (a) through (d) above.
"Person" means any natural person, corporation, limited liability
company, trust, investment fund, joint venture, association, company,
partnership, Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower
or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
19
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including
pursuant to a sale and leaseback transaction) of any property or
asset of the Borrower or any Subsidiary, other than Specified Asset
Realizations and dispositions described in clauses (a), (b), (d) or
(h) of Section 6.05; or
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of the Borrower or any
Subsidiary, but only to the extent that the Net Proceeds therefrom
have not been applied to repair, restore or replace such property or
asset within 360 days after such event; or
(c) any Specified Asset Realization; or
(d) the incurrence by the Borrower or any Subsidiary of any
Indebtedness, other than Indebtedness permitted under Section 6.01.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as
being effective.
"Redemption" means the redemption by the Borrower of all the
Subordinated Debt in accordance with the terms thereof.
"Redemption Reserve" means a reserve fund established by the Borrower
on or prior to the Effective Date and maintained until the Redemption is
consummated, pursuant to arrangements reasonably satisfactory to the
Administrative Agent.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, trustees, officers,
employees, agents and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing more than 50% of the
sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit,
on account of the purchase, redemption, retirement, acquisition, cancelation
or termination of any Equity Interests in the Borrower or any Subsidiary or
any option, warrant or other right to acquire any such Equity Interests in the
Borrower or any Subsidiary.
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"Revolving Availability Period" means the period from and including
the Effective Date to but excluding the earlier of the Revolving Maturity Date
and the date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed
as an amount representing the maximum aggregate amount of such Lender's
Revolving Exposure hereunder, as such commitment may be (a) reduced from time
to time pursuant to Section 2.08 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 9.04.
The initial amount of each Lender's Revolving Commitment is set forth on
Schedule 2.01, or in the Assignment and Assumption pursuant to which such
Lender shall have assumed its Revolving Commitment, as applicable. The initial
aggregate amount of the Lenders' Revolving Commitments is $45,000,000.
"Revolving Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans
and its LC Exposure and Swingline Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment or, if
the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"Revolving Loan" means a Loan made pursuant to clause (b) of Section
2.01.
"Revolving Maturity Date" means March 23, 2010.
"S&P" means Standard & Poor's Ratings Group, Inc.
"Secured Parties" shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.
"Security Documents" means the Guarantee and Collateral Agreement,
the Mortgages and each other security agreement or other instrument or
document executed and delivered pursuant to Section 5.12 or 5.13 to secure any
of the Obligations.
"Senior Subordinated Notes" means the 12.5% Senior Subordinated Notes
due 2009 issued by the Borrower in an aggregate principal amount of
$100,000,000.
"Share Repurchase" means the repurchase by the Borrower on the
Effective Date of shares of Xxxx Common Stock for an aggregate purchase price
in cash not in excess of $13,500,000.
"Specified Asset Realization" means (a) any sale, transfer or other
disposition of any Equity Interests in the Aircraft JV or the Irvine Facility
JV, (b) any sale, transfer or other disposition of all or any substantial part
of the assets that are owned
21
by the Aircraft JV or the Irvine Facility JV as of the Effective Date
(including any improvements to any such assets or replacements thereof) or (c)
any casualty or other insured damage to, or any taking under power of eminent
domain or by condemnation or similar proceeding of, any assets described in
clause (b) above, but only to the extent that the Net Proceeds therefrom are
not applied to repair or restore such assets promptly, and in any event within
360 days; provided that clause (a) and (b) above shall not include any sale
made pursuant to clause (j) of Section 6.05.
"Specified Reinvestment" means (a) the acquisition of real property,
equipment or other tangible assets to be used in the business of the Borrower
and the Subsidiaries or (ii) the purchase of Equity Interests of a Person in
the same or a similar line of business in connection with a Permitted
Acquisition; provided that (i) in the case of a sale made pursuant to clause
(j) or (k) of Section 6.05, a "Specified Reinvestment" shall be limited to
real property and improvements thereto to be used for purposes similar to
those of the sold assets and (ii) in the case of a sale made pursuant to
clause (j) of Section 6.05, any such real property must be located in the
United States.
"Standby LC" means any irrevocable standby letter of credit in
support of certain obligations of the Borrower available against sight drafts
and payable at sight, issued by the Issuing Bank for the account of the
Borrower pursuant to Section 2.05 hereof.
"Standby LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Standby LC.
"Standby LC Exposure" means, at any time, the sum of (a) the
aggregate undrawn and unexpired amount of all outstanding Standby LCs at such
time plus (b) the aggregate amount of all Standby LC Disbursements that have
not yet been reimbursed by or on behalf of the Borrower at such time. The
Standby LC Exposure of any Revolving Lender at any time shall be its
Applicable Percentage of the total Standby LC Exposure at such time.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including
any marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Board to which the Administrative Agent is subject
for eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Stockholders' Agreement" means the Stockholders' Agreement dated as
of July 7, 1999, to be amended on or about March 23, 2005, among the Company,
the
22
Borrower, Vestar/Xxxx, Vestar/SJK, Xxxxxx X. Xxxx, Xxxxx Xxxx, Xxxxx X. Xxxx,
the Xxxx Family Trust and the Xxxxx Xxx Xxxx Trust.
"Subordinated Debt" means the Senior Subordinated Notes and the
Indebtedness represented thereby.
"Subordinated Debt Documents" means the Indenture dated as of July 7,
1999, under which the Senior Subordinated Notes were issued and all other
instruments, agreements and other documents evidencing or governing the Senior
Subordinated Notes or providing for any Guarantee or other right in respect
thereof.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as
any other corporation, limited liability company, partnership, association or
other entity of which securities or other ownership interests representing
more than 50% of the equity or more than 50% of the ordinary voting power or,
in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held by the parent or one
or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Loan Party" means any Subsidiary (including the Company)
other than any Foreign Subsidiary.
"Supermajority Lenders" means, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing more than 66 2/3% of
the sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.
"Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial
or pricing indices or measures of economic, financial or pricing risk or value
or any similar transaction or any combination of these transactions; provided
that no phantom stock or similar plan providing for payments only on account
of services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
"Swingline Exposure" means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.
"Swingline Lender" means JPMorgan Chase Bank, N.A., in its capacity
as lender of Swingline Loans hereunder.
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"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loan" means a Loan made pursuant to clause (a) of Section 2.01.
"Term Loan Availability Period" means the period from and including
the Effective Date to and including the earlier of the date that is 90 days
after the Effective Date and the date of termination of the Term Loan
Commitments.
"Term Loan Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Term Loans hereunder during the
Term Loan Availability Period, expressed as an amount representing the maximum
aggregate principal amount of Term Loans to be made by such Lender hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section
2.08 and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 9.04. The initial amount of each
Lender's Term Loan Commitment is set forth on Schedule 2.01, or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Term Loan Commitment, as applicable. The initial aggregate amount of the
Lenders' Term Loan Commitments is $210,000,000.
"Term Loan Lender" means a Lender with a Term Loan Commitment or an
outstanding Term Loan.
"Term Loan Maturity Date" means March 23, 2012.
"Test Period" means a period of twelve consecutive months beginning
on the Effective Date or an anniversary thereof and ending on the day prior to
the immediately succeeding anniversary of the Effective Date.
"Total Indebtedness" means, as of any date of determination, without
duplication, the aggregate principal amount of Indebtedness of the Borrower
and the Subsidiaries outstanding as of such date, determined on a consolidated
basis in accordance with GAAP.
"Trade LC" means any irrevocable trade letter of credit available
against sight or time drafts and payable at sight, issued by the Issuing Bank
for the account of the Borrower pursuant to Section 2.05 hereof.
"Trade LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Trade LC.
"Trade LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn and unexpired amount of all outstanding Trade LCs at such time plus
(b) the aggregate amount of all Trade LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time. The Trade LC Exposure
of any Revolving
24
Lender at any time shall be its Applicable Percentage of the total Trade LC
Exposure at such time.
"Transactions" means (a) the Redemption, (b) the Share Repurchase,
(c) the execution, delivery and performance by each Loan Party of the Loan
Documents to which it is to be a party, the borrowing of Loans, the issuance
of Letters of Credit hereunder and the use of the proceeds thereof and (d) the
payment of fees and expenses in connection with the foregoing.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Vestar" means Vestar Capital Partners III, L.P.
"Vestar/Xxxx" means Vestar/Xxxx Investors LLC, a Delaware limited
liability company.
"Vestar/SJK" means Vestar/SJK Investors LLC, a Delaware limited
liability company.
"Vestar Group" means Vestar and its Affiliates.
"Vestar Management Agreement" means the Management Agreement dated as
of July 7, 1999, among Vestar, the Borrower and the Company.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth
herein), (b) any reference herein to any Person shall be construed to include
such Person's
25
successors and assigns, (c) the words "herein", "hereof" and "hereunder", and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and
(e) the words "asset" and "property" shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof
on the operation of such provision (or if the Administrative Agent notifies
the Borrower that the Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given
before or after such change in GAAP or in the application thereof, then such
provision shall be interpreted on the basis of GAAP as in effect and applied
immediately before such change shall have become effective until such notice
shall have been withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees (a) to make Term Loans to the Borrower on the
Effective Date and on not more than one other date during the Term Loan
Availability Period in an aggregate principal amount not exceeding (on any day
that such Lender is to make any such Term Loans) its Term Loan Commitment and
(b) to make Revolving Loans to the Borrower from time to time during the
Revolving Availability Period in an aggregate principal amount that will not
result in such Lender's Revolving Exposure exceeding such Lender's Revolving
Commitment. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans. Amounts repaid in respect of Term Loans may not be
reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of
the same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
26
(b) Subject to Section 2.14, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each Swingline Loan shall be an
ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of
the Borrower to repay such Loan in accordance with the terms of this Agreement
and shall not result in any increased costs under Section 2.15 or any
obligation by the Borrower to make any payment under Section 2.17 in excess of
the amounts, if any, that such Lender would be entitled to claim under Section
2.15 or 2.17, as applicable, without giving effect to such change in lending
office.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $2,500,000. At the time that each ABR
Revolving Borrowing is made, such Borrowing shall be in an aggregate amount
that is an integral multiple of $100,000 and not less than $1,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Revolving Commitments or that
is required to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.05(e). Each Swingline Loan shall be in an amount that is an
integral multiple of $100,000 and not less than $250,000. Borrowings of more
than one Type and Class may be outstanding at the same time; provided that
there shall not at any time be more than a total of ten Eurodollar Borrowings
outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Revolving Maturity Date or Term Loan Maturity Date, as applicable.
SECTION 2.03. Requests for Borrowings. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than 2:00 p.m., New York
City time, three Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing, not later than 2:00 p.m., New York City
time, one Business Day before the date of the proposed Borrowing; provided
that any such notice of an ABR Revolving Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be
given not later than 1:00 p.m., New York City time, on the date of the
proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Borrowing Request in a form approved by
the Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in
compliance with Section 2.02:
(i) whether the requested Borrowing is to be a Term Loan
Borrowing or a Revolving Borrowing;
27
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline
Loans to the Borrower from time to time during the Revolving Availability
Period, in an aggregate principal amount at any time outstanding that will not
result in (i) the aggregate principal amount of outstanding Swingline Loans
exceeding $5,000,000 or (ii) the sum of the total Revolving Exposures
exceeding the total Revolving Commitments; provided that the Swingline Lender
shall not be required to make a Swingline Loan to refinance an outstanding
Swingline Loan. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 2:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested
date (which shall be a Business Day) and amount of the requested Swingline
Loan. The Administrative Agent will promptly advise the Swingline Lender of
any such notice received from the Borrower. The Swingline Lender shall make
each Swingline Loan available to the Borrower by means of a credit to the
general deposit account of the Borrower with the Swingline Lender (or, in the
case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e), by remittance to the Issuing
Bank) by 4:00 p.m., New York City time, on the requested date of such
Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business
28
Day require the Revolving Lenders to acquire participations on such Business
Day in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice, the Administrative
Agent will give notice thereof to each Revolving Lender, specifying in such
notice such Lender's Applicable Percentage of such Swingline Loan or Loans.
Each Revolving Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the Administrative Agent, for
the account of the Swingline Lender, such Lender's Applicable Percentage of
such Swingline Loan or Loans. Each Revolving Lender acknowledges and agrees
that its obligation to acquire participations in Swingline Loans pursuant to
this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Revolving Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner
as provided in Section 2.06 with respect to Loans made by such Lender (and
Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the
Revolving Lenders), and the Administrative Agent shall promptly pay to the
Swingline Lender the amounts so received by it from the Revolving Lenders. The
Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and
not to the Swingline Lender. Any amounts received by the Swingline Lender from
the Borrower (or other party on behalf of the Borrower) in respect of a
Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale
of participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly
remitted by the Administrative Agent to the Revolving Lenders that shall have
made their payments pursuant to this paragraph and to the Swingline Lender, as
their interests may appear. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve the Borrower of any default in
the payment thereof.
