AMENDED AND RESTATED CREDIT AGREEMENT
among
EYE CARE CENTERS OF AMERICA, INC.,
VARIOUS LENDERS,
FLEET NATIONAL BANK,
as ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A.,
as SYNDICATION AGENT
and
FLEET SECURITIES, INC.
BANC OF AMERICA SECURITIES LLC,
as Co-Lead Arrangers
------------------------------------------
Dated as of December 23, 2002
TABLE OF CONTENTS
Page
----
SECTION 1. AMOUNT AND TERMS OF CREDIT. 1
1.01 THE COMMITMENTS. 1
1.02 MINIMUM AMOUNT OF EACH BORROWING. 4
1.03 NOTICE OF BORROWING. 4
1.04 DISBURSEMENT OF FUNDS. 5
1.05 EVIDENCE OF DEBT; NOTES. 6
1.06 CONVERSIONS. 7
1.07 PRO RATA BORROWINGS 8
1.08 INTEREST. 8
1.09 INTEREST PERIODS. 9
1.10 INCREASED COSTS, ILLEGALITY, ETC. 10
1.11 COMPENSATION. 12
1.12 CHANGE OF LENDING OFFICE. 13
1.13 REPLACEMENT OF LENDERS. 13
SECTION 2. LETTERS OF CREDIT. 15
2.01 LETTERS OF CREDIT. 15
2.02 LETTER OF CREDIT REQUESTS. 16
2.03 LETTER OF CREDIT PARTICIPATIONS. 17
2.04 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. 19
2.05 INCREASED COSTS. 20
SECTION 3. COMMITMENT COMMISSION; FEES; REDUCTIONS OF COMMITMENT. 20
3.01 FEES. 20
3.02 VOLUNTARY TERMINATION OF UNUTILIZED COMMITMENTS. 21
3.03 MANDATORY REDUCTION OF COMMITMENTS. 22
SECTION 4. PREPAYMENTS; PAYMENTS; TAXES. 22
4.01 VOLUNTARY PREPAYMENTS. 23
4.02 MANDATORY REPAYMENTS AND COMMITMENT REDUCTIONS. 23
4.03 METHOD AND PLACE OF PAYMENT. 27
4.04 NET PAYMENTS; TAXES. 28
SECTION 5. CONDITIONS PRECEDENT TO LOANS. 30
5.01 EXECUTION OF AGREEMENT; NOTES. 30
5.02 FEES, ETC. 30
5.03 OPINIONS OF COUNSEL. 31
5.04 CORPORATE DOCUMENTS; PROCEEDINGS; ETC. 31
5.05 EMPLOYEE BENEFIT PLANS; SHAREHOLDERS' AGREEMENTS; MANAGEMENT
AGREEMENTS;COLLECTIVE BARGAINING AGREEMENTS; DEBT AGREEMENTS;
TAX SHARING AGREEMENTS. 31
5.06 REFINANCING. 32
5.07 AMENDED AND RESTATED SUBSIDIARIES GUARANTY. 33
5.08 AMENDED AND RESTATED PLEDGE AGREEMENT. 33
5.09 AMENDED AND RESTATED SECURITY AGREEMENT. 33
5.10 ADVERSE CHANGE, ETC. 34
5.11 LITIGATION. 35
5.12 SOLVENCY CERTIFICATE; ENVIRONMENTAL ANALYSES; INSURANCE. 35
5.13 PRO FORMA BALANCE SHEET; FINANCIAL STATEMENTS; PROJECTIONS. 35
5.14 MINIMUM EBITDA. 35
5.15 CLOSING LEVERAGE RATIO. 35
SECTION 6. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. 35
6.01 NO DEFAULT; REPRESENTATIONS AND WARRANTIES. 35
6.02 NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. 36
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. 36
7.01 CORPORATE STATUS. 36
7.02 CORPORATE POWER AND AUTHORITY. 37
7.03 NO VIOLATION. 37
7.04 LITIGATION. 37
7.05 USE OF PROCEEDS: MARGIN REGULATIONS. 37
7.06 GOVERNMENTAL APPROVALS. 38
7.07 INVESTMENT COMPANY ACT. 38
7.08 PUBLIC UTILITY HOLDING COMPANY ACT. 38
7.09 TRUE AND COMPLETE DISCLOSURE. 38
7.10 FINANCIAL CONDITION, FINANCIAL STATEMENTS. 39
7.11 SECURITY INTERESTS. 40
7.12 REPRESENTATIONS AND WARRANTIES IN OTHER CREDIT DOCUMENTS. 40
7.13 COMPLIANCE WITH ERISA. 41
7.14 CAPITALIZATION. 42
7.15 SUBSIDIARIES. 42
7.16 INTELLECTUAL PROPERTY. 42
7.17 COMPLIANCE WITH STATUTES, ETC. 42
7.18 ENVIRONMENTAL MATTERS. 43
7.19 PROPERTIES. 43
7.20 LABOR RELATIONS. 44
7.21 TAX RETURNS AND PAYMENTS. 44
7.22 SENIOR SUBORDINATED NOTES. 44
7.23 FISCAL QUARTERS. 45
SECTION 8. AFFIRMATIVE COVENANTS. 45
8.01 INFORMATION COVENANTS. 45
8.02 BOOKS, RECORDS AND INSPECTIONS. 48
8.03 INSURANCE. 49
8.04 PAYMENT OF TAXES. 50
8.05 CORPORATE FRANCHISES. 50
8.06 COMPLIANCE WITH STATUTES, ETC. 50
8.07 COMPLIANCE WITH ENVIRONMENTAL LAWS. 51
8.08 ERISA. 52
8.09 GOOD REPAIR. 53
8.10 ADDITIONAL SECURITY; FURTHER ASSURANCES. 53
8.11 FOREIGN SUBSIDIARIES SECURITY. 55
8.12 PERFORMANCE OF OBLIGATIONS. 56
SECTION 9. NEGATIVE COVENANTS. 56
9.01 BUSINESS. 56
9.02 CONSOLIDATION, MERGER, PURCHASE OR SALE OF ASSETS, ETC. 56
9.03 LIENS. 59
9.04 INDEBTEDNESS. 62
9.05 DESIGNATED SENIOR DEBT. 64
9.06 ADVANCES, INVESTMENTS AND LOANS. 64
9.07 DIVIDENDS. 66
9.08 TRANSACTIONS WITH AFFILIATES. 67
2
9.09 CAPITAL EXPENDITURES. 68
9.10 CONSOLIDATED INTEREST COVERAGE RATIO. 69
9.11 MINIMUM CONSOLIDATED EBITDA. 70
9.12 MAXIMUM LEVERAGE RATIO. 70
9.13 LIMITATION ON PREPAYMENTS AND MODIFICATIONS OF INDEBTEDNESS;
MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS
AND CERTAIN OTHER AGREEMENTS; ETC. 71
9.14 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. 72
9.15 LIMITATION ON CREATION OF SUBSIDIARIES. 72
9.16 MAINTENANCE OF CORPORATE SEPARATENESS, ETC. 73
9.17 LIMITATION ON ISSUANCE OF CAPITAL STOCK. 73
SECTION 10. EVENTS OF DEFAULT. 73
10.01 PAYMENTS. 73
10.02 REPRESENTATIONS, ETC. 73
10.03 COVENANTS. 73
10.04 DEFAULT UNDER OTHER AGREEMENTS. 74
10.05 BANKRUPTCY, ETC. 74
10.06 ERISA. 75
10.07 SECURITY DOCUMENTS. 75
10.08 GUARANTIES. 75
10.09 JUDGMENTS. 76
10.10 OWNERSHIP. 76
SECTION 11. DEFINITIONS AND ACCOUNTING TERMS. 76
11.01 DEFINED TERMS. 76
SECTION 12. THE AGENTS. 100
12.01 APPOINTMENT. 100
12.02 NATURE OF DUTIES. 101
12.03 LACK OF RELIANCE ON THE AGENTS. 101
12.04 CERTAIN RIGHTS OF THE AGENTS. 101
12.05 RELIANCE. 102
12.06 INDEMNIFICATION. 102
12.07 EACH AGENT IN ITS INDIVIDUAL CAPACITY. 102
12.08 HOLDERS. 102
12.09 RESIGNATION BY THE AGENTS. 103
SECTION 13. MISCELLANEOUS. 103
13.01 PAYMENT OF EXPENSES, ETC. 103
13.02 RIGHT OF SETOFF. 104
13.03 NOTICES. 105
13.04 BENEFIT OF AGREEMENT. 105
13.05 NO WAIVER; REMEDIES CUMULATIVE. 107
13.06 PAYMENTS PRO RATA. 107
13.07 CALCULATIONS; COMPUTATIONS. 108
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL. 109
13.09 COUNTERPARTS. 109
13.10 EFFECTIVENESS. 110
13.11 HEADINGS DESCRIPTIVE. 110
13.12 AMENDMENT OR WAIVER; ETC. 110
13.13 SURVIVAL. 112
13.14 DOMICILE OF LOANS. 112
13.15 LIMITATION ON ADDITIONAL AMOUNTS, ETC. 112
3
13.16 CONFIDENTIALITY. 113
13.17 REGISTER. 113
13.18 USURY LAWS. 114
SECTION 14. TRANSITIONAL ARRANGEMENTS. 116
14.1. EXISTING CREDIT AGREEMENT SUPERSEDED. 116
14.2. RETURN AND CANCELLATION OF NOTES. 116
14.3. INTEREST AND FEES UNDER SUPERSEDED AGREEMENT. 116
4
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 23, 2002, among
EYE CARE CENTERS OF AMERICA, INC., a Texas corporation (the "Borrower"), the
Lenders party hereto from time to time, FLEET NATIONAL BANK, as Administrative
Agent (in such capacity, the "Administrative Agent") and BANK OF AMERICA, N.A.,
as Syndication Agent (in such capacity, the "Syndication Agent" and, together
with the Administrative Agent, each an "Agent" and collectively the "Agents")
(all capitalized terms used herein and defined in Section 11 are used herein as
therein defined).
W I T N E S S E T H :
WHEREAS, pursuant to that certain Credit Agreement, dated as of April 23,
1998 (as amended and in effect from time to time, the "Existing Credit
Agreement"), by and among the Borrower, Deutsche Bank Trust Company Americas
(f/k/a Bankers Trust Company), as administrative agent (the "Existing Agent"),
Xxxxxxx Xxxxx Capital Corporation, as syndication agent and the lending
institutions party thereto, the Lenders, subject to the terms and conditions
contained therein, provided certain financial accommodations to the Borrower;
WHEREAS, pursuant to a certain Assignment and Acceptance, dated as of
December 23, 2002 (the "Assignment"), among the Borrower, the Existing Agent,
the lendersparty to the Existing Credit Agreement, the Administrative Agent and
the Lenders party to this Agreement, (i) the lenders under the Existing Credit
Agreement have assigned to the Lenders the outstanding loans and other
obligations under the Existing Credit Agreement and (ii) the Existing Agent has
assigned to the Administrative Agent hereunder all of its liens, security
interests, and collateral security under the Existing Credit Agreement;
WHEREAS, the Borrower has requested, among other things, to amend and
restate the Existing Credit Agreement, and the Lenders are willing to amend and
restate the Existing Credit Agreement on the terms and conditions set forth
herein such that the rights, obligations, liens, security interests, and
collateral security assigned pursuant to the Assignment shall hereafter be
evidenced by this Agreement and the other Credit Documents referred to herein;
NOW, THEREFORE, the Borrower, the Lenders and the Agents agree that on the
Effective Date the Existing Credit Agreement is hereby amended and restated in
its entirety as set forth herein and shall remain in full force and effect only
as set forth herein.
SECTION 1. Amount and Terms of Credit.
1.01 THE COMMITMENTS. (a) Subject to and upon the terms and conditions set
forth herein, each Lender with a Term Loan A Commitment severally agrees to
make, on the Effective Date, a term loan (each, a "Term Loan A" and
collectively, "Term Loans A") to the Borrower, which Term Loans A (i) shall be
made and initially
maintained as a single Borrowing of Base Rate Loans (subject to the option to
convert such Term Loans A pursuant to Section 1.06) and (ii) shall be made by
each Lender in that initial aggregate principal amount as is equal to the Term
Loans A Commitment of such Lender on such date. Once repaid, Term Loans A may
not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein, each
Lender with a Term Loan B Commitment severally agrees to make, on the Effective
Date, a term loan (each, a "Term Loan B" collectively, the "Term Loans B" and,
together with Term Loans A, the "Term Loans") to the Borrower, which Term Loans
B (i) shall be made and initially maintained as a single Borrowing of Base Rate
Loans (subject to the option to convert such Term Loans B pursuant to Section
1.06) and (ii) shall be made by each Lender in that initial aggregate principal
amount as is equal to the Term Loans B Commitment of such Lender on such date.
Once repaid, Term Loans B may not be reborrowed.
(c) Subject to and upon the terms and conditions set forth herein, each
Lender with a Revolving Loan Commitment severally agrees, at any time and from
time to time on and after the Effective Date and prior to the RL Maturity Date,
to make a revolving loan or revolving loans (each, a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrower, which Revolving Loans (i)
shall, at the option of the Borrower, be Base Rate Loans or Eurodollar Loans,
provided that except as otherwise specifically provided in Section 1.10(b), all
Revolving Loans comprising the same Borrowing shall at all times be of the same
Type, (ii) may be repaid and reborrowed in accordance with the provisions
hereof, and (iii) shall not exceed for any Lender at any time outstanding that
aggregate principal amount which, when added to the product of (x) such Lender's
Percentage and (y) the sum of (I) the aggregate amount of all Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time and (II) the aggregate principal amount of all
Swingline Loans (exclusive of Swingline Loans which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) then outstanding, equals the Revolving Loan Commitment of such
Lender at such time and (iv) shall not exceed for all Lenders at any time
outstanding that aggregate principal amount which, when added to (x) the amount
of all Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) at such time and (y) the aggregate
principal amount of all Swingline Loans (exclusive of Swingline Loans which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) then outstanding, equals the Revolving
Loan Commitment at such time.
(d) Subject to and upon the terms and conditions herein set forth, the
Swingline Lender in its individual capacity agrees to make at any time and from
time to time on and after the Effective Date and prior to the Swingline Expiry
Date, a revolving loan or revolving loans (each, a "Swingline Loan" and,
collectively, the "Swingline Loans") to the Borrower, which Swingline Loans (i)
shall be made and maintained as
2
Base Rate Loans, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed in aggregate principal amount at any
time outstanding, when combined with the aggregate principal amount of all
Revolving Loans then outstanding and the Letter of Credit Outstandings at such
time, an amount equal to the Revolving Loan Commitment at such time (after
giving effect to any reductions to the Revolving Loan Commitment on such date),
(iv) shall not exceed at any time outstanding the Maximum Swingline Amount and
(v) shall not be extended if the Swingline Lender receives a written notice from
any Agent or the Required Lenders that has not been rescinded that there is a
Default or an Event of Default in existence hereunder. The Swingline Lender
shall not be obligated to make any Swingline Loans at a time when a Lender
Default exists unless the Swingline Lender has entered into arrangements
satisfactory to it and the Borrower to eliminate the Swingline Lender's risk
with respect to the Defaulting Lender's or Lenders' participation in such
Swingline Loans, including by cash collateralizing such Defaulting Lender's or
Lenders' Percentage of the outstanding Swingline Loans.
(e) On any Business Day, the Swingline Lender may, in its sole discretion,
give notice to the other Lenders that its outstanding Swingline Loans shall be
funded with a Borrowing of Revolving Loans (provided that such notice shall be
deemed to have been automatically given upon the occurrence of a Default or an
Event of Default under Section 10.05 or upon the exercise of any of the remedies
provided in the last paragraph of Section 10), in which case a Borrowing of
Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all
Lenders with a Revolving Loan Commitment (without giving effect to any
reductions thereto pursuant to the last paragraph of Section 10) pro rata based
on each Lender's Percentage (determined before giving effect to any termination
of the Revolving Loan Commitments pursuant to the last paragraph of Section 10)
and the proceeds thereof shall be applied directly to the Swingline Lender to
repay the Swingline Lender for such outstanding Swingline Loans. Each such
Lender hereby irrevocably agrees to make Revolving Loans upon one Business Day's
notice pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by the
Swingline Lender notwithstanding (i) the amount of the Mandatory Borrowing may
not comply with the minimum amount for Borrowings otherwise required hereunder,
(ii) whether any conditions specified in Section 6 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) the date of such
Mandatory Borrowing and (v) the amount of the Total Revolving Loan Commitment at
such time. In the event that any Mandatory Borrowing cannot for any reason be
made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower), then each such Lender hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrower on or after
such date and prior to such purchase) from the Swingline Lender such
participations in the outstanding Swingline Loans as shall be necessary to cause
such Lenders to share in such Swingline Loans ratably based upon their
respective Percentages (determined before giving effect to any termination of
the Revolving Loan
3
Commitments pursuant to the last paragraph of Section 10), provided that (x) all
interest payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date as of which the respective participation is
required to be purchased and, to the extent attributable to the purchased
participation, shall be payable to the participant from and after such date and
(y) at the time any purchase of participations pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay the Swingline
Lender interest on the principal amount of participation purchased for each day
from and including the day upon which the Mandatory Borrowing would otherwise
have occurred to but excluding the date of payment for such participation, at
the overnight Federal Funds Rate for the first three days and at the rate
otherwise applicable to Revolving Loans maintained as Base Rate Loans hereunder
for each day thereafter.
1.02 MINIMUM AMOUNT OF EACH BORROWING. (a) The aggregate principal amount
of each Borrowing of any Tranche of Loans shall not be less than the Minimum
Borrowing Amount for such Tranche. More than one Borrowing may occur on the same
date, but at no time shall there be outstanding more than ten Borrowings of
Eurodollar Loans.
1.03 NOTICE OF BORROWING. (a) Whenever the Borrower desires to make a
Borrowing hereunder (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Administrative Agent at its Notice Office at
least one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each Base Rate Loan and at least three Business Days'
prior written notice (or telephonic notice promptly confirmed in writing) of
each Eurodollar Loan to be made hereunder, provided that any such notice shall
be deemed to have been given on a certain day only if given before 1:00 P.M.
(New York time) in the case of a Borrowing of Eurodollar Loans and 1:00 P.M.
(New York time) in the case of a Borrowing of Base Rate Loans on such day. Each
such written notice or written confirmation of telephonic notice (each, a
"Notice of Borrowing"), except as otherwise expressly provided in Section 1.10,
shall be irrevocable and shall be given by the Borrower in the form of Exhibit
A, appropriately completed to specify the aggregate principal amount of the
Loans to be made pursuant to such Borrowing, the date of such Borrowing (which
shall be a Business Day), whether the Loans being made pursuant to such
Borrowing shall constitute Term Loans or Revolving Loans and whether the Loans
being made pursuant to such Borrowing are to be initially maintained as Base
Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the initial Interest
Period to be applicable thereto. The Administrative Agent shall promptly give
each Lender which is required to make Loans of the Tranche specified in the
respective Notice of Borrowing, notice (and the Administrative Agent shall use
its reasonable best efforts to provide such notice not later than an hour before
the close of business on the day received) of such proposed Borrowing, of such
Lender's proportionate share thereof and of the other matters required by the
immediately preceding sentence to be specified in the Notice of Borrowing.
(b)(i) Whenever the Borrower desires to make a Borrowing of Swingline Loans
hereunder, it shall give the Swingline Lender not later than 1:00 P.M. (New York
time)
4
on the date that a Swingline Loan is to be made, written notice or telephonic
notice promptly confirmed in writing of each Swingline Loan to be made
hereunder. Each such notice shall be irrevocable and specify in each case (A)
the date of Borrowing (which shall be a Business Day) and (B) the aggregate
principal amount of the Swingline Loans to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in Section
1.01(e), with the Borrower irrevocably agreeing, by its incurrence of any
Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(e).
(c) Without in any way limiting the obligation of the Borrower to confirm in
writing any telephonic notice of any Borrowing of Loans, the Administrative
Agent or the Swingline Lender, as the case may be, may act without liability
upon the basis of telephonic notice of such Borrowing, believed by the
Administrative Agent or the Swingline Lender, as the case may be, in good faith
to be from the Authorized Officer of the Borrower prior to receipt of written
confirmation. In each such case, the Borrower hereby waives the right to dispute
the Administrative Agent's and the Swingline Lender's record of the terms of
such telephonic notice of such Borrowing of Loans (except in the case of gross
negligence or willful misconduct).
1.04 DISBURSEMENT OF FUNDS. Except as otherwise specifically provided in
the immediately succeeding sentence, no later than 12:00 P.M. (New York time) on
the date specified in each Notice of Borrowing (or (x) in the case of Swingline
Loans, not later than 1:00 P.M. (New York time) on the date specified pursuant
to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later than
12:00 P.M. (New York time) on the date specified in Section 1.01(e)), each
Lender with a Commitment of the respective Tranche will make available its pro
rata portion of each such Borrowing requested to be made on such date (or in the
case of Swingline Loans, the Swingline Lender shall make available the full
amount thereof). All such amounts shall be made available in Dollars and in
immediately available funds at the Payment Office of the Administrative Agent,
and the Administrative Agent will make available to the Borrower at the Payment
Office the aggregate of the amounts so made available by the Lenders (for Loans
other than Swingline Loans, prior to 1:00 P.M. (New York time) on such day, to
the extent of funds actually received by the Administrative Agent prior to 12:00
P.M. (New York time) on such day). Unless the Administrative Agent shall have
been notified by any Lender prior to the date of Borrowing that such Lender does
not intend to make available to the Administrative Agent such Lender's portion
of any Borrowing to be made on such date, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent on
such date of Borrowing and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent
by such Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify the Borrower and the
Borrower shall immediately pay such corresponding
5
amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover on demand from such Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to the
Borrower until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from such
Lender, at the overnight Federal Funds Rate and (ii) if recovered from the
Borrower, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.08. Nothing in this Section 1.04 shall be
deemed to relieve any Lender from its obligation to make Loans hereunder or to
prejudice any rights which the Borrower may have against any Lender as a result
of any failure by such Lender to make Loans hereunder.
1.05 EVIDENCE OF DEBT; NOTES. (a) Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing indebtedness of the
Borrower to such Lender resulting from each Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 13.17, and a subaccount therein for each Lender in which shall be
recorded (i) the amount of each Loan made by such Lender hereunder, the Type
thereof and each 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) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's share
thereof (if any).
(c) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 1.05(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made by
such Lender in accordance with the terms of this Agreement.
(d) The Borrower agrees that, upon the request to the Administrative Agent
by any Lender, the Loans made by such Lender shall be evidenced (i) if Term
Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-1, in the case of Term Loans A, and
Exhibit B-2, in the case of Term Loans B, with blanks appropriately completed in
conformity herewith (each, respectively a "Term Note A" and "Term Note B" and,
collectively, the "Term Notes"), (ii) if Revolving Loans, by a promissory note
duly executed and delivered by the Borrower substantially in the form of Exhibit
B-3, with blanks appropriately completed in conformity herewith (each, a
"Revolving Note" and, collectively, the "Revolving Notes") and (iii) if
Swingline Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-4, with blanks appropriately
completed in conformity herewith (the "Swingline Note").
6
(e) The Term Notes issued to each Lender requesting same shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender and be
dated the Effective Date, (or, in the case of Term Notes issued after the
Effective Date, be dated the date of the issuance thereof), (iii) be in a stated
principal amount equal to the respective Term Loan A or Term Loan B made by such
Lender on the Effective Date (or, in the case of Term Notes issued after the
Effective Date, be in a stated principal amount equal to the outstanding
principal amount of the Term Loan of such Lender on the date of the issuance
thereof), (iv) mature on the Term Loan A Maturity Date in the case of Term Notes
A or the Term Loan B Maturity Date, in the case of Term Notes B, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby,
(vi) be subject to voluntary prepayment as provided in Section 4.01 and
mandatory repayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(f) The Revolving Note issued to each Lender requesting same shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender and be
dated the Effective Date (or, in the case of Revolving Notes issued after the
Effective Date, be dated the date of the issuance thereof), (iii) be in a stated
principal amount equal to the Revolving Loan Commitment of such Lender, (iv)
mature on the RL Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment
as provided in Section 4.01 and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(h) The Swingline Note (if any) issued to the Swingline Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of the Swingline Lender
and be dated the Effective Date (or, in the case of any Swingline Note issued
after the Effective Date, be dated the date of the issuance thereof), (iii) be
in a stated principal amount equal to the Maximum Swingline Amount, (iv) mature
on the Swingline Expiry Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans evidenced thereby and
(vi) be entitled to the benefits of this Agreement and the other Credit
Documents.
(i) Each Lender holding a Note will, prior to any transfer of such Note,
endorse on the reverse side thereof the outstanding principal amount of Loans
evidenced thereby. Failure to make any such notation or any error in any such
notation or endorsement shall not affect the Borrower's obligations in respect
of such Loans.
1.06 CONVERSIONS. The Borrower shall have the option to convert, subject to
the conditions set forth below, on any Business Day all or a portion equal to at
least the applicable Minimum Borrowing Amount of the outstanding principal
amount of Loans pursuant to a single Tranche into a Borrowing or Borrowings (of
the same Tranche) of another Type of Loan, provided that (i) if for any reason
whatsoever any Eurodollar Loans are converted into Base Rate Loans on a day
which is not the last day of an Interest Period applicable to the Loans being
converted, the Borrower shall pay all
7
amounts owing in connection therewith as required by Section 1.11, (ii) no
partial conversion of a Borrowing shall reduce the outstanding principal amount
of such Loans made pursuant to such Borrowing to less than the Minimum Borrowing
Amount applicable thereto, (iii) unless the Required Lenders otherwise
specifically agree in writing, Base Rate Loans may only be converted into
Eurodollar Loans if no Default or Event of Default is in existence on the date
of the conversion, (iv) no conversion pursuant to this Section 1.06 shall result
in a greater number of Eurodollar Borrowings than is permitted under Section
1.02 and (v) Swingline Loans may not be converted pursuant to this Section 1.06.
Each such conversion shall be effected by the Borrower by giving the
Administrative Agent at its Notice Office prior to 1:00 P.M. (New York time) at
least (x) in the case of a conversion to Eurodollar Loans, three Business Days'
prior notice and (y) in the case of a conversion to Base Rate Loans, one
Business Day's prior notice (each, a "Notice of Conversion") specifying the
Loans to be so converted, the Borrowing(s) pursuant to which such Loans were
made and, if to be converted into Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall give each Lender
prompt notice of any such proposed conversion affecting any of its Loans.
1.07 PRO RATA BORROWINGS All Borrowings of Term Loans and Revolving Loans
under this Agreement shall be incurred from the Lenders pro rata on the basis of
their Term Loan Commitments, or Revolving Loan Commitments, as the case may be.
It is understood that no Lender shall be responsible for any default by any
other Lender of its obligation to make Loans hereunder and that each Lender
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to make its Loans hereunder.
1.08 INTEREST. (a) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until the earlier of (i) the maturity
(whether by acceleration or otherwise) of such Base Rate Loan and (ii) the
conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06,
at a rate per annum which shall be equal to the sum of the Base Rate in effect
from time to time, plus: 3.50% in the case of Revolving Loans, 3.25% in the case
of the Term Loans A, and 3.75% in the case of the Term Loans B.
(b) The Borrower agrees to pay interest in respect of the unpaid principal
amount of each Eurodollar Loan from the date the proceeds thereof are made
available to the Borrower until the earlier of (i) the maturity (whether by
acceleration or otherwise) of such Eurodollar Loan and (ii) the conversion of
such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or
1.10(b), as applicable, at a rate per annum which shall, during each Interest
Period applicable thereto, be equal to the sum of the Eurodollar Rate for such
Interest Period, plus: 4.50% in the case of the Revolving Loans, 4.25% in the
case of the Term Loans A, and 4.75% in the case of the Term Loans B.
(c) Overdue principal and, to the extent permitted by law, overdue interest
in respect of each Loan and any other overdue amount payable hereunder shall, in
each case, bear interest at a rate per annum equal to 2% per annum in excess of
the rate
8
otherwise applicable to Base Rate Loans of the respective Tranche of Loans from
time to time; provided that principal in respect of Eurodollar Loans shall bear
interest after the same becomes due (whether by acceleration or otherwise) until
the end of the applicable Interest Period for such Eurodollar Loan at a per
annum rate equal to 2% in excess of the rate of interest applicable on the due
date therefor.
(d) During the continuance of an Event of Default pursuant to Section
10.01, the principal of the Revolving Credit Loans and the Term Loans A and Term
Loans B not overdue shall, until such Event of Default has been cured or
remedied or such Event of Default has been waived by the Required Lenders
pursuant to Sec.13.12, bear interest at a rate per annum equal to 2% in excess
of the rate otherwise applicable to Base Rate Loans and Eurodollar Loans
pursuant to Section 1.08.
(e) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, on any repayment
or prepayment (on the amount repaid or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(f) Upon each Interest Determination Date, the Administrative Agent shall
determine the Eurodollar Rate for each Interest Period applicable to Eurodollar
Loans and shall promptly notify the Borrower and the Lenders thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
1.09 INTEREST PERIODS. At the time it gives any Notice of Borrowing or
Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or on the third Business Day prior to the expiration of an Interest Period
applicable to such Eurodollar Loan (in the case of any subsequent Interest
Period), the Borrower shall have the right to elect, by giving the
Administrative Agent notice thereof, the interest period (each, an "Interest
Period") applicable to such Eurodollar Loan, which Interest Period shall, at the
option of the Borrower, be a one, two, three, six or twelve month period,
provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times have
the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall commence on
the date of Borrowing of such Eurodollar Loan (including the date of any
conversion thereto from a Loan of a different Type) and each Interest Period
occurring thereafter in respect of such Eurodollar Loan shall commence on the
day on which the next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on a day
for which there is no numerically corresponding day in the calendar month
9
at the end of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day; provided, however, that if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day;
(v) unless the Required Lenders otherwise specifically agree in writing, no
Interest Period may be selected at any time when a Default or Event of Default
is then in existence;
(vi) no Interest Period in respect of any Borrowing of any Tranche of Loans
shall be selected which extends beyond the respective Maturity Date for such
Tranche of Loans; and
(vii) no Interest Period of any Borrowing of Term Loans A or Term Loans B
shall be selected which extends beyond any date upon which a mandatory repayment
of such Tranche of Loans will be required to be made under Section 4.02(b) or
(c), as the case may be, if the aggregate principal amount of Term Loans A or
Term Loans B which have Interest Periods which will expire after such date will
be in excess of the aggregate principal amount of Term Loans A or Term Loans B,
as the case may be, then outstanding less the aggregate amount of such required
prepayment.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrower shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in the
case of clause (i) below, the Administrative Agent or (y) in the case of clauses
(ii) and (iii) below, any Lender, shall have determined (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto but, with respect to clause (i) below, may be made only by the
Administrative Agent):
(i) on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to any
Eurodollar Loan because of (x) any change since the date of this Agreement in
10
any applicable law or governmental rule, regulation, order, guideline or request
(whether or not having the force of law) or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, order, guideline or request, such as, for
example, but not limited to: (A) a change in the basis of taxation of payments
to any Lender of the principal of or interest on such Eurodollar Loan or any
other amounts payable hereunder (except for changes in respect of taxes based on
the overall net income of such Lender or of such applicable lending office, or
any franchise tax based on the net income or profits of such Lender, imposed by
the jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein), but
without duplication of any amounts payable in respect of Taxes pursuant to
Section 4.04(a), or (B) a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D to the extent included in
the computation of the Eurodollar Rate and/or (y) other circumstances since the
date of this Agreement affecting such Lender or the interbank Eurodollar market
or the position of such Lender in such market; or
(iii) at any time, that the making or continuance of any Eurodollar Loan
has been made (x) unlawful by any law or governmental rule, regulation or order,
(y) impossible by compliance by any Lender in good faith with any governmental
request (whether or not having force of law) or (z) impracticable as a result of
a contingency occurring after the date of this Agreement which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrower and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given
by the Borrower with respect to Eurodollar Loans which have not yet been
incurred (including by way of conversion) shall be deemed rescinded by the
Borrower, (y) in the case of clause (ii) above, the Borrower shall, subject to
the provisions of Section 13.15 (to the extent applicable) pay to such Lender,
upon written demand therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender in its sole discretion shall determine) as shall be required to
compensate such Lender for such increased costs or reductions in amounts
received or receivable hereunder (a written notice as to the additional amounts
owed to such Lender, showing the basis for and the calculation thereof,
submitted to the Borrower by such Lender in good faith shall, constitute prima
facie evidence of such amounts due and (z) in the case of clause (iii) above,
the Borrower shall take one of the actions specified in Section 1.10(b) as
promptly as possible and, in any event, within the time period required by law.
Each of the Administrative Agent
11
and each Lender agrees that if it gives notice
to the Borrower of any of the events described in clause (i) or (iii) above, it
shall promptly notify the Borrower and, in the case of any such Lender, the
Administrative Agent, if such event ceases to exist. If any such event described
in clause (iii) above ceases to exist as to a Lender, the obligations of such
Lender to make Eurodollar Loans and to convert Base Rate Loans into Eurodollar
Loans on the terms and conditions contained herein shall be reinstated.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, cancel the respective
Borrowing by giving the Administrative Agent telephonic notice (confirmed in
writing) on the same date that the Borrower was notified by the affected Lender
or the Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if
the affected Eurodollar Loan is then outstanding, upon at least one Business
Day's written notice to the Administrative Agent, require the affected Lender to
convert such Eurodollar Loan into a Base Rate Loan, provided that, if more than
one Lender is affected at any time, then all affected Lenders must be treated
the same pursuant to this Section 1.10(b).