SECTION 2.05. Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the Revolving Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and
conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the
Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the
Issuing Bank and the Administrative Agent
29
(reasonably in advance of the requested date of issuance, amendment, renewal
or extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall
be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend
such Letter of Credit. If requested by the Issuing Bank, the Borrower also
shall submit a letter of credit application on the Issuing Bank's standard
form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed
$35,000,000 and (ii) the total Revolving Exposures shall not exceed the total
Revolving Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or prior
to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal
or extension thereof, one year after such renewal or extension) and (ii) the
date that is five Business Days prior to the Revolving Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees
to pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing
Bank and not reimbursed by the Borrower on the date due as provided in
paragraph (e) of this Section, or of any reimbursement payment required to be
refunded to the Borrower for any reason. Each Lender acknowledges and agrees
that its obligation to acquire participations pursuant to this paragraph in
respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a
Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 2:00 p.m., New York City time, on (i) the Business
Day that the Borrower shall have received notice of such LC Disbursement, if
such notice is received prior to 12:00 noon, New York City time, on the day of
receipt, or (ii) the Business Day immediately
30
following the day that the Borrower receives such notice, if such notice is
not received prior to such time on the day of receipt; provided that the
Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.03 or 2.04 that such payment be financed with an
ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the
extent so financed, the Borrower's obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan. If the Borrower fails to make such payment when due and such payment has
not been refinanced with such an ABR Revolving Borrowing or Swingline Loan,
the Administrative Agent shall notify each Revolving Lender of the applicable
LC Disbursement, the payment then due from the Borrower in respect thereof and
such Lender's Applicable Percentage thereof. Promptly following receipt of
such notice, each Revolving Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.06 with respect to Loans made by such Lender
(and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of
the Revolving Lenders), and the Administrative Agent shall promptly pay to the
Issuing Bank the amounts so received by it from the Revolving Lenders.
Promptly following receipt by the Administrative Agent of any payment from the
Borrower pursuant to this paragraph, the Administrative Agent shall distribute
such payment to the Issuing Bank or, to the extent that Revolving Lenders have
made payments pursuant to this paragraph to reimburse the Issuing Bank, then
to such Lenders and the Issuing Bank as their interests may appear. Any
payment made by a Revolving Lender pursuant to this paragraph to reimburse the
Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving
Loans or a Swingline Loan as contemplated above) shall not constitute a Loan
and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever
and irrespective of (i) any lack of validity or enforceability of any Letter
of Credit or this Agreement, or any term or provision therein, (ii) any draft
or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower's obligations
hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank,
nor any of their Related Parties, shall have any liability or responsibility
by reason of or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder (irrespective
of any of the circumstances referred to in the preceding sentence), or any
error, omission, interruption, loss or delay in transmission or delivery of
any draft, notice or other communication under or relating to any Letter of
Credit (including any document required to make a drawing thereunder), any
error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank.
31
Notwithstanding the foregoing provisions of this paragraph (f) the Issuing
Bank shall not be excused from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by the Issuing Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or wilful misconduct
on the part of the Issuing Bank, the Issuing Bank shall be deemed to have
exercised care in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect
to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of
such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation
to reimburse the Issuing Bank and the Revolving Lenders with respect to any
such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement
in full on the date such LC Disbursement is made, the unpaid amount thereof
shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower reimburses
such LC Disbursement, at the rate per annum then applicable to ABR Revolving
Loans; provided that, if the Borrower fails to reimburse such LC Disbursement
when due pursuant to paragraph (e) of this Section, then Section 2.13(c) shall
apply. Interest accrued pursuant to this paragraph shall be for the account of
the Issuing Bank, except that interest accrued on and after the date of
payment by any Revolving Lender pursuant to paragraph (e) of this Section to
reimburse the Issuing Bank shall be for the account of such Lender to the
extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrower, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Bank. At
the time any such replacement shall become effective, the Borrower shall pay
all unpaid fees accrued for the account of the replaced Issuing Bank pursuant
to Section 2.12(b). From and after the effective date of any such replacement,
(i) the successor Issuing Bank shall have all the rights and obligations of
the Issuing Bank under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term "Issuing Bank" shall
be deemed to refer to such successor or to any previous Issuing Bank, or to
such
32
successor and all previous Issuing Banks, as the context shall require. After
the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and
be continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to 100% of the LC Exposure as
of such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (h) or (i) of Article VII. The
Borrower also shall deposit cash collateral pursuant to this paragraph as and
to the extent required by Section 2.11(b). Each such deposit shall be held by
the Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Administrative Agent and at the Borrower's risk and
expense, such deposits shall not bear interest; provided that, unless the
Borrower and the Administrative Agent otherwise agree, such investments shall
be made only in cash equivalents. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations
of the Borrower for the LC Exposure at such time or, if the maturity of the
Loans has been accelerated (but subject to the consent of Revolving Lenders
with LC Exposure representing greater than 50% of the total LC Exposure), be
applied to satisfy other obligations of the Borrower under this Agreement. If
the Borrower is required to provide an amount of cash collateral hereunder as
a result of the occurrence of an Event of Default, such amount (to the extent
not applied as aforesaid) shall be returned to the Borrower within three
Business Days after all Events of Default have been cured or waived. If the
Borrower is required to provide an amount of cash collateral hereunder
pursuant to Section 2.11(b), such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower as and to the extent that, after
giving effect to such return, the Borrower would remain in compliance with
Section 2.11(b) and no Default shall have occurred and be continuing.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer
of immediately available funds by 12:00 noon (or, in the case of an ABR
Revolving Loan
33
made to finance an LC Disbursement as contemplated by Section 2.05(e), 3:00
p.m.), New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders; provided
that Swingline Loans shall be made as provided in Section 2.04. The
Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of
the Borrower maintained with the Administrative Agent in New York City and
designated by the Borrower in the applicable Borrowing Request; provided that
(i) ABR Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e) shall be remitted by the
Administrative Agent to the Issuing Bank and (ii) Term Loans made after the
Effective Date shall be deposited in the Redemption Reserve to the extent
required by Section 5.15.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its
share of the applicable Borrowing available to the Administrative Agent, then
the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to the Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing and
Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter,
the Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among
the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This
Section shall not apply to Swingline Borrowings, which may not be converted or
continued.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that
a Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the
34
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02 and
paragraph (f) of this Section:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) below shall be specified
for each resulting Borrowing);
(ii) the effective date of the election made pursuant to
such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition
of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof,
if an Event of Default has occurred and is continuing and the Administrative
Agent, at the request of the Required Lenders, so notifies the Borrower, then,
so long as an Event of Default is continuing (i) no outstanding Borrowing may
be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid,
each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of
the Interest Period applicable thereto.
(f) A Borrowing of any Class may not be converted to or continued as
a Eurodollar Borrowing if after giving effect thereto (i) the Interest Period
therefor would commence before and end after a date on which any principal of
the Loans of such Class is scheduled to be repaid and (ii) the sum of the
aggregate principal amount of outstanding Eurodollar Borrowings of such Class
with Interest Periods ending on or prior to such scheduled repayment date plus
the aggregate principal amount of outstanding
35
ABR Borrowings of such Class would be less than the aggregate principal amount
of Loans of such Class required to be repaid on such scheduled repayment date.
SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
previously terminated, (i) the Term Loan Commitments shall terminate at 5:00
p.m., New York City time, on the last day of the Term Loan Availability Period
and (ii) the Revolving Commitments shall terminate on the Revolving Maturity
Date. The Term Loan Commitment of each Lender shall be reduced by an amount
equal to the principal amount of each Term Loan made by such Lender, effective
upon the funding of such Term Loan by such Lender.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments of either Class; provided that (i) each reduction of
the Commitments shall be in an amount that is an integral multiple of $100,000
and not less than $2,500,000, (ii) the Borrower shall not terminate or reduce
the Term Loan Commitments if doing so would violate Section 5.15 and (iii) the
Borrower shall not terminate or reduce the Revolving Commitments if, after
giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.11, the sum of the Revolving Exposures would exceed
the total Revolving Commitments.
(c) In the event that, on the date on which any prepayment would be
required pursuant to Section 2.11(c) or 2.11(d), no Term Borrowings remain
outstanding or the amount of the prepayment required by Section 2.11(c) or
2.11(d), as the case may be, exceeds the aggregate principal amount of Term
Borrowings then outstanding, the Term Loan Commitments or (if no Term Loan
Commitments remain in effect) the Revolving Commitments shall be reduced by an
amount equal to the excess of the required prepayment over the principal
amount, if any, of Term Borrowings actually prepaid.
(d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments of either Class under
paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Revolving
Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments of either Class
shall be permanent. Each reduction of the Commitments of either Class shall be
made ratably among the Lenders in accordance with their respective Commitments
of such Class.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account
36
of each Lender the then unpaid principal amount of each Revolving Loan of such
Lender on the Revolving Maturity Date, (ii) to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Term Loan
of such Lender as provided in Section 2.10 and (iii) to the Swingline Lender
the then unpaid principal amount of each Swingline Loan on the earlier of the
Revolving Maturity Date and the first date after such Swingline Loan is made
that is the 15th or last day of a calendar month and is at least two Business
Days after such Swingline Loan is made; provided that on each date that a
Revolving Borrowing is made, the Borrower shall repay all Swingline Loans then
outstanding.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note,
to such payee and its registered assigns), unless the Borrower and the payee
of any such promissory note (or, if applicable, the registered assignee
thereof) agree to cancel such promissory note.
SECTION 2.10. Amortization of Term Loans. (a) Subject to adjustment
pursuant to paragraph (c) of this Section, the Borrower shall repay Term
Borrowings on each date set forth below in the aggregate principal amount set
forth opposite such date:
Date Principal Amount
---- ----------------
June 30, 2005 $ 525,000
September 30, 2005 $ 525,000
37
Date Principal Amount
---- ----------------
December 31, 2005 $ 525,000
March 31, 2006 $ 525,000
June 30, 2006 $ 525,000
September 30, 2006 $ 525,000
December 31, 2006 $ 525,000
March 31, 2007 $ 525,000
June 30, 2007 $ 2,625,000
September 30, 2007 $ 2,625,000
December 31, 2007 $ 2,625,000
March 31, 2008 $ 2,625,000
June 30, 2008 $ 5,250,000
September 30, 2008 $ 5,250,000
December 31, 2008 $ 5,250,000
March 31, 2009 $ 5,250,000
June 30, 2009 $ 7,875,000
September 30, 2009 $ 7,875,000
December 31, 2009 $ 7,875,000
March 31, 2010 $ 7,875,000
June 30, 2010 $ 10,500,000
September 30, 2010 $ 10,500,000
December 31, 2010 $ 10,500,000
March 31, 2011 $ 10,500,000
June 30, 2011 $ 25,200,000
September 30, 2011 $ 25,200,000
December 31, 2011 $ 25,200,000
Term Loan Maturity Date $ 25,200,000
(b) To the extent not previously paid, all Term Loans shall be due
and payable on the Term Loan Maturity Date.
(c) Any prepayment of a Term Borrowing shall be applied (i) first, to
reduce the subsequent scheduled repayments of the Term Borrowings to be made
pursuant to this Section that are scheduled to be due during the 12-month
period immediately following the date of such prepayment, in the chronological
order that such scheduled repayments are due, and (ii) second, to reduce the
subsequent scheduled repayments of the Term Borrowings to be made pursuant to
this Section that are scheduled to be due after the expiration of such
12-month period, ratably; provided that any prepayment of a Term Borrowing
made pursuant to Section 2.11(a) shall be applied to reduce the subsequent
scheduled repayments of the Term Borrowings to be made pursuant to this
Section in such manner as the Borrower shall elect by written notice to the
Administrative Agent (or, in the event that the Borrower fails to make such
election, in the chronological order that such scheduled repayments are due).
(d) Prior to any repayment of any Term Borrowings under this Section
2.10, the Borrower shall select the Borrowing or Borrowings to be repaid and
38
shall notify the Administrative Agent by telephone (confirmed by telecopy) of
such selection not later than 12:00 noon, New York City time, three Business
Days before the scheduled date of such repayment. Each repayment of a
Borrowing shall be applied ratably to the Loans included in the repaid
Borrowing. Repayments of Term Borrowings shall be accompanied by accrued
interest on the amount repaid.
SECTION 2.11. Prepayment of Loans. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to the requirements of this Section.
(b) In the event and on such occasion that the sum of the Revolving
Exposures exceeds the total Revolving Commitments, the Borrower shall prepay
Revolving Borrowings or Swingline Borrowings (or, if no such Borrowings are
outstanding, deposit cash collateral in an account with the Administrative
Agent pursuant to Section 2.05(j)) in an aggregate amount equal to such
excess.
(c) (i) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of any
Prepayment Event, the Borrower shall, immediately after such Net Proceeds are
received, prepay Term Borrowings in an aggregate amount equal to (x) in the
case of a Specified Asset Realization, 25% of such Net Proceeds and (y) in the
case of all other Prepayment Events, 100% of such Net Proceeds; provided that,
in the case of any event described in clause (a) of the definition of the term
Prepayment Event or (to the extent of the Net Proceeds therefrom described in
clause (x) above) a Specified Asset Realization, if the Borrower shall deliver
to the Administrative Agent a certificate of a Financial Officer to the effect
that the Borrower and the Subsidiaries intend to apply the Net Proceeds from
such event, within 360 days after receipt of such Net Proceeds, to make
Specified Reinvestments and certifying that no Default has occurred and is
continuing, then no prepayment shall be required pursuant to this paragraph in
respect of such event except to the extent of any Net Proceeds therefrom that
have not been so applied by the end of such 360-day period, at which time a
prepayment shall be required in an amount equal to the Net Proceeds that have
not been so applied.
(ii) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of a
Specified Asset Realization, the Borrower shall, immediately after such Net
Proceeds are received, prepay Term Borrowings in an aggregate amount equal to
75% of such Net Proceeds.
(d) Following the end of each fiscal year of the Borrower, commencing
with the fiscal year ending on or about October 31, 2005 (or, if the Borrower
shall change its fiscal year to end on January 31 in accordance with Section
6.16, commencing with the fiscal period ending January 31, 2006), the Borrower
shall prepay Term Borrowings in an aggregate amount equal to 50% of Excess
Cash Flow for such fiscal year (or, in the event of such change in the
Borrower's fiscal year, 50% of Excess Cash Flow for (i) the period of four
consecutive fiscal quarters ending January 31, 2006, or (ii) such fiscal year,
in the case of fiscal years ended thereafter, as applicable); provided that,
if the Leverage Ratio as of the end of such fiscal year (or period, as
applicable) is less than (x)
39
2.50 to 1.00, the Borrower shall prepay Term Borrowings in an aggregate amount
equal to 25% of Excess Cash Flow for such fiscal year (or period, as
applicable) and (y) 2.00 to 1.00, no prepayment shall be required pursuant to
this paragraph (d) for such fiscal year (or period, as applicable). Each
prepayment pursuant to this paragraph shall be made on or before the date on
which financial statements are delivered pursuant to clause (a) of Section
5.01 with respect to the fiscal year (or period, as applicable) for which
Excess Cash Flow is being calculated (and in any event within 90 days after
the end of such fiscal year (or period, as applicable)).
(e) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (f) of this Section.
(f) The Borrower shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 2:00 p.m., New York City
time, three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 2:00 p.m., New York City time,
one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 2:00 p.m., New York City time,
on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment; provided that, if a
notice of optional prepayment is given in connection with a conditional notice
of termination of the Revolving Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any
such notice (other than a notice relating solely to Swingline Loans), the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02, except as necessary to apply fully the required
amount of a mandatory prepayment. Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section
2.13.
(g) All prepayments of Term Loans effected on or prior to the first
anniversary of the Effective Date with the proceeds of a substantially
concurrent issuance or incurrence of new secured credit facilities the primary
purpose of which is to refinance Indebtedness hereunder at an interest rate
spread more favorable to the Borrower, shall be accompanied by a prepayment
fee equal to 1.00% of the aggregate amount of such prepayments.
SECTION 2.12. Fees. (a) (i) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment
fee, which shall accrue at the rate of 0.50% per annum on the average daily
unused amount of
40
the Revolving Commitment of such Lender during the period from and including
the Effective Date to but excluding the date on which such Commitment
terminates. Accrued commitment fees with respect to the Revolving Commitments
shall be payable in arrears on the last day of March, June, September and
December of each year and on the date on which the Revolving Commitments
terminate, commencing on the first such date to occur after the Effective
Date. For purposes of computing commitment fees with respect to the Revolving
Commitments, a Revolving Commitment of a Lender shall be deemed to be used to
the extent of the outstanding Revolving Loans and LC Exposure of such Lender
(and the Swingline Exposure of such Lender shall be disregarded for such
purpose).
(ii) The Borrower agrees to pay to the Administrative Agent for the
account of each Term Loan Lender a commitment fee, which shall accrue on the
amount of the Term Loan Commitment of such Lender during the period from and
including the Effective Date to but excluding the date on which such
Commitment terminates, at the rate of (A) 0.50% per annum to but excluding the
date that is 45 days after the Effective Date and (B) 3.00% per annum on and
after the date that is 45 days after the Effective Date; provided that no such
commitment fee shall accrue on the amount of the Term Loan Commitments that
are terminated on the Effective Date. Accrued commitment fees with respect to
the Term Loan Commitments shall be payable in arrears on the date on which the
Term Loan Commitments terminate.
(iii) All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).
(b) The Borrower agrees to pay (i) to the Administrative Agent for
the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue (A) with respect to
Standby LCs, at the same Applicable Rate as interest on Eurodollar Revolving
Loans on the average daily amount of such Lender's Standby LC Exposure
(excluding any portion thereof attributable to unreimbursed Standby LC
Disbursements) and (B) with respect to Trade LCs, at the rate of 1.25% per
annum on the average daily amount of such Lender's Trade LC Exposure
(excluding any portion thereof attributable to unreimbursed Trade LC
Disbursements), in the case of each of clause (A) and (B) during the period
from and including the Effective Date to but excluding the later of the date
on which such Lender's Revolving Commitment terminates and the date on which
such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a
fronting fee, which shall accrue at the rate of 0.25% per annum on the average
daily amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the
Revolving Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Bank's standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following
such last day, commencing on the first such date to occur after the Effective
41
Date; provided that all such fees shall be payable on the date on which the
Revolving Commitments terminate and any such fees accruing after the date on
which the Revolving Commitments terminate shall be payable on demand. Any
other fees payable to the Issuing Bank pursuant to this paragraph shall be
payable within 10 days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed
upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at the Alternate Base Rate
plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise,
such overdue amount shall bear interest, after as well as before judgment, at
a rate per annum equal to (i) in the case of overdue principal of any Loan, 2%
plus the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount, 2% plus
the rate applicable to ABR Revolving Loans as provided in paragraph (a) of
this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Commitments; provided that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment
of an ABR Revolving Loan or Swingline Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
42
(e) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate
or Adjusted LIBO Rate shall be determined by the Administrative Agent in
accordance with the terms hereof, and such determination shall be conclusive
absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate
for such Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and
the Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Lender (except any
such reserve requirement reflected in the Adjusted LIBO Rate) or the
Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or
the Issuing Bank of participating in, issuing or maintaining any Letter of
Credit or to reduce the amount of any sum received or receivable by such
Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender or the Issuing Bank, as
the case may be, such additional amount or amounts as will compensate such
Lender or
43
the Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the
Issuing Bank, to a level below that which such Lender or the Issuing Bank or
such Lender's or the Issuing Bank's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's or the Issuing
Bank's policies and the policies of such Lender's or the Issuing Bank's
holding company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Bank or such Lender's or the Issuing Bank's holding company for any such
reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or
its holding company, as the case may be, as specified in paragraph (a) or (b)
of this Section, together with a brief explanation for the increased costs and
the basis for the calculation thereof, shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay such Lender
or the Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 180 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving
rise to such increased costs or reductions and of such Lender's or the Issuing
Bank's intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Revolving Loan or Eurodollar Term Loan on
the date specified in any notice delivered pursuant hereto (regardless of
whether such notice may be revoked under Section 2.11(f) and is revoked in
accordance therewith), or (d) the assignment of any Eurodollar Loan other than
on the last day of the Interest Period applicable thereto as a result of a
request by the Borrower pursuant to Section 2.19, then, in any such event, the
Borrower shall compensate each
44
Lender for the loss (other than lost profit) attributable to such event. In
the case of a Eurodollar Loan, such loss to any Lender shall be deemed to be
the amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such
Loan had such event not occurred, at the Adjusted LIBO Rate that would have
been applicable to such Loan, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in the case of
a failure to borrow, convert or continue, for the period that would have been
the Interest Period for such Loan), over (ii) the amount of interest which
would accrue on such principal amount for such period at the interest rate
which such Lender would bid were it to bid, at the commencement of such
period, for dollar deposits of a comparable amount and period from other banks
in the eurodollar market. A certificate of any Lender setting forth any amount
or amounts that such Lender is entitled to receive pursuant to this Section,
showing a calculation of the amounts payable in reasonable detail to the
extent reasonably practicable, shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the
amount shown as due on any such certificate within 10 days after receipt
thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or
Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section) the Administrative Agent, Lender or Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii)
the Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each
Lender and the Issuing Bank, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified
Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or the Issuing
Bank, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Bank, shall be conclusive absent manifest error.
45
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the Code, the law of the jurisdiction in
which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate.
(f) If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section 2.17, it shall
pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
2.17 with respect to the Taxes or Other Taxes giving rise to such refund), net
of all out-of-pocket expenses of the Administrative Agent or 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 the Administrative Agent or 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 the Administrative Agent or
such Lender in the event the Administrative Agent or such Lender is required
to repay such refund to such Governmental Authority.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest,
fees or reimbursement of LC Disbursements, or of amounts payable under Section
2.15, 2.16 or 2.17, or otherwise) prior to the time expressly required
hereunder or under such other Loan Document for such payment (or, if no such
time is expressly required, prior to 12:00 noon, New York City time), on the
date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, except payments to be made directly to the
Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly
to the Persons entitled thereto and payments pursuant to other Loan Documents
shall be made to the Persons specified therein. The Administrative Agent shall
distribute any such payments received by it for the account of any other
Person to the appropriate recipient promptly following receipt thereof. If any
46
payment under any Loan Document shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business
Day, and, in the case of any payment accruing interest, interest thereon shall
be payable for the period of such extension. All payments under each Loan
Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such
funds shall be applied (i) first, towards payment of interest and fees then
due hereunder, ratably among the parties entitled thereto in accordance with
the amounts of interest and fees then due to such parties, and (ii) second,
towards payment of principal and unreimbursed LC Disbursements then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such
parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Revolving Loans, Term
Loans and participations in LC Disbursements and Swingline Loans and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Revolving Loans, Term Loans and participations in
LC Disbursements and Swingline Loans of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders
ratably in accordance with the aggregate amount of principal of and accrued
interest on their respective Revolving Loans, Term Loans and participations in
LC Disbursements and Swingline Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment
made by the Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to
the Lenders or the Issuing Bank, as the case may be, the amount due. In
47
such event, if the Borrower has not in fact made such payment, then each of
the Lenders or the Issuing Bank, as the case may be, severally agrees to repay
to the Administrative Agent forthwith on demand the amount so distributed to
such Lender or Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date
of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or
9.03(c), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are
fully paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if,
in the reasonable judgment of such Lender, such designation or assignment (i)
would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as
the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.
(b) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Revolving Commitment is being assigned, the Issuing Bank and
Swingline Lender), which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements and Swingline
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal
and accrued interest and fees) or the Borrower (in the case of all other
amounts) and (iii) in the case of any such assignment resulting from a claim
for compensation under Section 2.15 or payments required to be made pursuant
to Section 2.17, such assignment will result in a reduction in such
compensation or
48
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business
in, and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions to be
entered into by each Loan Party are within such Loan Party's corporate powers
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement has been duly executed and delivered by the
Borrower and constitutes, and each other Loan Document to which any Loan Party
is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of the Borrower or such Loan
Party (as the case may be), enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law, and an implied covenant of good faith and fair dealing.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions
(a) do not require any material consent or approval of, registration or filing
with, or any other action by, any Governmental Authority or other Person,
except such as have been obtained or made and are in full force and effect and
except filings necessary to perfect Liens created under the Loan Documents,
(b) will not violate any applicable law or regulation in any material respect
or the charter, by-laws or other organizational documents of the Borrower or
any of its Subsidiaries or any order of any Governmental Authority, (c) except
as set forth on Schedule 3.03, will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Borrower or any
of its Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries, and
(d) will not result in the creation or imposition of any Lien on any asset of
the Borrower or any of its Subsidiaries, except Liens created under the Loan
Documents.
49
SECTION 3.04. Financial Condition; No Material Adverse Change. (a)
The Borrower has heretofore furnished to the Lenders its consolidated balance
sheet and statements of income, stockholders equity and cash flows as of and
for the fiscal year ended October 31, 2004, reported on by Deloitte & Touche
LLP, independent public accountants. Such financial statements present fairly,
in all material respects, the financial position and results of operations and
cash flows of the Borrower and its consolidated subsidiaries as of such date
and for such period in accordance with GAAP.
(b) Except as disclosed in the financial statements referred to above
or the notes thereto, after giving effect to the Transactions, neither the
Borrower nor any of its Subsidiaries has, as of the Effective Date, any
material contingent liabilities, unusual long-term commitments or material
unrealized losses.