(c) If at any time after the date of this Agreement any Lender determines
that the introduction of or any change in any applicable law or governmental
rule, regulation, order, guideline, directive or request (whether or not having
the force of law) concerning capital adequacy, or any change in interpretation
or administration thereof by any governmental authority, central bank or
comparable agency, in each case introduced or changed after the date hereof,
will have the effect of increasing the amount of capital required or expected to
be maintained by such Lender or any corporation controlling such Lender based on
the existence of such Lender's Commitments hereunder or its obligations
hereunder, then the Borrower shall, subject to the provisions of Section 13.15
(to the extent applicable), pay to such Lender, upon its written demand
therefor, such additional amounts as shall be required to compensate such Lender
or such other corporation for the increased cost to such Lender or such other
corporation or the reduction in the rate of return to such Lender or such other
corporation as a result of such increase of capital. In determining such
additional amounts, each Lender will act reasonably and in good faith and will
use averaging and attribution methods which are reasonable, provided that such
Lender's determination of compensation owing under this Section 1.10(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Lender, upon determining that any additional amounts will be
payable pursuant to this Section 1.10(c), will give prompt written notice
thereof to the Borrower, which notice shall show in reasonable detail the basis
for and calculation of such additional amounts.
1.11 COMPENSATION. The Borrower shall, subject to the provisions of Section
13.15 (to the extent applicable), compensate each Lender, upon its written
request (which request shall set forth in reasonable detail the basis for
requesting and the calculation of such compensation), for all reasonable losses,
expenses and liabilities
12
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Lender to fund its Eurodollar Loans but excluding any loss of anticipated
profit) which such Lender may sustain: (i) if for any reason (other than a
default by such Lender or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii)
if any repayment (including any repayment made pursuant to Section 4.02, as a
result of an acceleration of the Loans pursuant to Section 10 or in connection
with the replacement of a Lender pursuant to Section 1.13 or Section 13.12(b))
or conversion of any of its Eurodollar Loans occurs on a date which is not the
last day of an Interest Period with respect thereto; (iii) if any prepayment of
any of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Loans when required by the terms of this
Agreement or any Note held by such Lender or (y) any election made pursuant to
Section 1.10(b). Calculation of all amounts payable to a Lender under this
Section 1.11 shall be made as though that Lender had actually funded its
relevant Eurodollar Loan through the purchase of a Eurodollar deposit bearing
interest at the Eurodollar Rate in an amount equal to the amount of that Loan,
having a maturity comparable to the relevant Interest Period and through the
transfer of such Eurodollar deposit from an offshore office of that Lender to a
domestic office of that Lender in the United States of America; provided,
however, that each Lender may fund each of its Eurodollar Loans in any manner it
sees fit and the foregoing assumption shall be utilized only for the calculation
of amounts payable under this Section 1.11.
1.12 CHANGE OF LENDING OFFICE. Each Lender agrees that on the occurrence of
any event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 2.05 or Section 4.04 with respect to such Lender, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans
or Letters of Credit affected by such event, or, upon the occurrence of any
event giving rise to the operation of Section 4.04(a), use such other reasonable
efforts to eliminate or reduce such increased Taxes, provided that such
designation or other action is made on such terms that, in the sole judgment of
such Lender, such Lender and its lending office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of such Section. Nothing in this Section 1.12
shall affect or postpone any of the obligations of the Borrower or the right of
any Lender provided in Sections 1.10, 2.05 and 4.04.
1.13 REPLACEMENT OF LENDERS. (x) If any Lender becomes a Defaulting Lender
or otherwise defaults in its obligations to make Loans or fund Unpaid Drawings,
(y) upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with respect
to any Lender which results in such Lender charging to the Borrower increased
costs in excess of those being generally charged by the other Lenders, or (z) as
provided in Section 13.12(b) in the case
13
of certain refusals by a Lender to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Lenders, the Borrower shall have the right, if no
Default or Event of Default will exist immediately after giving effect to the
respective replacement, to either replace such Lender (the "Replaced Lender")
with one or more other Eligible Transferee or Transferees, none of whom shall
constitute a Defaulting Lender at the time of such replacement (collectively,
the "Replacement Lender") and each of whom shall be reasonably acceptable to the
Administrative Agent or, at the option of the Borrower, to replace only (a) the
Revolving Loan Commitment (and outstandings pursuant thereto) of the Replaced
Lender with an identical Revolving Loan Commitment provided by the Replacement
Lender, or (b) in the case of a replacement as provided in Section 13.12(b)
where the consent of the respective Lender is required with respect to less than
all Tranches of its Loans or Commitments, the Commitments and/or outstanding
Loans of such Lender in respect of each Tranche where the consent of such Lender
would otherwise be individually required, with identical Commitments and/or
Loans of the respective Tranche provided by the Replacement Lender, provided
that (i) at the time of any replacement pursuant to this Section 1.13, the
Replacement Lender shall enter into one or more Assignment and Acceptance
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant to
said Section 13.04(b) to be paid by the Replacement Lender) pursuant to which
the Replacement Lender shall acquire all of the Commitments and outstanding
Loans (or, in the case of the replacement of only (a) the Revolving Loan
Commitment, the Revolving Loan Commitment and outstanding Revolving Loans, (b)
the outstanding Term Loan A, such outstanding Term Loan A, or (c) the
outstanding Term Loan B, such outstanding Term Loan B) and in each case (except
for the replacement of only a portion of all of the outstanding Term Loans of
the respective Lender) participations in Letters of Credit by, the Replaced
Lender and, in connection therewith, shall pay to (x) the Replaced Lender in
respect thereof an amount equal to the sum (without duplication) of (A) an
amount equal to the principal of, and all accrued interest on, all applicable
outstanding Loans of the Replaced Lender, (B) except in the case of the
replacement of only the outstanding Term Loan A and/or Term Loan B of a Replaced
Lender, an amount equal to all Unpaid Drawings that have been funded by (and not
reimbursed to) such Replaced Lender, together with all then unpaid interest with
respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Lender (but only with respect to
the relevant Tranche, in the case of the replacement of less than all Tranches
of Loans then held by the respective Replaced Lender) pursuant to Section 3.01
and (y) except in the case of the replacement of only the outstanding Term Loan
A and/or Term Loan B of a Replaced Lender, the respective Issuing Lender an
amount equal to such Replaced Lender's Percentage of any Unpaid Drawing (which
at such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Lender and to the Swingline Lender an amount
equal to such Replaced Lender's Percentage of any Mandatory Borrowing to the
extent such amount was not theretofore funded by such Replaced Lender, and (ii)
all obligations of the Borrower owing to the Replaced Lender (other than those
(a) specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being, paid or (b)
relating to any Tranche of Loans and/or Commitments of the respective Replaced
14
Lender which will remain outstanding after giving effect to the respective
replacement) shall be paid in full to such Replaced Lender concurrently with
such replacement. Upon the execution of the respective Assignment and Acceptance
Agreements, the payment of amounts referred to in clauses (i) and (ii) above
and, if so requested by the Replacement Lender, delivery to the Replacement
Lender of the appropriate Note or Notes executed by the Borrower, the
Replacement Lender shall become a Lender hereunder and, unless the respective
Replaced Lender continues to have outstanding Loans or a Commitment hereunder,
the Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to indemnification provisions under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06), which shall
survive as to such Replaced Lender.
SECTION 2. Letters of Credit.
2.01 LETTERS OF CREDIT. (a) Subject to and upon the terms and conditions
herein set forth, the Borrower may request that any Issuing Lender issue, at any
time and from time to time on and after the Effective Date and prior to the RL
Maturity Date, (x) for the account of the Borrower and for the benefit of any
holder (or any trustee, agent or other similar representative for any such
holders) of L/C Supportable Indebtedness of the Borrower or any of its
Subsidiaries, an irrevocable sight standby letter of credit, in a form
customarily used by such Issuing Lender or in such other form as has been
approved by such Issuing Lender (each such standby letter of credit, a "Standby
Letter of Credit") in support of such L/C Supportable Indebtedness and (y) for
the account of the Borrower and for the benefit of sellers of goods or materials
to the Borrower or any of its Subsidiaries, an irrevocable sight commercial
letter of credit in a form customarily used by such Issuing Lender or in such
other form as has been approved by such Issuing Lender (each such commercial
letter of credit, a "Trade Letter of Credit," and each such Trade Letter of
Credit and each Standby Letter of Credit, a "Letter of Credit") in support of
commercial transactions of the Borrower and its Subsidiaries.
(b) Subject to the terms and conditions contained herein, the
Administrative Agent hereby agrees that it will (and at the Borrower's request
each other Issuing Lender may, at its option, agree that it will), at any time
and from time to time on or after the Effective Date and prior to the RL
Maturity Date, following its receipt of the respective Letter of Credit Request,
issue for the account of the Borrower one or more Letters of Credit (x) in the
case of Standby Letters of Credit, in support of such L/C Supportable
Indebtedness of the Borrower or any of its Subsidiaries as is permitted to
remain outstanding without giving rise to a Default or Event of Default
hereunder and (y) in the case of Trade Letters of Credit, in support of sellers
of goods or materials as referenced in Section 2.01(a), provided that the
respective Issuing Lender shall be under no obligation to issue any Letter of
Credit of the types described above if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing Lender
from issuing such Letter of Credit or any requirement of law applicable to such
15
Issuing Lender or any request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction over such Issuing Lender
shall prohibit, or request that such Issuing Lender refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Lender with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuing Lender is
not otherwise compensated) not in effect on the date hereof, or any unreimbursed
loss, cost or expense which was not applicable, in effect or known to such
Issuing Lender as of the date hereof and which such Issuing Lender in good xxxxx
xxxxx material to it; or
(ii) such Issuing Lender shall have received notice from any Lender prior
to the issuance of such Letter of Credit of the type described in the second
sentence of Section 2.02(b).
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time would
exceed either (x) $10,000,000 or (y) when added to the aggregate principal
amount of all Revolving Loans then outstanding and Swingline Loans then
outstanding, an amount equal to the Revolving Loan Commitment, (ii) each Letter
of Credit shall be denominated in Dollars, (iii) each Letter of Credit shall by
its terms terminate (x) in the case of Standby Letters of Credit, on or before
the earlier of (A) the date which occurs 12 months after the date of the
issuance thereof (although any such Standby Letter of Credit may be extendible
for successive periods of up to 12 months, on terms acceptable to the Issuing
Lender thereof) and (B) the date which is fourteen (14) Business Days prior to
the RL Maturity Date, and (y) in the case of Trade Letters of Credit, on or
before the earlier of (A) the date which occurs 360 days after the date of
issuance thereof and (B) the date which is 45 days prior to the RL Maturity Date
and (iv) the Stated Amount of each Letter of Credit upon issuance shall be not
less than $10,000 or such lesser amount as is acceptable to the respective
Issuing Lender.
(d) Notwithstanding the foregoing, in the event a Lender Default exists, no
Issuing Lender shall be required to issue any Letter of Credit unless such
Issuing Lender has entered into arrangements satisfactory to it and the Borrower
to eliminate such Issuing Lender's risk with respect to the Defaulting Lender's
or Lenders' participation in all Letters of Credit, including by cash
collateralizing such Defaulting Lender's or Lenders' Percentage of all Letter of
Credit Outstandings.
2.02 LETTER OF CREDIT REQUESTS. (a) Whenever the Borrower desires that a
Letter of Credit be issued for its account, the Borrower shall give the
Administrative Agent and the respective Issuing Lender at least five Business
Days' (or such shorter period as is acceptable to the respective Issuing Lender)
written notice thereof. Each notice shall be in the form of Exhibit D (each, a
"Letter of Credit Request").
16
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.01(c). Unless the respective Issuing Lender has received notice from any
Lender before it issues a Letter of Credit that one or more of the conditions
specified in Section 5 or Section 6, as applicable, are not then satisfied, or
that the issuance of such Letter of Credit would violate Section 2.01(c), then
such Issuing Lender shall issue the requested Letter of Credit for the account
of the Borrower in accordance with such Issuing Lender's usual and customary
practices. Upon the issuance of or amendment to any Standby Letter of Credit,
such Issuing Lender shall promptly notify each Lender of such issuance or
amendment and such notice shall be accompanied by a copy of the issued Standby
Letter of Credit or amendment, as the case may be. For Trade Letters of Credit
on which the Issuing Lender is other than the Administrative Agent, the Issuing
Lender will send to the Administrative Agent by facsimile transmission, promptly
on the first Business Day of each week, the daily aggregate Stated Amount of
Trade Letters of Credit issued by such Issuing Lender and outstanding during the
preceding week. The Administrative Agent shall deliver to each Lender, after
each calendar month end and upon each payment of the Letter of Credit Fee, a
report setting forth for the relevant period the daily aggregate Stated Amount
of all outstanding Trade Letters of Credit during such period.
2.03 LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the issuance by
any Issuing Lender of any Letter of Credit, such Issuing Lender shall be deemed
to have sold and transferred to each Lender with a Revolving Loan Commitment,
other than such Issuing Lender (each such Lender, in its capacity under this
Section 2.03, a "Participant"), and each such Participant shall be deemed
irrevocably and unconditionally to have purchased and received from such Issuing
Lender, without recourse or warranty, an undivided interest and participation,
to the extent of such Participant's Percentage, in such Letter of Credit, each
drawing made thereunder and the obligations of the Borrower under this Agreement
with respect thereto, and any security therefor or guaranty pertaining thereto.
Upon any change in the Revolving Loan Commitments or Percentages of the Lenders
pursuant to Section 1.13 or 13.04, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this Section 2.03 to reflect the
new Percentages of the assignor and assignee Lender or of all Lenders with
Revolving Loan Commitments, as the case may be.
(b) In determining whether to pay under any Letter of Credit, such Issuing
Lender shall have no obligation relative to the other Lenders other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by any Issuing Lender under or in connection with any Letter
of Credit if taken or omitted in the absence of gross negligence or willful
misconduct as determined by a court of competent jurisdiction, shall not create
for such Issuing Lender any resulting liability to the Borrower or any Lender.
17
(c) In the event that any Issuing Lender makes any payment under any Letter
of Credit and the Borrower shall not have reimbursed such amount in full to such
Issuing Lender pursuant to Section 2.04(a), such Issuing Lender shall promptly
notify the Administrative Agent, which shall promptly notify each Participant,
of such failure, and each Participant shall promptly and unconditionally pay to
such Issuing Lender the amount of such Participant's Percentage of such
unreimbursed payment in Dollars and in same day funds. If the Administrative
Agent so notifies, prior to 11:00 A.M. (New York time) on any Business Day, any
Participant required to fund a payment under a Letter of Credit, such
Participant shall make available to such Issuing Lender in Dollars such
Participant's Percentage of the amount of such payment on such Business Day in
same day funds. If and to the extent such Participant shall not have so made its
Percentage of the amount of such payment available to such Issuing Lender, such
Participant agrees to pay to such Issuing Lender, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to such Issuing Lender at the overnight Federal Funds
Rate. The failure of any Participant to make available to such Issuing Lender
its Percentage of any payment under any Letter of Credit shall not relieve any
other Participant of its obligation hereunder to make available to such Issuing
Lender its Percentage of any Letter of Credit on the date required, as specified
above, but no Participant shall be responsible for the failure of any other
Participant to make available to such Issuing Lender such other Participant's
Percentage of any such payment.
(d) Whenever any Issuing Lender receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Lender shall forward such payment to
the Administrative Agent, which in turn shall distribute to each Participant
which has paid its Percentage thereof, in Dollars and in same day funds, an
amount equal to such Participant's share (based upon the proportionate aggregate
amount originally funded by such Participant to the aggregate amount funded by
all Participants) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.
(e) Upon the request of any Participant, each Issuing Lender shall furnish
to such Participant copies of any Letter of Credit issued by it and such other
documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to each Issuing
Lender with respect to Letters of Credit issued by it shall be irrevocable and
not subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right which the
Borrower or any of its Subsidiaries may have at any time against a beneficiary
18
named in a Letter of Credit, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), the Administrative Agent,
any Issuing Lender, any Participant, or any other Person, whether in connection
with this Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction between the
Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.04 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrower hereby
agrees to reimburse the respective Issuing Lender, by making payment to the
Administrative Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by it under any Letter of Credit (each such
amount, so paid until reimbursed, an "Unpaid Drawing"), no later than three
Business Days after the date of such payment or disbursement, with interest on
the amount so paid or disbursed by such Issuing Lender, to the extent not
reimbursed prior to 1:00 P.M. (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but excluding the
date such Issuing Lender was reimbursed by the Borrower therefor at a rate per
annum which shall be the Base Rate in effect from time to time plus 3.50%;
provided, however, to the extent such amounts are not reimbursed prior to 1:00
P.M. (New York time) on the third Business Day following such payment or
disbursement, interest shall thereafter accrue on the amounts so paid or
disbursed by such Issuing Lender (and until reimbursed by the Borrower) at a
rate per annum which shall be the Base Rate in effect from time to time plus
5.50%, in each such case, with interest to be payable on demand. The respective
Issuing Lender shall give the Borrower prompt notice of each Drawing under any
Letter of Credit, provided that the failure to give any such notice shall in no
way affect, impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.04 to reimburse
the respective Issuing Lender with respect to payments on Letters of Credit
(each, a "Drawing") (including, in each case, interest thereon) shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which the Borrower may have or
have had against any Lender (including in its capacity as issuer of the Letter
of Credit or as Participant), or any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing, the respective Issuing Lender's
only obligation to the Borrower being to confirm that any documents required to
be delivered under such Letter of Credit appear to have been delivered and that
they appear to substantially comply on their face with the requirements of such
Letter of Credit; provided that the Borrowers shall not be
19
obligated to reimburse such Issuing Lender for any wrongful payment made by such
Issuing Lender under a Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct as determined by a court of
competent jurisdiction on the part of such Issuing Lender.
2.05 INCREASED COSTS. If at any time after the date of this Agreement, the
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Issuing Lender or any Participant with any request
or directive by any such authority (whether or not having the force of law),
shall either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against letters of credit issued by any Issuing
Lender or participated in by any Participant, or (ii) impose on any Issuing
Lender or any Participant any other conditions relating, directly or indirectly,
to this Agreement or any Letter of Credit; and the result of any of the
foregoing is to increase the cost to any Issuing Lender or any Participant of
issuing, maintaining or participating in any Letter of Credit, or reduce the
amount of any sum received or receivable by any Issuing Lender or any
Participant hereunder or reduce the rate of return on its capital with respect
to Letters of Credit (except for changes in respect of taxes based on the net
income or profits of such Issuing Lender or such Participant, or any franchise
tax based on the net income or profits of such Lender or Participant, imposed by
the jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein), but
without duplication of any amounts payable in respect of Taxes pursuant to
Section 4.04(a), then, upon demand to the Borrower by such Issuing Lender or any
Participant (a copy of which demand shall be sent by such Issuing Lender or such
Participant to the Administrative Agent) and subject to the provisions of
Section 13.15 (to the extent applicable), the Borrower shall pay to such Issuing
Lender or such Participant such additional amount or amounts as will compensate
such Lender for such increased cost or reduction in the amount receivable or
reduction on the rate of return on its capital. Any Issuing Lender or any
Participant, upon determining that any additional amounts will be payable
pursuant to this Section 2.05, will give prompt written notice thereof to the
Borrower, which notice shall include a certificate submitted to the Borrower by
such Issuing Lender or such Participant (a copy of which certificate shall be
sent by such Issuing Lender or such Participant to the Administrative Agent),
setting forth in reasonable detail the basis for and the calculation of such
additional amount or amounts necessary to compensate such Issuing Lender or such
Participant. The certificate required to be delivered pursuant to this Section
2.05 shall, if delivered in good faith and absent manifest error, be final and
conclusive and binding on the Borrower.
SECTION 3. RL Commitment Commission; Fees; Reductions of Commitment.
3.01 FEES. (a) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting Lender with a Revolving Loan Commitment a
commitment commission (the "RL Commitment Commission") for the period from the
Effective Date to but not including the RL Maturity Date (or to but not
including such
20
earlier date as the Total Revolving Loan Commitment shall have been terminated),
computed at a rate per annum for each day equal to 0.50% of the Unutilized
Revolving Loan Commitment of such Non-Defaulting Lender on such day. Accrued RL
Commitment Commission shall be due and payable quarterly in arrears on each
Quarterly Payment Date and on the RL Maturity Date or such earlier date upon
which the Total Revolving Loan Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent for distribution
to each Non-Defaulting Lender with a Revolving Loan Commitment (based on their
respective Percentages) a fee in respect of each Letter of Credit issued
hereunder (the "Letter of Credit Fee"), for the period from and including the
date of issuance of such Letter of Credit to and including the termination of
such Letter of Credit, computed at a rate per annum equal to 4.50% of the daily
average Stated Amount of such Letter of Credit. Accrued Letter of Credit Fees
shall be due and payable quarterly in arrears on each Quarterly Payment Date and
upon the first day on or after the termination of the Total Revolving Loan
Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the respective Issuing Lender, for its
own account, a facing fee in respect of each Letter of Credit issued for its
account hereunder (the "Facing Fee") for the period from and including the date
of issuance of such Letter of Credit to and including the termination of such
Letter of Credit, computed at a rate equal to 0.125% per annum of the daily
average Stated Amount of such Letter of Credit; provided that in no event shall
the annual Facing Fee with respect to any Letter of Credit be less than $500, it
being agreed that, on the date of issuance of any Letter of Credit and on each
anniversary thereof prior to the termination of such Letter of Credit, $500 will
be paid toward the next year's Facing Fees for such Letter of Credit, which
amount shall be credited in direct order to the Facing Fees which would
otherwise be payable with respect to such Letter of Credit in the succeeding
annual period. Accrued Facing Fees shall be due and payable quarterly in arrears
on each Quarterly Payment Date and on the date upon which the Total Revolving
Loan Commitment has been terminated and such Letter of Credit has been
terminated in accordance with its terms.
(d) The Borrower shall pay, upon each payment under, issuance of, or
amendment to, any Letter of Credit, such amount as shall at the time of such
event be the administrative charge which the respective Issuing Lender is
generally imposing in connection with such occurrence with respect to letters of
credit.
(e) The Borrower shall pay to each of the Agents, for their own account,
such other fees as have been agreed to in writing by the Borrower and the
Agents.
3.02 VOLUNTARY TERMINATION OF UNUTILIZED COMMITMENTS. Upon at least one
Business Day's prior notice to the Administrative Agent at its Notice Office
(which notice the Administrative Agent shall promptly transmit to each of the
Lenders), the Borrower shall have the right, at any time or from time to time,
without premium or penalty, to terminate the Total Unutilized Revolving Loan
Commitment, in whole or in part, in a minimum amount of $500,000 and integral
21
multiples of $500,000 thereafter in the case of partial reductions to the Total
Unutilized Revolving Loan Commitment, provided that (i) each such reduction
shall apply proportionately to permanently reduce the Revolving Loan Commitment
of each Lender with such a Commitment and (ii) no such reduction to the Total
Unutilized Revolving Loan Commitment shall in any case be in an amount which
would cause the Revolving Loan Commitment of any Lender to be reduced (as
required by preceding clause (i)) by an amount which exceeds the remainder of
(x) the Unutilized Revolving Loan Commitment of such Lender as in effect
immediately before giving effect to such reduction minus (y) such Lender's
Percentage of the aggregate principal amount of Swingline Loans then
outstanding.
3.03 MANDATORY REDUCTION OF COMMITMENTS. (a)(i) In addition to any other
mandatory commitment reductions pursuant to this Section 3.03, each of the Total
Term Loan A Commitment and the Total Term Loan B Commitment shall terminate in
its entirety on the Effective Date (after giving effect to the making of the
Term Loans on such date).
(b) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, the Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Lender) shall terminate in its entirety on the RL Maturity
Date.
(c) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, on each date after the Effective Date upon which a mandatory
prepayment of Loans pursuant to Sections 4.02(d) through (h), inclusive, is
required (and exceeds in amount the aggregate principal amount of Loans then
outstanding) or would be required if Loans were then outstanding, to extent that
but for the reduction provided for in this Section 3.03(c), the Borrower would
be required to make an offer to purchase Senior Subordinated Notes and/or
Additional Subordinated Debt as a result of any event set forth in such
Sections, the Total Revolving Loan Commitment (and the Revolving Loan Commitment
of each Lender with such a Commitment) shall be permanently reduced by the
amount, if any, by which the amount required to be applied pursuant to said
Section (determined as if an unlimited amount of Loans were actually
outstanding) exceeds the aggregate principal amount of Loans then outstanding.
(d) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, the Total Commitment (and the Term Loan A Commitment, the
Term Loan B Commitment and Revolving Loan Commitment of each Lender) shall
terminate on any date on which a Change of Control shall occur.
(e) Each reduction to the Total Term Loan A Commitment, the Total Term Loan
B Commitment and the Total Revolving Loan Commitment pursuant to this Section
3.03 (or pursuant to Section 4.02) shall be applied proportionately to reduce
the Term Loan A Commitment, the Term Loan B Commitment or the Revolving Loan
Commitment, as the case may be, of each Lender with such a Commitment.
SECTION 4. Prepayments; Payments; Taxes.
22
4.01 VOLUNTARY PREPAYMENTS. The Borrower shall have the right to prepay the
Loans, without premium or penalty, in whole or in part at any time and from time
to time on the following terms and conditions: (i) the Borrower shall give the
Administrative Agent prior to 12:00 P.M. (New York time) at its Notice Office at
least one Business Day's prior written notice (or telephone notice promptly
confirmed in writing) of its intent to prepay Loans (or same day notice in the
case of Swingline Loans provided such notice is given prior to 12:00 P.M. New
York time)) whether Term Loans, Revolving Loans or Swingline Loans shall be
prepaid, the amount of such prepayment and the Type(s) of Loans to be prepaid
and, in the case of Eurodollar Loans, the specific Borrowing or Borrowings
pursuant to which made, which notice the Administrative Agent shall promptly
transmit to each of the Lenders; (ii) each prepayment shall be in an aggregate
principal amount of at least $500,000 (or $25,000 in the case of Swingline
Loans) or such lesser amount of a Borrowing which is outstanding, provided that
if any partial prepayment of Eurodollar Loans made pursuant to any Borrowing
shall reduce the outstanding Eurodollar Loans made pursuant to such Borrowing to
an amount less than the Minimum Borrowing Amount applicable thereto, then such
Borrowing may not be continued as a Borrowing of Eurodollar Loans and any
election of an Interest Period with respect thereto given by the Borrower shall
have no force or effect; (iii) at the time of any prepayment of Eurodollar Loans
pursuant to this Section 4.01 on any date other than the last day of the
Interest Period applicable thereto, the Borrower shall pay the amounts required
pursuant to Section 1.11; and (iv) each prepayment in respect of any Loans made
pursuant to a Borrowing shall be applied pro rata among the Loans comprising
such Borrowing; provided that at the Borrower's election in connection with any
prepayment of Revolving Loans pursuant to this Section 4.01, such prepayment
shall not be applied to any Revolving Loan of a Defaulting Lender. Each
prepayment of principal of any Term Loans pursuant to this Section 4.01 shall be
applied to reduce the then remaining Term Loan A Scheduled Repayments and Term
Loan B Scheduled Repayments in the direct order of maturity for amounts of Term
Loan A Scheduled Repayments and Term Loan B Scheduled Repayments owing during
the immediately following one year period, after giving effect to all prior
reductions thereto, and applied pro rata for all amounts repaid in excess of
such amount.
4.02 MANDATORY REPAYMENTS AND COMMITMENT REDUCTIONS. (a) On any day on
which the sum of the aggregate outstanding principal amount of the Revolving
Loans, Swingline Loans and the Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment as then in effect, the Borrower shall prepay on such
day principal of Swingline Loans and, after the Swingline Loans have been repaid
in full, Revolving Loans in an amount equal to such excess. If, after giving
effect to the prepayment of all outstanding Swingline Loans and Revolving Loans,
the aggregate amount of the Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment as then in effect, the Borrower shall pay to the
Administrative Agent at the Payment Office on such date an amount of cash or
Cash Equivalents equal to the amount of such excess (up to a maximum amount
equal to the Letter of Credit Outstandings at such time), such cash or Cash
Equivalents to be held as security for all obligations of the Borrower hereunder
in a cash collateral account to be established by the Administrative Agent.
23
(b) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, on each date set forth below, the Borrower shall
be required to repay that principal amount of Term Loan A, to the extent then
outstanding, as is set forth opposite such date (each such repayment, as the
same may be reduced as provided in Sections 4.01 and 4.02(i), a "Term Loan A
Scheduled Repayment," and each such date, a "Term Loan A Scheduled Repayment
Date"):
Term Loan A
Scheduled Repayment Date Amount
-------------------------- ------
The last Business Day of FQ1 2003 $3,750,000
The last Business Day of FQ2 2003 $3,750,000
The last Business Day of FQ3 2003 $3,750,000
The last Business Day of FQ4 2003 $3,750,000
The last Business Day of FQ1 2004 $5,000,000
The last Business Day of FQ2 2004 $5,000,000
The last Business Day of FQ3 2004 $5,000,000
The last Business Day of FQ4 2004 $5,000,000
The last Business Day of FQ1 2005 $5,000,000
The last Business Day of FQ2 2005 $5,000,000
The last Business Day of FQ3 2005 $5,000,000
Term Loan A Maturity Date $5,000,000
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrower shall be required to repay that principal amount of Term Loan B, to the
extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(i),
a "Term Loan B Scheduled Repayment," and each such date, a "Term Loan B
Scheduled Repayment Date"):
Term Loan B
Scheduled Repayment Date Amount
-------------------------- ------
The last Business Day of FQ1 2006 $5,000,000
The last Business Day of FQ2 2006 $5,000,000
The last Business Day of FQ3 2006 $5,000,000
The last Business Day of FQ4 2006 $5,000,000
The last Business Day of FQ1 2007 $10,500,000
The last Business Day of FQ2 2007 $10,500,000
The last Business Day of FQ3 2007 $10,500,000
Term Loan B Maturity Date $10,500,000
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within one Business Day following each
date after the Effective Date upon which the Borrower or any of its Subsidiaries
receives any
24
proceeds from any sale or issuance of its equity (other than proceeds received
from the exercise of stock options granted to management as permitted hereunder,
the issuance of common equity by a Subsidiary of the Borrower to the Borrower or
a Subsidiary Guarantor, and the proceeds from any sale or issuance of equity
raised for the purpose of completing Permitted Acquisitions in an amount not to
exceed $10,000,000 in the aggregate (the proceeds described herein, the
"Excluded Proceeds")) an amount equal to 100% of the cash proceeds of the
respective sale or issuance (net of underwriting discounts and commissions and
other direct costs associated therewith, including, without limitation, legal
fees and expenses) shall be applied as a mandatory repayment of principal of
outstanding Loans in accordance with the requirements of Section 4.02(i) and
(j); provided that (i) the Borrower shall not be required to comply with this
Section 4.02(d) until such time as the net proceeds from all such issuances of
equity exceed $1,000,000, (ii) if THL or other Permitted Holders shall
contribute equity other than Excluded Proceeds, an amount equal to 50% of the
cash proceeds of the respective sale or issuance (net of underwriting discounts
and commissions and other direct costs associated therewith, including, without
limitation, legal fees and expenses) shall be applied as a mandatory repayment
of principal of outstanding Loans in accordance with the requirements of Section
4.02(i) and (j), and (iii) the Borrower shall not be required to comply with
this Section 4.02(d) if THL or other Permitted Holders shall contribute
additional equity to the extent the proceeds of such equity are used to
terminate the Commitments of a Lender in accordance with Section 13.12(c).
(e) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, within one Business Day following each date after
the Effective Date upon which the Borrower or any of its Subsidiaries receives
any proceeds from any incurrence by the Borrower or any of its Subsidiaries of
Indebtedness for borrowed money (other than Indebtedness for borrowed money
permitted to be incurred pursuant to Section 9.04), an amount equal to 100% of
the cash proceeds (net of underwriting discounts and commissions and other costs
associated therewith including, without limitation, legal fees and expenses) of
the respective incurrence of Indebtedness shall be applied as a mandatory
repayment of principal of outstanding Loans in accordance with the requirements
of Sections 4.02(i) and (j).