(c) Since October 31, 2004, there has been no material adverse change
in the business, assets, operations, or condition, financial or otherwise, of
the Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrower and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including its Mortgaged
Properties), except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(c) Schedule 3.05 sets forth the address of each real property (other
than locations within department stores) that is owned or leased by the
Borrower or any of its Subsidiaries as of the Effective Date.
(d) As of the Effective Date, neither the Borrower nor any of its
Subsidiaries has received notice of, or has knowledge of, any pending or
contemplated condemnation proceeding affecting any Mortgaged Property or any
sale or disposition thereof in lieu of condemnation. Neither any Mortgaged
Property nor any interest therein is subject to any right of first refusal,
option or other contractual right to purchase such Mortgaged Property or
interest therein.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) that could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters),
50
(ii) that adversely affect in any material respect the ability of the Loan
Parties to consummate the Transactions or (iii) that involve any of the Loan
Documents.
(b) Except for the Disclosed Matters and except with respect to any
matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, neither the Borrower nor any
of its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become obligated to redress any
Environmental Liability, (iii) has received notice of any claim asserting that
the Borrower or any of its Subsidiaries may be obligated to redress any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability that the Borrower or any of its Subsidiaries may become obligated to
redress.
(c) Since the Effective Date, there has been no change in the status
of the Disclosed Matters that, individually or in the aggregate, has resulted
in, or materially increased the likelihood of, a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with (a) all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
(b) all indentures, agreements and other instruments binding upon it or its
property, except (in the case of clauses (a) and (b)) where the failure to do
so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08. Investment and Holding Company Status. Neither the
Borrower nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b)
a "holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to
have been filed and has paid or caused to be paid all Taxes required to have
been paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events
for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not,
as of the date of the most recent financial statements reflecting such
amounts, exceed the fair market value of the assets of such Plan by an amount
that, if required to be paid, could reasonably be expected to result in a
51
Material Adverse Effect, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not, as of
the date of the most recent financial statements reflecting such amounts,
exceed the fair market value of the assets of all such underfunded Plans by an
amount that, if required to be paid, could reasonably be expected to result in
a Material Adverse Effect.
SECTION 3.11. Disclosure. The Borrower has disclosed to the Lenders
all agreements, instruments and corporate or other restrictions as of the
Effective Date to which the Borrower or any of its Subsidiaries is subject,
and all other matters known to any of them as of the Effective Date, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither the Information Memorandum nor any of the
other reports, financial statements, certificates or other information
furnished by or on behalf of any Loan Party to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or any other Loan
Document or delivered hereunder or thereunder (when taken as a whole and as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that, with respect to projected
financial information, the Borrower represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time furnished.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name and
jurisdiction of organization of, and the ownership interest of the Borrower
in, each Subsidiary of the Borrower and identifies each Subsidiary that is a
Subsidiary Loan Party, in each case as of the Effective Date.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a description of
all insurance maintained by or on behalf of the Borrower and its Subsidiaries
as of the Effective Date. As of the Effective Date, all premiums in respect of
such insurance have been paid.
SECTION 3.14. Labor Matters. As of the Effective Date, there are no
strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending
or, to the knowledge of the Borrower, threatened. The hours worked by and
payments made to employees of the Borrower and the Subsidiaries have not been
in violation of the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters. All material payments
due from the Borrower or any Subsidiary, or for which any claim may be made
against the Borrower or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as
a liability on the books of the Borrower or such Subsidiary. The consummation
of the Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining
agreement to which the Borrower or any Subsidiary is bound.
52
SECTION 3.15. Solvency. Immediately after the consummation of the
Transactions to occur on the Effective Date and immediately following the
making of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.
SECTION 3.16. Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" under and as defined in the Subordinated Debt Documents.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the
Lenders and dated the Effective Date) of each of (i) Xxxxxx Xxxxxxxx,
Esq., General Counsel of the Borrower, substantially in the form of
Exhibit D-1 and (ii) Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the
Loan Parties, substantially in the form of Exhibit D-2, in form and
substance reasonably satisfactory to the Administrative Agent, and,
in the case of each such opinion required by this paragraph, covering
such other matters relating to the Loan Parties, the Loan Documents
or the Transactions as the Required Lenders shall reasonably request.
The Borrower hereby requests such counsel to deliver such opinions.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request
53
relating to the organization, existence and good standing of each
Loan Party, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, the Loan Documents or the
Transactions, all in form and substance reasonably satisfactory to
the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02.
(e) The Administrative Agent shall have received all fees
and other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses (including fees, charges and disbursements of
counsel) required to be reimbursed or paid by the Borrower hereunder
or under any other Loan Document.
(f) The Collateral and Guarantee Requirement shall have been
satisfied and the Administrative Agent shall have received a
completed Perfection Certificate dated the Effective Date and signed
by an executive officer or Financial Officer of the Borrower,
together with all attachments contemplated thereby, including the
results of a search of the Uniform Commercial Code (or equivalent)
filings made with respect to the Loan Parties in the jurisdictions
contemplated by the Perfection Certificate and copies of the
financing statements (or similar documents) disclosed by such search
and evidence reasonably satisfactory to the Administrative Agent that
the Liens indicated by such financing statements (or similar
documents) are permitted by Section 6.02 or have been released.
(g) The Administrative Agent shall have received evidence
that the insurance required by Section 5.07 and the Security
Documents is in effect.
(h) The Administrative Agent shall have received a pro forma
consolidated balance sheet of the Borrower as of the Effective Date,
giving effect to the Transactions, and such pro forma balance sheet
shall be consistent with the forecasts and other financial
information provided to the Administrative Agent and the Lenders
prior to the date of this Agreement.
(i) The Administrative Agent shall have received evidence
satisfactory to it of the termination of lending commitments under,
and the payment of all amounts owing under, the Existing Credit
Agreement and the termination of all liens and security interests
securing obligations thereunder. After giving effect to the
Transactions and the other transactions contemplated hereby, the
Borrower and its Subsidiaries shall have outstanding no Indebtedness
or preferred Equity Interests, other than (i) Indebtedness hereunder,
(ii) the Senior Subordinated Notes, (iii) the Indebtedness listed on
Schedule 6.01 and (iv) Indebtedness permitted by clause (iv) of
Section 6.01(a). The Administrative Agent shall be reasonably
satisfied with the terms and conditions of all Indebtedness of the
54
Borrower and its Subsidiaries that shall remain outstanding after the
Effective Date.
(j) The Borrower shall have given (or shall have made
arrangements satisfactory to the Administrative Agent to give, on the
Effective Date) irrevocable notice of the Redemption, which notice
shall comply with all applicable requirements of the Subordinated
Debt Documents and shall specify a redemption date within 90 days
after the Effective Date. The Administrative Agent shall have
received a certificate, dated the Effective Date and signed by a
Financial Officer of the Borrower, setting forth the aggregate amount
required to be paid by it on the redemption date for the Redemption
(in respect of the principal of the Subordinated Debt, accrued
interest thereon and redemption premiums). The Borrower shall have
established the Redemption Reserve and shall have made arrangements
reasonably satisfactory to the Administrative Agent for the funding
of the Redemption Reserve on the Effective Date, in each case to the
extent necessary to comply with Section 5.15.
(k) The Borrower shall consummate, concurrently with the
Loans being made on the Effective Date, the Share Repurchase.
(l) The Administrative Agent shall be reasonably satisfied
that the total amount of fees and expenses payable by the Borrower
and the Subsidiaries in connection with the Transactions does not
exceed $3,000,000.
(m) The Administrative Agent shall have received all
documentation and other information reasonably requested by it to
satisfy the requirements of bank regulatory authorities under
applicable "know your customer" and anti-money laundering rules and
regulations, including the USA Patriot Act (as defined in Section
9.14).
The Administrative Agent shall notify the Borrower and the Lenders of
the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
and the Issuing Bank to issue Letters of Credit shall not become effective
unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 9.02) at or prior to 3:00 p.m., New York City time, on June 21, 2005
(and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing, and of the Issuing Bank to
issue, amend, renew or extend any Letter of Credit, is subject to receipt of
the request therefor in accordance herewith and to the satisfaction of the
following conditions:
(a) The representations and warranties of each Loan Party
set forth in the Loan Documents shall be true and correct in all
material respects on and as of the date of such Borrowing or the date
of issuance, amendment, renewal or extension of such Letter of
Credit, as applicable.
55
(b) At the time of and immediately after giving effect to
such Borrowing or the issuance, amendment, renewal or extension of
such Letter of Credit, as applicable, no Default shall have occurred
and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter
of Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall
have been paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent (who shall thereafter
distribute to the Lenders):
(a) (i) within 90 days after the end of each fiscal year of
the Borrower (or, if earlier, promptly when made publicly available),
its audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and
for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by Deloitte &
Touche LLP or other independent public accountants of recognized
national standing (without a "going concern" or like qualification or
exception and without any qualification or exception as to the scope
of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated and consolidating basis
in accordance with GAAP consistently applied, provided that in the
event that the Borrower shall change its fiscal year to end on
January 31 as provided in Section 6.16, audited financial statements
as of and for the year ended January 31, 2007, shall not be required
to set forth in comparative form the figures for the previous fiscal
year, and (ii) solely in the event that the Borrower shall change its
fiscal year to end on January 31 as provided in Section 6.16, within
90 days after January 31, 2006 (or, if earlier, promptly when made
available), its audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flow as of
the end of and for the fiscal quarter ending January 31, 2006, all
reported on by Deloitte & Touche LLP or other independent public
accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in
all material
56
respects the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated and
consolidating basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower (or, if earlier,
promptly when made publicly available), its consolidated balance
sheet and related statements of operations, stockholders' equity and
cash flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods
of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by one of its Financial Officers
as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments
and the absence of footnotes; provided that, if the Borrower shall
change its fiscal year to end on January 31 as provided in Section
6.16, no financial statements shall be required pursuant to this
clause (b) in respect of the fiscal quarter ending January 31, 2006;
(c) within 30 days after the end of each of the first two
fiscal months of each fiscal quarter of the Borrower, its
consolidated balance sheet and income statement as of the end of and
for such fiscal month and the then elapsed portion of the fiscal
year, all certified by one of its Financial Officers as presenting in
all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of
footnotes;
(d) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer
of the Borrower (i) certifying as to whether a Default has occurred
and, if a Default has occurred, specifying the details thereof and
any action taken or proposed to be taken with respect thereto, (ii)
setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.12, 6.13, 6.14 and 6.15 and (iii) stating
whether any change in GAAP or in the application thereof has occurred
since the date of the Borrower's audited financial statements
referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements
accompanying such certificate;
(e) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(f) not later than 30 days after the commencement of each
fiscal year of the Borrower, commencing 30 days after the fiscal year
ended January 31, 2006,
57
if the Borrower shall have changed its fiscal year in accordance with
Section 6.16, a detailed consolidated budget for such fiscal year
(including a projected consolidated balance sheet, related statements
of projected operations and cash flow as of the end of and for such
fiscal year) stating the assumptions used therein and, promptly when
available, any significant revisions of such budget;
(g) promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other
materials filed by the Borrower or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to
any or all of the functions of said Commission, or with any national
securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be; and
(h) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the
terms of any Loan Document, as the Administrative Agent or any Lender
may reasonably request.
SECTION 5.02. Notices of Material Events. Promptly after obtaining
knowledge of the following, the Borrower will furnish to the Administrative
Agent written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Borrower or any Affiliate thereof that, if
adversely determined, would reasonably be expected to result in a
Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding $1,000,000; and
(d) any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement
of a Financial Officer or other executive officer of the Borrower setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) Concurrently with
the delivery of information under Section 5.01(a) or (b), the Borrower will
furnish to the Administrative Agent prompt written notice of any change (i) in
any Loan Party's legal name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
case of any Loan Party that is not a "registered organization" (as defined in
Article 9 of the Uniform Commercial Code in effect in the
00
Xxxxx xx Xxx Xxxx), in the location of such Loan Party's chief
executive office, (iii) in any Loan Party's identity or corporate
structure, (iv) in any Loan Party's "organizational identification
number" or any similar jurisdictional identification number required
for the filing of financing statements in any applicable
jurisdiction, or (v) in any Loan Party's jurisdiction of
organization. The Borrower agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been
made under the Uniform Commercial Code or otherwise that are required
in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security
interest in all the Collateral.
(b) Each year, at the time of delivery of annual financial statements
with respect to the preceding fiscal year pursuant to clause (a) of Section
5.01 (commencing with the delivery of such financial statements with respect
to the first fiscal year ending more than 12 months after the Effective Date),
the Borrower shall deliver to the Administrative Agent a certificate of a
Financial Officer of the Borrower setting forth the information required
pursuant to Section 2 of the Perfection Certificate or confirming that there
has been no change in such information since the date of the Perfection
Certificate delivered on the Effective Date or the date of the most recent
certificate delivered pursuant to this Section.