(f) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, within two Business Days following each date
after the Effective Date upon which the Borrower or any of its Subsidiaries
receives proceeds from any sale of assets (including capital stock and
securities held thereby, but excluding (i) sales or transfers of inventory in
the ordinary course of business, (ii) sales or transfers of assets in accordance
with Sections 9.02(v) and (vi) and (iii) sales of assets between the Borrower
and its Wholly-Owned Subsidiaries and/or sales of assets between Wholly-Owned
Subsidiaries of the Borrower, in each case to the extent permitted by Section
9.02), an amount equal to 100% of the Net Sale Proceeds therefrom shall be
applied as a mandatory repayment of principal of outstanding Loans in accordance
with the requirements of Sections 4.02(i) and (j), provided that so long as no
Default or Event of Default then exists, (i) with respect to no more than (I)
$2,000,000 in aggregate amount of consideration received in any transaction or
series of related
25
transactions and (II) no more than $3,500,000 in the aggregate of such Net Sale
Proceeds in any fiscal year of the Borrower, such Net Sale Proceeds shall not be
required to be so applied on such date to the extent that no Default or Event of
Default then exists and the Borrower delivers a certificate to the
Administrative Agent on or prior to such date stating that such Net Sale
Proceeds shall be used to purchase assets used or to be used in, or, to the
extent otherwise permitted by this Agreement, to acquire the capital stock of a
Person engaged and to be engaged in, the businesses referred to in Section 9.01
within 360 days following the date of such asset sale (which certificate shall
set forth the estimates of the proceeds to be so expended) and (ii) the Borrower
shall not be required to comply with this clause (f) until such time as the
cumulative Net Sale Proceeds from all asset sales not yet applied as a mandatory
repayment hereunder equals or exceeds $2,000,000, and provided further, that if
all or any portion of such Net Sale Proceeds not so applied to the repayment of
Loans have not yet resulted in a requirement that the Borrower make an offer to
repurchase Senior Subordinated Notes and/or Additional Subordinated Debt (a
"Note Offer") and are not so used within such 360-day period then, such
remaining portion not used shall be applied on the last day of such period or,
if earlier, the date on which the Borrower would be obligated to make a Note
Offer with respect to such Asset Sale as a mandatory repayment of principal of
outstanding Loans in accordance with the requirements of Section 4.02(i) and
(j).
(g) In addition to any other mandatory repayments pursuant to this Section
4.02, on each Excess Cash Payment Date, an amount equal to (i) if the Leverage
Ratio for the fiscal year then ended is equal to or greater than 3.75:1.00, 75%
of the Excess Cash Flow for the relevant Excess Cash Payment Period and (ii) if
the Leverage Ratio for the fiscal year then ended is less than 3.75:1.00, 50% of
the Excess Cash Flow for the relevant Excess Cash Payment Period shall be
applied as a mandatory repayment of principal of outstanding Loans in accordance
with the requirements of Sections 4.02(i) and (j).
(h) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, within 30 days following each date after the
Effective Date on which the Borrower or any of its Subsidiaries receives any
proceeds from any Recovery Event, an amount equal to 100% of the proceeds of
such Recovery Event (net of reasonable costs including, without limitation,
legal costs and expenses, and taxes incurred in connection with such Recovery
Event) shall be applied as a mandatory repayment of principal of outstanding
Loans in accordance with the requirements of Sections 4.02(i) and (j), provided
that so long as no Default or Event of Default then exists, such proceeds up to
an aggregate amount not to exceed $15,000,000 shall not be required to be so
applied on such date to the extent that the Borrower has delivered a certificate
to the Administrative Agent on or prior to such date stating that such proceeds
shall be used or shall be committed to be used to replace or restore any
properties or assets in respect of which such proceeds were paid within 360 days
following the date of such Recovery Event (which certificate shall set forth the
estimates of the proceeds to be so expended), and provided further, that if all
or any portion of such proceeds not required to be applied to the repayment of
Loans are not so used within 360 days after the date of the respective Recovery
Event, such remaining portion not used shall be applied on the last day of the
respective period above as a mandatory
26
repayment of principal of outstanding Loans in accordance with the requirements
of Section 4.02(i) and (j).
(i) Each amount required to be applied to repay Loans (or to reduce
Commitments) pursuant to Sections 4.02(d), (e), (f), (g) and (h) shall be
applied first, to repay the Term Loans pro rata; second, after all Term Loans
shall have been repaid (and the Total Term Loan A Commitment and the Total Term
Loan B Commitment reduced to zero), to repay Swingline Loans and third after all
Swingline Loans shall have been repaid, to repay Revolving Loans and,
concurrently with the prepayment described in second and third above, to the
extent provided in Section 3.03(d), to reduce the Total Revolving Loan
Commitment. The amount of each principal repayment of Term Loans made as
required by Sections 4.02(d), (e), (f), (g) and (h) shall be applied to reduce
the then remaining Term Loan A Scheduled Repayments and Term Loan B Scheduled
Repayments pro rata based upon the then remaining Term Loan A Scheduled
Repayments and Term Loan B Scheduled Repayments after giving effect to all prior
reductions thereto.
(j) With respect to each repayment of Loans required by this Section 4.02,
the Borrower may designate the Types of Loans of the respective Tranche which
are to be repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings of the respective Tranche pursuant to which made, provided that: (i)
repayments of Eurodollar Loans pursuant to this Section 4.02 may only be made on
the last day of an Interest Period applicable thereto unless all Eurodollar
Loans of the respective Tranche with Interest Periods ending on such date of
required repayment and all Base Rate Loans of the respective Tranche have been
paid in full; (ii) if any repayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount with respect
to such Tranche, such Borrowing shall be converted at the end of the then
current Interest Period into a Borrowing of Base Rate Loans; and (iii) each
repayment of any Loans comprising a Borrowing shall be applied pro rata among
such Loans. In the absence of a designation by the Borrower as described in the
preceding sentence, the Administrative Agent shall, subject to the above, make
such designation in its sole discretion with a view, but no obligation, to
minimize breakage costs under Section 1.11.
(k) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, (i) all then outstanding Swingline Loans shall be repaid in full on
the Swingline Expiry Date and (ii) all other then outstanding Loans shall be
repaid in full on the respective Maturity Date for such Loans.
4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically provided
herein, all payments under this Agreement or any Note shall be made to the
Administrative Agent for the account of the Lender or Lenders entitled thereto
not later than 12:00 P.M. (New York time) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office of the
Administrative Agent, it being understood that written or facsimile transmission
notice by the Borrower to the Administrative Agent to make a payment from the
funds in the Borrower's account at
27
the Payment Office shall constitute the making of such payment to the extent of
such funds held in such account. Any payments under this Agreement or under any
Note which are made later than 12:00 P.M. (New York time) shall be deemed to
have been made on the next succeeding Business Day. Whenever any payment to be
made hereunder or under any Note shall be stated to be due on a day which is not
a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
4.04 NET PAYMENTS; TAXES. (a) All payments made by any Credit Party
hereunder, or under any Note or other Credit Document will be made without
setoff, counterclaim or other defense. Except as provided in Section 4.04(b),
all such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any Excluded Taxes) and all interest, penalties or
similar liabilities with respect thereto (all such nonexcluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, (i) the sum
payable shall be increased by the amount necessary so that every payment of all
amounts due under this Agreement or under any Note, after withholdings or
deductions for or on account of Taxes will not be less than the amount provided
for herein or in such Note, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount of such Taxes to the relevant
taxing authority in accordance with applicable law. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Lender, upon the written request of such Lender, for taxes
relating to such amounts imposed on or measured by the net income or net profits
of such Lender pursuant to the laws of the jurisdiction in which the principal
office or applicable lending office of such Lender is located or under the laws
of any political subdivision or taxing authority of any such jurisdiction in
which the principal office or applicable lending office of such Lender is
located and for any withholding of taxes as such Lender shall determine are
payable by, or withheld from, such Lender in respect of such amounts so paid to
or on behalf of such Lender pursuant to the preceding sentence and in respect of
any amounts paid to or on behalf of such Lender pursuant to this sentence. The
Borrower will furnish to the Administrative Agent promptly, and in any event
within 45 days after the date the payment of any Taxes is due, certified copies
of tax receipts, if any, issued by such taxing authority, or other evidence
reasonably acceptable to the Administrative Agent evidencing such payment by the
Borrower (or, if the Borrower has not received such certified copies of tax
receipts within such time period, then the Borrower shall furnish such certified
copies of tax receipts to the Administrative Agent promptly, and in any event
within 15 days after the Borrower has received such certified copies of tax
receipts). The Borrower agrees to indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Lender, other than penalties, additions to
tax, interest and expenses arising as a result of the willful misconduct or
gross
28
negligence of such Lender. Such indemnification shall be made promptly, and in
any event within 30 days after the date upon which such Lender makes written
demand therefor, which demand shall identify the nature and amount of Taxes for
which indemnification is sought. In addition, the Borrower agrees to pay any
present and future stamp, documentary taxes or any other excise, property,
transfer or similar taxes, and any charges relating thereto, arising from any
payment made hereunder or from the execution, delivery, enforcement or
registration of, or otherwise in connection with, this Agreement.
(b) Each Lender that is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower and the
Administrative Agent on or prior to the Effective Date, or in the case of a
Lender that is an assignee or transferee of an interest under this Agreement
pursuant to Section 1.13 or 13.04 (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment or transfer), on the date
of such assignment or transfer to such Lender, (i) two copies of either United
States Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to
relief under an income tax treaty) (or successor forms) certifying to such
Lender's entitlement as of such date to a complete exemption from or a reduced
rate of, United States withholding tax with respect to payments to be made under
this Agreement and under any Note or (ii) if such Lender is claiming exception
from United States federal withholding tax under Section 871(h) or 881(c) of the
Code with respect to payment of "portfolio interest" (x) a certificate, in form
and substance reasonably satisfactory to the Borrower, executed by a duly
authorized agent of such Lender certifying to such Lender's entitlement as of
such date to a complete exemption from United States withholding tax with
respect to payment of interest to be made under this Agreement and under any
Note and (y) two copies of United States Internal Revenue Service Form W-8BEN
(with respect to the portfolio interest exemption) (or successor form). In
addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will, but only
so long as such Lender or Eligible Transferee remains lawfully able to do so,
deliver to the Borrower and the Administrative Agent two new accurate and
complete original signed copies of United States Internal Revenue Service Form
W-8ECI or Form W-8BEN and a Section 4.04(b)(ii) Certificate, as the case may be,
and such other forms as may be required in order to confirm or establish the
entitlement of such Lender to a continued exemption from or reduction in United
States withholding tax with respect to payments under this Agreement and any
Note, or it shall immediately notify the Borrower and the Administrative Agent
of its inability to deliver any such Form or Certificate. Notwithstanding any
other provision of this Section 4.04(b) and Section 13.04, a Lender or Eligible
Transferee shall be required to deliver any form and/or certification pursuant
to this Section 4.04(b) only if such Lender or Eligible Transferee is lawfully
able to do so and is legally entitled to claim an exemption from United States
withholding and is otherwise legally entitled to provide such form and/or
certification. Notwithstanding anything to the contrary contained in Section
4.04(a), but subject to Section 13.04(b) and the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the
29
United States (or any political subdivision or taxing authority thereof or
therein) from interest, fees or other amounts payable hereunder for the account
of any Lender which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to the
extent that such Lender has not provided to the Borrower U.S. Internal Revenue
Service Forms that establish a complete exemption from or reduction in such
deduction or withholding except if such Lender or Eligible Transferee is not
lawfully able to deliver such forms and (y) the Borrower shall not be obligated
pursuant to Section 4.04(a) hereof to gross-up payments to be made to a Lender
in respect of income or similar taxes imposed by the United States if such
Lender has not provided to the Borrower the Internal Revenue Service Forms
required to be provided to the Borrower pursuant to this Section 4.04(b) except
if such Lender or Eligible Transferee is not lawfully able to deliver such
forms. Subject to Section 13.04(b), the Borrower agrees to pay additional
amounts and to indemnify each Lender in the manner set forth in Section 4.04(a)
(without regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as described
in the immediately preceding sentence as a result of any changes that are
effective after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar Taxes.
(c) If any Lender receives a refund in respect of any Taxes as to which it
has been indemnified by any of the Borrower pursuant to this Section 4.04, it
shall promptly notify the Borrower of such refund and, within 30 days of
receipt, pay over such refund to the Borrower (to the extent of amounts that
have been paid by any of the Borrower under this Section 4.04 with respect to
such refund and not previously reimbursed), net of all reasonably documented
out-of-pocket expenses of such Lender and without interest (other than the
interest, if any, included in such refund net of any Taxes payable with respect
to receipt of such refund), provided that such Borrower, upon written request of
the Lender agrees to return such refund (plus penalties, interest or other
charges) to such Lender in the event such bank is required to repay such refund.
SECTION 5. CONDITIONS PRECEDENT TO LOANS. The obligation of each Lender to
convert its Loans under the Existing Credit Agreement to Loans hereunder, make
Loans, and the obligation of each Issuing Lender to issue Letters of Credit, on
the Effective Date, is subject at the time of the making of such Loans or the
issuance of such Letters of Credit to the satisfaction of the following
conditions:
5.01 EXECUTION OF AGREEMENT; NOTES. On or prior the Effective Date there
shall have been delivered to the Administrative Agent for the account of each of
the Lenders requesting same the appropriate Term Note A, Term Note B, and/or
Revolving Note executed by the Borrower; and to the Swingline Lender the
Swingline Note executed by the Borrower, in each case in the amount, maturity
and as otherwise provided herein.
5.02 FEES, ETC. On the Effective Date, the Borrower shall have paid to the
Agents and the Lenders all costs, fees and expenses (including, without
limitation, legal
30
fees and expenses) payable to the respective Agents and the Lenders to the
extent then due.
5.03 OPINION OF COUNSEL. On the Effective Date, the Administrative Agent
shall have received (i) from Weil, Gotshal & Xxxxxx LLP, special counsel to the
Borrower and its Subsidiaries, an opinion addressed to each of the Agents and
each of the Lenders and dated the Effective Date covering the matters set forth
in Exhibit F and which opinion (x) shall be addressed to each of the Agents and
each of the Lenders and dated the Effective Date, (y) shall be in form and
substance reasonably satisfactory to the Agents and the Required Lenders and (z)
shall cover the perfection of the security interests granted pursuant to the
Security Agreement and such other matters incident to the transactions
contemplated herein as the Agents may reasonably request.
5.04 CORPORATE DOCUMENTS; PROCEEDINGS; ETC. (a) On the Effective Date, the
Administrative Agent shall have received a certificate, dated the Effective
Date, signed by the Chairman of the Board, the President, any Vice President or
the Treasurer of each Credit Party, and attested to by the Secretary or any
Assistant Secretary of such Credit Party, in the form of Exhibit G with
appropriate insertions, together with copies of the Certificate of Incorporation
and By-Laws of such Credit Party and the resolutions of such Credit Party
referred to in such certificate, and the foregoing shall be reasonably
acceptable to the Agents.
(b) All corporate and legal proceedings and all material instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Credit Documents shall be reasonably satisfactory in form and
substance to the Agents and the Required Lenders, and the Administrative Agent
shall have received all information and copies of all documents and papers,
including records of corporate proceedings, governmental approvals, good
standing certificates and bring-down telegrams or facsimiles, if any, which any
Agent reasonably may have requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate or governmental
authorities.
5.05 EMPLOYEE BENEFIT PLANS; SHAREHOLDERS' AGREEMENTS; MANAGEMENT
AGREEMENTS; COLLECTIVE BARGAINING AGREEMENTS; DEBT AGREEMENTS; TAX SHARING
AGREEMENTS. On the Effective Date, there shall have been made available for
review by the Agents and by any Bank requesting same true and correct copies of
the following documents (which copies in the case of the documents described in
clauses (ii), (iii), (v), (vi) and (vii) shall be certified by the President or
any Vice President of the Borrower):
(i) all Plans and all Multiemployer Plans (and for each such plan that
is required to file an annual report on Internal Revenue Service Form
5500-series, a copy of the most recent such report (including, to the extent
required, the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and for each
such plan that is a "single-employer plan," as defined in Section 4001(a)(15) of
ERISA, the
31
most recently prepared actuarial valuation therefor) and any other "employee
benefit plans," as defined in Section 3(3) of ERISA, and any other material
agreements, plans or arrangements, with or for the benefit of current or former
employees of the Borrower or any of its Subsidiaries or any ERISA Affiliate
(provided that the foregoing shall apply in the case of any multiemployer plan,
as defined in 4001(a)(3) of ERISA, only to the extent that any document
described therein is in the possession of the Borrower or any of its
Subsidiaries or any ERISA Affiliate or reasonably available thereto from the
sponsor or trustee of any such plan) (collectively, the "Employee Benefit
Plans");
(ii) all agreements entered into by the Borrower or any of its Subsidiaries
governing the terms and relative rights of its capital stock and any agreements
entered into by shareholders relating to any such entity with respect to its
capital stock (collectively, the "Shareholders' Agreements"); (iii) all
agreements with members of, or with respect to, the management of the Borrower
or any of its Subsidiaries (collectively, the "Management Agreements");
(iv) all collective bargaining agreements applying or relating to any
employee of the Borrower or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements");
(v) all agreements evidencing or relating to Indebtedness for borrowed
money of the Borrower or any of its Subsidiaries which is to remain outstanding
after giving effect to the incurrence of Loans on the Effective Date
(collectively, the "Debt Agreements"); and
(vi) all tax sharing, tax allocation and other similar agreements entered
into by the Borrower or any of its Subsidiaries (collectively, the "Tax Sharing
Agreements");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Collective Bargaining Agreements, Debt Agreements and Tax Sharing
Agreements shall be in form and substance reasonably satisfactory to the Agents
and the Required Lenders and shall be in full force and effect on the Effective
Date.
5.06 REFINANCING. (a) On the Effective Date, the total commitments in
respect of the Existing Credit Agreement, and all loans and notes with respect
thereto shall have been converted to Loans and Commitments hereunder, all
letters of credit issued thereunder shall constitute Letters of Credit hereunder
and all other amounts (including premiums) owing pursuant to the Existing Credit
Agreement shall have been repaid in full and all documents in respect of the
Existing Credit Agreement and all guarantees with respect thereto shall remain
in force and effect only as set forth herein.
(b) On the Effective Date, the creditors in respect of the Existing Credit
Agreement shall have assigned to the Administrative Agent all security interests
And
32
Liens on the assets owned by the Borrower and Subsidiaries. The Administrative
Agent shall have received such assignments of security interests in and Liens on
the assets owned by the Borrower and its Subsidiaries as may have been requested
by the Administrative Agent, which assignments shall be in form and substance
reasonably satisfactory the Administrative Agent. Without limiting the
foregoing, there shall have been delivered (i) proper amendments (Form UCC-3 or
the appropriate equivalent) for filing under the UCC of each jurisdiction where
a financing statement (Form UCC-1 or the appropriate equivalent) was filed with
respect to the Borrower or any of its Subsidiaries in connection with the
security interests created with respect to the Existing Credit Agreement and the
documentation related thereto, (ii) assignment to the Administrative Agent of
any security interest in, or Lien on, any patents, trademarks, copyrights, or
similar interests of the Borrower or any of its Subsidiaries on which filings
have been made, (iii) assignments to the Administrative Agent of all mortgages,
leasehold mortgages, deeds of trust and leasehold deeds of trust created with
respect to property of the Borrower or any of its Subsidiaries, in each case, to
secure the obligations in respect of the Existing Credit Agreement, all of which
shall be in form and substance reasonably satisfactory to the Agent, (iv)
assignments, and agreements with respect to all lockbox, warehousing, bailee and
similar agreements, duly acknowledged by all counterparties thereto, all of
which shall be in form and substance reasonably satisfactory to the
Administrative Agent, and (v) all collateral owned by the Borrower or any of its
Subsidiaries in the possession of any of the creditors in respect of the
Existing Credit Agreement or any collateral agent or trustee under any related
security document shall have been delivered to the Administrative Agent.
5.07 AMENDED AND RESTATED SUBSIDIARIES GUARANTY. On the Effective Date,
each Subsidiary Guarantor shall have duly authorized, executed and delivered an
Amended and Restated Subsidiaries Guaranty in the form of Exhibit H hereto (as
modified, supplemented or amended from time to time, the "Subsidiaries
Guaranty").
5.08 AMENDED AND RESTATED PLEDGE AGREEMENT. On the Effective Date, each
Credit Party shall have duly authorized, executed and delivered the Amended and
Restated Pledge Agreement in the form of Exhibit I (as modified, supplemented or
amended from time to time, the "Pledge Agreement") and shall have delivered to
the Collateral Agent, as pledgee, all the Pledged Securities, if any, referred
to therein then owned by such Credit Party, (x) endorsed in blank in the case of
promissory notes constituting Pledged Securities and (y) together with executed
and undated stock powers, in the case of capital stock constituting Pledged
Securities.
5.09 AMENDED AND RESTATED SECURITY AGREEMENT. On the Effective Date, each
Credit Party shall have duly authorized, executed and delivered the Amended and
Restated Security Agreement in the form of Exhibit J (as modified, supplemented
or amended from time to time, the "Security Agreement") covering all of such
Credit Party's present and future Security Agreement Collateral, in each case
together with:
33
(a) proper Financing Statements (Form UCC-1) for filing under the UCC or
other appropriate filing offices of each jurisdiction as may be necessary or, in
the reasonable opinion of the Collateral Agent, desirable to perfect the
security interests purported to be created by the Security Agreement;
(b) certified copies of Requests for Information or Copies (Form UCC-11),
or equivalent reports, listing all effective financing statements that name any
Credit Party as debtor and that are filed in the jurisdictions referred to in
clause (a) above, together with copies of such other financing statements (none
of which shall cover the Collateral except to the extent evidencing Permitted
Liens or in respect of which the Collateral Agent shall have received
termination statements (Form UCC-3) or such other termination statements as
shall be required by local law) fully executed for filing
;
(c) a duly authorized, executed and delivered and fully completed
Perfection Certificate for each Credit Party;
(d) evidence of execution for post-closing filing and recordation of all
other recordings and filings of, or with respect to, the Security Agreement as
may be necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect the security interests intended to be created by such
Security Agreement; and
(e) evidence that all other actions necessary or, in the reasonable opinion
of the Collateral Agent, desirable to perfect and protect the security interests
purported to be created by the Security Agreement have been taken.
5.10 TRADEMARK AGREEMENT. On the Effective Date, each of the Credit Parties
shall have duly authorized, executed and delivered the Trademark Collateral
Security and Pledge Agreement in the form of Exhibit L (as modified,
supplemented or amended from time to time, the "Trademark Agreement").
5.11 ADVERSE CHANGE, ETC. (a) On the Effective Date, there shall not have
occurred or become known to the Agents any events, conditions and/or
contingencies that have had, or could reasonably be expected to have, a Material
Adverse Effect on the Borrower or on the Borrower and its Subsidiaries taken as
a whole since December 28, 2001.
(b) On or prior to the Effective Date, all necessary material governmental
(domestic and foreign) and third party approvals and/or consents in connection
the transactions contemplated by the Credit Documents and otherwise referred to
herein or therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken by
any competent authority which restrains, prevents or imposes materially adverse
conditions upon the consummation of the transactions contemplated by this
Agreement. Additionally, there shall not exist any judgment, order, injunction
or other restraint prohibiting or imposing materially adverse conditions upon
the transactions contemplated by this Agreement.
34
5.12 LITIGATION. On the Effective Date, no litigation by any entity
(private or governmental) shall be pending or threatened with respect to this
Agreement or any documentation executed in connection therewith, or which has
had, or could reasonably be expected to have a Material Adverse Effect.
5.13 SOLVENCY CERTIFICATE; INSURANCE. On or before the Effective Date, the
Borrower shall cause to be delivered to the Administrative Agent (i) a solvency
certificate from the Chief Financial Officer of the Borrower dated the Effective
Date, setting forth the conclusion that, after giving effect to the incurrence
of all the financings contemplated herein, the Borrower (on a stand alone basis)
and the Borrower and its Subsidiaries taken as a whole (on a consolidated
basis), are not insolvent and will not be rendered insolvent by the indebtedness
incurred in connection therewith, and will not be left with unreasonably small
capital with which to engage in their businesses and will not have incurred
debts beyond their ability to pay debts as they mature and (ii) certificates of
insurance complying with the requirements of Section 8.03 for the business and
properties of the Borrower and its Subsidiaries, in scope, form and substance
reasonably satisfactory to the Agents and the Required Lenders and naming the
Collateral Agent as an additional insured and/or loss payee, and stating that
such insurance shall not be canceled or revised without 30 days prior written
notice by the insurer to the Collateral Agent.
5.14 PRO FORMA BALANCE SHEET; FINANCIAL STATEMENTS; PROJECTIONS. On or
prior to the Effective Date, the Agents and each Lender shall have received
copies of the financial statements (including the pro forma financial
statements) and Projections referred to in Sections 7.10(b) and (e).
5.15 MINIMUM EBITDA. On the Effective Date, the Borrower shall have minimum
Consolidated EBITDA on a consolidated basis for the most recent twelve month
period ended October 26, 2002 of $56,000,000, and shall certify to such effect
to the Administrative Agent.
5.16 CLOSING LEVERAGE RATIO. On the Effective Date, the Borrower shall
certify to the Administrative Agent that the Borrower's Leverage Ratio for the
twelve month period ended October 26, 2002, pro forma, after giving effect to
the Loans, did not exceed 4.60:1.00.
SECTION 6. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The obligation of
each Lender to make Loans (including Loans made on the Effective Date but
excluding Mandatory Borrowings made thereafter, which shall be made as provided
in Section 1.01(e)), and the obligation of an Issuing Lender to issue any Letter
of Credit, is subject, at the time of each such Credit Event (except as
hereinafter indicated), to the satisfaction of the following conditions:
6.01 NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of each such
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein
35
or in any other Credit Document shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on the date of the making of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
6.02 NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. (a) Prior to the making
of each Loan (excluding Swingline Loans), the Administrative Agent shall have
received the notice required by Section 1.03(a). Prior to the making of any
Swingline Loan, the Swingline Lender shall have received the notice required by
Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Administrative
Agent and the respective Issuing Lender shall have received a Letter of Credit
Request meeting the requirements of Section 2.02.
The acceptance of the proceeds of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Agents and each of
the Lenders that all the conditions specified in Section 5 and in this Section 6
and applicable to such Credit Event exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
Section 5 and in this Section 6, unless otherwise specified, shall be delivered
to the Administrative Agent at the Notice Office for the account of each of the
Lenders and, except for the Notes, in sufficient counterparts for each of the
Lenders and shall be in form and substance reasonably satisfactory to the
Agents.
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to induce
the Lenders to enter into this Agreement and to make the Loans and issue and/or
participate in the Letters of Credit provided for herein, the Borrower makes the
following representations, warranties and agreements, all of which shall survive
the execution and delivery of this Agreement, the making of the Loans and the
issuance of the Letters of Credit (with the occurrence of each Credit Event
being deemed to constitute a representation and warranty that the matters
specified in this Section 7 are true and correct in all material respects on and
as of the date of each such Credit Event, unless stated to relate to a specific
earlier date, in which case all representations and warranties specifically
relating to an earlier date shall be true and correct in all material respects
as of such earlier date):
7.01 CORPORATE STATUS. Each of the Credit Parties and each of the
Borrower's other Material Subsidiaries (i) is a duly organized and validly
existing corporation (or, in the case of any of the foregoing that is not a
corporation, other form of legal entity) in good standing under the laws of the
jurisdiction of its organization, (ii) has the corporate or other power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (iii) is duly qualified and
is authorized to do business and is in good standing in all jurisdictions where
it is required to be so qualified except for failures to be so qualified
36
which, either individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.
7.02 CORPORATE POWER AND AUTHORITY. Each Credit Party has the corporate or
other power and authority to execute, deliver and carry out the terms and
provisions of each of the Credit Documents to which it is a party and has taken
all necessary corporate or other action to authorize the execution, delivery and
performance of the each of such Credit Documents. Each Credit Party has duly
executed and delivered each Credit Document to which it is a party and each such
Credit Document constitutes the legal, valid and binding obligation of such
Credit Party enforceable in accordance with its terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
7.03 NO VIOLATION. Neither the execution, delivery or performance by any
Credit Party of the Credit Documents to which it is a party nor compliance by
any Credit Party with the terms and provisions thereof, nor the consummation of
the transactions contemplated herein or therein, (i) will materially contravene
any applicable provision of any law, statute, rule or regulation, or any order,
writ, injunction or decree of any court or governmental instrumentality, (ii)
(A) will conflict or be inconsistent with, or result in any breach of, any of
the terms, covenants, conditions or provisions of, or constitute a default
under, the Senior Subordinated Notes Indenture or (B) will materially conflict
or be inconsistent with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or (other than
pursuant to the Security Documents) result in the creation or imposition of (or
the obligation to create or impose) any Lien upon any of the property or assets
of the Borrower or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, credit agreement or any
other material agreement or instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets are
bound or to which it may be subject, except for such conflicts, inconsistencies,
breaches or defaults described in this clause (ii) which, either individually or
in the aggregate, have not had, and could not reasonably be expected to have, a
Material Adverse Effect, or (iii) will violate any provision of the Certificate
of Incorporation or By-Laws of the Borrower or any of its Subsidiaries.
7.04 LITIGATION. There are no actions, suits or proceedings pending or, to
the knowledge of the Borrower or any of its Subsidiaries, threatened, with
respect to the Borrower or any of its Subsidiaries that have had, or could
reasonably be expected to have, a Material Adverse Effect. Additionally, there
does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the occurrence of any Credit Event.
7.05 USE OF PROCEEDS: MARGIN REGULATIONS. (a) The proceeds of all Term
Loans and Revolving Loans incurred on the Effective Date shall be utilized
directly or indirectly (i) to convert loans under the Existing Credit Agreement
to loans
37
hereunder, to refinance the existing senior debt of the Borrower, (ii) to
purchase and retire up to $20,000,000 face value of the Senior Subordinated
Notes (at a cost not to exceed $17,000,000 plus accrued interest), (iii) to pay
the fees and expenses incurred in connection therewith and (iv) for working
capital purposes; provided that no more than $7,000,000 in aggregate principal
amount of Revolving Loans and no Swingline Loans may be incurred on the
Effective Date.
(b) The proceeds of all Revolving Loans and Swingline Loans incurred after
the Effective Date shall be utilized for working capital purposes and other
general corporate purposes of the Borrower and its Subsidiaries; provided that
no Revolving Loans or Swingline Loans may be incurred to finance Permitted
Acquisitions.
(c) Neither the making of any Loan, nor the use of the proceeds thereof nor
the occurrence of any other Credit Event, will violate or be inconsistent with
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System and no part of the proceeds of any Loan will be used to purchase
or carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock.
7.06 GOVERNMENTAL APPROVALS. All orders, consents, approvals, licenses,
authorizations, and validations of, and filings, recordings or registrations
with, or exemptions by, any foreign or domestic governmental or public body or
authority, or any subdivision thereof, which may be required to authorize, or is
required in connection with, (i) the execution, delivery and performance by the
Borrower or any Subsidiary of any Credit Document or (ii) the legality,
validity, binding effect or enforceability of any Credit Document, have been
obtained or made.
7.07 INVESTMENT COMPANY ACT. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.08 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
7.09 TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Borrower
or any of its Subsidiaries in writing to any Agent or any Lender (including,
without limitation, all information so furnished which is contained in the
Credit Documents, or in the Confidential Information Memorandum dated September,
2002 for purposes of or in connection with this Agreement, the other Credit
Documents or any transaction contemplated herein or therein is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of any such Persons in writing to any Agent or any Lender will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any
38
material fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided; provided that, with respect to projected financial
information, the Borrower makes only the representation set forth in Section
7.10(e) below.
7.10 FINANCIAL CONDITION, FINANCIAL STATEMENTS. (a) On and as of the
Effective Date, after giving effect to the conversion of the Loans under the
Existing Credit Agreement and the repurchase of the Senior Subordinated Notes
contemplated by this Agreement in connection therewith, with respect to the
Borrower and its Subsidiaries (on a consolidated basis) and the Borrower (on a
stand alone basis) (x) the sum of the assets, at a fair valuation, of each of
the Borrower and its Subsidiaries (on a consolidated basis) and of the Borrower
(on a stand alone basis) will exceed its or their debts, (y) it has not
incurred, nor intended to, nor believes that it will, incur, debts beyond its
ability to pay such debts as such debts mature and (z) it will have sufficient
capital with which to conduct its business. For purposes of this Section 7.10,
"debt" means any liability on a claim, and "claim" means (i) right to payment
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (ii) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.
(b)(i) The pro forma (both immediately before and after giving effect to
the transactions contemplated hereby) consolidated balance sheets of the
Borrower and its Subsidiaries taken as a whole as at the Effective Date prepared
on a basis consistent with the Projections and copies of which have heretofore
been delivered to each Lender pursuant to Section 5.14 and (ii) the consolidated
balance sheets of the Borrower and its Subsidiaries at December 28, 2001 and the
related consolidated statements of income, stockholders' equity and cash flows
of the Borrower and its Subsidiaries for the fiscal year ended as of said date
(which financial statements have been audited by Ernst & Young LLP), copies of
which have heretofore been furnished to each Lender prior to the Effective Date
pursuant to Section 5.14, in each such case set forth in (i) and (ii) above are
true and correct in all material respects and present fairly in all material
respects the combined financial position of the Borrower and its Subsidiaries at
the date of said statements and the results for the period covered thereby (or,
in the case of the pro forma balance sheets, present a good faith estimate of
the pro forma consolidated financial condition of the Borrower and its
Subsidiaries both immediately before and immediately after giving effect to the
transactions contemplated hereby). All such financial statements described in
clause (ii) above have been prepared in accordance with GAAP consistently
applied except to the extent provided in the notes to said financial statements.