SECTION 5.04. Existence; Conduct of Business. The Borrower will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names, in each case material to the conduct
of its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.05. Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, pay its Material Indebtedness and other
obligations, including Tax liabilities, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending
such contest could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.06. Maintenance of Properties. The Borrower will, and will
cause each of the Subsidiaries to, keep and maintain all property material to
the conduct of its business in good working order and condition, ordinary wear
and tear excepted.
SECTION 5.07. Insurance. The Borrower will, and will cause each of
the Subsidiaries to, maintain, with financially sound and reputable insurance
companies (a) adequate insurance for its insurable properties, all to such
extent and against such risks, including fire, casualty and other risks
insured against by extended coverage, as is customary with companies in the
same or similar businesses operating in the same or similar locations, (b)
such other insurance as is required pursuant to the terms of any
59
Security Document and (c) business interruption insurance, insuring against
loss of gross earnings for a period of not less than 6 months arising from any
risks or occurrences required to be covered by insurance pursuant to this
Section 5.07. The Borrower will furnish to the Lenders, upon request of the
Administrative Agent, information in reasonable detail as to the insurance so
maintained.
SECTION 5.08. Casualty and Condemnation. The Borrower (a) will
furnish to the Administrative Agent and the Lenders prompt written notice of
any casualty or other insured damage to any material portion of any Collateral
or the commencement of any action or proceeding for the taking of any material
portion of the Collateral or any part thereof or interest therein under power
of eminent domain or by condemnation or similar proceeding and (b) will ensure
that the Net Proceeds of any such event (whether in the form of insurance
proceeds, condemnation awards or otherwise) are collected and applied in
accordance with the applicable provisions of the Loan Documents; provided that
in the event of a conflict between the collection and application provisions
of this Agreement and any other Loan Document, the provisions of this
Agreement shall govern.
SECTION 5.09. Books and Records; Inspection Rights. The Borrower
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings
and transactions in relation to its business and activities. The Borrower
will, and will cause each of its Subsidiaries to, permit any representatives
designated by the Administrative Agent or any Lender (after notice to, and
coordination with, the Administrative Agent), upon reasonable prior notice, to
visit and inspect its properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as
often as reasonably requested.
SECTION 5.10. Compliance with Laws. The Borrower will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.11. Use of Proceeds and Letters of Credit. The proceeds of
the Term Loans will be used only for financing the payment of amounts owing
under the Existing Credit Agreement, the Redemption, the Share Repurchase and
payment of fees and expenses related to the foregoing. The proceeds of the
Revolving Loans and Swingline Loans will be used only for general corporate
purposes. No part of the proceeds of any Loan will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations U and X. Letters of Credit
will be issued only for general corporate purposes.
SECTION 5.12. Additional Subsidiaries. If any additional Subsidiary
is formed or acquired after the Effective Date, the Borrower will notify the
Administrative Agent and the Lenders thereof (which notice shall indicate the
name of such Subsidiary,
60
the jurisdiction in which it is organized and its status as a Foreign
Subsidiary or a Subsidiary Loan Party) and, within 30 days after such
Subsidiary is formed or acquired, cause the Collateral and Guarantee
Requirement to be satisfied with respect to such Subsidiary (if it is a
Subsidiary Loan Party) and with respect to any Equity Interest in or
Indebtedness of such Subsidiary owned by or on behalf of any Loan Party.
SECTION 5.13. Further Assurances. (a) The Borrower will, and will
cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), which may be required
under any applicable law, or which the Administrative Agent or the Required
Lenders may reasonably request, to cause the Collateral and Guarantee
Requirement to be and remain satisfied, all at the expense of the Loan
Parties. The Borrower also agrees to provide to the Administrative Agent, from
time to time upon request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by any Loan Party
after the Effective Date (other than assets constituting Collateral under the
Guarantee and Collateral Agreement that become subject to the Lien of the
Guarantee and Collateral Agreement upon acquisition thereof), the Borrower
will notify the Administrative Agent and the Lenders thereof, and, if
requested by the Administrative Agent or the Required Lenders, the Borrower
will cause such assets to be subjected to a Lien securing the Obligations and
will take, and cause the Subsidiary Loan Parties to take, such actions as
shall be necessary or reasonably requested by the Administrative Agent to
grant and perfect such Liens, including actions described in paragraph (a) of
this Section, all at the expense of the Loan Parties.
SECTION 5.14. Interest Rate Protection. As promptly as practicable,
and in any event within 90 days after the Effective Date, the Borrower will
enter into, and thereafter for a period of not less than two years will
maintain in effect, one or more Swap Agreements on such terms and with such
parties as shall be reasonably satisfactory to the Administrative Agent, the
effect of which shall be to fix or limit the interest cost to the Borrower
with respect to at least 50% of the outstanding Indebtedness of the Borrower
after giving effect to the Redemption.
SECTION 5.15. Redemption; Redemption Reserve. On and after the
Effective Date, until the Redemption is consummated, to the extent that the
aggregate amount of Term Loan Commitments that remain in effect is less than
the aggregate amount required to be paid by the Borrower in order to
consummate the Redemption on the redemption date therefor (including in
respect of the principal of the Subordinated Debt, accrued interest thereon
and redemption premiums), the Borrower will maintain funds on deposit in the
Redemption Reserve, free of any Lien or any restriction on the application
thereof to fund the Redemption, in an amount equal to such difference. On the
date of the Redemption, the funds in the Redemption Reserve, if any, shall be
applied
61
in respect of the Redemption. The Borrower shall cause the Redemption to be
consummated on the date specified in the notice thereof referred to in Section
4.01(j).
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in
full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees
with the Lenders that:
SECTION 6.01. Indebtedness; Certain Equity Securities. (a) The
Borrower will not, and will not permit any Subsidiary to, create, incur,
assume or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) until the Redemption is consummated, the Senior
Subordinated Notes;
(iii) Indebtedness existing on the Effective Date and set
forth in Schedule 6.01 and extensions, renewals and replacements of
any such Indebtedness that do not (A) increase the outstanding
principal amount thereof, or (B) result in an earlier maturity date
or decreased weighted average life thereof; (iv) Indebtedness of the
Borrower to any Subsidiary and of any Subsidiary to the Borrower or
any other Subsidiary; provided that Indebtedness of any Subsidiary
that is not a Loan Party to the Borrower or any Subsidiary Loan Party
shall be subject to clause (d)(ii) of Section 6.04;
(v) Guarantees by the Borrower of Indebtedness of any
Subsidiary and by any Subsidiary of Indebtedness of the Borrower or
any other Subsidiary; provided that (A) the Indebtedness so
guaranteed is permitted by this Section and (B) Guarantees by the
Borrower or any Subsidiary Loan Party of Indebtedness of any
Subsidiary that is not a Loan Party shall be subject to clause
(e)(ii) of Section 6.04;
(vi) Indebtedness of the Borrower or any Subsidiary incurred
to finance the acquisition, construction or improvement of any fixed
or capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the
acquisition thereof, and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal
amount thereof or result in an earlier maturity date or decreased
weighted average life thereof; provided that (A) such Indebtedness is
incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement and (B) the aggregate
principal amount of Indebtedness permitted by this clause (vi) shall
not exceed $10,000,000 at any time outstanding;
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(vii) unsecured Indebtedness incurred and secured or
unsecured Indebtedness assumed, in each case in connection with, or
resulting from, Permitted Acquisitions; provided that the aggregate
principal amount of Indebtedness permitted by this clause (vii) shall
be subject to the limitations of clause (h) of Section 6.04;
(viii) Indebtedness representing deferred compensation to
employees of the Borrower or the Subsidiaries; provided that the
aggregate principal amount of Indebtedness permitted by this clause
(viii) shall not exceed $5,000,000 at any time outstanding;
(ix) other Indebtedness of the Borrower incurred in
connection with the repurchase by the Borrower of its outstanding
capital stock in accordance with clause (iv) of Section 6.08(a) which
by its terms is subordinated to the Obligations in a manner and to
the extent reasonably acceptable to the Administrative Agent, in an
aggregate principal amount not exceeding $1,000,000 at any time
outstanding;
(x) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business,
provided that such Indebtedness is extinguished within two Business
Days of its incurrence;
(xi) Indebtedness of any Subsidiary that is not a Loan Party
incurred to finance working capital needs of such Subsidiary in an
aggregate principal amount (for all such Indebtedness of all such
Subsidiaries) not to exceed $1,000,000 at any time outstanding;
(xii) other unsecured Indebtedness in an aggregate principal
amount not exceeding $5,000,000 at any time outstanding; and
(xiii) if the Equity Interests in the Irvine Facility JV are
acquired as provided in clause (r) of Section 6.04, secured
Indebtedness secured by the assets of the Irvine Facility JV that is
outstanding immediately prior to such acquisition (provided that the
outstanding principal amount of such Indebtedness does not exceed the
aggregate principal amount thereof outstanding as of the date of this
Agreement), and extensions, renewals and replacements of such
Indebtedness that do not increase the outstanding principal amount
thereof or result in any earlier maturity date or decreased weighted
average life thereof.
(b) The Borrower will not, nor will it permit any Subsidiary to,
issue any preferred stock or other preferred Equity Interests; provided that
the Borrower may issue (i) Xxxx Preferred Stock for the purpose of
repurchasing Xxxx Common Stock as required by the provisions of the
Stockholders' Agreement, as in effect as of the Effective Date, to the extent
that such repurchase requirements exceed the payments permitted by Section
6.08(a)(v), (ii) Permitted Acquisition Preferred Stock, and (iii) any other
preferred stock that is not Disqualified Stock.
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SECTION 6.02. Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the Effective Date and set forth in Schedule
6.02; provided that (i) such Lien shall not apply to any other
property or asset of the Borrower or any Subsidiary and (ii) such
Lien shall secure only those obligations which it secures on the
Effective Date and extensions, renewals and replacements thereof to
the extent that they do not increase the outstanding principal amount
thereof;
(d) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on
any property or asset of any Person that becomes a Subsidiary after
the Effective Date prior to the time such Person becomes a
Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary, as the case may be, (ii) such Lien
shall not apply to any other property or assets of the Borrower or
any Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the
date such Person becomes a Subsidiary, as the case may be and
extensions, renewals and replacements thereof to the extent that they
do not increase the outstanding principal amount thereof;
(e) Liens on fixed or capital assets acquired, constructed
or improved by the Borrower or any Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by clause (vi) of
Section 6.01(a), (ii) such security interests and the Indebtedness
secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement,
(iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital
assets and (iv) such security interests shall not apply to any other
property or assets of the Borrower or any Subsidiary;
(f) Liens arising by operation of law that secure
obligations in an aggregate amount not to exceed $5,000,000 at any
time outstanding, including Liens imposed pursuant to Environmental
Laws or ERISA securing obligations not reasonably expected to exceed
such amount;
(g) "Permitted Encumbrances" on the Mortgaged Properties as
defined in the applicable Mortgage;
(h) leases, subleases, licenses or sublicenses, in each case
granted to others not interfering in any material respect with the
business of the Borrower or its
64
Subsidiaries; provided that each such lease, sublease, license or
sublicense (i) is entered into in compliance with this Agreement and
the other Loan Documents and (ii) is expressly subject to the Liens
of the applicable Security Documents;
(i) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(j) normal and customary rights of set-off upon deposits of
cash in favor of banks or other depository institutions;
(k) Liens with respect to investments consisting of fully
collateralized repurchase agreements constituting Permitted
Investments permitted under Section 6.04;
(l) Liens granted by a Subsidiary that is not a Loan Party
in favor of a Loan Party in respect of Indebtedness owed by such
Subsidiary to such Loan Party;
(m) Liens on any property of a Subsidiary that is not a Loan
Party or any of its subsidiaries securing Indebtedness of such
Subsidiary permitted by clause (xi) of Section 6.01(a);
(n) Liens on securities held by the Borrower or any
Subsidiary representing an interest in a joint venture to which the
Borrower or such Subsidiary is a party (provided that such joint
venture is not a Subsidiary) to the extent that (i) such Liens
constitute purchase options, call or similar rights of a counterparty
to such joint venture and (ii) such Liens are granted pursuant to the
terms of the partnership agreement, joint venture agreement or other
similar document or documents pursuant to which such joint venture
was created or otherwise governing the rights and obligations of the
parties to such joint venture;
(o) other Liens securing obligations not exceeding
$1,500,000 at any time outstanding; and
(p) the Borrower may sell or assign overdue accounts
receivable in connection with the collection thereof in the ordinary
course of business.