(c) Since December 28, 2001, nothing has occurred that has had or could
reasonably be expected to have a Material Adverse Effect.
(d) Except as fully reflected in the financial statements described in
Section 7.10(b) and the Indebtedness incurred under this Agreement, there were
as of the
39
Effective Date (and after giving effect to any Loans made on such date), no
liabilities or obligations with respect to the Borrower or any of its
Subsidiaries (whether absolute, accrued, contingent or otherwise and whether or
not due), and neither the Borrower nor any of its Subsidiaries know of any basis
for the assertion against the Borrower or any of its Subsidiaries of any such
liability or obligation, which, either individually or in the aggregate, have
had, or are or could be reasonably expected to have, a Material Adverse Effect.
(e) The financial projections set forth in the Confidential Information
Memorandum dated September, 2002 (the "Projections"), which include the
projected results of the Borrower and its Subsidiaries for the five years ended
after the Effective Date, have been prepared on a basis consistent with the
financial statements referred to in Section 7.01(a) and are based on good faith
estimates and assumptions made by the management of the Borrower and believed
reasonable and attainable at the time of execution of this Agreement, and on the
Effective Date such management believed that the Projections were reasonable and
attainable and there are no statements or conclusions in any of the Projections
which are based upon or include information known to the Borrower or any of its
Subsidiaries to be misleading or which fail to take into account material
information including the matters reported therein, it being recognized by the
Agents and the Lenders, however, that projections as to future events are not to
be viewed as facts and that the actual results during the period or periods
covered by the Projections probably will differ from the projected results and
that such differences may be material.
7.11 SECURITY INTERESTS. On and after the Effective Date, each of the
Security Documents creates (or after the execution and delivery thereof will
create), as security for the Obligations and the other obligations purportedly
secured thereby, a legal, valid and enforceable (and, after effecting the filing
referred to in the next succeeding sentence, perfected) security interest in and
Lien on all of the Collateral subject thereto, superior to and prior to the
rights of all third Persons, and subject to no other Liens (except that the
Security Agreement Collateral, the Mortgaged Properties and the Collateral
covered by the Additional Security Documents may be subject to Permitted Liens
relating thereto), in favor of the Collateral Agent. No filings or recordings
are required in order to perfect the security interests created under any
Security Document except for filings or recordings required in connection with
any such Security Document which will be prepared for filing and delivered to
the Collateral Agent and which shall have been made on or prior to the Effective
Date on or prior to the execution and delivery thereof as contemplated by
Sections 8.10 and 8.11. Each of the Credit Parties party to a Security Document
has good and valid title to all Collateral described therein, free and clear of
all Liens except Permitted Liens.
7.12 REPRESENTATIONS AND WARRANTIES IN OTHER CREDIT DOCUMENTS. All
representations and warranties set forth in the other Credit Documents were true
and correct in all material respects as of the time such representations and
warranties were made and shall be true and correct in all material respects as
of the Effective Date as if such representations and warranties were made on
40
and as of such date, unless stated to relate to a specific earlier date, in
which case such representations and warranties shall be true and correct in all
material respects as of such earlier date.
7.13 COMPLIANCE WITH ERISA. (a) No Reportable Event has occurred with
respect to a Plan during the five year period prior to the date on which this
representation is made or deemed made with respect to any Plan; no Multiemployer
Plan is insolvent or in reorganization; no Plan has an accumulated or waived
funding deficiency, or has applied for a waiver of the minimum funding standard
or an extension of any amortization period within the meaning of Section 412 of
the Code during the five year period prior to the date on which this
representation is made or deemed made with respect to any Plan; no proceedings
have been instituted to terminate by the PBGC, or to appoint a trustee to
administer, any Plan; no lien has been imposed under the Code or ERISA on the
assets of the Borrower or any of its Subsidiaries or any ERISA Affiliate or is
likely to be imposed on account of any Plan; except for any noncompliance,
liabilities, obligations and other matters or events that, individually or in
the aggregate, have not had, and could not reasonably be expected to have, a
Material Adverse Effect: each Plan is in substantial compliance with its terms
and with all applicable laws including, without limitation, ERISA and the Code;
no Plan has an Unfunded Current Liability; all contributions required to be made
by the Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate with
respect to each Plan, Multiemployer Plan and Foreign Pension Plan have been
timely made; neither the Borrower nor any of its Subsidiaries nor any ERISA
Affiliate has incurred any material liability to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or
reasonably expects to incur any material liability (including any indirect,
contingent or secondary liability) under any of the foregoing Sections with
respect to any Plan (other than liabilities of any ERISA Affiliate which could
not, by operation of law or otherwise, become a liability of the Borrower or any
of its Subsidiaries); no condition exists which presents a material risk to the
Borrower or any of its Subsidiaries or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; using actuarial assumptions and computation methods
consistent with subpart I of subtitle E of Title IV of ERISA, the aggregate
liabilities on the part of the Borrower and its Subsidiaries and its ERISA
Affiliates to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Plan ended prior to the date
of the most recent Credit Event could not reasonably be expected to have a
Material Adverse Effect; and the Borrower and its Subsidiaries do not maintain
or contribute to any Retiree Welfare Plan.
(b) Except for any noncompliance, liabilities or other matters or events
that, individually or in the aggregate, have not had, and could not reasonably
be expected to have, a Material Adverse Effect: any Foreign Pension Plan has
been maintained in substantial compliance with its terms and with the
requirements of any and all applicable laws, statutes rules, regulations and
orders and has been maintained, where required, in good standing with applicable
regulatory authorities; the Borrower and all
41
of its Subsidiaries have performed all obligations to be performed in connection
with any Foreign Pension Plan and any funding agreements therefor in a timely
fashion; neither the Borrower nor any of its Subsidiaries has incurred any
obligation in connection with the termination of or withdrawal from any Foreign
Pension Plan; and the present value of the accrued benefit liabilities (whether
or not vested) under any Foreign Pension Plan which is funded, determined on the
basis of the most recently completed actuarial valuation using actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan, and for any Foreign Pension Plan which
is not funded, the obligations of such Foreign Pension Plan are properly
accrued.
7.14 CAPITALIZATION. On the Effective Date and after giving effect to the
transactions contemplated hereby, the authorized and issued capital stock of the
Borrower shall be as set forth on Schedule 7.14. All outstanding shares of
capital stock of the Borrower have been duly and validly issued, are fully paid
and nonassessable and were not subject to any preemptive rights which were
exercisable in connection with the issuance thereof. On the Effective Date, the
Borrower does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock, except as set forth on Schedule
7.14.
7.15 SUBSIDIARIES. On and after the Effective Date, the Borrower has no
Subsidiaries other than (i) the Subsidiaries listed on Schedule 7.15 and (ii)
new Subsidiaries created in compliance with Section 9.15. Schedule 7.15
correctly sets forth, as of the Effective Date, the percentage ownership (direct
and indirect) of the Borrower in each class of capital stock of each of its
Subsidiaries and also identifies the direct owner thereof and whether such
Subsidiary is a Domestic Subsidiary or Foreign Subsidiary and whether such
Subsidiary is a Material Subsidiary.
7.16 INTELLECTUAL PROPERTY. Each of the Borrower and each of its
Subsidiaries owns or holds, free from Liens, a valid license or otherwise has
the right to use all the patents, trademarks, service marks, trade names,
technology, know-how, copyrights, licenses, franchises and formulas or other
rights with respect to the foregoing that are used in the operation of the
business of the Borrower and each of its Subsidiaries as presently conducted
except where the failure to do so has not had, and could not reasonably be
expected to have, a Material Adverse Effect.
7.17 COMPLIANCE WITH STATUTES, ETC. The Borrower and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including compliance with all applicable provisions of the
federal Fair Labor Standards Act, as amended, and including compliance with all
applicable Environmental Laws with respect to any Real Property or governing its
business and the requirements of any permits issued under such Environmental
Laws with respect to any such Real Property
42
or the operations of the Borrower or any of its Subsidiaries), except such
non-compliance as, individually or in the aggregate, has not had, and could not
reasonably be expected to have, a Material Adverse Effect.
7.18 ENVIRONMENTAL MATTERS. (a) Each of the Borrower and each of its
Subsidiaries has complied with, and on the date of each Credit Event is in
compliance with, all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws. There are no pending or, to the
best knowledge of the Borrower, past or threatened Environmental Claims against
the Borrower or any of its Subsidiaries or any Real Property owned or operated
by the Borrower or any of its Subsidiaries. To the best knowledge of the
Borrower, there are no facts, circumstances, conditions or occurrences on any
Real Property owned or operated by the Borrower or any of its Subsidiaries or,
on any property adjoining or in the vicinity of any such Real Property that
could reasonably be expected (i) to form the basis of an Environmental Claim
against the Borrower or any of its Subsidiaries or any such Real Property or
(ii) to cause any such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Property by the
Borrower or any of its Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, treated or
stored on, or transported to or from, any Real Property owned or operated by the
Borrower or any of its Subsidiaries where such generation, use, treatment or
storage has violated or given rise to any Environmental Claim under any
Environmental Law. Hazardous Materials have not at any time been Released on or
from any Real Property owned or operated by the Borrower or any of its
Subsidiaries in a manner that have formed or would reasonably be expected to
form the basis for an Environmental Claim against the Borrower or any of its
Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 7.18, the
representations made in this Section 7.18 shall only be untrue if the aggregate
effect of all conditions, failures, noncompliances, Environmental Claims,
Releases and presence of underground storage tanks, in each case of the types
described above, has had, or could reasonably be expected to have, a Material
Adverse Effect.
7.19 PROPERTIES. All Real Property owned by the Borrower or any of its
Subsidiaries and all Leaseholds leased by the Borrower or any of its
Subsidiaries, in each case as of the Effective Date, and the nature of the
interest therein, are correctly set forth in Schedule 7.19. Each of the Borrower
and each of its Subsidiaries has good and marketable title to, or a validly
subsisting leasehold interest in, all material properties owned or leased by it,
including all Real Property reflected in Schedule 7.19 or in the financial
statements referred to in Section 7.10(b) (in each case, except as disposed of
after the Effective Date in accordance with this Agreement), free and clear of
all Liens, other than Permitted Liens. The Borrower and its Subsidiaries have
good and marketable title to all other property owned by them, including all
property reflected in the financial statements referred to in Section 7.10(b)
(except as otherwise disposed of since the date of such balance sheet in the
ordinary cause of business, or, if disposed of after the Effective Date, as
permitted by the terms of this Agreement).
43
7.20 LABOR RELATIONS. Neither the Borrower nor any of its Subsidiaries is
engaged in any unfair labor practice that has had, or could reasonably be
expected to have, a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower, threatened against any of them, before
the National Labor Relations Board or any other applicable Government Authority,
and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrower, threatened against any
of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the
Borrower or any of its Subsidiaries or, to the best knowledge of the Borrower,
threatened against the Borrower or any of its Subsidiaries and (iii) to the best
knowledge of the Borrower, no union representation proceeding is pending or
question exists, in each case, with respect to the employees of the Borrower or
any of its Subsidiaries and, to the best knowledge of the Borrower, no union
organizing activities are taking place, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate) such as has not had, and could not reasonably be expected to have, a
Material Adverse Effect.
7.21 TAX RETURNS AND PAYMENTS. All domestic and foreign Federal, state,
provincial and other material returns, statements, forms and reports for taxes
(the "Returns") required to be filed by or with respect to the income,
properties or operations of the Borrower and/or any of its Subsidiaries have
been timely filed (taking into account all extensions of due dates) with the
appropriate taxing authority. The Returns accurately reflect all material
liabilities for taxes of the Borrower and its Subsidiaries for the periods
covered thereby. The Borrower and each of its Subsidiaries have paid all taxes
payable by them other than immaterial taxes and other taxes which are not yet
due and payable, and other than taxes contested in good faith and for which
adequate reserves have been established in accordance with GAAP and disclosed on
the financial statements of the Borrower. Except as disclosed in the financial
statements referred to in Section 7.10(b), there is no material action, suit,
proceeding, investigation, audit, or claim now pending or, to the knowledge of
the Borrower or any of its Subsidiaries, threatened by any authority regarding
any material taxes relating to the Borrower or any of its Subsidiaries. As of
the Effective Date of this Agreement, neither the Borrower nor any of its
Subsidiaries has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to the
payment or collection of material taxes of the Borrower or any of its
Subsidiaries, or is aware of any circumstances that would cause the taxable
years or other taxable periods of the Borrower or any of its Subsidiaries not to
be subject to the normally applicable statute of limitations. Neither the
Borrower nor any of its Subsidiaries has provided, with respect to themselves or
property held by them, any consent under Section 341 of the Code. Neither the
Borrower nor any of its Subsidiaries has incurred, or will incur, any material
tax liability in connection with the transactions contemplated hereby.
7.22 SENIOR SUBORDINATED NOTES. The subordination provisions contained in
the Senior Subordinated Note Documents and any documents relating to the
Additional Subordinated Debt (if any) are enforceable against the Borrower, the
44
respective Subsidiary Guarantors and the holders thereof, and all Obligations
and Guaranteed Obligations (as defined herein and in the Guaranty) and all
obligations of the Borrower in respect of the Xxxx Loan are within the
definition of "Senior Indebtedness," "Guarantor Senior Indebtedness" and any
similar term, as the case may be, included in such subordination provisions.
7.23 FISCAL YEAR; FISCAL QUARTERS. The Borrower and each of its
Subsidiaries has a fiscal year which is the twelve months ending on the Saturday
closest to December 31 of each year, consisting of fiscal quarters ending on the
dates set forth on Schedule 7.23 hereto.
SECTION 8. AFFIRMATIVE COVENANTS. The Borrower hereby covenants and agrees
that as of the Effective Date and thereafter for so long as this Agreement is in
effect and until the Commitments have terminated, no Letters of Credit (other
than any Letter of Credit, together with all Fees that have accrued and will
accrue thereon through the stated termination date of such Letter of Credit,
which have either been (a) cash collateralized in a manner reasonably
satisfactory to the respective Issuing Lender or (b) backstopped by a letter of
credit or other security acceptable to the respective Issuing Lender) or Notes
are outstanding and the Loans and Unpaid Drawings, together with interest, Fees
and all other Obligations (other than any indemnities described in Section 13.01
which are not then due and payable) incurred hereunder, are paid in full:
8.01 INFORMATION COVENANTS. The Borrower will furnish to the Administrative
Agent (with copies sufficient for each Lender):
(a) MONTHLY REPORTS. Within 30 days after the end of each fiscal month of
the Borrower, the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such monthly accounting period and the related
consolidated statements of income and retained earnings and of cash flows for
such monthly accounting period and for the elapsed portion of the fiscal year
ended with the last day of such monthly accounting period, in each case, setting
forth comparative figures for the related periods in the prior fiscal year and,
after delivery of the first budget pursuant to Section 8.01(d), the budgeted
figures for such monthly periods as set forth in the respective budget delivered
pursuant to Section 8.01(d); all of which shall be in reasonable detail and
certified by the chief financial officer or other Authorized Officer of the
Borrower that they fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the dates indicated and the
results of their operations and changes in their cash flows for the periods
indicated, subject to normal year-end audit adjustments and the absence of
footnotes.
(b) QUARTERLY FINANCIAL STATEMENTS. Within the earlier of (A) 50 days after
the close of each quarterly accounting period in each fiscal year of the
Borrower or (B) one Business Day following the filing of such quarterly
financial statements with the SEC, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such quarterly accounting period
and the related consolidated statements of income and retained earnings and of
cash flows for such quarterly accounting period and for the elapsed portion of
the fiscal year ended with the
45
last day of such quarterly accounting period, in each case, setting forth
comparative figures for the related periods in the prior fiscal year and, after
delivery of the first budget pursuant to Section 8.01(d), the budgeted figures
for such quarterly periods as set forth in the respective budget delivered
pursuant to Section 8.01(d); all of which shall be in reasonable detail and
certified by the chief financial officer or other Authorized Officer of the
Borrower that they fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the dates indicated and the
results of their operations and changes in their cash flows for the periods
indicated, subject to normal year-end audit adjustments and the absence of
footnotes.
(c) ANNUAL FINANCIAL STATEMENTS. Within the earlier of (A) 90 days after
the close of each fiscal year of the Borrower or (B) one Business Day following
the filing of such annual financial statements with the SEC, the consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income and retained earnings and
of cash flows for such fiscal year and setting forth comparative consolidated
figures for the preceding fiscal year and certified, without qualification as to
scope of audit, and without an expression of uncertainty as to the ability of
the Borrower or any of its Subsidiaries to continue as going concerns, by Ernst
& Young LLP or such other independent certified public accountants of recognized
national standing as shall be reasonably acceptable to the Administrative Agent,
in each case to the effect that such statements fairly present the financial
condition of the Borrower and its Subsidiaries as of the dates indicated and the
results of their operations and changes in cash flows, together with a
certificate of such accounting firm stating that in the course of its regular
audit of the business of the Borrower and its Subsidiaries, which audit was
conducted in accordance with generally accepted auditing standards, no Default
or Event of Default which has occurred and is continuing has come to their
attention pursuant to Sections 9.02, 9.03, 9.04, 9.06, 9.07, 9.09, 9.10, 9.11
and 9.12, or if such a Default or an Event of Default has come to their
attention a statement as to the nature thereof.
(d) BUDGETS. No later than 60 days following the commencement of the first
day of each fiscal year of the Borrower, a budget in form satisfactory to the
Agents (including budgeted statements of income (including pro forma covenant
calculations, sources and uses of cash and balance sheets)) prepared by the
Borrower for (x) each of the four fiscal quarters of such fiscal year prepared
in detail, including monthly reporting of gross and net sales, consolidated
EBITDA and store count, and (y) the next year following such fiscal year
prepared in summary form, in each case, of the Borrower and its Subsidiaries,
accompanied by the statement of the chief financial officer of the Borrower to
the effect that, to the best of his knowledge, the budget is a reasonable
estimate for the period covered thereby.
(e) OFFICER'S CERTIFICATES. At the time of the delivery of the financial
statements provided for in Sections 8.01(a), (b) and (c), a certificate (a
"Compliance Certificate") of the chief financial officer or other Authorized
Officer of the Borrower to the effect that no Default or Event of Default exists
or, if any Default or Event of Default does exist, specifying the nature and
extent thereof, which certificate shall, in the case of
46
any such financial statements delivered in respect of a period ending on the
last day of a fiscal quarter or year of the Borrower set forth the calculations
required to establish whether the Borrower and its Subsidiaries were in
compliance with the provisions of Sections 9.09 through and including 9.12, as
at the end of such fiscal quarter or year, as the case may be (including a
schedule setting forth the calculations with respect to compliance with such
sections, which shall be in reasonable detail and certified by the chief
financial officer or other Authorized Officer), such Compliance Certificate to
be substantially in the form of Exhibit C. In addition, at the time of the
delivery of the financial statements provided for in Section 8.01(c), a
certificate of the chief financial officer or other Authorized Officer of the
Borrower setting forth (i) the amount of, and calculations required to establish
the amount of, Excess Cash Flow for the Excess Cash Flow Period ending on the
last day of the respective fiscal year and the Equity Proceeds Amount, if any at
such time and (ii) the calculations required to establish whether the Borrower
was in compliance with Section 4.02(f) and (h) for the respective fiscal year.
(f) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event within 3
Business Days (or 10 Business Days in the case of clause (y) below) after any
officer of the Borrower obtains knowledge thereof, notice of (x) the occurrence
of any event which constitutes a Default or an Event of Default, which notice
shall specify the nature thereof, the period of existence thereof and what
action the Borrower proposes to take with respect thereto and (y) the
commencement of, or threat of, or any significant development in, any litigation
or governmental proceeding pending against the Borrower or any of its
Subsidiaries (i) in which the amount involved is $3,000,000 or more or (ii)
where there is a reasonable possibility of an adverse determination and which
could reasonably be expected to have a Material Adverse Effect, or a material
adverse effect on the ability of any Credit Party to perform its respective
obligations hereunder or under any other Credit Document.
(g) AUDITORS' REPORTS. Promptly upon receipt thereof, a copy of each final
report or "management letter," if any, submitted to the Borrower or any of its
Subsidiaries by its independent accountants in connection with any annual,
interim or special audit made by them of the books of the Borrower of any of its
Subsidiaries.
(h) ENVIRONMENTAL MATTERS. Promptly after obtaining knowledge of any of the
following, written notice of one or more of the following environmental matters,
unless such environmental matters could not individually or when aggregated
result in a Material Adverse Effect:
(i) any pending or threatened material Environmental Claim against the
Borrower or any of its Subsidiaries or any Real Property owned or operated by
the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real Property owned
or operated by the Borrower or any of its Subsidiaries that (x) results in
noncompliance by the Borrower or any of its Subsidiaries with any applicable
Environmental Law or (y) could reasonably be anticipated to form the basis of an
47
Environmental Claim against the Borrower or any of its Subsidiaries or any such
Real Property;
(iii) any condition or occurrence on any Real Property owned or operated by
the Borrower or any of its Subsidiaries that could reasonably be anticipated to
result in any liability under Environmental Law;
(iv) any condition or occurrence on any Real Property owned or operated by
the Borrower or any of its Subsidiaries that could reasonably be expected to
cause such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability by the Borrower or any of its Subsidiaries of
such Real Property under any Environmental Law; and
(v) the taking of any removal or remedial action in response to the actual
or alleged presence of any Hazardous Material on any Real Property owned or
operated by the Borrower or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative agency; provided
that in any event the Borrower shall deliver to each Lender all notices of, or
relating to, a material matter or event received by it or any of their
respective Subsidiaries from any government or governmental agency under, or
pursuant to, CERCLA.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action and
the Borrower's or such Subsidiary's response thereto. In addition, the Borrower
agrees to provide the Lenders with copies of all material written communications
by the Borrower or any of its Subsidiaries with any Person (other than its
counsel) or Governmental Authority relating to any of the matters set forth in
clauses (i)-(v) above, and such detailed reports relating to any of the matters
set forth in clauses (i)-(v) above as may reasonably be requested by the
Administrative Agent or the Required Lenders.
(i) OTHER INFORMATION. Promptly upon transmission thereof, copies of any
filings and registrations with, and reports to, the SEC by the Borrower or any
of its Subsidiaries and copies of all financial statements, proxy statements,
notices and reports as the Borrower or any of its Subsidiaries shall send
generally to analysts, the holders of their capital stock or of the Senior
Subordinated Notes or Additional Subordinated Debt (if any) in their capacity as
such holders (in each case to the extent not theretofore delivered to the
Lenders pursuant to this Agreement) and, with reasonable promptness, such other
information or documents (financial or otherwise) as any Agent on its own behalf
or on behalf of the Required Lenders may reasonably request from time to time.
8.02 BOOKS, RECORDS AND INSPECTIONS. 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 in conformity with GAAP and all requirements of law
shall be 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, upon two Business Days' prior notice to the chief financial officer or
other Authorized Officer of the
48
Borrower (except when a Default or Event of Default has occurred and is
continuing, in which case, no notice shall be required), officers and designated
representatives of any Agent or any Lender (after notice to, and coordination
with, the Administrative Agent) (at the expense of the applicable Agent or
Lender, except when a Default or Event of Default has occurred and is
continuing, in which case the Borrower shall pay such expenses), to visit and
inspect any of the properties or assets of the Borrower and any of its
Subsidiaries in whomsoever's possession, and to examine the books of account of
the Borrower and any of its Subsidiaries and discuss the affairs, finances and
accounts of the Borrower and of any of its Subsidiaries with, and be advised as
to the same by, their officers and independent accountants, all at such
reasonable times and to such reasonable extent as any Agent or any Lender may
desire, provided that the Borrower shall be given reasonable opportunity to
participate in such discussions; and provided further that all such visits and
inspections by any Lender in its capacity as such shall be limited to two such
inspections and visits per Lender in each year (except when a Default or Event
of Default has occurred and is continuing, in which case there shall be no
limitations on such inspections and visits). The Borrower will, and will cause
each of its Subsidiaries to, permit the Agents to conduct periodic collateral
exams, at the Borrowers expense, all at such reasonable times and to such
reasonable extent as any Agent may desire, provided that such collateral exams
shall be limited to two such collateral exams in each year (except when a
Default or Event of Default has occurred and is continuing, in which case there
shall be no limitations on such collateral exams).
8.03 INSURANCE. (a) Schedule 8.03 sets forth a true and complete listing of
all insurance -------------- maintained by the Borrower and its Subsidiaries as
of the Effective Date. The Borrower will, and will cause each of its
Subsidiaries to, at all times from and after the Effective Date maintain in full
force and effect insurance with reputable and solvent insurance carriers in such
amounts, covering such risks and liabilities and with such deductibles or
self-insured retentions as are in accordance with normal industry practice, and
shall furnish to the Administrative Agent upon written request full information
as to the insurance so carried.
(b) The Borrower will, and will cause their respective Subsidiaries to, at
all times keep their respective property insured in favor of the Collateral
Agent, and all policies (including Mortgage Policies) or certificates (or
certified copies thereof) with respect to such insurance (and any other
insurance maintained by the Borrower or any of its Subsidiaries) (i) shall be
endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as loss payee or as an additional insured), (ii) shall state that such insurance
policies shall not be canceled without 30 days' prior written notice thereof by
the respective insurer to the Collateral Agent, (iii) shall provide that the
respective insurers irrevocably waive any and all rights of subrogation with
respect to the Collateral Agent and the Secured Creditors, (iv) shall contain
the standard non-contributing mortgagee clause endorsement in favor of the
Collateral Agent with respect to hazard liability insurance, and (v) shall,
except in the case of public liability insurance, provide that any losses shall
be payable notwithstanding (A) any act or neglect of the Borrower or any of its
Subsidiaries, (B) the occupation or use of the properties for purposes more
Hazardous
49
than those permitted by the terms of the respective policy if such coverage is
obtainable at commercially reasonable rates and is of the kind from time to time
customarily insured against by Persons owning or using similar property and in
such amounts as are customary, (C) any foreclosure or other proceeding relating
to the insured properties or (D) any change in the title to or ownership or
possession of the insured properties.
(c) If the Borrower or any of its Subsidiaries shall fail to maintain all
insurance in accordance with this Section 8.03, or if the Borrower or any of its
Subsidiaries shall fail to so endorse and deposit all policies or certificates
with respect thereto, the Administrative Agent and/or the Collateral Agent shall
have the right (but shall be under no obligation), upon thirty days' advance
notice to the Borrower or any of its Subsidiaries, as the case may be, to
procure such insurance and the Borrower agrees to reimburse the Administrative
Agent or the Collateral Agent as the case may be, for all costs and expenses of
procuring such insurance.
8.04 PAYMENT OF TAXES. The Borrower and each of its Subsidiaries will file
all income tax returns and other material tax returns required to be filed by
it, and pay and discharge all tax liabilities reflected thereon, and will cause
each of its Subsidiaries to pay and discharge, all other taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which material
penalties attach thereto, and all lawful claims for sums that have become due
and payable which, if unpaid, might become a Lien not otherwise permitted under
Section 9.03(i) or charge upon any properties of the Borrower or any of its
Subsidiaries; provided that neither the Borrower nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim (i)
which is being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with GAAP, or
(ii) where the failure to pay such tax, assessment, charge, levy or claim has
not had, and could not reasonably be expected to have, a Material Adverse
Effect.
8.05 CORPORATE FRANCHISES. The Borrower will do, and will cause each of its
Subsidiaries to do, or cause to be done, all things necessary to preserve and
keep in full force and effect (a) its existence and (b) except where the failure
to do so, individually or in the aggregate, has not had, and could not
reasonably be expected to have, a Material Adverse Effect; provided, however,
that any transaction permitted by Section 9.02 will not constitute a breach of
this Section 8.05.
8.06 COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will cause each
of its Subsidiaries to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including all applicable provisions of the federal Fair Labor
Standards Act, as amended, and including applicable statutes, regulations,
orders and restrictions relating to environmental standards and controls) except
for such noncompliances as, individually or in the aggregate, have not had, and
could not be reasonably expected to have, a Material Adverse Effect.
50
8.07 COMPLIANCE WITH ENVIRONMENTAL LAWS. (a) The Borrower will pay, and
will cause each of its Subsidiaries to pay, all costs and expenses incurred by
it in keeping in compliance with all Environmental Laws, and will keep or cause
to be kept all Real Properties owned or operated by the Borrower or any of its
Subsidiaries free and clear of any Liens imposed pursuant to such Environmental
Laws; and (b) neither the Borrower nor any of its Subsidiaries will generate,
use, treat, store, release or dispose of, or permit the generation, use,
treatment, storage, release or disposal of, Hazardous Materials on any Real
Property owned or operated by the Borrower or any of its Subsidiaries, or
transport or permit the transportation of Hazardous Materials to or from any
such Real Property, unless the failure to comply with the requirements specified
in clause (a) or (b) above, either individually or in the aggregate, has not
had, and could not reasonably be expected to have, a Material Adverse Effect. If
the Borrower or any of its Subsidiaries, or any tenant or occupant of any Real
Property owned or operated by the Borrower or any of its Subsidiaries, cause or
permit any intentional or unintentional act or omission resulting in the
presence or Release of any Hazardous Material (except in compliance with
applicable Environmental Laws), the Borrower agrees to undertake, and/or to
cause any of its Subsidiaries, tenants or occupants to undertake, without any
expense to the Lenders, any clean up, removal, remedial or other action required
pursuant to Environmental Laws to remove and clean up any Hazardous Materials
from any Real Property except where the failure to do so has not had, and could
not reasonably be expected to have, a Material Adverse Effect, provided that
neither the Borrower nor any of its Subsidiaries shall be required to comply
with any order or directive with respect to such removal or clean up which is
being contested in good faith and by proper proceedings so long as it has
maintained adequate reserves with respect to such compliance to the extent
required in accordance with GAAP.
(b) At the written request of the Administrative Agent or the Required
Lenders, which request shall specify in reasonable detail the basis therefor, at
any time and from time to time, the Borrower will provide, at the Borrower's
sole cost and expense, an environmental site assessment report concerning any
Real Property now or hereafter owned or operated by the Borrower or any of its
Subsidiaries, prepared by an environmental consulting firm approved by the
Administrative Agent, indicating the presence or absence of Hazardous Materials
and the potential cost of any removal or remedial action in connection with any
Hazardous Materials on such Real Property; provided that such request may be
made only if (i) there has occurred and is continuing a Default or Event of
Default, (ii) the Administrative Agent or the Required Lenders reasonably
believe that the Borrower or any such Real Property is not in material
compliance with Environmental Law, or (iii) circumstances exist that reasonably
could be expected to form the basis of a material Environmental Claim against
the Borrower or any such Real Property. If the Borrower fails to provide the
same within 30 days after such request was made, the Administrative Agent may
order the same, and the Borrower shall grant and hereby grants to the
Administrative Agent and the Lenders and their agents reasonable access to such
Real Property and specifically grants the Administrative Agent and the Lenders
an irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment, all at the Borrower's expense.
51
8.08 ERISA. As soon as possible and, in any event, within 10 days after the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate knows or has
reason to know of the occurrence of any of the following events to the extent
that one or more of such events is reasonably likely to result in a liability to
any one or more of the Borrower and its Subsidiaries in an aggregate amount in
excess of $3,000,000, the Borrower will deliver to each of the Lenders a
certificate of the chief financial officer of the Borrower setting forth details
as to such occurrence and the action, if any, which the Borrower, such
Subsidiary or such ERISA Affiliate is required or proposes to take, together
with a copy of any notices required or proposed to be given to or filed with or
by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: that a Reportable
Event has occurred; that a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the
advance reporting requirement of PBGC Regulation Section 4043.61 (without regard
to subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
..64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; that an
accumulated funding deficiency has been incurred or an application may be or has
been made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; that a contribution required to be
made by the Borrower, a Subsidiary of the Borrower or any ERISA Affiliate to a
Plan, Multiemployer Plan or Foreign Pension Plan has not been timely made; that
a Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current Liability
giving rise to a lien under ERISA or the Code; that proceedings may be or have
been instituted by the PBGC to terminate or appoint a trustee to administer a
Plan; that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Multiemployer Plan; that the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate will or could reasonably
be expected to incur any liability (including any contingent or secondary
liability) to or on account of the termination of or withdrawal from a Plan or
Multiemployer Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or with respect to a Plan under Section 401(a)(29), 4971, or 4975 of the
Code or Section 409, 502(i) or 502(l) of ERISA or with respect to a group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
under Section 4980B of the Code; or that the Borrower or any Subsidiary of the
Borrower has or may incur any material liability under any Retiree Welfare Plan
or Foreign Pension Plan. At the request of any Lender, the Borrower will deliver
to such Lender a complete copy of the annual report (Form 5500) of each Plan
required to be filed with the Internal Revenue Service. In addition to any
certificates or notices delivered to the Lenders pursuant to the first sentence
hereof, copies of annual reports and any notices received by the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate with respect to any Plan or
Foreign Pension Plan shall be delivered to the Lenders no later than 10 days
after the date such report has been filed with the Internal Revenue Service or
received by the Borrower or the Subsidiary or the ERISA Affiliate. The Borrower
and each of its applicable Subsidiaries shall ensure that each Foreign Pension
Plan administered by it or
52
into which it makes payments obtains or retains (as applicable) registered
status under and as required by applicable law and is administered in a timely
manner in all respects in compliance with all applicable laws except where the
failure to do any of the foregoing has not had, and could not be reasonably
expected to result in, a Material Adverse Effect.