SECTION 6.03. Fundamental Changes. (a) The Borrower will not, and
will not permit any Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
liquidate or dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Default shall have occurred and be continuing
(i) any Subsidiary may merge into the Borrower in a transaction in which the
Borrower is the surviving corporation, (ii) any Subsidiary may merge into any
Subsidiary in a transaction in which the surviving entity is a Subsidiary and,
if either Subsidiary is a Subsidiary Loan Party, the surviving entity is a
Subsidiary Loan Party, (iii) any Subsidiary may liquidate or dissolve if the
Borrower determines in good faith that such liquidation or dissolution is in
the best interests of the Borrower and
65
is not materially disadvantageous to the Lenders and (iv) any Subsidiary may
merge with another Person in a transaction that results in such Subsidiary
ceasing to be a Subsidiary if such transaction is intended to effect a sale of
the Equity Interests in such Subsidiary and such sale is permitted by Section
6.05; provided that any such merger described in clause (i), (ii) or (iii)
above involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by Section
6.04.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its subsidiaries on the
Effective Date and businesses reasonably related thereto.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of its
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger)
any Equity Interests in or evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other
interest in, any other Person, or purchase or otherwise acquire (in one
transaction or a series of transactions) assets constituting a business unit
of any other Person, except:
(a) Permitted Investments;
(b) investments, loans, advances and Guarantees existing on
the Effective Date and set forth on Schedule 6.04;
(c) investments by the Borrower and its Subsidiaries in
Equity Interests in their respective Subsidiaries; provided that (i)
any such Equity Interests held by a Loan Party shall be pledged to
the extent necessary to satisfy the Collateral and Guarantee
Requirement and (ii) the aggregate amount of investments by Loan
Parties in, and loans and advances by Loan Parties to, and Guarantees
by Loan Parties of Indebtedness of, Subsidiaries that are not Loan
Parties (excluding all such investments, loans, advances and
Guarantees existing on the Effective Date and set forth on Schedule
6.04, but including investments resulting from Permitted Acquisitions
to the extent provided in clause (h)(ii) below) at any time
outstanding shall not exceed the sum of (A) $15,000,000 during the
first Test Period, $25,000,000 during the second Test Period,
$35,000,000 during the third Test Period, $45,000,000 during the
fourth Test Period or $55,000,000 thereafter plus (B) the amount of
any loans or advances existing on the Effective Date owed to Loan
Parties by Subsidiaries that are not Loan Parties and set forth on
Schedule 6.04, to the extent repaid in cash to such Loan Parties
after the Effective Date; provided further, that (A) any investments
in joint ventures permitted by clause (l) below shall reduce the
amount available for investments, loans, advances and Guarantees
pursuant to clause (ii) of the immediately preceding proviso and (B)
any investments in a Subsidiary that is not a Loan Party resulting
66
from Acquisition Consideration in the form of Indebtedness of (or
Guaranteed by) a Loan Party or in the form of Permitted Acquisition
Preferred Stock, in each case as provided in clause (h)(ii)(B) below,
shall be treated as an investment in such Subsidiary made in cash for
purposes of determining compliance with the limitation in clause (ii)
of the immediately preceding proviso, with the result that the
"outstanding" amount of such investment shall be reduced based on
cash distributions by such Subsidiary to a Loan Party but not by any
repayment or redemption of such Indebtedness or Permitted Acquisition
Preferred Stock (other than any repayment of any such Indebtedness
made by a Subsidiary that is not a Loan Party, which also shall
reduce the "outstanding" amount of such investment);
(d) loans or advances made by the Borrower to any Subsidiary
and made by any Subsidiary to the Borrower or any other Subsidiary;
provided that (i) any such loans and advances made by a Loan Party
shall be evidenced by a promissory note pledged to the extent
necessary to satisfy the Collateral and Guarantee Requirement and
(ii) the amount of such loans and advances made by Loan Parties to
Subsidiaries that are not Loan Parties shall be subject to the
limitation set forth in clause (c)(ii) above;
(e) Guarantees constituting Indebtedness permitted by
Section 6.01; provided that (i) a Subsidiary shall not Guarantee the
Subordinated Debt unless (A) such Subsidiary also has Guaranteed the
Obligations pursuant to the Guarantee and Collateral Agreement, (B)
such Guarantee of the Subordinated Debt is subordinated to such
Guarantee of the Obligations on terms no less favorable to the
Lenders than the subordination provisions of the Subordinated Debt
and (C) such Guarantee of the Subordinated Debt provides for the
release and termination thereof, without action by any party, upon
any release and termination of such Guarantee of the Obligations, and
(ii) the aggregate principal amount of Indebtedness of Subsidiaries
that are not Loan Parties that is Guaranteed by any Loan Party shall
be subject to the limitation set forth in clause (c)(ii) above;
(f) investments received in connection with the bankruptcy
or reorganization of, or settlement of delinquent accounts and
disputes with, customers and suppliers, in each case in the ordinary
course of business;
(g) loans or advances made by the Borrower and its
Subsidiaries to their respective directors, officers and employees on
an arm's-length basis in the ordinary course of business; provided
that the aggregate amount of all loans and advances permitted by this
clause (g) shall not exceed $5,000,000 at any time outstanding;
(h) Permitted Acquisitions; provided that (i) the sum of all
Acquisition Consideration (subject to the exclusion set forth in
clause (ii)(A) below) shall not exceed, on a cumulative basis (A)
$10,000,000 during any fiscal year and (B) $40,000,000 during the
term of this Agreement, (ii) in the case of a Permitted
67
Acquisition that results in a Subsidiary that is not a Loan Party,
(A) Acquisition Consideration in the form of cash paid by a Loan
Party or non-cash consideration delivered by a Loan Party (other than
Indebtedness or Permitted Acquisition Preferred Stock) shall be
treated as an investment by a Loan Party in a Subsidiary that is not
a Loan Party (and subject to the limitation set forth in clause
(c)(ii) above) and shall be excluded for purposes of calculating
compliance with the limitations in clause (h)(i) above and (B)
Acquisition Consideration in the form of Indebtedness of (or
Guaranteed by) a Loan Party or in the form of Permitted Acquisition
Preferred Stock shall be treated as an investment by a Loan Party in
a Subsidiary that is not a Loan Party (and subject to the limitation
set forth in clause (c)(ii) above) and also included for purposes of
calculating compliance with the limitations in clause (h)(i) above,
and (iii) in the case of a Permitted Acquisition that results in both
one or more Subsidiaries that are not Loan Parties and acquired
assets owned by Loan Parties (including Loan Parties that may result
from such Permitted Acquisition), the Acquisition Consideration shall
be allocated ratably among the assets and businesses acquired
pursuant to such Permitted Acquisition (based on the fair value
thereof, as reasonably determined by a Financial Officer of the
Borrower and certified to the Administrative Agent) for purposes of
clause (h)(ii) above; provided further that, in the event of an
acquisition of Equity Interests in the Irvine Facility JV, the amount
permitted for Permitted Acquisitions in any fiscal year referred to
in clause (i)(A) above shall be reduced (but not below zero and only
for the fiscal year during which such acquisition occurs) by the
amount of consideration for such acquisition;
(i) receivables owing to the Borrower or a Subsidiary if
created in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms (including the
dating of receivables and extensions of payment in the ordinary
course of business consistent with past practices) of the Borrower or
such Subsidiary;
(j) acquisitions of property, plant and equipment that
constitute a business unit and are Capital Expenditures otherwise
permitted by Section 6.12;
(k) investments of any Person existing at the time such
Person becomes a Subsidiary or at the time such Person merges or
consolidates with the Borrower or any of its Subsidiaries, in either
case, as a result of a Permitted Acquisition in compliance with the
terms of this Agreement, provided that such investments were not made
by such Person in connection with, or in anticipation or
contemplation of, such Person becoming a Subsidiary or such merger or
consolidation;
(l) investments in joint ventures; provided that (A) such
investments are permitted by clause (c)(ii) above, (B) the aggregate
amount of such investments at any time outstanding shall not to
exceed $27,500,000 and (C) if the joint venture investment permitted
by clause (s) below is made and the Borrower or any of its
Subsidiaries has made investments in the Borrower's wholly owned
Subsidiary in Japan in the period between the Effective Date and the
date of consummation of
68
the contribution permitted by clause (s) below, then such investments
shall be treated as usage of the limitations in this clause (l) at
the time of such consummation;
(m) investments consisting of loans by the Borrower or its
Subsidiaries to employees of the Borrower or its Subsidiaries made
solely for the purpose of funding purchases by such employees from
the Borrower of the Borrower's capital stock in an amount not
exceeding $2,000,000 at any time outstanding;
(n) investments consisting of non-cash consideration
received in connection with the disposition of assets permitted by
Section 6.05;
(o) investments constituting pledges and deposits made in
the ordinary course of business in compliance with workers'
compensation, unemployment insurance and other social security laws
or regulations;
(p) investments constituting deposits to secure the
performance of bids, trade contracts, leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature, in each case in the ordinary course of business;
(q) Swap Agreements entered into in compliance with Section
6.07;
(r) the acquisition for cash consideration of all (but not
less than all) of the Equity Interests in the Irvine Facility JV that
are not owned by the Borrower and its Subsidiaries as of the
Effective Date; provided that (i) at the time of and immediately
after giving effect to such acquisition, no Default has occurred and
is continuing or would result therefrom, (ii) at the time of and
immediately after giving effect to such acquisition (including
payment of the consideration therefor and any related incurrence of
Indebtedness), the sum of the unused Revolving Commitments plus
unrestricted cash balances and Permitted Investments (in each case,
that are not subject to any Lien, other than Liens created under the
Loan Documents) shall be at least $15,000,000 and (iii) such
acquisition shall be made before (and in lieu of) any sale of Equity
Interests in the Irvine Facility JV owned by the Borrower on the
Effective Date and permitted by clause (i) of Section 6.05; and
(s) the contribution (including by means of merger or other
transaction with the similar effect) by the Borrower's existing
wholly owned Subsidiary in Japan of all or substantially all its
assets to a joint venture in exchange for Equity Interests of such
joint venture pursuant to a transaction that does not involve any
other material consideration.
SECTION 6.05. Asset Sales. The Borrower will not, and will not permit
any of its Subsidiaries to, sell, transfer, lease or otherwise dispose of any
asset, including any Equity Interest owned by it, nor will the Borrower permit
any of its Subsidiaries to issue any additional Equity Interest in such
Subsidiary, except:
69
(a) sales of inventory, fixtures, used or surplus equipment
and Permitted Investments in the ordinary course of business;
(b) sales, transfers and dispositions to the Borrower or a
Subsidiary; provided that any such sales, transfers or dispositions
involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09;
(c) sales, transfers and other dispositions of assets that
are not permitted by any other clause of this Section; provided that
in the case of any such sale, transfer or disposition of Equity
Interests of a Subsidiary, such sale, transfer or disposition shall
include all Equity Interests of and other investments in and loans
and advances to such Subsidiary (and any other Subsidiary in which
such sold Subsidiary holds an Equity Interest) and, after giving
effect thereto, none of the Borrower and the Subsidiaries shall owe
any Indebtedness to the Subsidiary so sold, transferred or otherwise
disposed of; provided further, that the aggregate fair market value
of all assets sold, transferred or otherwise disposed of in reliance
upon this clause (c) shall not exceed $2,500,000 during any fiscal
year of the Borrower;
(d) the Borrower may sell or assign overdue accounts
receivable in connection with the collection thereof in the ordinary
course of business;
(e) pursuant to a transaction permitted by clause (i), (ii)
or (iii) of Section 6.03(a);
(f) sales of assets in connection with a sale-leaseback
transaction permitted by Section 6.06;
(g) involuntary dispositions resulting from any casualty or
other insured damage to, or any taking under power of eminent domain
or by condemnation or similar proceeding of, any property or asset of
the Borrower or any Subsidiary;
(h) licensing and cross-licensing arrangements entered into
in the ordinary course of business involving any intellectual
property of the Borrower or any Subsidiary;
(i) the sale of all (but not less than all) of the Equity
Interests in the Irvine Facility JV owned by the Borrower and its
Subsidiaries on the Effective Date; provided that any such sale shall
be made (i) solely for cash consideration and (ii) before (and in
lieu of) any acquisition of Equity Interests in the Irvine Facility
JV permitted by clause (r) of Section 6.04;
(j) the sale of all (but not less than all) of the Equity
Interests in, or the assets of, the Irvine Facility JV after any
acquisition of Equity Interests therein permitted by clause (r) of
Section 6.04; provided that at least 75% of the consideration for any
such sale (excluding consideration applied to repay or refinance
Indebtedness of the Irvine Facility JV owed to a third party) shall
be in cash; and
70
(k) the sale of the land and buildings owned at the date of
this Agreement that are located in Tijuana, Mexico; and
(l) the contribution (including by means of merger or other
transaction with the similar effect) by the Borrower's existing
wholly owned Subsidiary in Japan of all or substantially all its
assets to a joint venture in exchange for Equity Interests of such
joint venture pursuant to a transaction that does not involve any
other material consideration;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clauses (b) and (g) above) shall be made
for fair value.