8.09 GOOD REPAIR. The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used in its
business are kept in good repair, working order and condition, normal wear and
tear and damage by casualty excepted, and, subject to Section 9.09, that from
time to time there are made in such properties and equipment all needful and
proper repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner consistent with prior
practice.
8.10 ADDITIONAL SECURITY; FURTHER ASSURANCES; LEASEHOLD MORTGAGES; LANDLORD
WAIVERS. (a) The Borrower will, and will cause each of its Domestic Subsidiaries
to, grant, to the extent permitted by applicable law, to the Collateral Agent
security interests and mortgages in such assets and properties of the Borrower
and its Domestic Subsidiaries as are not covered by the original Security
Documents, and as may be requested from time to time by the Administrative Agent
or the Required Lenders. All such security interests and mortgages shall be
granted pursuant to documentation reasonably satisfactory in form and substance
to the Administrative Agent and shall constitute valid and enforceable perfected
security interests and mortgages superior to and prior to the rights of all
third Persons and subject to no other Liens except for Permitted Liens (i) at
the time of perfection thereof or (ii) arising and having priority by operation
of law. The Additional Security Documents or instruments related thereto shall
be duly recorded or filed in such manner and in such places as are required by
law to establish, perfect, preserve and protect the Liens in favor of the
Collateral Agent required to be granted pursuant to such Additional Security
Documents (it being understood that perfection of Liens on intellectual property
shall not be required outside the United States) and all taxes, fees and other
charges payable in connection therewith shall be paid in full by the Borrower.
(b) The Borrower will, and will cause each of its Domestic Subsidiaries to,
at the expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports
and other assurances or instruments and take such further steps relating to the
Collateral covered by any of the Security Documents as the Collateral Agent may
reasonably require. Furthermore, the Borrower shall cause to be delivered to the
Collateral Agent such opinions of counsel, title insurance and other related
documents as may be reasonable requested by the Administrative Agent to assure
themselves that this Section 8.10 has been complied with.
53
(c) If the Administrative Agent or the Required Lenders determine that they
are required by law or regulation to have appraisals prepared in respect of the
Real Property of the Borrower and its Subsidiaries constituting Collateral, the
Borrower shall provide to the Administrative Agent appraisals which satisfy the
applicable requirements of the Real Estate Appraisal Reform Amendments of the
Financial Institution Reform, Recovery and Enforcement Act of 1989 and which
shall be in form and substance reasonably satisfactory to the Administrative
Agent.
(d) The Borrower agrees to cause each Domestic Subsidiary established or
created in accordance with Section 9.15 to execute and deliver a guaranty of all
Obligations and all obligations under Interest Rate Protection Agreements or
Other Hedging Agreements in substantially the form of the Subsidiaries Guaranty.
(e) The Borrower agrees to pledge and deliver, or cause to be pledged and
delivered, all of the capital stock of each new Subsidiary (excluding that
portion of the voting stock of any Foreign Subsidiary which would be in excess
of 65% of the total outstanding voting stock of such Foreign Subsidiary)
established or created after the Effective Date, to the extent owned by the
Borrower or any Domestic Subsidiary, to the Collateral Agent for the benefit of
the Secured Creditors pursuant to the Pledge Agreement.
(f) The Borrower will cause each Domestic Subsidiary established or created
in accordance with Section 9.15 to grant to the Collateral Agent a first
priority (subject to Permitted Liens) Lien on property (tangible and intangible)
of such Subsidiary upon terms and with exceptions similar to those set forth in
the Security Documents as appropriate, and satisfactory in form and substance to
the Borrower, the Administrative Agent and Required Lenders. The Borrower shall
cause each such Domestic Subsidiary, at its own expense, to execute, acknowledge
and deliver, or cause the execution, acknowledgment and delivery of, and
thereafter register, file or record in any appropriate governmental office, any
document or instrument reasonably deemed by the Collateral Agent to be necessary
or desirable for the creation and perfection of the foregoing Liens. The
Borrower will cause each of such Domestic Subsidiaries to take all actions
reasonably requested by the Administrative Agent (including, without limitation,
the filing of UCC-1's) in connection with the granting of such security
interests.
(g) The security interests required to be granted pursuant to this Section
8.10 shall be granted pursuant to security documentation which shall be
substantially similar to the Security Documents already executed and delivered
by the Borrower or its Subsidiaries, as applicable or otherwise satisfactory in
form and substance to the Collateral Agent and the Borrower and shall constitute
valid and enforceable perfected security interests prior to the rights of all
third Persons and subject to no other Liens except Permitted Liens. The
Additional Security Documents and other instruments related thereto shall be
duly recorded or filed in such manner and in such places and at such times as
are required by law to establish, perfect, preserve and protect the Liens, in
favor of the Collateral Agent for the benefit of the respective Secured
Creditors, required to be granted pursuant to the Additional Security Documents
and all taxes, fees and
54
other charges payable in connection therewith shall be paid in full by the
Borrower. At the time of the execution and delivery of the Additional Security
Documents, the Borrower shall cause to be delivered to the Collateral Agent such
opinions of counsel, Mortgage Policies, title surveys, real estate appraisals
and other related documents as may be reasonably requested by the Agents or the
Required Lenders to assure themselves that this Section 8.10 has been complied
with.
(h) The Borrower agrees that each action required above by Section 8.10(a)
shall be completed within 60 days after such action is requested to be taken by
either the Administrative Agent or the Required Lenders, provided that in no
event shall the Borrower be required to take any action, other than using its
reasonable commercial efforts, to obtain consents from third parties with
respect to its compliance with this Section 8.10. The Borrower further agrees
that each action required by Section 8.10(d), (e), (f) and (g) with respect to
the creation or acquisition of a new Subsidiary shall be completed
contemporaneously with (or, in the case of any documents or instruments to be
registered, filed or recorded, within 10 days of) the creation of such new
Subsidiary.
8.11 FOREIGN SUBSIDIARIES SECURITY. If following a change in the relevant
sections of the Code or the regulations, rules, rulings, notices or other
official pronouncements issued or promulgated thereunder, counsel for the
Borrower reasonably acceptable to the Administrative Agent does not within 60
days after a written request from the Administrative Agent or the Required
Lenders deliver evidence, in form and substance satisfactory to the
Administrative Agent, the Required Lenders and the Borrower, with respect to any
Foreign Subsidiary which has not already had all of its stock pledged pursuant
to the Pledge Agreement that (i) a pledge of 66-2/3% or more of the total
combined voting power of all classes of capital stock of such Foreign Subsidiary
entitled to vote, (ii) the entering into by such Foreign Subsidiary of a
security agreement in substantially the form of the Security Agreement and (iii)
the entering into by such Foreign Subsidiary of a guaranty in substantially the
form of the Guaranty, in any such case would cause the undistributed earnings of
such Foreign Subsidiary as determined for Federal income tax purposes to be
treated as a deemed dividend to such Foreign Subsidiary's United States parent
for Federal income tax purposes, then in the case of a failure to deliver the
evidence described in clause (i) above, that portion of such Foreign
Subsidiary's outstanding capital stock not theretofore pledged pursuant to the
Pledge Agreement shall be pledged to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Pledge Agreement (or another pledge agreement
in substantially similar form, if needed), and in the case of a failure to
deliver the evidence described in clause (ii) above, such Foreign Subsidiary
shall execute and deliver the Security Agreement (or another security agreement
in substantially similar form, if needed), granting the Secured Creditors a
security interest in all of such Foreign Subsidiary's assets and securing the
Obligations of the Borrowers under the Credit Documents and under any Interest
Rate Protection Agreement or Other Hedging Agreement and, in the event the
Guaranty shall have been executed by such Foreign Subsidiary, the obligations of
such Foreign Subsidiary thereunder, and in the case of a failure to deliver the
evidence described in clause (iii) above, such Foreign Subsidiary shall execute
and deliver the Subsidiaries Guaranty (or another guaranty in
55
substantially similar form, if needed), guaranteeing the Obligations of the
Borrower under the Credit Documents and under any Interest Rate Protection
Agreement or Other Hedging Agreement, in each case to the extent that the
entering into of such Security Agreement or Guaranty is permitted by the laws of
the respective foreign jurisdiction and with all documents delivered pursuant to
this Section 8.11 to be in form and substance reasonably satisfactory to the
Administrative Agent.
8.12 PERFORMANCE OF OBLIGATIONS. The Borrower will, and will cause each of
its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement and other debt instrument by which it is
bound, except such non-performances as, individually or in the aggregate, have
not had, and could not reasonably be expected to have, a Material Adverse
Effect.
SECTION 9. NEGATIVE COVENANTS. The Borrower hereby covenants and agrees
that as of the Effective Date and thereafter for so long as this Agreement is in
effect and until the Commitments have terminated, no Letters of Credit (other
than Letters of Credit, together with all Fees that have accrued and will accrue
thereon through the stated termination date of such Letters of Credit, which
have either been (a) cash collateralized in a manner reasonably satisfactory to
the applicable Issuing Lender or (b) backstopped by a letter of credit or other
security acceptable to the applicable Issuing Lender) or Notes are outstanding
and the Loans, together with interest, Fees and all other Obligations (other
than any indemnities described in Section 13.01 which are not then due and
payable) incurred hereunder, are paid in full:
9.01 BUSINESS. The Borrower will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than the
business in which the Borrower and its Subsidiaries are engaged on the Effective
Date and other businesses reasonably related thereto.
9.02 CONSOLIDATION, MERGER, PURCHASE OR SALE OF ASSETS, ETC. The Borrower
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or any part of its property or assets (other
than inventory in the ordinary course of business), or enter into any
sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) any part of the property or assets (other than
purchases or other acquisitions of inventory, materials, equipment and
intangible assets in the ordinary course of business) of any Person (or agree to
do any of the foregoing at any future time), except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall be
permitted to the extent not in violation of Section 9.09;
(ii) each of the Borrower and its Subsidiaries may in the ordinary course
of business, sell, lease or otherwise dispose of any assets which, in the
56
reasonable judgment of such Person, are obsolete, worn out or otherwise no
longer useful in the conduct of such Person's business;
(iii) advances, investments and loans may be made to the extent permitted
by Section 9.06;
(iv) each of the Borrower and its Subsidiaries (x) may lease (as lessee)
real or personal property in the ordinary course of business (so long as any
such lease does not create a Capitalized Lease Obligation except to the extent
permitted by Section 9.04) and (y) may lease or sublease property to third
Persons which leases and subleases do not interfere in any material respect with
the business of the Borrower or any of its Subsidiaries;
(v) the Borrower and its Subsidiaries may sell or discount, in each case
without recourse and in the ordinary course of business, accounts receivable
arising in the ordinary course of business, but only in connection with the
compromise or collection thereof consistent with customary industry practice
(and not as part of any bulk sale);
(vi) licenses or sublicenses by the Borrower and its Subsidiaries of
software, copyrights, trademarks, patents, know-how and other intellectual
property in the ordinary course of business and which do not materially
interfere with the business of the Borrower or the Borrower and its Subsidiaries
taken as a whole shall be permitted;
(vii) (A) the Borrower or any Domestic Wholly-Owned Subsidiary of the
Borrower may transfer or lease assets to or acquire or lease assets from the
Borrower or any other Domestic Wholly-Owned Subsidiary, (B) any Subsidiary may
be merged or liquidated into the Borrower (as long as the Borrower is the
surviving corporation of such merger) or any other Domestic Wholly-Owned
Subsidiary of the Borrower and (C) the Borrower may be merged solely for the
purposes set forth in clause (c) of the proviso to Section 9.13, so long as, in
each such case (x) the security interests granted to the Collateral Agent for
the benefit of the Secured Creditors pursuant to the Security Documents in the
assets so transferred shall be in full force and effect and shall be perfected
and of first priority to the extent provided therein, and (y) any Indebtedness
of, or Liens on the assets of, the Subsidiary transferring assets or being
dissolved or liquidated shall be otherwise permitted to be incurred by, and to
exist on the assets of, such Wholly-Owned Domestic Subsidiary, pursuant to the
other provisions of this Agreement;
(viii) each of the Borrower and its Subsidiaries may sell, lease or
otherwise dispose of any equipment and other assets, to the extent not otherwise
permitted under any other clause of this Section 9.02, at the fair market value
thereof (as determined in good faith by the Borrower), provided that the Net
Sale Proceeds thereof (x) shall consist of at least 75% in cash, (y) to the
extent required
57
to do so by Section 4.02, shall be applied by the Borrower to repay Loans and
(z) do not exceed $5,000,000 in the aggregate in any fiscal year of the
Borrower;
(ix) the Borrower and its Subsidiaries may sell or exchange any item of
equipment, so long as the purpose of each such sale or exchange is to acquire
(and results within 360 days before or after such sale or exchange in the
acquisition of) replacement items of equipment which are the functional
equivalent of the item of equipment so sold or exchanged;
(x) so long as no Default or Event of Default then exists or would result
therefrom, (i) the Borrower and its Wholly-Owned Subsidiaries may acquire
substantially all of the assets or the capital stock of any Person, (ii) the
Borrower and its Wholly-Owned Subsidiaries may simultaneously exchange (for
reasonably equivalent value, a portion thereof which may include cash) 100% of
the assets or locations or capital stock or other equity interests (in the case
of transactions in which all of the equity of the entities owning solely such
assets or locations is exchanged) of any Subsidiary of such Person for 100% of
the assets or locations or capital stock or other equity interests (in the case
of transactions in which all of the equity of the entities owning solely such
assets or locations is exchanged) of any Person (any such acquisition permitted
by this clause (x), a "Permitted Acquisition"), provided that (A) such Person
(or the assets so acquired) was, immediately prior to such acquisition, engaged
(or used) primarily in the business permitted pursuant to Section 9.01, (B) if
such acquisition is structured as a stock acquisition, then either (1) the
Person so acquired becomes a Wholly-Owned Subsidiary of the Borrower or (2) such
Person is merged with and into a Wholly-Owned Subsidiary of the Borrower (with
such Wholly-Owned Subsidiary being the surviving corporation of such merger),
and in any case, all of the provisions of Section 9.15 have been complied with
in respect of such Person, (C) any Liens or Indebtedness assumed or issued in
connection with such acquisition are otherwise permitted under Section 9.03 or
9.04, as the case may be, (D) the only consideration paid in connection with any
such Permitted Acquisitions shall consist of (x) Net Sale Proceeds permitted to
be reinvested in accordance with Section 4.02(f), and (y) net cash proceeds from
the issuance of common equity of the Borrower to the extent the aggregate amount
of same so used in connection with any Permitted Acquisition shall not exceed
the Equity Proceeds Amount at such time, (E) with respect to an asset or
location swap contemplated by clause (ii), the net cash expenditure shall not
exceed $2,000,000 in the aggregate, (F) the Borrower and its Subsidiaries are in
compliance, after giving effect to such acquisition and the incurrence or
assumption of any Indebtedness related thereto, with the covenants contained in
Sections 9.09, 9.10, 9.11 and 9.12 for the Test Period then most recently ended
on a pro forma Basis as if such Permitted Acquisition had been consummated on
the first day of such Test Period, provided further, that for purposes of
compliance with Sections 9.10 and 9.12, the Borrower must evidence compliance at
a level at least twenty-five basis points better than the ratio otherwise
applicable for such Test Period, (iii) such Permitted Acquisition shall be
permitted pursuant to the
58
terms of the Senior Subordinated Note Documents and any documents entered into
in connection with any Additional Subordinated Debt and (iv) at least 5 Business
Days prior to the consummation of any Permitted Acquisition, the Borrower shall
deliver to each Agent a certificate of its chief financial officer or other
Authorized Officer certifying (and showing the calculations therefor) compliance
with the foregoing clauses (i) through (iv); and (v) the aggregate purchase
price for all such Permitted Acquisitions shall not exceed $10,000,000 over the
term of the facility; and
(xi) so long as no Default or Event of Default then exists or would result
therefrom, the Borrower and its Wholly-Owned Subsidiaries may acquire additional
stores or all or substantially all of the assets of a Person which solely owns
additional stores provided that the aggregate purchase price for all such stores
shall not exceed $1,000,000 in any fiscal year and, provided that such purchase
price shall constitute Capital Expenditures in such fiscal year.
To the extent the Required Lenders waive the provisions of this Section 9.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 9.02, such Collateral shall be sold free and clear of
the Liens created by the Security Documents, and the Administrative Agent and
Collateral Agent shall be authorized to take any actions deemed appropriate in
order to effect the foregoing.
9.03 LIENS. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable with recourse to the Borrower or any of
its Subsidiaries), or assign any right to receive income or permit the filing of
any effective financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute; provided that the provisions
of this Section 9.03 shall not prevent the creation, incurrence, assumption or
existence of the following (Liens described below are herein referred to as
"Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or levies
not yet due and payable or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for which
adequate reserves have been established in accordance with generally accepted
accounting principles in the United States (or the equivalent thereof in any
country in which a Foreign Subsidiary is doing business, as applicable);
(ii) Liens in respect of property or assets of the Borrower or any of its
Subsidiaries imposed by law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as carriers',
warehousemen's, materialmen's and mechanics' liens and other similar Liens
arising in the ordinary course of business, and (x) which do not in the
aggregate materially detract from the value of the property or assets of the
Borrower or the
59
Borrower and its Subsidiaries taken as a whole and do not materially impair the
use thereof in the operation of the business of the Borrower or the Borrower and
its Subsidiaries taken as a whole or (y) which are being contested in good faith
by appropriate proceedings, which proceedings (or orders entered in connection
with such proceedings) have the effect of preventing the forfeiture or sale of
the property or assets subject to any such Lien;
(iii) Liens in existence on the Effective Date which are listed, and the
property subject thereto described, in Schedule 9.03, plus renewals and
extensions of such Liens, provided that (x) the aggregate principal amount of
the Indebtedness, if any, secured by such Liens does not increase from that
amount outstanding at the time of any such renewal or extension and (y) any such
renewal or extension does not encumber any additional assets or properties of
the Borrower or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to this Agreement and the Security Documents;
(vi) licenses, sublicenses, leases or subleases granted to other Persons in
the ordinary course of business not materially interfering with the conduct of
the business of the Borrower or any of its Subsidiaries;
(vii) Liens upon assets of the Borrower and its Subsidiaries subject to
Capitalized Lease Obligations to the extent permitted by Section 9.04, provided
that (x) such Liens only serve to secure the payment of Indebtedness arising
under such Capitalized Lease Obligation and (y) the Lien encumbering the asset
giving rise to the Capitalized Lease Obligation does not encumber any other
asset (other than proceeds thereof) of the Borrower or any Subsidiary of the
Borrower;
(viii) Liens placed upon assets used in the ordinary course of business of
the Borrower or any of its Subsidiaries at the time of acquisition thereof by
the Borrower or any such Subsidiary or within 90 days thereafter to secure
Indebtedness incurred to pay all or a portion of the purchase price thereof,
provided that (x) the aggregate outstanding principal amount of all Indebtedness
secured by Liens permitted by this clause (viii) shall not at any time exceed
$7,500,000, (y) the Indebtedness secured by any such Lien does not exceed 100%,
of the lesser of the fair market value and the purchase price of the property
being purchased at the time of incurrence of such Indebtedness and (z) in all
events, the Lien encumbering the assets so acquired does not encumber any other
asset (other than proceeds thereof) of the Borrower or such Subsidiary;
(ix) easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies, in each case whether now or
60
hereafter in existence, not securing Indebtedness and not materially interfering
with the conduct of the business of the Borrower or the Borrower and its
Subsidiaries taken as a whole;
(x) Liens arising from precautionary UCC financing statement filings
regarding operating leases entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business;
(xi) Liens arising out of judgments or awards in circumstances not
constituting an Event of Default under Section 10.09;
(xii) statutory and common law landlords' liens under leases or subleases
to which the Borrower or any of its Subsidiaries is a party;
(xiii) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business (x) in connection with workers'
compensation, unemployment insurance and other types of social security, (y) to
secure the performance of tenders, statutory obligations (other than excise
taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases,
government contracts, trade contracts, performance and return of money bonds and
other similar obligations (exclusive of obligations for the payment of borrowed
money) or (z) to secure liability for premiums to insurance carriers;
(xiv) any interest or title of a lessor, sublessor, licensee or licensor
under any lease or license agreement permitted by this Agreement; (xv) Liens in
favor of customs and revenue authorities arising as a matter of law to secure
the payment of customs duties in connection with the importation of goods;
(xvi) Liens arising out of conditional sale, title retention, consignment
or similar arrangements for the sale of goods entered into by the Borrower or
any of its Subsidiaries in the ordinary course of business in accordance with
the past practices of the Borrower and its Subsidiaries prior to the Effective
Date;
(xvii) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (i) any Indebtedness that is secured by such Liens is
permitted to exist under Section 9.04(xii), and (ii) such Liens are not incurred
in connection with, or in contemplation or anticipation of, such Permitted
Acquisition and do not attach to any other asset of the Borrower or any of its
Subsidiaries;
(xviii) Liens on assets of Foreign Subsidiaries to secure Indebtedness
permitted to be outstanding pursuant to Section 9.04(xiii) of this Agreement;
61
(xix) Liens not otherwise permitted by the foregoing clauses (i) through
(xviii) to the extent attaching to properties and assets with an aggregate fair
value not in excess of, and securing liabilities not in excess of, $5,000,000 in
the aggregate at any time outstanding.
9.04 INDEBTEDNESS. The Borrower will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other Credit
Documents;
(ii) Indebtedness of the Borrower pursuant to the Senior Subordinated Notes
and/or Additional Subordinated Debt in an aggregate principal amount not to
exceed $130,000,000 in the aggregate at any time outstanding so long as any such
Additional Subordinated Debt shall be permitted to be incurred by the other
provisions of this Agreement;
(iii) Existing Indebtedness shall be permitted to the extent the same is
listed on Schedule 9.04, and extensions, replacements, refinancings or renewals
thereof; provided that no such extensions, replacements, refinancings or
renewals shall increase the principal amount of any of the Existing
Indebtedness;
(iv) Accrued expenses and current trade accounts payable incurred in the
ordinary course;
(v) Indebtedness under non-speculative Interest Rate Protection Agreements
which may be entered into from time to time by the Borrower and which the
Borrower in good faith believes will provide protection against fluctuations in
interest rates with respect to outstanding floating rate Indebtedness then
outstanding, and permitted to remain outstanding, pursuant to the other
provisions of this Section 9.04;
(vi) Indebtedness evidenced by Capitalized Lease Obligations to the extent
permitted pursuant to Section 9.09, and Indebtedness subject to Liens otherwise
permitted under Section 9.03(viii) provided that in no event shall the aggregate
principal amount of such Indebtedness permitted by this clause (vi) exceed
$10,000,000 at any time outstanding;
(vii) Intercompany Indebtedness of any Domestic Wholly-Owned Subsidiary
owing to the Borrower or any other Domestic Wholly-Owned Subsidiary, or of the
Borrower owing to any Domestic Wholly-Owned Subsidiary, to the extent permitted
by Section 9.06(vi);
(viii) In addition to any Indebtedness permitted by the preceding clause
(vii), Indebtedness of any Wholly-Owned Subsidiary to the Borrower or
another Wholly-Owned Subsidiary constituting the purchase price in respect of
62
intercompany transfers of goods made in the ordinary course of business to the
extent not constituting Indebtedness for borrowed money;
(ix) Indebtedness evidenced by Other Hedging Agreements entered into
pursuant to Section 9.06(v);
(x) Indebtedness under performance bonds, letter of credit obligations to
provide security for worker's compensation claims and bank overdrafts, in each
case incurred in the ordinary course of business, provided that any obligations
arising in connection with such bank overdraft Indebtedness is extinguished
within five Business Days;
(xi) Indebtedness consisting of (a) guaranties by any Credit Party of
Indebtedness of any Credit Party provided such Indebtedness is otherwise
permitted pursuant to this Section 9.04 and (b) indemnities and guaranties in
each case with respect to obligations not constituting Indebtedness, other than
pursuant to clause (vi) of the definition of Indebtedness hereof, and made in
the ordinary course of business consistent with past practices;
(xii) Indebtedness of a Subsidiary acquired pursuant to a Permitted
Acquisition and existing at the time of consummation thereof (or Indebtedness
assumed at the time of a Permitted Acquisition of an asset securing such
Indebtedness), provided that such Indebtedness (x) was not incurred in
connection with, or in anticipation or contemplation of, such Permitted
Acquisition and (y) does not exceed in aggregate principal amount for any
Permitted Acquisition or group of related Permitted Acquisitions, an amount
equal to 20% of the fair market value of the assets acquired in such Permitted
Acquisition or Permitted Acquisitions;
(xiii) Indebtedness consisting of (x) local loans from local lenders in
jurisdictions outside the United States to Foreign Subsidiaries located in such
jurisdictions; provided that the aggregate principal amount of all such
Indebtedness does not exceed $500,000 at any time outstanding and (y)
Indebtedness of the Borrower and its Domestic Subsidiaries consisting of
guarantees of the foregoing Indebtedness so long as the sum of (I) the aggregate
amount of Indebtedness so guaranteed at any time, (II) the aggregate amount of
investments made in Foreign Subsidiaries pursuant to Section 9.06(xii) after the
Effective Date (without giving effect to any write-offs or write-downs thereof)
and (III) the aggregate amount of intercompany loans extended to Foreign
Subsidiaries pursuant to Section 9.06(vi) hereof (without giving effect to any
write-offs or write-downs thereof) shall not exceed $2,000,000;
(xiv) Indebtedness of the Borrower pursuant to its guaranty of the Xxxx
Loan; and
(xv) Additional Indebtedness of the Borrower and its Subsidiaries to the
extent not permitted by the foregoing clauses of this Section 9.04 (but
63
excluding any additional Indebtedness constituting (1) intercompany loans to
Foreign Subsidiaries or (2) Indebtedness acquired pursuant to a Permitted
Acquisition) not to exceed $7,500,000 in aggregate principal amount at any time
outstanding.
9.05 DESIGNATED SENIOR DEBT. The Borrower will not, and will not permit any
of its Subsidiaries to, designate any Indebtedness (other than the Obligations)
as "Designated Senior Indebtedness", "Designated Guarantor Senior Indebtedness"
or any similar term for purposes of, and as defined in, the Senior Subordinated
Note Documents and the documents entered into in connection with any Additional
Subordinated Debt.
9.06 ADVANCES, INVESTMENTS AND LOANS. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or hold any cash or Cash Equivalents,
except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivable owing to any of them;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and Cash
Equivalents;
(iii) the Borrower and its Subsidiaries may make loans and advances in the
ordinary course of business to their respective employees for moving, travel and
similar expenses so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs of such
loans and advances) shall not exceed $2,000,000;
(iv) the Borrower may enter into Interest Rate Protection Agreements to the
extent permitted in Section 9.04(v);
(v) the Borrower may enter into and perform its obligations under Other
Hedging Agreements entered into in the ordinary course of business and so long
as any such Other Hedging Agreement is not speculative in nature and is (x)
related to income derived from foreign operations of the Borrower or any
Subsidiary or otherwise related to purchases permitted hereunder from foreign
suppliers or (y) entered into to protect the Borrower and/or its Subsidiaries
against fluctuations in the prices of raw materials used in their Businesses;
(vi) any Subsidiary may make intercompany loans to the Borrower or any
Wholly-Owned Subsidiary and the Borrower may make intercompany loans and
advances to any Wholly-Owned Subsidiary, provided that any promissory notes
evidencing such intercompany loans shall be pledged (and delivered) by
64
the Borrower or the respective Domestic Wholly-Owned Subsidiary that is the
lender of such intercompany loan as Collateral pursuant to the applicable Pledge
Agreement, provided further, that the aggregate amount of intercompany loans
from the Borrower or any Domestic Subsidiary to Foreign Subsidiaries (without
giving effect to any write-downs or write-offs thereof) shall not when added to
(I) the aggregate principal amount of all Indebtedness guaranteed pursuant to
Section 9.04(xiii) then outstanding and (II) the aggregate amount of investments
in Foreign Subsidiaries pursuant to Section 9.06(xii) hereof (without giving
effect to any write-offs or write-downs thereof), exceed $2,000,000;
(vii) the Borrower may establish Subsidiaries to the extent permitted by
Section 9.15;
(viii) the Borrower and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
(ix) advances, loans and investments in existence on the Effective Date and
listed on Schedule 9.06 shall be permitted, without giving effect to any
additions thereto or replacements thereof;
(x) the Borrower may acquire and hold obligations of one or more officers
or other employees of the Borrower or its Subsidiaries in connection with such
officers' or employees' acquisition of shares of the Borrower Common Stock so
long as no cash is paid by the Borrower or any of its Subsidiaries in connection
with the acquisition of any such obligations, (ii) the Borrower may extend loans
to officers and employees of the Borrower and its Subsidiaries on or after the
date on which any such officers and employees exercise their options to purchase
capital stock of the Borrower so long as the proceeds of such loans are required
to be promptly used by such officers and employees to pay taxes payable by them
as a result of such exercise and (iii) 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 of Borrower
Common Stock shall be permitted; provided that the aggregate principal amount at
any time outstanding of the obligations and loans extended pursuant to clauses
(i), (ii) and (iii) shall not exceed $3,000,000;
(xi) Permitted Acquisitions shall be permitted;
(xii) investments by the Borrower and its Subsidiaries in (A) Wholly-Owned
Domestic Subsidiaries of the Borrower and (B) in Wholly-Owned Foreign
Subsidiaries of the Borrower, so long as in the case of this clause (B), the sum
of (I) the aggregate amount of all such investments since the Effective Date
(without giving effect to any write-offs or write-downs thereof), (II) the
aggregate amount of all Indebtedness of Foreign Subsidiaries guaranteed
65
pursuant to Section 9.04(xiii) then outstanding plus (III) the aggregate amount
of intercompany loans extended to Foreign Subsidiaries pursuant to Section
9.06(vi) hereof (without giving effect to any write-offs or write-downs thereof)
shall not exceed $2,000,000;
(xiii) investments by the Borrower and its Subsidiaries in non-Wholly-Owned
Subsidiaries and joint entities so long as (I) after giving effect to such
investment, the Borrower and its Subsidiaries are in compliance with the
covenants set forth in Section 9.09, 9.10, 9.11 and 9.12 for the Test Period
then most recently ended on a pro forma Basis as if such investment had been
consummated on the last day of such Test Period, (II) such investment is
permitted pursuant to the terms of the Senior Subordinated Note Documents and
pursuant to any documents entered into in connection with any Additional
Subordinated Debt and no such Subsidiary or joint venture shall be obligated to,
guarantee the Senior Subordinated Notes or any Additional Subordinated Debt and
(III) the aggregate amount expended on all such investments after the Effective
Date shall not exceed $2,500,000;
(xiv) deposits made in the ordinary course of business to secure the
performance of leases shall be permitted; and
(xv) additional investments of the Borrower and its Subsidiaries to the
extent not permitted by the foregoing clauses of this Section 9.06 not to exceed
$2,000,000 at any time.
9.07 DIVIDENDS. The Borrower shall not, and shall not permit any of its
Subsidiaries to, authorize, declare or pay any dividends (other than dividends
payable solely in common stock of the Borrower or any such Subsidiary, as the
case may be) or return any capital to, its stockholders or authorize or make any
other distribution, payment or delivery of property or cash to its stockholders
as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for a consideration, any shares of any class of its capital stock,
now or hereafter outstanding (or any warrants for or options or stock
appreciation rights in respect of any of such shares), or set aside any funds
for any of the foregoing purposes, and the Borrower will not permit any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the capital stock of the Borrower or any Subsidiary, as the case
may be, now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued by such Person with respect to its capital stock)
(all of the foregoing and including all payments made or required to be made by
such Person with respect to any stock appreciation rights, plans, equity
incentive or achievement plans or any similar plans or setting aside of any
funds for the foregoing purposes, "Dividends"), except that:
(i) any Subsidiary of the Borrower (x) may pay Dividends to the Borrower or
any Wholly-Owned Subsidiary of the Borrower and (y) if such Subsidiary is not a
Wholly-Owned Subsidiary, may pay cash Dividends to its shareholders generally so
long as the Borrower or its respective Subsidiary which owns the equity interest
or interests in the Subsidiary paying such Dividends
66
receives at least its proportionate share thereof (based upon its relative
holdings of equity interests in the Subsidiary paying such Dividends and taking
into account the relative preferences, if any, of the various classes of equity
interests in such Subsidiary);
(ii) Borrower Preferred Stock may be issued as a dividend on the Borrower
Preferred Stock;
(iii) so long as no Default or Event of Default shall have occurred or
shall result therefrom, the Borrower will be permitted (x) to redeem or
repurchase, shares of its common stock or options in respect thereof, in each
case, in connection with the repurchase provisions under employee stock option
or stock purchase agreements or other agreements to compensate management
employees; and (y) to make payments in respect of any redemption, repurchase,
acquisition, cancellation or other retirement for value of shares of capital
stock of the Borrower or options, stock appreciation or similar securities, in
each case held by then current or former officers, directors or employees of the
Borrower or any of its Subsidiaries (or their estates or beneficiaries under
their estates) or by an employee benefit plan, upon the death, disability,
retirement or termination of employment of such officers, directors and
employees, provided that such payments pursuant to this clause (iii), shall not
exceed $10,000,000 in the aggregate after the Effective Date.
9.08 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any of its Affiliates or any of its Subsidiaries, other than in the ordinary
course of business and on terms and conditions substantially as favorable to the
Borrower or such Subsidiary as would reasonably be obtained by the Borrower or
such Subsidiary at that time in a comparable arm's-length transaction with a
Person other than an Affiliate, except that:
(i) Dividends may be paid to the extent provided in Section 9.07;
(ii) loans may be made and other transactions may be entered into between
the Borrower and its Subsidiaries to the extent permitted by Sections 9.04 and
9.06;
(iii) customary fees may be paid to non-officer directors of the Borrower;
(iv) the payment, on a quarterly basis, of management fees to THL and/or
THL Affiliates in accordance with the management agreement between THL and/or
THL Affiliates and the Borrower in an aggregate amount (for all such Persons
taken together) not to exceed $125,000 in any fiscal quarter of the Borrower,
provided however, that in the event that Consolidated EBITDA for the Test Period
most recently ended is greater than or equal to $60,000,000,
67
management fees for such fiscal quarter shall not exceed $250,000 in such fiscal
quarter of the Borrower;
(v) the reimbursement of THL and/or THL Affiliates for their reasonable
out-of-pocket expenses incurred by them in connection with performing management
services to the Borrower and its Subsidiaries;
(vi) the payment of one time fees to THL and/or the THL Affiliates in
connection with each acquisition of a company or a line of business by the
Borrower or its Subsidiaries, such fees to be payable at the time of each such
acquisition and not to exceed 1% of the aggregate consideration paid by the
Borrower and its Subsidiaries for any such acquisition;
(vii) the payment of consulting fees to Xxxxxx Xxxxxxxx pursuant to a
consulting arrangement entered into on or prior to the Effective Date on an
aggregate amount not to exceed $50,000 in any fiscal year of the Borrower; and
(viii) transactions among the Borrower and its Subsidiaries not otherwise
restricted under this Agreement.
9.09 CAPITAL EXPENDITURES. (a) The Borrower will not, and will not permit
any of its Subsidiaries to, make any Capital Expenditures, except that (w)
during the fiscal year (taken as one accounting period) ending on or about
December 31, 2002, the Borrower and its Subsidiaries may make Capital
Expenditures in an aggregate amount not to exceed $11,000,000, (x) during the
fiscal year (taken as one accounting period) ending on or about December 31,
2003 the Borrower and its Subsidiaries may make Capital Expenditures in an
aggregate amount not to exceed $12,000,000, (y) during the fiscal year (taken as
one accounting period) ending on or about December 31, 2004 the Borrower and its
Subsidiaries may make Capital Expenditures in an aggregate amount not to exceed
$10,000,000 provided that the aggregate amount of the Capital Expenditures made
during the fiscal years ending on or about December 31, 2003 and December 31,
2004 shall not exceed $22,000,000 and (z) during each fiscal year thereafter
(taken as one accounting period), the Borrower and its Subsidiaries may make
Capital Expenditures in an aggregate amount not to exceed $12,000,000 provided
that Consolidated EBITDA for the prior fiscal year (taken as one accounting
period) is greater than or equal to $60,000,000, otherwise the Borrower and its
Subsidiaries may make Capital Expenditures in an aggregate amount not to exceed
$10,000,000.
(b) Notwithstanding the foregoing, in the event that the amount of Capital
Expenditures permitted to be made by the Borrower and its Subsidiaries pursuant
to clause (a) above in any fiscal year (after giving effect to the proviso
thereto, but before giving effect to any increase in such permitted expenditure
amount pursuant to this clause (b)) is greater than the amount of such Capital
Expenditures made by the Borrower and its Subsidiaries during such fiscal year,
such excess in an amount not to exceed $5,000,000 (the "Rollover Amount") may be
carried forward and utilized to make Capital Expenditures in the next fiscal
year.
68
(c) Notwithstanding the foregoing, the Borrower and its Subsidiaries may
make Capital Expenditures (which Capital Expenditures will not be included in
any determination under the foregoing clause (a)) with the Net Sale Proceeds of
asset sales to the extent such proceeds are not required to be applied to repay
Loans pursuant to Section 4.02(f).
(d) Notwithstanding the foregoing, the Borrower and its Subsidiaries may
make Capital Expenditures (which Capital Expenditures will not be included in
any determination under the foregoing clause (a)) with the insurance proceeds
received by the Borrower or any of its Subsidiaries from any Recovery Event so
long as such Capital Expenditures are to replace or restore any properties or
assets in respect of which such proceeds were paid within 360 days following the
date of the receipt of such insurance proceeds to the extent such insurance
proceeds are not required to be applied to repay Loans pursuant to Section
4.02(h).
(e) Notwithstanding the foregoing, the Borrower may make Capital
Expenditures constituting Permitted Acquisitions (which Capital Expenditures
will not be included in any determination under the foregoing clause (a)).
(f) Notwithstanding the foregoing, the Borrower may make Capital
Expenditures at any time (which Capital Expenditures will not be included in any
determination under the foregoing clause (a)) with proceeds received from the
sale of common equity so long as at the time of the making of any such Capital
Expenditure, the aggregate amount to be expended in connection therewith does
not exceed the Equity Proceeds Amount at such time.
9.10 CONSOLIDATED INTEREST COVERAGE RATIO.
The Borrower will not permit the Consolidated Interest Coverage Ratio for
any period of four consecutive fiscal quarters, in each case taken as one
accounting period, ended on the last day of a fiscal quarter described below to
be less than the amount set forth opposite such fiscal quarter below:
Fiscal Quarter Ended In, Or Closest To Ratio
-------------------------------------------- -----
FQ1 2003 2.50:1.00
FQ2 2003 2.50:1.00
FQ3 2003 2.50:1.00
FQ4 2003 2.50:1.00
FQ1 2004 2.50:1.00
FQ2 2004 2.50:1.00
FQ3 2004 2.50:1.00
FQ4 2004 2.50:1.00
FQ1 2005 2.50:1.00
FQ2 2005 2.50:1.00
FQ3 2005 2.50:1.00
FQ4 2005 2.75:1.00
FQ1 2006 2.75:1.00
69
FQ2 2006 2.75:1.00
FQ3 2006 2.75:1.00
FQ4 2006 3.00:1.00
FQ1 2007 3.00:1.00
FQ2 2007 3.00:1.00
FQ3 2007 3.00:1.00
9.11 MINIMUM CONSOLIDATED EBITDA. The Borrower will not permit Consolidated
EBITDA for any period of four consecutive fiscal quarters (in each case taken as
one accounting period), ended on the last day of any fiscal quarter set forth
below to be less than the amount set forth opposite such fiscal quarter below:
FQ4 2002 $56,200,000
FQ1 2003 $53,200,000
FQ2 2003 $51,900,000
FQ3 2003 $51,900,000
FQ4 2003 $51,900,000
FQ1 2004 $51,900,000
FQ2 2004 $51,900,000
FQ3 2004 $51,900,000
FQ4 2004 $54,000,000
FQ1 2005 $54,000,000
FQ2 2005 $54,000,000
FQ3 2005 $54,000,000
FQ4 2005 $56,300,000
FQ1 2006 $56,300,000
FQ2 2006 $56,300,000
FQ3 2006 $56,300,000
FQ4 2006 $58,700,000
FQ1 2007 $58,700,000
FQ2 2007 $58,700,000
FQ3 2007 $58,700,000
9.12 MAXIMUM LEVERAGE RATIO. The Borrower will not permit the Leverage
Ratio at any time during a fiscal quarter set forth below to be greater than the
ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ended In, Or Closest To Ratio
-------------------------------------------- -----
Effective Date through FQ1 2003 4.75:1.00
FQ2 2003 4.75:1.00
FQ3 2003 4.75:1.00
FQ4 2003 4.65:1.00
FQ1 2004 4.65:1.00
FQ2 2004 4.65:1.00
FQ3 2004 4.65:1.00
70
FQ4 2004 4.15:1.00
FQ1 2005 4.15:1.00
FQ2 2005 4.15:1.00
FQ3 2005 4.15:1.00
FQ4 2005 3.65:1.00
FQ1 2006 3.65:1.00
FQ2 2006 3.65:1.00
FQ3 2006 3.65:1.00
FQ4 2006 3.00:1.00
FQ1 2007 3.00:1.00
FQ2 2007 3.00:1.00
FQ3 2007 3.00:1.00
9.13 LIMITATION ON PREPAYMENTS AND MODIFICATIONS OF INDEBTEDNESS;
MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND CERTAIN OTHER
AGREEMENTS; ETC. The Borrower will not, and will not permit any of its
Subsidiaries to, (i) amend or modify, or permit the amendment or modification
of, any provision of the Existing Indebtedness, the Senior Subordinated Notes
or, if issued, any Additional Subordinated Debt or of any material agreement
(including, without limitation, any purchase agreement, indenture, loan
agreement or security agreement) relating thereto except for any amendment or
modifications which are not in any way adverse to the interests of the Lenders
and are effected pursuant to documentation satisfactory in form and substance to
the Agents in their sole judgment, (ii) make (or give any notice in respect
thereof) any voluntary or optional payment or prepayment on or redemption or
acquisition for value of, or any prepayment or redemption as a result of any
asset sale, change of control or similar event of, any Existing Indebtedness,
Senior Subordinated Notes or any Additional Subordinated Debt, or (iii) amend,
modify or change its Certificate of Incorporation (including, without
limitation, by the filing or modification of any certificate of designation) or
By-Laws, or any agreement entered into by it, with respect to its capital stock
(including any Shareholders' Agreement), or enter into any new agreement with
respect to its capital stock, other than any amendments, modifications or
changes pursuant to this clause (iii) or any such new agreements pursuant to
this clause (iii) which do not in any way adversely affect the interests of the
Lenders or such as are otherwise approved by the Required Lenders, provided that
(a) nothing in this Section 9.13 shall prevent the Borrower or any of its
Subsidiaries from amending its Certificate of Incorporation or By-Laws to
provide indemnification to any officer or director of the Borrower or any such
Subsidiary to the maximum extent permitted by applicable law and provided that
the Borrower may issue such capital stock as is provided in Section 9.17; (b)
the Senior Subordinated Notes may be repaid with the proceeds of the concurrent
issuance of Additional Subordinated Debt so long as (I) no Default or Event of
Default then exists or would exist after giving effect thereto, (II) the
aggregate principal amount of such Additional Subordinated Debt does not exceed
the principal amount of Senior Subordinated Notes refinanced thereby and (III)
after giving effect to such issuance, the Borrower and its Subsidiaries are in
compliance with the covenants
71
contained in Sections 9.10, 9.11 and 9.12 for the Test Period most recently
ended on a pro forma Basis as if such Additional Subordinated Debt had been
issued on the first day of such Test Period; and (c) the Borrower and its
Subsidiaries may reincorporate in another jurisdiction located within the United
States so long as the Borrower or such Subsidiary, as the case may be, shall
provide 15 days prior written notice to the Administrative Agent and
simultaneously comply with the provisions of Section 8.10.
9.14 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any such Subsidiary to (a) pay dividends or
make any other distributions on its capital stock or any other interest or
participation in its profits owned by the Borrower or any Subsidiary of the
Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of the
Borrower, (b) make loans or advances to the Borrower or any of the Borrower's
Subsidiaries or (c) transfer any of its properties or assets to the Borrower or
any of the Borrower's Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) this Agreement and the
other Credit Documents, (iii) the Debt Agreements, Senior Subordinated Note
Documents and Additional Subordinated Debt (if any), (iv) customary provisions
restricting subletting or assignment of any lease governing a leasehold interest
of the Borrower or a Subsidiary of the Borrower, (v) customary provisions
restricting assignment of any licensing agreement entered into by the Borrower
or a Subsidiary of the Borrower in the ordinary course of business, (vi)
customary provisions of any asset purchase agreement entered into by the
Borrower or a Subsidiary of the Borrower in respect of an asset disposition
permitted hereunder restricting transfer of assets which are the subject of such
disposition, (vii) any holder of a Permitted Lien may restrict the transfer of
the asset or assets subject thereto and (viii) any Indebtedness incurred after
the Effective Date in accordance with the provisions of this Agreement may
contain restrictions which are not more restrictive than those contained in this
Agreement. Notwithstanding the foregoing, the Borrower and each of the
Borrower's Subsidiaries shall be permitted to dispose of assets in accordance
with Section 9.02 hereof.
9.15 LIMITATION ON CREATION OF SUBSIDIARIES. The Borrower shall not
establish, create or acquire any additional Subsidiaries without the prior
written consent of the Required Lenders; provided that the Borrower and its
Wholly-Owned Domestic Subsidiaries (a) may make investments permitted under
Section 9.06 (xiii) without such consent and (b) may establish or create one or
more Wholly-Owned Subsidiaries of the Borrower without such consent so long as,
in the case of Subsidiaries created as provided in this clause (b) and in the
case of any Subsidiary created as contemplated in clause (a) but only in the
event such Subsidiary guarantees, or is required to guaranty, any amounts in
respect of the Senior Subordinated Notes or any Additional Subordinated Debt,
(i) 100% of the capital stock of any new Domestic Subsidiary (or all capital
stock of any new Foreign Subsidiary which is owned by any Credit Party, except
that not more than 65% of the voting stock of any such Foreign Subsidiary shall
be required to be so pledged) is upon the creation or Establishment of
72
any such new Subsidiary pledged and delivered to the Collateral Agent for the
benefit of the Secured Creditors under the Pledge Agreement and (ii) upon the
creation or establishment of any such new Domestic Subsidiary such Domestic
Subsidiary executes the additional Security Documents and guaranty required to
be executed by it in accordance with Section 8.10.
9.16 MAINTENANCE OF CORPORATE SEPARATENESS, ETC. The Borrower will not, and
will not permit any of its Subsidiaries to, (a) fail to satisfy customary
corporate formalities, including, without limitation, (i) the holding of regular
board of directors' and shareholders' meetings, (ii) the maintenance of separate
corporate offices and records and (iii) the maintenance of separate bank
accounts in its own name; or (b) fail to act solely in its own corporate name
and through its authorized officers and agents.
9.17 LIMITATION ON ISSUANCE OF CAPITAL STOCK. (a) The Borrower will not,
and will not permit any of its Subsidiaries to issue (i) any preferred stock
except for the issuance of Borrower Preferred Stock as a dividend on Borrower
Preferred Stock then outstanding or (ii) any class of redeemable common stock.
(b) The Borrower will not permit any of its Subsidiaries to issue any
capital stock (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, capital stock, except (i)
for transfers and replacements of then outstanding shares of capital stock, (ii)
for stock splits, stock dividends and additional issuances which do not decrease
the percentage ownership of the Borrower or any of its Subsidiaries in any class
of the capital stock of such Subsidiary, (iii) in the case of Foreign
Subsidiaries of the Borrower, to qualify directors to the extent required by
applicable law, and (iv) Subsidiaries of the Borrower formed after the Effective
Date pursuant to Section 9.15 may issue capital stock to the Borrower or the
respective Subsidiary of the Borrower which is to own such stock in accordance
with the requirements of Section 9.15. All capital stock issued in accordance
with this Section 9.17(b) shall, to the extent required by the Pledge Agreement,
be delivered to the Collateral Agent for pledge pursuant to the Pledge
Agreement.
9.18 FISCAL YEAR; FISCAL QUARTERS. The Borrower will not, and will not
permit any of its Subsidiaries to, change the dates of the end of its fiscal
years and fiscal quarters from those set forth in Section 7.23.
SECTION 10. EVENTS OF DEFAULT. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
10.01 PAYMENTS.
The Borrower shall (i) default in the payment when due of any principal of
the Loans or (ii) default, and such default shall continue for three or more
days, in the payment when due of any Unpaid Drawing, any interest on any Loan or
any Fees or any other amounts owing hereunder or under any other Credit
Document; or
73
10.02 REPRESENTATIONS, ETC. Any representation, warranty or statement made
by any Credit Party herein or in any other Credit Document or in any statement
or certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
10.03 COVENANTS. Any Credit Party shall (a) default in the due performance
or observance by it of any term, covenant or agreement contained in Section
8.01(f), 8.10 or 9, or (b) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in Section 10.01,
10.02 or clause (a) of this Section 10.03) contained in this Agreement and such
default shall continue unremedied for a period of at least 30 days after notice
to the defaulting party by any Agent or the Required Lenders; or
10.04 DEFAULT UNDER OTHER AGREEMENTS. (a) The Borrower or any of its
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created or (ii)
default in the observance or performance of any agreement or condition relating
to any Indebtedness (other than the Obligations) or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required) any such Indebtedness to
become due prior to its stated maturity; or (b) any Indebtedness (other than the
Obligations) of the Borrower or any of its Subsidiaries shall be declared to be
due and payable, or shall be required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof, provided
that it shall not constitute an Event of Default pursuant to clause (a) or (b)
of this Section 10.04 unless the principal amount of any one issue of such
Indebtedness, or the aggregate amount of all such Indebtedness referred to in
clauses (a) and (b) above, exceeds $5,000,000 at any one time; or
10.05 BANKRUPTCY, ETC. The Borrower or any of its Material Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the Borrower or any of its Material Subsidiaries and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Material Subsidiaries; or the Borrower or any of its
Material Subsidiaries commences any other proceeding under any reorganization,
bankruptcy, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Borrower or any of its Material
Subsidiaries, or there is commenced against the Borrower or any of its Material
Subsidiaries any such proceeding which remains undismissed for a period of 60
days; or the Borrower or any of its Material
74
Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or the Borrower or
any of its Material Subsidiaries suffers any appointment of any custodian or the
like for it or any substantial part of its property to continue undischarged or
unstayed for a period of 60 days; or the Borrower or any of its Material
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by the Borrower or any of its Material Subsidiaries
for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code, or Section 303 or 304 of ERISA, a Reportable Event shall have
occurred, a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of
a Plan subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
..67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan shall have had
a trustee appointed to administer such Plan, any Plan is terminated or shall
have been terminated or the subject of termination proceedings under ERISA, any
Plan shall have an Unfunded Current Liability, a contribution required to be
made to a Plan or a Foreign Pension Plan has not been timely made, the Borrower
or any of its Subsidiaries or any ERISA Affiliate has incurred or is likely to
incur a liability to or on account of a Plan under Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971, 4975, 4980 of the Code, or the Borrower or any of its Subsidiaries has
incurred liabilities pursuant to one or more Retiree Welfare Plan or Foreign
Pension Plans; (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) which lien, security interest or
liability which arises from such event or events has had, or, in the opinion of
the Required Lenders, could reasonably be expected to have, a Material Adverse
Effect; or
10.07 SECURITY DOCUMENTS. (a) Except in each case to the extent resulting
from the failure of the Collateral Agent to retain possession of the applicable
Pledged Securities, any Security Document shall cease to be, or shall be
asserted by any Credit Party not to be, in full force and effect, or shall cease
to give the Collateral Agent the Liens, rights, powers and privileges purported
to be created thereby in favor of the Collateral Agent, (including, without
limitation, a perfected security interest in, and Lien on, all of the
Collateral, other than Collateral with an aggregate value of less than or equal
to $1,000,000; provided that if the Borrower is notified by the Administrative
Agent of a lack of perfection with respect to any of the Collateral, the
Borrower will take such steps as are necessary or advisable to perfect the
Collateral Agent's security interest in such Collateral), or (b) any Credit
Party shall default in the due performance or observance of any term, covenant
or agreement on its part to be performed or observed pursuant to any such
Security Document and such default (except to the extent that same will
adversely affect the continued perfection and priority of the Liens created by
any such Security Document in Collateral with an aggregate value in excess of
75
$1,000,000, in which case clause (a) of this Section 10.07 will be applicable)
shall continue unremedied for a period of 30 days; or
10.08 GUARANTIES. Any Guaranty or any provision thereof shall cease to be
in full force and effect as to the relevant Subsidiary Guarantor (unless such
Subsidiary Guarantor is no longer a Subsidiary by virtue of a liquidation, sale,
merger or consolidation permitted by Section 9.02), or any Subsidiary Guarantor
or any Person acting by or on behalf of such Subsidiary Guarantor shall deny or
disaffirm such Subsidiary Guarantor's obligations under any Guaranty or any
Subsidiary Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed pursuant to
any Guaranty; or
10.09 JUDGMENTS. One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving a liability (to the extent not
paid or not fully covered by a reputable and solvent insurance company) in
excess of $5,000,000 for all such judgments and decrees and all such judgments
or decrees either shall be final and non-appealable or shall not have been
vacated, discharged or stayed or bonded pending appeal within 60 days from the
entry thereof; or
10.10 OWNERSHIP. A Change of Control shall have occurred; then, and in any
such event, and at any time thereafter, if any Event of Default shall then be
continuing, the Administrative Agent shall, upon the written request of the
Required Lenders, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of any Agent, any Lender or
the holder of any Note to enforce its claims against any Credit Party, except as
otherwise specifically provided for in this Agreement (provided that if an Event
of Default specified in Section 10.05 shall occur with respect to the Borrower,
the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon all Commitments of each Lender shall forthwith
terminate immediately and any RL Commitment Commission shall forthwith become
due and payable without any other notice of any kind; (ii) declare the principal
of and any accrued interest in respect of all Loans and any Notes and all other
Obligations owing hereunder and thereunder (including Unpaid Drawings) to be,
whereupon the same shall become, forthwith due and payable without presentiment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; (iii) enforce, as Collateral Agent (or direct the Collateral Agent
to enforce), any or all of the Liens and security interests created pursuant to
the Security Documents; (iv) terminate any Letter of Credit which may be
terminated in accordance with its terms; (v) direct the Borrower to pay (and the
Borrower hereby agrees upon receipt of such notice, or upon the occurrence of
any Event of Default specified in Section 10.05, to pay) to the Collateral Agent
at the Payment Office such additional amounts of cash, to be held as security
for the Borrower's reimbursement obligations in respect of Letters of Credit
then outstanding, equal to the aggregate Stated Amount of all Letters of Credit
then outstanding; and (vi) apply any cash collateral as provided in Section
4.02(a).
76
SECTION 11. DEFINITIONS AND ACCOUNTING TERMS.
11.01 DEFINED TERMS. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Additional Collateral" shall mean all property (whether real or personal)
in which security interests are granted (or have been purported to be granted)
(and continue to be in effect at the time of determination) pursuant to Section
8.10 or Section 8.11.
"Additional Mortgage" shall mean and include each mortgage, deed of trust
or other security instrument with respect to Real Property executed in
accordance with Section 8.10 or Section 8.11.
"Additional Security Documents" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 8.10 on Section 8.11 with respect to Additional Collateral.
"Additional Subordinated Debt" shall mean subordinated indebtedness of the
Borrower issued after the Effective Date (i) which contains no financial
maintenance covenants or cross-default (as opposed to cross-acceleration)
provisions, (ii) which does not provide for any collateral security, (iii) all
of the terms and conditions of which (including, without limitation, as to the
issuer, interest rates, amortization, maturities, covenants, defaults, remedies,
sinking fund provisions, subordination provisions and other terms), taken as a
whole, are not less favorable to the Borrower or the Lenders than those
contained in the Senior Subordinated Notes, (iv) the subordination provisions of
which are no less favorable to the Lenders than those contained in the Senior
Subordinated Notes and (v) the documentation with respect to which shall reflect
the foregoing and shall otherwise be in form and substance satisfactory to the
Agents.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement, and shall include any successor thereto.
"Affiliate" shall mean, with respect to any Person, any other Person
(including, for purposes of Section 9.08 only, all directors, officers and
partners of such Person) directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such Person; provided, however,
that for purposes of Section 9.08, an Affiliate of the Borrower shall include
any Person that directly or indirectly votes or has the power to vote more than
10% of any class of the capital stock of the Borrower and any officer or
director of the Borrower or any of its Subsidiaries. A Person shall be deemed to
control another Person if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of such
other Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" shall have the meaning set forth in the first paragraph of this
Agreement.
77
"Agreement" shall mean this Amended and Restated Credit Agreement, as
modified, supplemented, amended, restated, extended, renewed or replaced from
time to time.
"Assignment" shall have the meaning set forth in the recitals of this
Agreement.
"Assignment and Acceptance Agreement" shall mean the Assignment and
Acceptance Agreement substantially in the form of Exhibit K (appropriately
completed).
"Assignments of Security Interest in Trademarks" shall mean the several
Assignments of Security Interest in Trademarks, made by Deutsche Bank Trust
Company Americas (f.k.a. Bankers Trust Company), as Agent under the Existing
Credit Agreement, in favor of the Agent, in the form and substance acceptable to
the Agent.
"Authorized Officer" shall mean any senior officer of the Borrower or a
Subsidiary of the Borrower designated as such in writing to the Administrative
Agent by the Borrower, in each case to the extent reasonably acceptable to the
Administrative Agent.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" shall mean for any day, a rate of interest per annum equal to
the higher of (i) the Prime Lending Rate for such day and (ii) the overnight
Federal Funds Rate for such day plus 1/2 of 1%.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each Loan
designated or deemed designated as such by the Borrower at the time of the
incurrence thereof or conversion thereto.
"Borrower" shall have the meaning set forth in the first paragraph of this
Agreement.
"Borrower Common Stock" shall mean the common stock of the Borrower.
"Borrower Preferred Stock" shall mean the Series A Preferred Stock of the
Borrower, par value $.01 per share.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Lenders (other than any Lender which has not funded its
share of a Borrowing in accordance with this Agreement) having Commitments of
the respective Tranche (or from the Swingline Lender in the case of Swingline
Loans) on a given date (or resulting from a conversion or conversions on such
date) having in the case of Eurodollar Loans the same Interest Period, provided
that Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered
part of the related Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) with respect to any borrowing, payment or
rate selection of Eurodollar Loans, a day (other than a Saturday or Sunday) on
which banks
78
generally are open in New York for the conduct of substantially all of their
commercial lending activities and on which dealings in United States dollars are
carried on in the London interbank market and (ii) for all other purposes, a day
(other than a Saturday or Sunday) on which banks generally are open in New York
for the conduct of substantially all of their commercial lending activities.
"Calculation Period" shall mean the Test Period most recently ended on
prior to the date that any determination is required to be made hereunder on a
pro forma Basis.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with
generally accepted accounting principles) and the amount of Capitalized Lease
Obligations incurred by such Person.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one
year from the date of acquisition, (ii) time deposits, certificates of deposit
and bankers' acceptances of any commercial bank having, or which is the
principal banking subsidiary of a bank holding company organized under the laws
of the United States, any State thereof, the District of Columbia or any foreign
jurisdiction rated at least A-1 or the equivalent by Standard & Poor's
Corporation or at least P-1 or the equivalent by Xxxxx'x Investors Service,
Inc., with maturities of not more than one year from the date of acquisition by
such Person, (iii) repurchase obligations with a term of not more than ninety
(90) days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (ii)
above, (iv) commercial paper issued by any Person incorporated in the United
States rated at least A-1 or the equivalent thereof by Standard & Poor's
Corporation or at least P-1 or the equivalent thereof by Xxxxx'x Investors
Service, Inc. and in each case maturing not more than one year after the date of
acquisition by such Person, (v) investments in money market funds substantially
all of whose assets are comprised of securities of the types described in
clauses (i) through (iv) above and (vi) demand deposit accounts maintained in
the ordinary course of business, in each case to the extent constituting a "Cash
Equivalent" under, and as defined in, the Senior Subordinated Notes and the
Additional Subordinated Debt (if any).
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as the same may be amended from time to time, 42
U.S.C. Sec. 9601 ET SEQ.
79
"Change of Control" shall mean (a) prior to the date of an initial
registered public offering by the Borrower of its common stock, the Permitted
Holders shall cease to own on a fully diluted basis in the aggregate at least
51% of the economic and voting interest in the Borrower's capital stock free of
Liens except Liens granted by individuals who are principals or employees of THL
to secure personal financing arrangements so long as the holders of such Liens
do not exercise or attempt to exercise rights in respect of such stock, (b) on
or after the date of an initial registered public offering by the Borrower of
its common stock, (A) any other Person or "group" (within the meaning of Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, as in effect on the
Effective Date) shall own more than 20% of the voting and/or economic interest
in the Borrower's capital stock, (B) the Board of Directors of the Borrower
shall cease to consist of a majority of Continuing Directors or (C) the
Permitted Holders shall cease to own on a fully diluted basis in the aggregate
at least 30% of the economic and voting interest in the Borrower's capital stock
free of Liens except Liens granted by individuals who are employees of THL to
secure personal financing arrangements so long as the holders of such Liens do
not exercise or attempt to exercise rights in respect of such stock, or (c) a
"change of control" or similar event shall occur as provided in the Senior
Subordinated Note Indenture or in any document relating to the Additional
Subordinated Debt (if any).
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, all Mortgaged
Properties, all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.02 or 10 hereof and all Additional Collateral, if any.
"Collateral Agent" shall mean the Administrative Agent acting as collateral
agent for the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.05.
"Commitment" shall mean any of the commitments of any Lender, I.E., whether
a Term Loan A Commitment, a Term Loan B Commitment or Revolving Loan Commitment.
"Consolidated Current Assets" shall mean, at any time, the current assets
(other than cash, Cash Equivalents and deferred income taxes to the extent
included in current assets) of the Borrower and its Subsidiaries at such time
determined on a consolidated basis in accordance with GAAP.
80
"Consolidated Current Liabilities" shall mean, at any time, the
consolidated current liabilities of the Borrower and its Subsidiaries at such
time, but excluding (i) the current portion of any Indebtedness under this
Agreement and any other long-term Indebtedness which would otherwise be included
therein, (ii) accrued but unpaid interest with respect to the Indebtedness
described in clause (i), (iii) the current portion of Indebtedness constituting
Capitalized Lease Obligations and (iv) deferred income taxes.
"Consolidated EBIT" shall mean, for any period, Consolidated Net Income of
the Company and its Subsidiaries determined as provided in the definition of
Consolidated Net Income, before total interest expense (whether cash or
non-cash) and provisions for taxes based on income, and determined (i) without
giving effect to any extraordinary gains or losses but with giving effect to
gains or losses from sales of assets sold in the ordinary course of business,
(ii) without giving effect to (1) nonrecurring cash charges, in an amount not to
exceed $5,000,000 (for all periods combined over the term of this facility), and
(2) non-cash charges, in an aggregate amount, together with non-recurring cash
charges, not to exceed $10,000,000 (for all periods combined over the term of
this facility), (iii) without giving effect to any non-cash charges deducted in
determining Consolidated Net Income for such period related to the issuance by
the Borrower of stock, warrants or options to management (or any exercise of any
such warrants or options), (iv) without giving effect to any fees and expenses
deducted in determining Consolidated Net Income for such period related to the
transaction fees and expenses in connection with this Agreement and the
transactions contemplated hereby and (v) without giving effect to management
fees permitted to be paid to THL and the THL Affiliates pursuant to Section 9.08
provided that for purposes of any calculation pursuant to Section 9.08(iv),
Consolidated EBIT shall give effect to any such management fees previously paid
or then contemplated to be paid at the time of such calculation in excess of
$125,000 in any fiscal quarter of the Borrower.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all depreciation, amortization and,
without duplication, other non-cash expenses that were deducted in determining
Consolidated EBIT for such period, minus cash outlays in such period related to
non-cash expenses that were added back in determining Consolidated EBITDA in a
prior period .
"Consolidated Indebtedness" shall mean, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness (but including in
any event the then outstanding principal amount of all Loans, and the Senior
Subordinated Notes, any Additional Subordinated Debt, all Capitalized Lease
Obligations and all Letter of Credit Outstandings) of the Borrower and its
Subsidiaries on a consolidated basis as determined in accordance with GAAP.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated Interest
Expense for such period.
81
"Consolidated Interest Expense" shall mean, for any period, total interest
expense (including that attributable to Capital Leases in accordance with GAAP)
of the Borrower and its Subsidiaries determined on a consolidated basis with
respect to all outstanding Indebtedness of the Company and its Subsidiaries,
including, without limitation, (i) all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, and (ii) net costs or benefits under Interest Rate Protection
Agreements, but excluding, however, amortization of original issue discount,
amortization of any payments made to obtain any Interest Rate Protection
Agreement, amortization of deferred financing costs and any interest expense on
deferred compensation arrangements and any non-cash interest to the extent
included in total interest expense.
"Consolidated Net Income" shall mean, for any period, the net income (or
loss) after provision for taxes but before any pay-in-kind or non-cash
accumulating dividends on the Borrower Preferred Stock of the Borrower and its
Subsidiaries on a consolidated basis for such period taken as a single
accounting period, but excluding any unrealized losses and gains for such period
resulting from xxxx-to-market of Other Hedging Agreements; provided, however,
that (A) there shall be excluded (without duplication) (i) income (or loss) of
any Person in which any other Person (other than such Person or any of its
consolidated Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to such Person or
subject to subclause (iii) below) any of its consolidated Subsidiaries by such
other Person during such period, (ii) the income (or loss) of any Person during
such period accrued prior to the date it becomes a consolidated Subsidiary of
such Person or is merged into or consolidated with such Person or any of its
consolidated Subsidiaries, (iii) the income of any consolidated Subsidiary or
the Borrower to the extent attributable to minority interests held therein by
Persons other than the Borrower and its Wholly-Owned Subsidiaries, and (iv) the
income of any consolidated Subsidiary or the Borrower during such period to the
extent that the declaration or payment of dividends or similar distributions by
that consolidated Subsidiary of such income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary or the Borrower or any of its other Subsidiaries and (B) for purposes
of determining compliance with Section 9.12 there shall be included (to the
extent not already included) in determining Consolidated Net Income for any
period the net income (or loss) of any Person, business, property or asset
acquired during such period pursuant to a Permitted Acquisition and not
subsequently sold or otherwise disposed of by the Borrower or one of its
Subsidiaries during such period (each Person, business, property or asset
acquired and not subsequently disposed of during such period, an "Acquired
Entity or Business") based on the actual net income (or loss) of such Acquired
Entity or Business for the entire period (including the portion thereof
occurring prior to such acquisition).