SECTION 6.06. Sale and Leaseback Transactions. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into any arrangement,
directly or indirectly, with any Person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned
or hereinafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes
as the property sold or transferred; provided that the Borrower and its
Subsidiaries may enter into (i) such a sale and leaseback transaction with
respect to all (but not less than all) of the assets of the Irvine Facility JV
pursuant to clause (j) of Section 6.05 and (ii) such other transactions with
respect to assets having a fair market value not in excess of $1,000,000 in
the aggregate during the term of this Agreement.
SECTION 6.07. Swap Agreements. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any Swap Agreement, other than
(a) Swap Agreements required by Section 5.14, (b) Swap Agreements entered into
in the ordinary course of business to hedge or mitigate risks to which the
Borrower or any Subsidiary is exposed in the conduct of its business or the
management of its liabilities and (c) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of either the Borrower
or any Subsidiary.
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.
(a) The Borrower will not, and will not permit any Subsidiary to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
or incur any obligation (contingent or otherwise) to do so, except (i) the
Borrower may declare and pay dividends with respect to any class of its
capital stock payable solely in additional shares of such class of stock, (ii)
Subsidiaries may declare and pay dividends ratably with respect to their
capital stock, (iii) the Borrower may consummate the Share Repurchase, (iv)
the Borrower may repurchase stock or stock options purchased by or granted to
members of senior management (other than the Grays) and other key employees
pursuant to a Borrower stock purchase and option plan in the event any such
employee is terminated for any reason, but in no event shall the aggregate
amount of all such repurchases exceed $500,000 in any fiscal year; provided
that the amount of Restricted Payments permitted under this clause (iv) in any
fiscal year shall be increased on a cumulative basis by an amount equal to the
total unused amount of Restricted Payments
71
permitted by this clause (iv) for the preceding year; (v) the Borrower shall
accrue the ability to repurchase Xxxx Common Stock and Xxxx Preferred Stock
and may repurchase Xxxx Common Stock and Xxxx Preferred Stock as follows: (A)
the Borrower shall accrue the ability to repurchase Xxxx Common Stock and Xxxx
Preferred Stock in an aggregate amount not to exceed $2,500,000 during any
Test Period; provided that any amount of Xxxx Common Stock and Xxxx Preferred
Stock which the Borrower accrues the ability to but does not repurchase in any
Test Period may be carried forward to subsequent Test Periods; provided
further, that notwithstanding such accrual, the Borrower (1) shall only
repurchase Xxxx Common Stock to the extent required by the provisions of the
Stockholders' Agreement, as in effect as of the Effective Date, and (2) shall
only repurchase Xxxx Common Stock and/or Xxxx Preferred Stock so long as no
Default shall have occurred and be continuing on the date of any such
repurchase or would result from such repurchase; and (B) on the last day of
any Test Period, the Borrower may repurchase Xxxx Common Stock and Xxxx
Preferred Stock in an additional aggregate amount of up to $2,500,000;
provided that (1) no Default shall have occurred and be continuing on such day
or would result from such repurchase and (2) on the date of and after giving
effect to such repurchase (and the incurrence of any Indebtedness to be
incurred on such date), the Leverage Ratio shall be less than 3.5 to 1.0, (for
purposes of determining the Leverage Ratio for this clause, Consolidated
EBITDA shall be calculated for the period of four consecutive fiscal quarters
of the Borrower ended on the last day of the most recent fiscal quarter for
which financial statements have been delivered to the Administrative Agent
under Section 5.01(a) or (b)); provided further, that the Borrower shall only
repurchase Xxxx Common Stock to the extent required by the provisions of the
Stockholders' Agreement, as in effect as of the Effective Date; (vi) on the
last day of any Test Period, the Borrower may pay accrued dividends with
respect to the Xxxx Preferred Stock in cash in an aggregate amount not to
exceed $250,000; provided that (1) no Default shall have occurred and be
continuing on such day or would result from such payment and (2) on the date
of and after giving effect to such payment (along with (A) any payment
pursuant to clause (v)(B) above on such date and (B) the incurrence of any
Indebtedness to be incurred on such date), the Leverage Ratio (determined as
set forth in clause (v)(B)(2) above) shall be less than 3.5 to 1.0; (vii) the
Borrower may pay cash dividends with respect to any Permitted Acquisition
Preferred Stock; (viii) the Borrower may redeem or repurchase Permitted
Acquisition Preferred Stock in accordance with the terms thereof; and (ix) the
Borrower may, and may permit any Subsidiary to, make payments to the Vestar
Group pursuant to and to the extent expressly contemplated by the Vestar
Management Agreement.
(b) The Borrower will not, and will not permit any Subsidiary to,
make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash securities or other property) of or in respect
of principal of or interest on the Senior Subordinated Notes, or any payment
or other distribution (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancelation or termination of any of the
Senior Subordinated Notes, except (i) pursuant to the Redemption and (ii)
payment of regularly scheduled interest payments as and when due prior to the
Redemption, other than payments prohibited by the subordination provisions
thereof.
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SECTION 6.09. Transactions with Affiliates. The Borrower will not,
and will not permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions in the ordinary course of business that
are at prices and on terms and conditions not less favorable to the Borrower
or such Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties, (b) transactions between or among the Borrower and
the Subsidiary Loan Parties not involving any other Affiliate, (c) any
investment, loan, advance or Guarantee permitted by clause (c), (d) or (e) of
Section 6.04, provided that if any Subsidiary benefiting from such transaction
is not a wholly owned Subsidiary, then this clause shall not apply to such
transaction if any material interest in such Subsidiary is owned by an
Affiliate of the Borrower that is not a Subsidiary, (d) any Indebtedness
permitted under clause (iv) or (v) of Section 6.01(a), provided that if any
Subsidiary benefiting from such transaction is not a wholly owned Subsidiary,
then this clause shall not apply to such transaction if any material interest
in such Subsidiary is owned by an Affiliate of the Borrower that is not a
Subsidiary, (e) loans or advances to employees permitted under clause (g) of
Section 6.04, (f) any Restricted Payment permitted by Section 6.08, (g)
customary fees paid to members of the Board of Directors of the Borrower and
its Subsidiaries for their services as directors not in excess of fees paid to
directors who are not Affiliates of the Borrower or a Subsidiary, and
compensation and employee benefit arrangements paid to, and indemnities
provided for the benefit of, directors, officers or employees of the Borrower
or its Subsidiaries in the ordinary course of business and (h) leasing by the
Borrower or any Subsidiary of real property owned or purchased in the future
by Xxxxxx X. Xxxx, provided that each such lease is on terms and conditions
not less favorable to the Borrower or such Subsidiary than could be obtained
on an arm's-length basis from unrelated third parties.
SECTION 6.10. Restrictive Agreements. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of the Borrower or any
Subsidiary to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Subsidiary to pay dividends or
other distributions with respect to any shares of its capital stock or to make
or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by
law or by any Loan Document or Subordinated Debt Document, (ii) the foregoing
shall not apply to restrictions and conditions existing on the Effective Date
identified on Schedule 6.10 (but shall apply to any amendment or modification
expanding the scope of any such restriction or condition), (iii) the foregoing
shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing
shall not apply to
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restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and
other contractual agreements restricting the assignment thereof.
SECTION 6.11. Amendment of Material Documents. The Borrower will not,
and will not permit any Subsidiary to, amend, modify or waive any of its
rights under (a) any Subordinated Debt Document, (b) its certificate of
incorporation, by-laws or other organizational documents (other than to change
its name), or (c) the Vestar Management Agreement, except to the extent that
such amendment, modification or waiver would not reasonably be expected to
have a Material Adverse Effect or be materially adverse to the interests of
the Lenders; provided that the fees under the Vestar Management Agreement will
not be increased.
SECTION 6.12. Capital Expenditures. The Borrower will not permit the
aggregate amount of Capital Expenditures made by the Borrower and the
Subsidiaries (a) in the fiscal year ending on or about October 31, 2005, to
exceed $20,000,000, (b) if the Borrower changes its fiscal year to end on
January 31 as provided in Section 6.16, in the period of five consecutive
fiscal quarters ending January 31, 2006, to exceed $27,500,000 and (c) in any
fiscal year thereafter to exceed $25,000,000; provided that (i) the amount of
permitted Capital Expenditures in any fiscal year referred to in clause (c)
above shall be increased by an amount equal to the total amount of unused
permitted Capital Expenditures for the immediately preceding year (or, if
clause (b) above applies, then in the case of the increase permitted by this
proviso for the fiscal year ending January 31, 2007, by an amount equal to the
total amount of unused permitted Capital Expenditures for the period referred
to in such clause) and (ii) for purposes of determining the amount of any
increase allowed by clause (i) above for any fiscal year, any increase allowed
by such clause in the immediately preceding fiscal year shall be disregarded
and be deemed not to constitute permitted Capital Expenditures for such
immediately preceding fiscal year.
SECTION 6.13. Leverage Ratio. The Borrower will not permit the
Leverage Ratio as of the end of any fiscal quarter ending on or about any date
or ending during any period set forth below to exceed the ratio set forth
below opposite such period:
Period Ratio
------ -----
April 30, 2005, July 31, 2005 and October 31, 2005 3.75 to 1.0
January 31, 2006, April 30, 2006 and July 31, 2006 3.50 to 1.0
October 31, 2006 and January 31, 2007 3.25 to 1.0
April 30, 2007 and July 31, 2007 3.00 to 1.0
October 31, 2007 2.75 to 1.0
January 31, April 30, July 31 and October 31, 2008 2.50 to 1.0
January 31, 2009 and thereafter 2.25 to 1.0
SECTION 6.14. Fixed Charge Coverage Ratio. The Borrower will not
permit the Consolidated Fixed Charge Coverage Ratio for any four-fiscal-quarter
period ending on the last day of any fiscal quarter (a) ending during the
period from the
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Effective Date through and including the fiscal quarter ending on or about
October 31, 2007, to be less than 1.20 to 1.0 and (b) ending thereafter, to be
less than 1.10 to 1.0.
SECTION 6.15. Interest Expense Coverage Ratio. The Borrower will not
permit the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest
Expense for any period of four consecutive fiscal quarters ending after the
Effective Date to be less than 3.25 to 1.0.
SECTION 6.16. Fiscal Year. The Borrower will not change its fiscal
year, except the Borrower may change its fiscal year to end on January 31 if
such change is made effective immediately following the close of its fiscal
year ending on or about October 31, 2005.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement
when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan
or any fee or any other amount (other than an amount referred to in
clause (a) of this Article) payable under this Agreement or any other
Loan Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three Business
Days;
(c) any representation or warranty made or deemed made by or
on behalf of the Borrower or any Subsidiary in or in connection with
any Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with any Loan
Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material
respect when made or deemed made;
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02(a), 5.04
(with respect to the existence of the Borrower or the Company) or
5.11 or in Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document
(other than those specified in clause (a), (b) or (d) of this
Article), and such failure shall continue unremedied for a period of
30 days after notice thereof from the Administrative Agent to the
Borrower (which notice will be given at the request of any Lender);
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(f) the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount)
in respect of any Material Indebtedness, when and as the same shall
become due and payable after giving effect to any applicable grace
period;
(g) any event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled maturity or
that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity; provided that this clause (g) shall not apply
to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any
Subsidiary or its debts, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or
for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter
in effect, (ii) consent to the institution of, or fail to contest in
a timely and appropriate manner, any proceeding or petition described
in clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or
for a substantial part of its assets, (iv) file an answer admitting
the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
(j) the Borrower or any Subsidiary shall become unable,
admit in writing its inability or fail generally to pay its debts as
they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $7,500,000 shall be rendered against
the Borrower, any Subsidiary or any combination thereof (to the
extent not covered by independent third party insurance as to which
the insurer is rated at least "A" by A.M. Best Company, has been
notified of the potential claim and does not dispute coverage) and
the same shall remain undischarged for a period of 45 consecutive
days during which execution shall not be effectively stayed, or any
action shall be
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legally taken by a judgment creditor to attach or levy upon any
assets of the Borrower or any Subsidiary to enforce any such
judgment;
(l) an ERISA Event shall have occurred that, in the opinion
of the Required Lenders, when taken together with all other ERISA
Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount
that could have a Material Adverse Effect;
(m) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party
not to be, a valid and perfected Lien on any Collateral, with the
priority required by the applicable Security Document, except (i) as
a result of the sale or other disposition of the applicable
Collateral in a transaction permitted under the Loan Documents or
(ii) as a result of the Administrative Agent's failure to maintain
possession of any stock certificates, promissory notes or other
instruments delivered to it under the Guarantee and Collateral
Agreement or to properly file UCC financing or continuation
statements under the Guarantee and Collateral Agreement (unless such
failure to file is attributable to the Borrower's or any Subsidiary's
failure to comply with any of its obligations under the Loan
Documents); or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to
the Borrower described in clause (h) or (i) of this Article), and at
any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Borrower, take either or both of the
following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due
and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due
and payable), and thereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall
become due and payable immediately, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived
by the Borrower; and in case of any event with respect to the
Borrower described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and
all fees and other obligations of the Borrower accrued hereunder,
shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby
waived by the Borrower.