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation
82
of such Person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (x) for the purchase or payment of any such
primary obligation or (y) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the holder of such primary obligation
against loss in respect thereof; provided, however, that the term Contingent
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business and any products' warranties
extended in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made (or, if the less, the maximum amount of such primary obligation for
which such Person may be liable pursuant to the terms of the instrument
evidencing such Contingent Obligation) or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.
"Continuing Directors" shall mean the (i) directors of the Borrower on the
Effective Date and (ii) each other director, if such director's nomination for
election to the Board of Directors of the Borrower is recommended by a majority
of the then Continuing Directors.
"Credit Documents" shall mean this Agreement and, after the execution and
delivery thereof pursuant to the terms of this Agreement, each Note, each
Perfection Certificate, each Security Document, each of the Assignments of
Security Interest in Trademarks and the Subsidiaries Guaranty and, after the
execution and delivery thereof, each additional guaranty or security document
executed pursuant to Section 8.10 or Section 8.11.
"Credit Event" shall mean the making of any Loan or the issuance of any
Letter of Credit.
"Credit Party" shall mean the Borrower, each Subsidiary Guarantor and any
other Subsidiary which at any time executes and delivers any Credit Document as
required by this Agreement.
"Debt Agreements" shall have the meaning provided in Section 5.05.
"Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a Lender
Default is in effect.
"Dividend" shall have the meaning provided in Section 9.07.
83
"Dollars" and the sign "$" shall each mean lawful money of the United
States.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any State or territory
thereof.
"Domestic Wholly-Owned Subsidiary" shall mean each Domestic Subsidiary
which is a Wholly-Owned Subsidiary of the Borrower.
"Drawing" shall have the meaning provided in Section 2.04(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean any of (a) a Lender, (b) an Affiliate of a
Lender and (c) any other Person which regularly purchases interests in loans or
extensions of credit of (other than a natural person) approved by (i) the
Administrative Agent and (ii) unless a Default or an Event of Default has
occurred and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed) which would constitute a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act as
in effect on the Effective Date and any other "accredited investor" (as defined
in Regulation D of the Securities Act.)).
"Employee Benefit Plans" shall have the meaning provided in Section 5.05.
"Environmental Claims" shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations or proceedings relating in any way
to any Environmental Law (hereafter "Claims") or any permit issued to the
Borrower or any of its Subsidiaries under any such Law, including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief arising from alleged injury or threat of
injury to health, safety or the environment, as a result of a release or
threatened release of Hazardous Materials.
"Environmental Law" shall mean any domestic or foreign, federal, state,
provincial or local statute, law, rule, regulation, ordinance, code or
applicable and binding rule of common law now or hereafter in effect and in each
case as amended, and any applicable judicial or administrative order, consent,
decree or judgment (for purposes of this definition (collectively, "Laws")),
relating to the environment, or Hazardous Materials or health and safety to the
extent such health and safety issues arise under the Occupational Safety and
Health Act of 1970, as amended, or any such similar Laws.
"Equity Proceeds Amount" shall mean, on any date in connection with any
transaction, an amount equal to (i) 50% of the aggregate amount of net cash
proceeds (other than Excluded Proceeds) received by the Borrower from the
issuance of its
84
common equity after the Effective Date less the sum of the aggregate amount of
such proceeds expended on or prior to such date (before giving effect to the
transaction then being considered) (x) to effect Permitted Acquisitions, (y) to
effect Capital Expenditures pursuant to Section 9.09(f) hereof and (z) to repay
Senior Subordinated Notes.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" within the meaning of Section 414(b), (c), (m)
or (o) of the Code.
"Eurodollar Loan" shall mean each Loan (excluding Swingline Loans)
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Eurodollar Rate" shall mean the sum of (i) the quotient of (a) the rate
determined by the Administrative Agent to be the rate at which deposits in U.S.
dollars are offered to first-class banks in the London interbank market based on
information presented on Page 3750 of the Dow Xxxxx Market Service (formerly
known as the Telerate Service) at approximately 11 a.m. (London time) two
Business Days prior to the first day of the Interest Period applicable to such
Eurodollar Loan, having a maturity approximately equal to the Interest Period
applicable to such Eurodollar Loan divided by (b) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves required by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D). The Eurodollar Rate shall be rounded to the next higher multiple
of 1/100 of 1% if the rate is not such a multiple.
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" shall mean, for any period (i) the sum of (A)
Consolidated Net Income for such period, plus (B) the amount of all non-cash
charges (including, without limitation or duplication, depreciation,
amortization and non-cash interest expense, but excluding those non-cash charges
that had the effect of decreasing Working Capital for such period) included in
determining Consolidated Net Income for such period, plus (C) the decrease, if
any, in Working Capital from the first day to the last day of such period, minus
(ii) the sum (without duplication) of (A) any non-cash credits (including from
sales or other dispositions of assets) included in determining Consolidated Net
Income for such period, (B) gains from sales or other dispositions of assets
(other than sales of inventory in the ordinary course of business) included in
determining Consolidated Net Income for such period, (C) an amount equal to (1)
all Capital Expenditures (other than Capital Expenditures made pursuant to
Section 9.09(c),
85
(d), (e), (f) or (g)) made during such period that are not financed by
Indebtedness (including Capitalized Lease Obligations but excluding Loans
hereunder) plus (or minus, if negative) (2) the Rollover Amount for such period
to be carried forward to the next period less the Rollover Amount (if any) for
the preceding period carried forward to the current period, (D) the amount
expended in respect of Permitted Acquisitions during such period, except to the
extent constituting Capital Expenditures or financed with Indebtedness, (E) the
aggregate principal amount of permanent principal payments of Indebtedness for
borrowed money of the Company and its Subsidiaries (other than (I) repayments of
Indebtedness with the proceeds of the Loans or with the proceeds of the
Indebtedness or equity or with the proceeds of asset sales or Recovery Events
and (II) repayments of Loans, provided that repayments of Loans shall be
deducted in determining Excess Cash Flow if such repayments were (x) required as
a result of a Scheduled Repayment under Section 4.02(b) or (c), or (y) made as a
voluntary prepayment with internally generated funds (but in the case of a
voluntary prepayment of Revolving Loans or Swingline Loans, only to the extent
accompanied by a voluntary reduction to the Total Revolving Loan Commitment))
during such period, (F) non-cash charges added back in a previous period
pursuant to clause (i) (B) above to the extent any such charge has become a cash
item in the current period, (G) the increase, if any, in Working Capital from
the first day to the last day of such period, (H) any cash disbursements made
against noncurrent liabilities (such as transition reserves and deferred taxes)
to the extent not deducted in determining Consolidated Net Income for such
period and (I) the amount of cash expenditures which are not classified as
Capital Expenditures but which were capitalized and not expensed during such
period.
"Excess Cash Payment Date" shall mean the date occurring 90 days after the
last day of each fiscal year of the Borrower beginning with its fiscal year
ending closest to December 31, 2003.
"Excess Cash Payment Period" shall mean, with respect to the repayment
required on each Excess Cash Payment Date, the immediately preceding fiscal year
of the Borrower.
"Excluded Proceeds" shall have the meaning provided in Section 4.02(d).
"Excluded Taxes" shall mean (a) all taxes (including franchise taxes),
levies, imposts, duties, charges, fees, deductions and withholdings imposed on
or measured by net income or capital or (b) any withholding tax imposed by
reason of the failure of any Agent or Lender to comply with its obligations, if
any, under Section 4.04 hereof.
"Existing Credit Agreement" shall have the meaning provided in the recitals
to this Agreement.
"Existing Indebtedness" shall have the meaning provided in Section 9.04.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
86
"Federal Funds Rate" shall mean, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 11 a.m. (New York
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion. Any change to the Base Rate due to
a change in the Federal Funds Rate shall be effective as of the opening of
business on the effective date of such change in the Federal Funds Rate.
"Fees" shall mean all amounts payable pursuant to or referred to in Section
3.01.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuating fund) or other similar program established or
maintained outside the United States of America by the Borrower or any one or
more of its Subsidiaries primarily for the benefit of employees of the Borrower
or such Subsidiaries residing outside the United States of America and into
which the Borrower or any of its Subsidiaries makes, or is obliged by law on
behalf of its employees to make payments, which plan, fund or other similar
program provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower that is
incorporated under the laws of any jurisdiction other than the United States of
America, any State thereof, the United States Virgin Islands or Puerto Rico.
"FQ1, FQ2, FQ3, FQ4", shall mean the first, second, third and fourth
quarters, respectively, of a specified fiscal year, as set forth on Schedule
7.23.
"GAAP" shall have the meaning (a) when used in Section 9, whether directly
or indirectly through reference to a capitalized term used therein, means (i)
principles that are consistent with the principles promulgated or adopted by the
Financial Accounting Standards Board and its predecessors, in effect for the
fiscal year ended on December 31, 2001, and (ii) to the extent consistent with
such principles, the accounting practice of the Borrower reflected in its
financial statements for the year ended on December 31, 2001, and (b) when used
in general, other than as provided above, means principles that are (i)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time,
and (ii) consistently applied with past financial statements of the Borrower
adopting the same principles, provided that in each case referred to in this
definition of "GAAP" a certified public accountant would, insofar as the use of
such accounting principles is pertinent, be in a position to deliver an
unqualified opinion (other than a qualification regarding changes in GAAP) as to
financial statements in which such principles have been properly applied;
provided, further, that if there occurs after the Effective Date any change in
GAAP that affects in any respect the calculation of any covenant contained in
Section 9
87
hereof, the Lenders and the Borrower shall negotiate in good faith amendments to
the provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective positions of the Lenders and the
Borrower after such change in GAAP conform as nearly as possible to their
respective positions as of the Effective Date and, until any such amendments
have been agreed upon, the covenants in Section 9 hereof shall be calculated as
if no such change in GAAP had occurred.
"Governmental Authority" shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state,
provincial, 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.
"Guaranteed Obligations" shall mean all obligations of the Borrower (i) to
each Lender for the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of the principal and interest on each
Loan made by such Lender and each Note (if any) issued by the Borrower to such
Lender, and Loans made, under the Agreement and all reimbursement obligations
and Unpaid Drawings with respect to Letters of Credit, together with all the
other obligations and liabilities (including, without limitation, indemnities,
fees and interest thereon) of the Borrower to such Lender now existing or
hereafter incurred under, arising out of or in connection with the Agreement or
any other Credit Document and the due performance and compliance with all the
terms, conditions and agreements contained in the Credit Documents by the
Borrower and (ii) to each Lender and each Affiliate of a Lender which enters
into an Interest Rate Protection or Other Hedging Agreement with the Borrower,
the full and prompt payment when due (whether by acceleration or otherwise) of
all obligations of the Borrower owing under any such Interest Rate Protection or
Other Hedging Agreement, whether now in existence or hereafter arising, and the
due performance and compliance with all terms, conditions and agreements
contained therein.
"Guaranty" shall mean the Subsidiaries Guaranty and any other guarantee
executed and delivered by a Subsidiary of the Borrower pursuant to Section 8.10
or Section 8.11.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "restricted hazardous materials," "extremely hazardous wastes,"
"restrictive hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar meaning and regulatory
effect.
"Highest Lawful Rate" shall mean, with respect to any indebtedness owed to
any Lender hereunder or under any other Credit Document, the maximum nonusurious
88
interest rate, if any, that at any time or from time to time may be contracted
for, taken, reserved, charged or received by such Lender with respect to such
indebtedness under applicable law.
"Immaterial Subsidiary" shall mean, at any time, any subsidiary, direct or
indirect, that (a) has less than 5% of the consolidated assets of the Borrower
and its consolidated Subsidiaries as of the last day of the most recently ended
Test Period and (b) has less than 5% of the Consolidated EBITDA of the Borrower
and its consolidated Subsidiaries for the Test Period most recently ended;
provided that if more than one subsidiary is deemed an Immaterial Subsidiary
pursuant to this definition, all Immaterial Subsidiaries shall be considered to
be a single consolidated subsidiary for purposes of determining whether the
conditions specified above are satisfied.
"Indebtedness" shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the maximum amount available to be drawn under all letters of credit issued
for the account of such Person and, without duplication, all unpaid drawings in
respect of such letters of credit, (iii) all Indebtedness of the types described
in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person (to the extent of the value of the respective
property), (iv) the aggregate amount required to be capitalized under
capitalized leases under which such Person is the lessee, (v) all obligations of
such person to pay a specified purchase price for goods or services, whether or
not delivered or accepted, i.e., take-or-pay and similar obligations, (vi) all
Contingent Obligations of such Person and (vii) all obligations under any
Interest Rate Protection Agreement or Other Hedging Agreement or under any
similar type of agreement; provided that Indebtedness shall not include trade
payables and accrued expenses, in each case arising in the ordinary course of
business.
"Interest Determination Date" shall mean, with respect to any Eurodollar
Loan, the second Business Day prior to the commencement of any Interest Period
relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement, interest rate floor agreement or other similar agreement or
arrangement.
"Issuing Lender" shall mean the Administrative Agent and any Lender which
at the request of the Borrower and with the consent of the Administrative Agent
(which shall not be unreasonably withheld) agrees, in such Lender's sole
discretion, to become an Issuing Lender for the purpose of issuing Letters of
Credit pursuant to Section 2.
"L/C Supportable Indebtedness" shall mean (i) obligations of the Borrower
or its Subsidiaries incurred in the ordinary course of business with respect to
Insurance
89
obligations and workers' compensation, surety bonds and other similar statutory
obligations and (ii) such other obligations of the Borrower or any of its
Subsidiaries as are reasonably acceptable to the Administrative Agent and the
Letter of Credit Issuer and otherwise are permitted to exist pursuant to the
terms of this Agreement.
"Leaseholds" of any Person means all the right, title and interest of such
Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Lender" shall mean each financial institution listed on Schedule 1, as
well as any Person which becomes a "Lender" hereunder pursuant to Section 1.13
or 13.04(b).
"Lender Default" shall mean (i) the refusal (which has not been retracted)
of a Lender to make available its portion of any Borrowing (including any
Mandatory Borrowing) or to fund its portion of any unreimbursed payment under
Section 2.03(c) or (ii) a Lender having notified in writing the Borrower and/or
the Administrative Agent that it does not intend to comply with its obligations
under Section 1.01 or Section 2.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum (without
duplication) of (i) the aggregate Stated Amount of all outstanding Letters of
Credit and (ii) the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.02(a).
"Leverage Ratio" shall mean, at any date of determination, the ratio of
Consolidated Indebtedness on such date to Consolidated EBITDA for the Test
Period last ended.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).
"Loan" shall mean each Term Loan A, each Term Loan B, each Revolving Loan
and each Swingline Loan.
"Management Agreements" shall have the meaning provided in Section 5.05.
"Mandatory Borrowing" shall have the meaning provided in Section 1.01(e).
"Margin Stock" shall have the meaning provided in Regulation U.
90
"Material Adverse Effect" shall mean with respect to any event or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration or governmental investigation or proceeding): (a) a
material adverse effect on the business, properties, assets, liabilities or
condition (financial or otherwise) of the Borrower (on a stand alone basis) or
of the Borrower and its Subsidiaries, taken as a whole (on a consolidated
basis); (b) an adverse effect on the ability of the Borrower or any of its
Subsidiaries, individually and taken as a whole, to perform any of their
respective Obligations under any of the Credit Documents to which it is a party;
or (c) any impairment of the validity, binding effect or enforceability of this
Agreement or any of the other Credit Documents, any impairment of the rights,
remedies or benefits available to the Administrative Agent or any Lender under
any Credit Document or any impairment of the attachment, perfection or priority
of any Lien of the Administrative Agent under the Security Documents.
"Material Subsidiary" means any Subsidiary of the Borrower, direct or
indirect other than an Immaterial Subsidiary.
"Maturity Date" shall mean, with respect to any Tranche of Loans, the Term
Loan A Maturity Date, the Term Loan B Maturity Date, the RL Maturity Date or the
Swingline Expiry Date, as the case may be.
"Maximum Swingline Amount" shall mean $5,000,000.
"Minimum Borrowing Amount" shall mean (x) with respect to each Borrowing of
Eurodollar Loans, $1,000,000, (y) with respect to each Borrowing of Base Rate
Loans (other than Swingline Loans), $500,000, and (z) with respect to each
Borrowing of Swingline Loans, $50,000.
"Mortgage", after the execution and delivery thereof, shall include each
Additional Mortgage.
"Mortgage Policies" shall mean mortgage title insurance policies on each
Mortgaged Property issued by title insurers, and having other terms (including
any exceptions and endorsements thereon) reasonably satisfactory to the
Collateral Agent.
"Mortgaged Property", after the execution and delivery of any Additional
Mortgage, shall include the respective additional property subject thereto.
"Multiemployer Plan" shall mean any multiemployer plan (within the meaning
of Section 4001(a)(3) of ERISA) to which the Borrower or any of its Subsidiaries
has any liability or contributes (or has at any time within the past five years
contributed to or had any liability to contribute).
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from any sale of assets, net of (i) reasonable transaction costs
(including, without limitation, any
91
underwriting, brokerage or other customary selling commissions and reasonable
legal, advisory and other fees and expenses, including title and recording
expenses, associated therewith), (ii) payments of unassumed liabilities relating
to the assets sold at the time of, or within 90 days after, the date of such
sale, (iii) the amount of such gross cash proceeds required to be used to repay
any Indebtedness (other than Indebtedness of the Lenders pursuant to this
Agreement) which is secured by the respective assets which were sold, (iv) the
estimated marginal increase in income taxes paid, or which are estimated to be
payable by the Borrower's consolidated group with respect to the fiscal year in
which the sale occurs as a result of such sale and (v) the amount of any
reserves established by the Borrower and its Subsidiaries to fund contingent
liabilities reasonably estimated to be payable during the year that such sale of
assets occurred for the next succeeding year that are directly attributable to
such sale of assets; provided that if any such reserves are terminated or the
amount is reduced, the amount of such eliminated reserves shall be deemed Net
Sale Proceeds on the date so terminated or reduced.
"Non-Defaulting Lender" shall mean and include each Lender other than a
Defaulting Lender.
"Note" shall mean each Term Note A, each Term Note B, each Revolving Note
and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section 1.06.
"Notice Office" shall mean the office of the Administrative Agent located
at 000 Xxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxxxx X. X'Xxxxxxxx or
such other office as the Administrative Agent may hereafter designate in writing
as such to the other parties hereto.
"Obligations" shall mean all amounts owing to any of the Agents, the
Collateral Agent or any Lender pursuant to the terms of this Agreement, any
Interest Rate Protection Agreement or Other Hedging Agreement or any other
Credit Document.
"Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency or
commodity values.
"Participant" shall have the meaning provided in Section 2.03(a).
"Payment Office" shall mean the office of the Administrative Agent located
at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
92
"Percentage" of any Lender at any time shall mean a fraction (expressed as
a percentage) the numerator of which is the Revolving Loan Commitment of such
Lender at such time and the denominator of which is the Total Revolving Loan
Commitment at such time and, provided that if the Percentage of any Lender is to
be determined after the Total Revolving Loan Commitment has been terminated,
then the Percentages of the Lenders shall be determined immediately prior (and
without giving effect) to such termination.
"Perfection Certificates" shall have the meaning provided in each of the
Security Agreements.
"Permitted Acquisitions" shall have the meaning provided in Section
9.02(x).
"Permitted Encumbrance" shall mean, with respect to any Mortgaged Property,
such exceptions to title as are set forth in the title insurance policy or title
commitment delivered with respect thereto, all of which exceptions must be
acceptable to the Agents in their reasonable judgment, which acceptance will not
be unreasonably withheld.
"Permitted Holders" shall mean (a) THL, THL Affiliates, THL Investors and
(b) with respect to the Common Stock so purchased or which had been owned prior
to April 23, 1998, shareholders, management and directors of the Borrower who
acquired Common Stock of the Borrower on or prior to April 23, 1998, and certain
members of management and employees who acquired such Common Stock within 90
days following April 23, 1998 for an aggregate purchase price not in excess of
$5,000,000.
"Permitted Liens" shall have the meaning provided in Section 9.03.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any employee pension benefit plan (within the meaning of
Section 3(2) of ERISA) which is maintained or contributed to by the Borrower or
any of its Subsidiaries, or for which the Borrower or any of its Subsidiaries
has any liability or contingent liability, other than a Multiemployer Plan.
"Pledge Agreement" shall have the meaning provided in Section 5.08.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined in
each of the Pledge Agreements.
"Pledged Securities" shall mean "Pledged Securities" as defined in the
Pledge Agreements.
"Xxxx Loan" shall mean the loan to Xx. Xxxxxx Xxxx in connection with his
previous purchase of the stock of Hour Eyes Doctors of Optometry, P.C., as the
same may be amended or modified from time to time pursuant to the terms hereof
and
93
thereof, provided that the aggregate principal amount of such loan shall not
exceed $1,000,000.
"Prime Lending Rate" shall mean the rate which the Administrative Agent
announces from time to time as its "prime rate", the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. The Administrative Agent may make commercial
loans or other loans at rates of interest at, above or below the Prime Lending
Rate.
"pro forma Basis" in connection with any calculation of compliance with any
financial covenant or financial term, the calculation thereof after giving
effect on a pro forma basis to (w) if the relevant period to be tested includes
any Permitted Acquisition, the consummation of such Permitted Acquisition as if
the same had occurred on the first day of such period, (x) the assumption,
incurrence or issuance of any Indebtedness (other than revolving Indebtedness,
except to the extent same is incurred to refinance other outstanding
Indebtedness) after the first day of the relevant Calculation Period as if such
Indebtedness had been incurred (and the proceeds thereof applied) on the first
day of the relevant Calculation Period and (y) the permanent repayment of any
Indebtedness (other than revolving Indebtedness unless accompanied by a
corresponding commitment reduction) after the first day of the relevant
Calculation Period as if such Indebtedness had been retired, redeemed or
repurchased on the first day of the relevant Calculation Period, with the
following rules to apply in connection therewith:
(i) all Indebtedness (x) (other than revolving Indebtedness, except to the
extent same is incurred to refinance other outstanding Indebtedness) assumed,
incurred or issued after the first day of the relevant Calculation Period
(whether incurred to refinance Indebtedness or otherwise) shall be deemed to
have been incurred or issued (and the proceeds thereof applied) on the first day
of the respective Calculation period and remain outstanding through the date of
determination and (y) (other than revolving Indebtedness unless accompanied by a
corresponding commitment reduction) permanently retired or redeemed after the
first day of the relevant Calculation Period shall be deemed to have been
retired or redeemed on the first day of the respective Calculation Period and
remain retired through the date of determination; and
(ii) all Indebtedness assumed to be outstanding pursuant to preceding
clause (i) shall be deemed to have borne interest at (x) the rate applicable
thereto, in the case of fixed rate Indebtedness or (y) the rates which would
have been applicable thereto during the respective period when same was deemed
outstanding, in the case of floating rate Indebtedness (although interest
expense with respect to any Indebtedness for periods while same was actually
outstanding during the respective shall be calculated using the actual rates
applicable thereto while same was actually outstanding).
"Projections" shall have the meaning provided in Section 7.10(e).
94
"Quarterly Payment Date" shall mean the last Business Day of March, June,
September and December occurring after the Effective Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the same
may be amended from time to time, 42 U.S.C. Sec. 6901 ET SEQ.
"Real Property" of any Person shall mean all the right, title and interest
of such Person in and to land, improvements and fixtures, including Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable (i) by
reason of theft, loss, physical destruction or damage or any other similar event
with respect to any property or assets of the Borrower or any of its
Subsidiaries and (ii) under any policy of insurance maintained by the Borrower
and its Subsidiaries or required to be so maintained under Section 8.03.
"Register" shall have the meaning provided in Section 13.17.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.
"Replaced Lender" shall have the meaning provided in Section 1.13.
"Replacement Lender" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
..22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
95
"Required Lenders" shall mean Non-Defaulting Lenders, the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and Percentage of Swingline Loans and
Letter of Credit Outstandings) represent an amount greater than 50% of the sum
of all outstanding Term Loans of Non-Defaulting Lenders and the Total Revolving
Loan Commitment (or after the termination thereof, the sum of the then total
outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate
Percentages of all Non-Defaulting Lenders of the total outstanding Swingline
Loans and Letter of Credit Outstandings at such time).
"Retiree Welfare Plan" shall mean any employee welfare benefit plan (within
the meaning of section 3(1) of ERISA) which provides benefits to retired or
other former employees of the Borrower or any of its Subsidiaries (other than
continuation of group health plan coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, or pursuant to applicable state law).
"Returns" shall have the meaning provided in Section 7.21.
"Revolving Loan" shall have the meaning provided in Section 1.01(c).
"Revolving Loan Commitment" shall mean, for each Lender, the amount set
forth opposite such Lender's name in Schedule 1 hereto directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (y) adjusted from time
to time as a result of assignments to or from such Lender pursuant to Section
1.13 or 13.04(b).
"Revolving Note" shall have the meaning provided in Section 1.05(d).
"RL Commitment Commission" shall have the meaning provided in Section
3.01(a).
"RL Maturity Date" shall mean December 23, 2006.
"Rollover Amount" shall have the meaning provided in Section 9.09(b).
"Scheduled Repayments" shall mean TL Scheduled Repayments.
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b).
"Secured Creditors" shall have the meaning assigned that term in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended.
96
"Security Agreement" shall have the meaning provided in Section 5.09.
"Security Agreement Collateral" shall mean all "Collateral" as defined in
the Security Agreement.
"Security Document" shall mean the Pledge Agreement, the Security
Agreement, the Trademark Agreement and, after the execution and delivery
thereof, each Additional Mortgage and each Additional Security Document.
"Senior Subordinated Note Documents" shall mean the Senior Subordinated
Notes, the Senior Subordinated Note Indenture and all other documents executed
and delivered with respect to the Senior Subordinated Notes or Senior
Subordinated Note Indenture.
"Senior Subordinated Note Indenture" shall mean the indenture dated as of
April 24, 1998, between the Borrower and the Senior Subordinated Note Indenture
Trustee, as in effect on the Effective Date and as thereafter amended from time
to time in accordance with the requirements thereof and of this Agreement.
"Senior Subordinated Note Indenture Trustee" shall mean United States Trust
Company of New York or any Successor thereto as trustee under the Senior
Subordinated Note Indenture.
"Senior Subordinated Notes" shall mean the Borrower's 9 1/8% Senior
Subordinated Notes due 2008 and Floating Interest Rate Subordinated Term
Securities due 2008, in each case issued pursuant to the Senior Subordinated
Note Indenture, as such notes may be modified, supplemented or amended from time
to time pursuant to the terms hereof and thereof.
"Shareholders' Agreements" shall have the meaning provided in Section 5.05.
"Standby Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).
"Subsidiaries Guaranty" shall have the meaning provided in Section 5.07.
"Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
97
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower
designated as a "Subsidiary Guarantor" on Schedule 7.15 hereto or which executes
a guarantee after the Effective Date pursuant to Section 8.10 or Section 8.11.
"Swingline Expiry Date" shall mean the date which is two Business Days
prior to the RL Maturity Date.
"Swingline Lender" shall mean the Administrative Agent.
"Swingline Loan" shall have the meaning provided in Section 1.01(d).
"Swingline Note" shall have the meaning provided in Section 1.05(d).
"Syndication Agent" shall have the meaning provided in the first paragraph
of this Agreement.
"Tax Sharing Agreement" shall have the meaning provided in Section 5.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan A" and "Term Loans A" shall have the meaning provided in Section
1.01(a).
"Term Loan B" and "Term Loans B" shall have the meaning provided in Section
1.01(b).
"Term Loans" shall have the meaning provided in Section 1.01(b).
"Term Loan A Commitment" shall mean, for each Lender, the amount set forth
opposite such Lender's name in Schedule 1 hereto directly below the column
entitled "Term Loan A Commitment," as same may be (x) reduced from time to time
pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted from time to time as a
result of assignments to or from such Lender pursuant to Section 1.13 or 13.04.
"Term Loan B Commitment" shall mean, for each Lender, the amount set forth
opposite such Lender's name in Schedule 1 hereto directly below the column
entitled "Term Loan B Commitment," as same may be (x) reduced from time to time
pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted from time to time as a
result of assignments to or from such Lender pursuant to Section 1.13 or 13.04.
"Term Loan A Maturity Date" shall mean December 23, 2005.
"Term Loan B Maturity Date" shall mean November 1, 2007.
"Term Loan A Scheduled Repayment" shall have the meaning provided in
Section 4.02(b).
98
"Term Loan B Scheduled Repayment" shall have the meaning provided in
Section 4.02(c).
"Term Loan A Scheduled Repayment Date" shall have the meaning provided in
Section 4.02(b).
"Term Loan B Scheduled Repayment Date" shall have the meaning provided in
Section 4.02(c).
"Term Note" shall have the meaning provided in Section 1.05(d).
"Term Note A" shall have the meaning provided in Section 1.05(d).
"Term Note B" shall have the meaning provided in Section 1.05(d).
"Test Period" shall mean, except as otherwise provided in the definitions
of Consolidated EBITDA and Consolidated Interest Expense, each period of four
consecutive fiscal quarters of the Borrower then last ended taken as one
accounting period, ended after the Effective Date.
"THL" shall mean Xxxxxx X. Xxx Company, a sole proprietorship located in
Massachusetts.
"THL Affiliates" shall mean any Affiliate of THL, provided that for purpose
of the definition of "Change of Control," the term THL Affiliate shall not
include any portfolio company of either THL or any Affiliate of THL.
"THL Investor" shall mean and include Xxxxxx X. Xxx Equity Fund IV, L.P. or
any limited or general partner, stockholder, officer, or employee of such THL
Investor or any officer or employee of THL.
"Total Commitments" shall mean, at any time, the sum of the Commitments of
each of the Lenders.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the Lenders.
"Total Term Loan A Commitment" shall mean, at any time, the sum of the Term
Loan A Commitments of each of the Lenders.
"Total Term Loan B Commitment" shall mean, at any time, the sum of the Term
Loan B Commitments of each of the Lenders.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time, an
amount equal to the remainder of (x) the then Total Revolving Loan Commitment,
less (y) the sum of the aggregate principal amount of Revolving Loans and
Swingline Loans then outstanding plus the then aggregate amount of Letter of
Credit Outstandings.
99
"Trade Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Trademark Agreement" shall have the meaning provided in Section 5.10.
"Tranche" shall mean the respective facility and commitments utilized in
making Loans hereunder, with there being four separate Tranches, I.E., Term Loan
A, Term Loan B, Revolving Loans and Swingline Loans.
"Type" shall mean the type of Loan determined with regard to the interest
option applicable thereto, I.E., whether a Base Rate Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year, determined in accordance with
actuarial assumptions at such time consistent with Statement of Financial
Accounting Standards No. 87, exceeds the market value of the assets allocable
thereto.
"United States" and "U.S." shall each mean the United States of America.
"Unpaid Drawing" shall have the meaning provided for in Section 2.04(a).
"Unutilized Revolving Loan Commitment" with respect to any Lender, at any
time, shall mean such Lender's Revolving Loan Commitment at such time less the
sum of (i) the aggregate outstanding principal amount of Revolving Loans made by
such Lender and (ii) such Lender's Percentage of the Letter of Credit
Outstandings in respect of Letters of Credit issued under this Agreement.
"Voting Stock" shall mean any class or classes of capital stock of the Borrower
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the Board of Directors of
the Borrower.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation
100% of whose capital stock (other than director's qualifying shares and/or
other nominal numbers of shares required to be held by others under applicable
law) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
"Working Capital" at any time shall mean Consolidated Current Assets (but
excluding therefrom all cash and Cash Equivalents) less Consolidated Current
Liabilities.
SECTION 12. THE AGENTS.
100
12.01 APPOINTMENT. The Lenders hereby designate Fleet National Bank as
Administrative Agent (for purposes of this Section 12, the term "Administrative
Agent" shall include Fleet National Bank (and/or any of its affiliates) in its
capacity as Collateral Agent pursuant to the Security Documents) to act as
specified herein and in the other Credit Documents. The Lenders hereby designate
Bank of America, N.A. as Syndication Agent to act as specified herein and in the
other Credit Documents. Each Lender hereby irrevocably authorizes, and each
holder of any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Agents to take such action on its behalf under the provisions of
this Agreement, the other Credit Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the respective Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto. Each of the Agents may perform any
of its duties hereunder by or through its respective officers, directors,
agents, employees or affiliates.
12.02 NATURE OF DUTIES. No Agent shall have any duties or responsibilities
except those expressly set forth in this Agreement and the Security Documents.
None of the Agents nor any of their respective officers, directors, agents,
employees or affiliates shall be liable for any action taken or omitted by it or
them hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by the respective such Person's gross negligence or
willful misconduct. The duties of each Agent shall be mechanical and
administrative in nature; no Agent shall have by reason of this Agreement or any
other Credit Document a fiduciary relationship in respect of any Lender or the
holder of any Note; and nothing in this Agreement or any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
any Agent any obligations in respect of this Agreement or any other Credit
Document except as expressly set forth herein or therein.
12.03 LACK OF RELIANCE ON THE AGENTS. Independently and without reliance
upon any Agent, each Lender and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Borrower and its
Subsidiaries in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of the Borrower and its Subsidiaries and,
except as expressly provided in this Agreement, no Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. No Agent shall be responsible to any Lender or the
holder of any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document or the financial condition of the
Borrower and its Subsidiaries or be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any other
101
Credit Document, or the financial condition of the Borrower and its Subsidiaries
or the existence or possible existence of any Default or Event of Default.
12.04 CERTAIN RIGHTS OF THE AGENTS. If any Agent shall request instructions
from the Required Lenders with respect to any act or action (including failure
to act) in connection with this Agreement or any other Credit Document, such
Agent shall be entitled to refrain from such act or taking such action unless
and until such Agent shall have received instructions from the Required Lenders;
and such Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender or the holder of any Note
shall have any right of action whatsoever against any Agent as a result of such
Agent acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Lenders.
12.05 RELIANCE. Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by any Person that
such Agent believed to be the proper Person, and, with respect to all legal
matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by such Agent.
12.06 INDEMNIFICATION. To the extent any Agent is not reimbursed and
indemnified by the Borrower the Lenders will reimburse and indemnify such Agent,
in proportion to their respective "percentages" as used in determining the
Required Lenders, for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by such Agent in performing its respective duties hereunder or under
any other Credit Document, in any way relating to or arising out of this
Agreement or any other Credit Document; provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent's gross negligence or willful misconduct.
12.07 EACH AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its obligation
to make Loans under this Agreement, each Agent shall have the rights and powers
specified herein for a "Lender" and may exercise the same rights and powers as
though it were not performing the duties specified herein; and the term
"Lenders," "Required Lenders," "holders of Notes" or any similar terms shall,
unless the context clearly otherwise indicates, include each Agent in its
individual capacity. Each Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with any Credit
Party or any Affiliate of any Credit Party as if they were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrower or any other Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Lenders.
102
12.08 HOLDERS. The Administrative Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Administrative Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or endorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
12.09 RESIGNATION BY THE AGENTS. (a) The Administrative Agent may resign
from the performance of all its functions and duties hereunder and/or under the
other Credit Documents at any time by giving 20 Business Days' prior written
notice to the Borrower and the Lenders. Such resignation shall take effect upon
the appointment of a successor Administrative Agent pursuant to clauses (b) and
(c) below or as otherwise provided below. Each other Agent may resign from the
performance of all of its functions and duties hereunder and/or under the other
Credit Documents at any time by giving notice to the Borrower, the
Administrative Agent and the Lenders. Such resignation shall take effect upon
delivery of such notice.
(b) Upon any such notice of resignation by the Administrative Agent, the
Lenders shall appoint a successor Administrative Agent hereunder or thereunder
who shall be a commercial bank or trust company reasonably acceptable to the
Borrower.
(c) If a successor Administrative Agent shall not have been so appointed
within such 20 Business Day period, the Administrative Agent, with the consent
of the Borrower (which shall not be unreasonably withheld or delayed), shall
then appoint a commercial bank or trust company with capital and surplus of not
less than $500,000,000 as successor Administrative Agent who shall serve as
Administrative Agent hereunder or thereunder until such time, if any, as the
Lenders appoint a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant to
clause (b) or (c) above by the 30th Business Day after the date such notice of
resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Agents (if one or more so agrees), or
if there are no Agents or no Agent so agrees, then the Required Lenders, shall
thereafter perform all the duties of the Administrative Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required Lenders
appoint a successor Administrative Agent as provided above.
SECTION 13. MISCELLANEOUS.
13.01 PAYMENT OF EXPENSES, ETC. The Borrower shall: (i) whether or not the
transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of (a) the Agents (including, without
limitation, the reasonable fees and disbursements of Xxxxxxx XxXxxxxxx LLP and
local counsel) in connection with the preparation, execution and delivery of
this Agreement and the other Credit
103
Documents and the documents and instruments referred to herein and therein and
any amendment, waiver or consent relating hereto or thereto relating to the
syndication of Commitments hereunder or requested by any Credit Party, and of
the Agents in connection with their syndication efforts with respect to this
Agreement and of (b) the Agents and, following and during the continuation of an
Event of Default, each of the Lenders in connection with the enforcement of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Agents and, following and during the
continuation of an Event of Default, for each of the Lenders, provided that the
Borrower shall be obligated to pay the fees and disbursements of only one
counsel to the Agents and the Lenders pursuant to this clause (i)(b) unless an
Agent or Lender notifies the Borrower that it reasonably believes that its legal
position differs from the other Agents or Lenders or that it may be subject to
different claims or defenses than the other Agents and Lenders, in which case
the Borrower will also pay the reasonable fees and disbursements of counsel of
such Agent or Lender; (iii) pay and hold each of the Lenders harmless from and
against any and all present and future stamp, excise and other similar taxes
with respect to the foregoing matters and save each of the Lenders harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such Lender) to pay such
taxes; and (iv) indemnify each Agent and each Lender, and each of their
respective officers, directors, employees, representatives and agents from and
hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions), losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not any Agent or any Lender is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of any Letter of Credit or the proceeds of any Loans
hereunder or the consummation of any transactions contemplated in any Credit
Document, or in any other Credit Document or the exercise of any of their rights
or remedies provided herein or in the other Credit Documents, or (b) the actual
or alleged presence of Hazardous Materials in the air, surface water or
groundwater or on the surface or subsurface of any Real Property owned or at any
time operated by the Borrower or any of its Subsidiaries, the generation,
storage, transportation, handling or disposal of Hazardous Materials at any
location, whether or not owned or operated by the Borrower or any of its
Subsidiaries, the non-compliance of any Real Property with foreign, federal,
state and local laws, regulations, and ordinances (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim asserted
against the Borrower, any of its Subsidiaries or any Real Property owned or at
any time operated by the Borrower or any of its Subsidiaries, including, in each
case, without limitation, the reasonable fees and disbursements of counsel and
other consultants incurred in connection with any such investigation, litigation
or other proceeding (but, also in each case, excluding any losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified). To the extent
that the undertaking
104
to indemnify, pay or hold harmless the Agents or any Lender set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Borrower shall make the maximum contribution to the payment
and satisfaction of each of the indemnified liabilities which is permissible
under applicable law.
13.02 RIGHT OF SETOFF. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
each Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of any Credit Party against and on account of the
Obligations and liabilities of the Borrower or such Credit Party, as applicable,
to such Agent or such Lender under this Agreement or under any of the other
Credit Documents, including, without limitation, all interests in Obligations
purchased by such Lender pursuant to Section 13.06(b), and all other claims of
any nature or description arising out of or connected with this Agreement or any
other Credit Document, irrespective of whether or not such Lender shall have
made any demand hereunder and although said Obligations, liabilities or claims,
or any of them, shall be contingent or unmatured.
13.03 NOTICES. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telegraphic, facsimile or cable communication) and mailed, telexed, telecopied,
cabled or delivered: if to the Borrower or any other Credit Party, at the
Borrower's address specified opposite its signature below; if to any Lender, at
its address specified opposite its name on Schedule 1 below; and if to the
Administrative Agent, at its Notice Office; or, as to any Credit Party or any of
the Agents, at such other address as shall be designated by such party in a
written notice to the other parties hereto and, as to each Lender, at such other
address as shall be designated by such Lender in a written notice to the
Borrower and the Agents. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied or cabled or sent by overnight courier, be
effective when deposited in the mails or delivered to the overnight courier,
prepaid and properly addressed for delivery on such or the next Business Day, or
sent by telex, telegraph, cable or telecopier, except that notices and
communications to the Agents and the Borrower shall not be effective until
received by the Agents or the Borrower, as the case may be.
13.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, no Credit Party may assign or
transfer any of its rights, obligations or interest hereunder or under any other
Credit Document without the prior written consent of the Lenders and, provided
further, that, although any Lender may transfer, assign or grant participations
in its rights hereunder, such Lender shall remain a "Lender" for all purposes
hereunder (and may not transfer or assign all or
105
any portion of its Commitments hereunder except as provided in Section 13.04(b))
and, in the case of any assignment, such Lender shall not be "Lender" hereunder
to the extent of such assignment) and the transferee, assignee or participant,
as the case may be, shall not constitute a "Lender" hereunder except, in the
case of an assignment, upon execution of and delivery to the Administrative
Agent of an Assignment and Acceptance Agreement and otherwise in compliance with
Section 13.04(b) and, provided further, that no Lender shall transfer or grant
any participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the Revolving Loan Maturity Date) in which such participant
is participating, or reduce the rate or extend the time of payment of interest
or Fees thereon (except (x) in connection with a waiver of applicability of any
post-default increase in interest rates and (y) that any amendment or
modification to the financial definitions in this Agreement shall not constitute
a reduction in the rate of interest for purposes of this clause (i)) or reduce
the principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be permitted
without the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement or (iii)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Credit Documents) supporting the
Loans hereunder in which such participant is participating. In the case of any
such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights against
such Lender in respect of such participation to be those set forth in the
agreement executed by such Lender in favor of the participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as if such
Lender had not sold such participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender together with
one or more other Lenders) may (x) assign all or a portion of its Revolving Loan
Commitment (and related outstanding Obligations hereunder), its outstanding Term
Loan A or Term Loan B to (I) its parent company and/or any affiliate of such
Lender which is at least 50% owned by such Lender or its parent company, (II) to
one or more Lenders or (III) in the case of any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is managed
or advised by the same investment advisor of such Lender or by an Affiliate of
such investment advisor or (y) assign all, or if less than all, a portion equal
to at least $1,000,000 in the aggregate for the assigning Lender or assigning
Lenders, of such Revolving Loan Commitments, and/or outstanding principal amount
of Term Loan A or Term Loan B hereunder to one or more Eligible Transferees
(treating any fund that invests in bank loans and any other fund that invests in
bank loans and is managed or advised by the same investment advisor of such fund
or by an Affiliate of such investment advisor as a single Eligible
106
Transferee),
each of which assignees under the foregoing clauses (x) and (y) shall become a
party to this Agreement as a Lender by execution of an Assignment and Acceptance
Agreement, provided that, (i) at such time Schedule 1 shall be deemed modified
to reflect the Commitments (and/or outstanding Loans, as the case may be) of
such new Lender and of the existing Lenders, (ii) upon surrender of the old
Notes, new Notes will be issued, at the Borrower's expense, to such new Lender
and to the assigning Lender upon the request of such new Lender or assigning
Lender to the extent it is retaining any Commitments or Leases, such new Notes
to be in conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments (and/or
outstanding Loans, as the case may be), (iii) with respect to any assignment
pursuant to the foregoing clause (y), the consent of the Administrative Agent
and so long as no Default under Section 10.05 and no Event of Default then
exists, the Borrower, shall be required in connection with any such assignment
(each of which consents shall not be unreasonably withheld or delayed) and (iv)
the Administrative Agent shall receive at the time of each such assignment
pursuant to preceding clause (y), from the assigning or assignee Lender, the
payment of a non-refundable assignment fee of $3,500. To the extent of any
assignment pursuant to this Section 13.04(b), the assigning Lender shall be
relieved of its obligations hereunder with respect to its assigned Commitments.
At the time of each assignment pursuant to this Section 13.04(b) to a Person
which is not already a Lender hereunder and which is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for Federal income
tax purposes, the respective assignee Lender shall provide to the Borrower and
the Agent the appropriate Internal Revenue Service Forms (and, if applicable, a
Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent
that an assignment of all or any portion of a Lender's Commitments and related
outstanding Obligations pursuant to Section 1.13 or this Section 13.04(b) would,
at the time of such assignment, result in increased costs under Section 1.10,
1.11 or 4.04 from those being charged by the respective assigning Lender prior
to such assignment, then the Borrower shall not be obligated to pay such
increased costs (although the Borrower shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank.
13.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
any Agent or any Lender or any holder of any Note in exercising any right, power
or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower or any other Credit Party and any Agent or any
Lender or the holder of any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
under any other Credit Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege hereunder or thereunder.
The rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which any Agent or any Lender or the holder of any Note
107
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of any Agent
or any Lender or the holder of any Note to any other or further action in any
circumstances without notice or demand.
13.06 PAYMENTS PRO RATA. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower or any Subsidiary Guarantor in
respect of any Obligations hereunder, it shall distribute such payment to the
Lenders (other than any Lender that has consented in writing to waive its pro
rata share of any such payment) pro rata based upon their respective shares, if
any, of the Obligations with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, the RL Commitment Commission or Letter of Credit
Fees, of a sum which with respect to the related sum or sums received by other
Lenders is in a greater proportion than the total of such Obligation then owed
and due to such Lender bears to the total of such Obligation then owed and due
to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations of the respective
Credit Party to such Lenders in such amount as shall result in a proportional
participation by all the Lenders in such amount; provided that if all or any
portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
13.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
(or the equivalent thereof in any country in which a Foreign Subsidiary is doing
business, as applicable) consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); provided that, except as otherwise specifically
provided herein, all computations of Excess Cash Flow and all computations
determining compliance with Section 4.02 and Sections 9.09 through 9.12,
inclusive, shall utilize accounting principles and policies in conformity with
those used to prepare the historical financial statements delivered to the
Lenders for the first fiscal year of the Borrower ended December 28, 2001 (with
the foregoing
108
generally accepted accounting principles, subject to the preceding proviso,
herein called "GAAP"), except that such computations shall not, in any event,
give effect to purchase accounting adjustments required or permitted by APB 16
(including non-cash write-up and non-cash charges relating to inventory and
fixed assets, in each case arising in connection with the Borrower), and APB 17
(including non-cash charges relating to intangibles and goodwill arising in
connection with the Borrower).
(b) All computations of interest, the RL Commitment Commission and Fees
hereunder shall be made on the basis of a year of 360 days (except for Base Rate
Loans where the rate of interest is based on the Prime Lending Rate, in which
case such computation shall be made on the basis of 365 or 366 days, as the case
may be) for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest, the RL Commitment
Commission or Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY CREDIT
PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER
OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
109
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
13.09 COUNTERPARTS. This Agreement and any amendment hereof may be executed
in any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Administrative Agent.
13.10 EFFECTIVENESS. This Agreement shall become effective on the date (the
"Effective Date") on which the Borrower and each of the Lenders shall have
signed a counterpart hereof (whether the same or different counterparts) and
shall have delivered the same to the Administrative Agent or, in the case of the
Lenders, shall have given to the Administrative Agent telephonic (confirmed in
writing), written or telex notice (actually received) at such office that the
same has been signed and mailed to it. The Administrative Agent will give the
Borrower and each Lender prompt written notice of the occurrence of the
Effective Date.
13.11 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 AMENDMENT OR WAIVER; ETC. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Lenders, provided that
(i) no such change, waiver, discharge or termination shall, without the consent
of each Lender (other than a Defaulting Lender), directly affected thereby:
(A) extend the final scheduled maturity of any Loan or Note, extend any
regularly scheduled dates for payment of principal of, or interest on, the
Loans, or extend the stated maturity of any Letter of Credit beyond the RL
Maturity Date, or reduce or forgive the principal amount thereof (except to the
extent repaid in cash), or reduce the rate or extend the time of payment of
interest or Fees thereon (except (x) in connection with the waiver of
applicability of any post-default increase in interest rates and (y) that any
amendment or modification to the financial definitions in this Agreement shall
not constitute a reduction in the rate of interest for purposes of this clause
(A)),
(B) increase the amount of any Commitment of such Lender or extend the
expiration date of any Commitment of such Lender,
110
(C) release all or substantially all of the Collateral (except as expressly
provided in the Credit Documents) under all the Security Documents or release
all or substantially all of the Subsidiary Guarantors from their guaranty
obligations under the Subsidiaries Guaranty,
(D) amend, modify or waive any provision of this Section 13.12,
(E) reduce the percentage specified in the definition of Required Lenders
(it being understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement, in each such case, may be
included in the determination of the Required Lenders on substantially the same
basis as the extensions of Term Loans and the Revolving Loan Commitments are
included on the Effective Date), or
(F) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement; provided further, that no such
change, waiver, discharge or termination shall increase the Commitments of any
Lender over the amount thereof then in effect without the consent of such Lender
(it being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Commitment shall not constitute an increase of the Commitment of any
Lender, and that an increase in the available portion of any Commitment of any
Lender shall not constitute an increase in the Commitment of such Lender).
(ii) no such change, waiver, discharge or termination shall, without the consent
of the Swingline Lender or, in the case of Letters of Credit, the respective
Issuing Lender, amend, modify or waive any provision of Section 2 or alter its
rights or obligations with respect to Letters of Credit or Swingline Loans,
(iii) no such change, waiver, discharge or termination shall, without the
consent of each Agent affected thereby, amend, modify or waive any provision of
Section 12 as same applies to such Agent or any other provision as same relates
to the rights or obligations of such Agent, or
(iv) no such change, waiver, discharge or termination shall, without the consent
of the Collateral Agent, amend, modify or waive any provision relating to the
rights or obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by the
first proviso to Section 13.12(a), the consent of the Required Lenders is
obtained but the consent of one or more of such other Lenders whose consent is
required is not obtained, then the Borrower shall have the right, so long as all
non-consenting Lenders whose individual consent is required are treated as
described in clause (A) below, to (A) replace each such non-consenting Lender or
Lenders (or, at the option of the Borrower if the respective Lender's consent is
required with respect to less than all Tranches of Loans (or related
Commitments), to replace only the respective Tranche or Tranches of
111
Commitments and/or Loans of the respective non-consenting Lender which gave rise
to the need to obtain such Lender's individual consent) with one or more
Replacement Lenders pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Lender consents to the proposed change,
waiver, discharge or termination.
(c) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by the
first proviso to Section 13.12(a), the consent of the Required Lenders is
obtained but the consent of one or more of such other Lenders whose individual
consent is required is not obtained, then the Borrower shall have the right to
terminate such non-consenting Lender's Commitments and/or repay the outstanding
Loans of such Lender, provided, however, that such termination shall only be
permitted to the extent the Borrower receives proceeds from the issuance of
common equity to THL or other Permitted Holders, and provided, further, that,
unless the Commitments terminated and Loans repaid pursuant to this subclause
(c) are immediately replaced in full at such time through the addition of new
Lenders or the increase of the Commitments and/or outstanding Loans of existing
Lenders (who in each case must specifically consent thereto), then in the case
of any action pursuant to this subclause (c) the Required Lenders (determined
before giving effect to the proposed action) shall specifically consent thereto,
provided further, that in any event the Borrower shall not have the right to
terminate the Commitment of a Lender or repay its Loans solely as a result of
the exercise of such Lender's rights (and the withholding of any required
consent by such Lender) pursuant to the second proviso to Section 13.12(a).
13.13 SURVIVAL. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06 shall, subject
to Section 13.15 (to the extent applicable), survive the execution, delivery and
termination of this Agreement and the Notes and the making and repayment of the
Loans.
13.14 DOMICILE OF LOANS. Each Lender may transfer and carry its Loans at,
to or for the account of any office, Subsidiary or Affiliate of such Lender.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.05 or 4.04 from
those being charged by the respective Lender prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 LIMITATION ON ADDITIONAL AMOUNTS, ETC. Notwithstanding anything to
the contrary contained in Sections 1.10, 1.11, 2.05 or 4.04 of this Agreement,
unless a Lender gives notice to the Borrower that it is obligated to pay an
amount under any such Section within one year after the later of (x) the date
the Lender incurs the respective increased costs, Taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital or (y) the date such Lender has actual knowledge of its incurrence of
the respective increased costs, Taxes, loss, expense
112
or liability, reductions in amounts received or receivable or reduction in
return on capital, then such Lender shall only be entitled to be compensated for
such amount by the Borrower pursuant to said Section 1.10, 1.11, 2.05 or 4.04,
as the case may be, to the extent the costs, Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital
are incurred or suffered on or after the date which occurs one year prior to
such Lender giving notice to the Borrower that it is obligated to pay the
respective amounts pursuant to said Section 1.10, 1.11, 2.05 or 4.04, as the
case may be. This Section 13.15 shall have no applicability to any Section of
this Agreement other than said Sections 1.10, 1.11, 2.05 and 4.04.
13.16 CONFIDENTIALITY. (a) Subject to the provisions of clause (b) of this
Section 13.16, each Lender agrees that it will use its reasonable efforts not to
disclose without the prior consent of the Borrower (other than to its employees,
auditors, professional advisors or counsel, to affiliates or to another Lender
if the Lender or such Lender's holding or parent company in its sole discretion
determines that any such party should have access to such information, provided
such Persons shall be subject to the provisions of this Section 13.16 to the
same extent as such Lender) any information with respect to the Borrower or any
of its Subsidiaries which is now or in the future furnished pursuant to this
Agreement or any other Credit Document and which is designated by the Borrower
to the Lenders in writing as confidential, provided that any Lender may disclose
any such information (a) as has become generally available to the public other
than by virtue of a breach of this Section 13.16(a) by the respective Lender,
(b) as may be required or appropriate in any report, statement or testimony
submitted to any municipal, state or Federal regulatory body having or claiming
to have jurisdiction over such Lender or to the Federal Reserve Board or the
Federal Deposit Insurance Corporation or similar organizations (whether in the
United States or elsewhere) or their successors or to the National Association
of Insurance Commissioners (to the extent necessary to receive the benefits of
any law or regulation governing such Lender's investments), (c) as may be
required or appropriate in respect to any summons or subpoena or in connection
with any litigation, (d) in order to comply with any law, order, regulation or
ruling applicable to such Lender, (e) to the Agents or the Collateral Agent, (f)
to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about such Lender's investment portfolio in connection with ratings
issued with respect to such Lender, (g) to any prospective or actual transferee
or participant in connection with any contemplated assignment, transfer or
participation of any of the Notes or Commitments or any interest therein by such
Lender and (h) to any direct or indirect counterparty with a Lender or its
affiliate in a swap agreement with respect to such Lender's Loans, provided that
in he case of clauses (g) and (h) such prospective transferee agrees to be bound
by the confidentiality provisions contained in this Section 13.16.
(b) The Borrower hereby acknowledges and agrees that each Lender may share
with any of its affiliates any information related to the Borrower or any of its
Subsidiaries (including, without limitation, any nonpublic customer information
regarding the creditworthiness of the Borrower and its Subsidiaries, provided
such
113
Persons shall be subject to the provisions of this Section 13.16 to the same
extent as such Lender).
13.17 REGISTER. The Borrower hereby designates the Administrative Agent to
serve as the Borrower's agent, solely for purposes of this Section 13.17, to
maintain a register (the "Register") on which it will record the Commitments
from time to time of each of the Lenders, the Loans made by each of the Lenders
and each repayment in respect of the principal amount of the Loans of each
Lender. Failure to make any such recordation, or any error in such recordation
shall not affect the Borrower's obligations in respect of such Loans. With
respect to any Lender, the transfer of the Commitments of such Lender and the
rights to the principal of, and interest on, any Loan made pursuant to such
Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of any
Commitments and Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Acceptance Agreement pursuant to Section
13.04(b). Coincident with the delivery of such an Assignment and Acceptance
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Lender and/or
the new Lender. The Borrower agrees to indemnify the Administrative Agent from
and against any and all losses, claims, damages and liabilities of whatsoever
nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 13.17 except
when caused by the gross negligence or willful misconduct of the Administrative
Agent. Notwithstanding the foregoing, in the case of any assignment of any Term
Loans pursuant to clause (x) of Section 13.04(b) that is not reflected in the
Register, the assigning Lender shall maintain a comparable register on behalf of
the Administrative Agent.
13.18 USURY LAWS. (a) It is the intention of the parties hereto that each
Lender shall conform strictly to usury laws applicable to it. Accordingly, the
parties hereto stipulate and agree that none of the terms and provisions
contained in the Notes, this Agreement, or any of the other Credit Documents
shall ever be construed to create a contract to pay to any Lender for the use,
forbearance, or detention of money at a rate in excess of the Highest Lawful
Rate applicable to such Lender, and that for purposes hereof, "interest" shall
include the aggregate of all charges or other consideration which constitute
interest under applicable laws and are contracted for, taken, reserved, charged,
or received under any of this Agreement, the Notes, or the other Credit
Documents or otherwise in connection with the transactions contemplated by this
Agreement. Further, if the transactions contemplated hereby would be usurious as
to any Lender under laws applicable to it then, in that event, notwithstanding
anything to the contrary in the Notes, this Agreement or in any other Credit
Document or agreement
114
entered into in connection with or as security for the Notes, it is agreed as
follows: the aggregate of all consideration which constitutes interest under law
applicable to each such Lender that is contracted for, taken, reserved, charged,
or received by such Lender under the Notes, this Agreement, or under any of the
other aforesaid Credit Documents or agreements or otherwise in connection with
the Notes shall under no circumstances exceed the maximum amount allowed by the
law applicable to such Lender, and any excess shall be credited by such Lender
on the principal amount of the Indebtedness of the Borrower owed to such Lender
(or, if the principal amount of such Indebtedness shall have been paid in full,
to the extent such interest has been received by a Lender, it shall be refunded
by such Lender to the Borrower). The provisions of this Section 13.18(a) shall
control over all other provisions of this Agreement, the Notes, and the other
Credit Documents which may be in apparent conflict herewith. The parties further
stipulate and agree that, without limitation on the foregoing, all calculations
of the rate or amount of interest contracted for, taken, reserved, charged or
received under any of this Agreement, the Notes, and the other Credit Documents
which are made for the purpose of determining whether such rate or amount exceed
the Highest Lawful Rate shall be made, to the extent permitted by applicable
law, by amortizing, prorating, allocating, and spreading during the period of
the full stated term of the Indebtedness, and if longer and if permitted by
applicable law, until payment in full, all interest at any time so contracted
for, taken, reserved, charged, or received.
(b) If at any time the effective rate of interest of any Lender's Notes
would exceed the Highest Lawful Rate applicable to such Lender (taking into
account the interest rate applicable to such Indebtedness pursuant to the other
provisions of this Agreement, plus all additional charges and consideration
which have been contracted for, taken, reserved, charged, or received under this
Agreement, such Lender's Notes and the other Credit Documents, or any of them,
and which additional charges or consideration (the "Additional Charges")
constitute interest with respect to such Indebtedness), the effective interest
rate to apply to such Indebtedness made by a Lender shall be limited to the
Highest Lawful Rate, but any subsequent reductions in the interest rate
applicable to such Indebtedness owed to such Lender shall not reduce the
effective interest rate to apply to such Indebtedness owed to such Lender below
the Highest Lawful Rate applicable to such Lender until the total amount of
interest accrued on such Indebtedness equals the amount of interest which would
have accrued if the Interest Rate from time to time applicable to such
Indebtedness owed to such Lender had at all times been in effect with respect to
such Indebtedness pursuant to the other provisions of this Agreement and if the
Lender had collected all Additional Charges called for under this Agreement, the
Notes, and the other Credit Documents. If at maturity or final payment of such
Lender's Notes the total amount of interest accrued on such Lender's Notes
(including amounts designated as "interest" plus any Additional Charges which
constitute interest with respect to such Lender's Notes, and taking into account
the limitations of the first sentence of this Section 13.18(b)) is less than the
total amount of interest which would have accrued if the interest rate or
interest rates applicable to the Indebtedness from time to time outstanding
under such Lender's Notes had at all times been in effect pursuant to the other
provisions of this Agreement, then the respective Borrower agrees, to the
fullest extent permitted by the laws applicable to
115
such Lender, to pay to such Lender an amount equal to the difference between (i)
the lesser of (1) the amount of interest which would have accrued on such
lender's Notes if the Highest Lawful Rate had at all times been in effect (but
excluding, for purposes of calculating such amount of interest, any Additional
Charges which constitute interest with respect to such Lender's Notes), or (2)
the amount of interest which would have accrued on such lender's Notes if the
interest rate or interest rates applicable to the Indebtedness from time to time
outstanding under such Lender's Notes had at all times been in effect pursuant
to the other provisions of this Agreement (including amounts designated as
"interest" plus any Additional Charges which constitute interest with respect to
such lender's Notes) less (ii) the amount of interest actually accrued on such
lender's Notes (including amounts designated as "interest" plus any Additional
Charges which constitute interest with respect to such Lender's Notes).
SECTION 14. TRANSITIONAL ARRANGEMENTS.
14.01 EXISTING CREDIT AGREEMENT SUPERSEDED. This Agreement shall on the
Effective Date amend and restate the Existing Credit Agreement in its entirety,
except as provided in this Section 14.01. On the Effective Date, the rights and
obligations of the parties evidenced by the Existing Credit Agreement shall be
evidenced by the Agreement and the other Credit Documents, the "Loans" as
defined in the Existing Credit Agreement shall be converted to Loans as defined
herein, and all outstanding Letters of Credit issued by an Issuing Lender prior
to the Effective Date shall, for purposes of this Agreement, be Letters of
Credit.
14.02 RETURN AND CANCELLATION OF NOTES. As soon as reasonably practicable
after its receipt of its Revolving Note and Term Notes hereunder on the
Effective Date, each Lender will promptly return to the Borrower, marked
"Substituted" or "Cancelled" as the case may be, any notes of the Borrower held
by the Lenders pursuant to the Existing Credit Agreement.
14.03 INTEREST AND FEES UNDER SUPERSEDED AGREEMENT. All interest and fees
and expenses, if any, owing or accruing under or in respect of the Existing
Credit Agreement through the Effective Date shall be calculated as of the
Effective Date (prorated in the case of any fractional periods), and shall be
paid in accordance with the method, and on the dates, specified in the Existing
Credit Agreement, as if the Existing Credit Agreement were still in effect.
Commencing on the Effective Date, the RL Commitment Commission shall be payable
by the Borrower to the Administrative Agent for the account of the Lenders in
accordance with Section 3.01.
[Remainder of page intentionally left blank.]
116
Signature Pages to the Amended and Restated Credit Agreement
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Amended and Restated Credit Agreement as of
the date first above written.
EYE CARE CENTERS OF AMERICA, INC.
By:__________________________________
Name:
Title:
FLEET NATIONAL BANK, individually and as Administrative Agent
By:__________________________________
Name:
Title:
BANK OF AMERICA, N.A., individually and as Syndication Agent
By:__________________________________
Name:
Title:
DEUTSCHE BANK TRUST COMPANY AMERICAS (f/k/a Bankers Trust Company)
By:__________________________________
Name:
Title:
BANK AUSTRIA CREDITANSTALT
By:__________________________________
Name:
Title:
GE CAPITAL CFE, INC.
By:__________________________________
Name:
Title:
XXXXXX FINANCIAL, INC.
By:__________________________________
Name:
Title:
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
By: Highland Capital Management, L.P.
As Authorized Representatives of the Board
By:__________________________________
Name:
Title:
EMERALD ORCHARD LIMITED.
By:__________________________________
Name:
Title:
PAMCO CAYMAN LTD.
By: Highland Capital Management, L.P.
As Collateral Manager
By:__________________________________
Name:
Title:
HIGHLAND LEGACY LIMITED
By: Highland Capital Management, L.P.
As Collateral Manager
By:__________________________________
Name:
Title:
INDOSUEZ CAPITAL FUNDING VI, LIMITED
By:__________________________________
Name:
Title:
INDOSUEZ CAPITAL FUNDING IIA, LIMITED
By:__________________________________
Name:
Title:
INDOSUEZ CAPITAL FUNDING IV, LIMITED
By:__________________________________
Name:
Title:
XXX CAPITAL FUNDING LP
By: Highland Capital Management, L.P.,
As Collateral Manager
By:__________________________________
Name:
Title:
CREDIT INDUSTRIEL
ET COMMERCIAL
By:__________________________________
Name:
Title:
XXXXXXX XXXXX CAPITAL,
a division of Xxxxxxx Xxxxx Business Financial Services, Inc.
By:__________________________________
Name:
Title:
DYMAS FUNDING COMPANY, LLC
By: Dymas Capital Management Company, LLC, its Manager
By:__________________________________
Name:
Title:
XXXXX POINT II CBO 2000-1 LTD.
By:__________________________________
Name:
Title:
GREAT POINT CLO 1999-1 LTD.
By:__________________________________
Name:
Title:
CASTLE HILL I - INGOTS, LTD.
By: Sankaty Advisors, LLC,
As Collateral Manager
By:__________________________________
Name:
Title:
SANKATY HIGH YIELD PARTNERS II, L.P.
By:__________________________________
Name:
Title:
SANKATY HIGH YIELD PARTNERS III, L.P.
By:__________________________________
Name:
Title:
RACE POINT II CLO, LIMITED
By: Sankaty Advisors, LLC,
As Collateral Manager
By:__________________________________
Name:
Title:
HARBOUR TOWN FUNDING LLC
By:__________________________________
Name:
Title:
SCHEDULE 1
COMMITMENTS