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ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent
to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
bank and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any
duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated by the Loan
Documents that the Administrative Agent is required to exercise in writing by
the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.02), and
(c) except as expressly set forth in the Loan Documents, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by
it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own gross
negligence or wilful misconduct. The Administrative Agent shall not be deemed
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv)
the validity, enforceability, effectiveness or genuineness of any Loan
Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
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The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply
to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative
Agent.
Subject to the appointment and acceptance of a successor to the
Administrative Agent as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower. Upon any such resignation, the Required Lenders shall have the
right, subject to the approval by the Borrower which approval shall not be
unreasonably withheld, to appoint a successor. If no successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank and in consultation with the Borrower, appoint a
successor Administrative Agent which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Administrative Agent's resignation
hereunder, the provisions of this Article and Section 9.03 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or
omitted to be taken by any of them while it was acting as Administrative
Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue
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to make its own decisions in taking or not taking action under or based upon
this Agreement, any other Loan Document or related agreement or any document
furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(i) if to the Borrower, to it at 0000 Xxxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxx 00000, Attention of Xxxxx Xxxxxxx (Telecopy No.
(000) 000-0000); with a copy to (other than with respect to
administrative matters): Vestar Capital Partners, Inc., at 0000 00xx
Xx., Xxxxx 0000, Xxxxxx, XX 00000 (Telecopy No. (000) 000-0000);
(ii) if to the Administrative Agent, to JPMorgan Chase Bank,
N.A., Agent Bank Services Group, 0000 Xxxxxx Xxxxxx, Xxxxxxx, XX
00000, Attention of Xxxx Xxxxxx (Telecopy No. (000) 000-0000) and, in
the event of the delivery of a Borrowing Request, Deepa Madhavan
(Telecopy No. (000) 000-0000), with a copy to JPMorgan Chase Bank,
N.A., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxxx
Xxxxxx (Telecopy No. (000) 000-0000);
(iii) if to the Issuing Bank, to it at JPMorgan Chase Bank,
N.A., in care of Agent Bank Services Group, 0000 Xxxxxx Xxxxxx,
Xxxxxxx, XX 00000, Attention of Xxxx Xxxxxx (Telecopy No. (713)
750-2932), with a copy to JPMorgan Chase Bank, N.A., 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxxx Xxxxxx (Telecopy No.
(000) 000-0000);
(iv) if to the Swingline Lender, to it at JPMorgan Chase
Bank, N.A., Agent Bank Services Group, 0000 Xxxxxx Xxxxxx, Xxxxxxx,
XX 00000, Attention of Xxxx Xxxxxx (Telecopy No. (000) 000-0000),
with a copy to JPMorgan Chase Bank, N.A., 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention of Xxxxxxx Xxxxxx (Telecopy No. (212)
270-6637); and
(v) if to any other Lender, to it at its address (or
telecopy number) set forth in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable
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Lender. The Administrative Agent or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval
of such procedures may be limited to particular notices or communications.
(c) Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the Administrative
Agent. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right
or power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Issuing Bank and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section, and then
such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or the Issuing Bank may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Loan Party or Loan Parties that are
parties thereto, in each case with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any
Lender without the written consent of such Lender, (ii) reduce the principal
amount of any Loan or LC Disbursement or reduce the rate of interest thereon,
or reduce any fees payable hereunder, without the written consent of each
Lender directly affected thereby, (iii) postpone the maturity of any Loan, or
any scheduled date of payment of the principal amount of any Term Loan under
Section 2.10, or the required date of reimbursement of any LC Disbursement, or
date for the payment of any interest or any fees payable hereunder, or reduce
the amount of, waive or excuse any such scheduled payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender directly affected thereby, (iv) change Section 2.18(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) change any of the provisions
of this Section or the definition of "Required Lenders" or any other provision
of any Loan Document specifying the number or percentage of Lenders (or
Lenders of any Class)
81
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release
any material Guarantee under the Guarantee and Collateral Agreement (except as
expressly provided in the Guarantee and Collateral Agreement), or limit any
Loan Party's liability in respect of any such material Guarantee without the
written consent of each Lender, (vii) except in strict accordance with the
express provisions thereof, release all or substantially all of the Collateral
from the Liens of the Security Documents, without the written consent of each
Lender, or (viii) change any provisions of any Loan Document in a manner that
by its terms adversely affects the rights in respect of payments due to
Lenders holding Loans of any Class differently than those holding Loans of any
other Class, without the written consent of Lenders holding a majority in
interest of the outstanding Loans and unused Commitments of each affected
Class; provided further that (A) no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent, the Issuing
Bank or the Swingline Lender without the prior written consent of the
Administrative Agent, the Issuing Bank or the Swingline Lender, as the case
may be, and (B) any waiver, amendment or modification of this Agreement that
by its terms affects the rights or duties under this Agreement of the
Revolving Lenders (but not the Term Loan Lenders) or the Term Loan Lenders
(but not the Revolving Lenders) may be effected by an agreement or agreements
in writing entered into by the Borrower and requisite percentage in interest
of the affected Class of Lenders that would be required to consent thereto
under this Section 9.02 if such Class of Lenders were the only Class of
Lenders hereunder at the time.
In connection with any proposed amendment, modification or waiver (a
"Proposed Change") requiring the consent of all affected Lenders, if the
consent of the Supermajority Lenders (and, to the extent any Proposed Change
requires the consent of Lenders holding Loans of any Class pursuant to clause
(viii) of this Section 9.02(b), the consent of more than 66 2/3% in interest
of the outstanding Loans and unused Commitments of such Class) to such
Proposed Change is obtained, but the consent to such Proposed Change of other
Lenders whose consent is required is not obtained (any such Lender whose
consent is not obtained as described in this Section 9.02(b) being referred to
as a "Non-Consenting Lender"), then, so long as the Lender that is acting as
the Administrative Agent is not a Non-Consenting Lender, the Borrower may, at
its sole expense and effort, upon notice to each Non-Consenting Lender and the
Administrative Agent, require such Non-Consenting Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (i) the Borrower shall have received the prior written consent of the
Administrative Agent (and, if a Revolving Commitment is being assigned, the
Issuing Bank and Swingline Lender), which consent shall not unreasonably be
withheld, (ii) such Non-Consenting Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in
LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts) and (iii) such Non-
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Consenting Lender shall not be required to effect any such assignment, unless
all Non-Consenting Lenders are required to effect an assignment and such
Proposed Change shall become effective.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent, in
connection with the syndication of the credit facilities provided for herein,
the preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Issuing Bank or any Lender,
including the reasonable fees, charges and disbursements of any counsel for
the Administrative Agent, the Issuing Bank or any Lender, in connection with
the enforcement or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the
Loans made or Letters of Credit issued hereunder, including all such
reasonable out-of-pocket expenses incurred during any workout, restructuring
or negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Administrative Agent, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the reasonable fees, charges and disbursements of
any counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan or
Letter of Credit or the use of the proceeds therefrom (including any refusal
by the Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any Mortgaged Property or any
other property currently or formerly owned or operated by the Borrower or any
of its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that (x) such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses resulted from the gross negligence or
wilful misconduct of such Indemnitee and (y) this Section 9.03(b) shall not
apply to expenses referred to in Section 9.03(a).
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(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent, the Issuing Bank or the
Swingline Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, the Issuing Bank or the
Swingline Lender, as the case may be, such Lender's pro rata share (determined
as of the time that the applicable unreimbursed expense or indemnity payment
is sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent, the Issuing
Bank or the Swingline Lender in its capacity as such. For purposes hereof, a
Lender's "pro rata share" shall be determined based upon its share of the sum
of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at the time.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as
a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that
(i) the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and
any attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer
its rights or obligations hereunder except in accordance with this Section.
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors
and assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit), Participants (to the extent provided in
paragraph (c) of this Section) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the Issuing
Bank and the Lenders) any legal or equitable right, remedy or claim under or
by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld) of:
(A) the Borrower; provided that no consent of the Borrower
shall be required for an assignment to a Lender, an Affiliate of a
Lender, an Approved Fund or, if an Event of Default has occurred and
is continuing, any other assignee;
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provided further that the consent of the Borrower shall be required
for an assignment to an Affiliate of a Lender or an Approved Fund if
such assignment would result in increased costs to the Borrower under
Section 2.15 or 2.17 at the time of such assignment;
(B) the Administrative Agent; provided that no consent of
the Administrative Agent shall be required for an assignment of all
or any portion of a Term Loan to a Lender, an Affiliate of a Lender
or an Approved Fund; and
(C) the Issuing Bank and the Swingline Lender; provided that
no consent of the Issuing Bank or Swingline Lender shall be required
for an assignment of all or any portion of a Term Loan Commitment or
a Term Loan.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender's Commitment or Loans
of any Class, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than
$2,500,000 (or $1,000,000 in the case of a Term Loan Commitment or
Term Loan), unless each of the Borrower and the Administrative Agent
otherwise consents; provided that no such consent of the Borrower
shall be required if an Event of Default has occurred and is
continuing;
(B) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, except that this clause (B) shall
not be construed to prohibit the assignment of a proportionate part
of all the assigning Lender's rights and obligations in respect of
one Class of Commitments or Loans;
(C) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of $3,500; and
(D) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire.
For purposes of this Section 9.04(b), the term "Approved Fund" has
the following meaning:
"Approved Fund" means any Person (other than a natural person) that
is engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course and that is administered
or managed by a Lender, an Affiliate of a Lender or an entity or an Affiliate
of an entity that administers or manages a Lender.
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(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date specified
in each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption
covering all of the assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 9.04 shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries
in the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent, the Issuing Bank and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender's obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the Borrower,
the Administrative Agent, the Issuing Bank and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and
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obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.18(c) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.17 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 2.17(e) as though it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment
of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a
party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Administrative Agent, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other
amount payable under this Agreement is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
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Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This
Agreement, the other Loan Document and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating
to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of
the Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement, to
the extent such obligations are then due and payable (by acceleration or
otherwise). The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
any Loan Document, or for recognition or
88
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement or any other
Loan Document shall affect any right that the Administrative Agent, the
Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against the
Borrower or its properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a)
to its and its Affiliates'
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and its related Approved Funds' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; provided that the Borrower should be
given advance notice (to the extent practicable) and an opportunity to contest
such disclosure, (d) to any other party to this Agreement, (e) in connection
with the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder; provided that the Borrower should be given
advance notice (to the extent practicable) and an opportunity to contest such
disclosure, (f) subject to an agreement containing provisions substantially
the same as those of this Section, to (i) any assignee of or Participant in,
or any prospective assignee of or Participant in, any of its rights or
obligations under this Agreement, (ii) any pledgee referred to in Section
9.04(d) or (iii) any actual or prospective counterparty (or its advisors) to
any swap or derivative transaction relating to the Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach
of this Section or (ii) becomes available to the Administrative Agent, the
Issuing Bank or any Lender on a nonconfidential basis from a source other than
the Borrower. For the purposes of this Section, "Information" means all
information received from the Borrower relating to the Borrower or its
business, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by the Borrower; provided that, in the case of
information received from the Borrower after the Effective Date, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any
Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively, the "Charges"),
shall exceed the maximum lawful rate (the "Maximum Rate") which may be
contracted for, charged, taken, received or reserved by the Lender holding
such Loan in accordance with applicable law, the rate of interest payable in
respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but
were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been
received by such Lender.
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SECTION 9.14. USA Patriot Act. Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot Act") it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender to identify the Borrower in
accordance with the Patriot Act.
SECTION 9.15. Waiver Under Existing Credit Agreement. Each of the
Lenders party hereto that is a "Lender" under the Existing Credit Agreement
hereby waives advance notice of the termination of the commitments and
prepayment of the loans under the Existing Credit Agreement; provided that
notice thereof is provided on the Effective Date.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
ST. XXXX KNITS INTERNATIONAL,
INCORPORATED
by
----------------------------
Name:
Title:
JPMORGAN CHASE BANK, N.A., as
Administrative Agent
by
----------------------------
Name:
Title:
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SIGNATURE PAGE TO ST. XXXX KNITS
INTERNATIONAL, INCORPORATED
CREDIT AGREEMENT, DATED AS OF
THE DATE FIRST WRITTEN ABOVE
LENDER:
-----------------------------
by
----------------------------
Name:
Title:
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SIGNATURE PAGE TO ST. XXXX KNITS
INTERNATIONAL, INCORPORATED
CREDIT AGREEMENT, DATED AS OF THE
DATE FIRST WRITTEN ABOVE
LENDER:
-----------------------------
by
----------------------------
Name:
Title:
by
----------------------------
Name:
Title:
94
