Exhibit 1.02
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SECOND LIEN CREDIT AND GUARANTY AGREEMENT
DATED AS OF DECEMBER 23, 2005
AMONG
AAH HOLDINGS CORPORATION,
AMSCAN HOLDINGS, INC.,
CERTAIN SUBSIDIARIES OF AMSCAN HOLDINGS, INC.,
AS GUARANTORS,
VARIOUS LENDERS,
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
AS JOINT LEAD ARRANGER, JOINT BOOKRUNNER,
SYNDICATION AGENT, ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
BANC OF AMERICA SECURITIES LLC,
AS JOINT LEAD ARRANGER AND JOINT BOOKRUNNER,
AND
BANK OF AMERICA, N.A.,
AS DOCUMENTATION AGENT
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$60,000,000 SENIOR SECURED SECOND LIEN CREDIT FACILITY
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS AND INTERPRETATION............................... 2
1.1. Definitions.................................................. 2
1.2. Accounting Terms............................................. 28
1.3. Interpretation, Etc.......................................... 28
SECTION 2. LOANS........................................................ 29
2.1. Loans........................................................ 29
2.2. Pro Rata Shares; Availability of Funds....................... 29
2.3. Use of Proceeds.............................................. 30
2.4. Evidence of Debt; Register; Lenders' Books and Records;
Notes..................................................... 30
2.5. Interest on Loans............................................ 31
2.6. Conversion/Continuation...................................... 32
2.7. Default Interest............................................. 32
2.8. Fees......................................................... 32
2.9. Repayment.................................................... 32
2.10. Voluntary Prepayments........................................ 33
2.11. Mandatory Prepayments........................................ 35
2.12. Application of Prepayments................................... 37
2.13. General Provisions Regarding Payments........................ 37
2.14. Ratable Sharing.............................................. 38
2.15. Making or Maintaining Eurodollar Rate Loans.................. 39
2.16. Increased Costs; Capital Adequacy............................ 40
2.17. Taxes; Withholding, Etc...................................... 42
2.18. Obligation To Mitigate....................................... 43
2.19. Removal or Replacement of a Lender........................... 44
2.20. Application of Proceeds...................................... 44
2.21. Original Issue Discount...................................... 45
SECTION 3. CONDITIONS PRECEDENT......................................... 45
3.1. Closing Date................................................. 45
3.2. Further Conditions to Loans.................................. 49
SECTION 4. REPRESENTATIONS AND WARRANTIES............................... 49
4.1. Organization; Requisite Power and Authority; Qualification... 49
4.2. Capital Stock and Ownership.................................. 50
4.3. Due Authorization............................................ 50
4.4. No Conflict.................................................. 50
4.5. Governmental Consents........................................ 50
4.6. Binding Obligation........................................... 50
4.7. Historical Financial Statements.............................. 51
4.8. Projections.................................................. 51
4.9. No Material Adverse Change................................... 51
4.10. No Restricted Junior Payments................................ 51
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4.11. Adverse Proceedings, Etc..................................... 51
4.12. Payment of Taxes............................................. 51
4.13. Properties................................................... 52
4.14. Environmental Matters........................................ 52
4.15. No Defaults.................................................. 52
4.16. Material Contracts........................................... 53
4.17. Governmental Regulation...................................... 53
4.18. Margin Stock................................................. 53
4.19. Employee Matters............................................. 53
4.20. Employee Benefit Plans....................................... 53
4.21. Certain Fees................................................. 54
4.22. Solvency..................................................... 54
4.23. Compliance with Statutes, Etc................................ 54
4.24. Disclosure................................................... 54
4.25. Patriot Act.................................................. 54
4.26. First Lien Documents......................................... 55
SECTION 5. AFFIRMATIVE COVENANTS........................................ 55
5.1. Financial Statements and Other Reports....................... 55
5.2. Existence.................................................... 58
5.3. Payment of Taxes and Claims.................................. 58
5.4. Maintenance of Properties.................................... 59
5.5. Insurance.................................................... 59
5.6. Inspections.................................................. 59
5.7. Lenders Meetings............................................. 60
5.8. Compliance with Laws......................................... 60
5.9. Environmental................................................ 60
5.10. Subsidiaries................................................. 61
5.11. Additional Material Real Estate Assets....................... 62
5.12. Further Assurances........................................... 63
5.13. Interest Rate Protection..................................... 63
5.14. Post-Closing Covenant........................................ 63
SECTION 6. NEGATIVE COVENANTS........................................... 64
6.1. Indebtedness................................................. 64
6.2. Liens........................................................ 66
6.3. Equitable Lien............................................... 68
6.4. No Further Negative Pledges.................................. 69
6.5. Restricted Junior Payments................................... 69
6.6. Restrictions on Subsidiary Distributions..................... 70
6.7. Investments.................................................. 70
6.8. Financial Covenants.......................................... 71
6.9. Fundamental Changes; Disposition of Assets; Acquisitions..... 73
6.10. Disposal of Subsidiary Interests............................. 74
6.11. Sales and Lease-Backs........................................ 74
6.12. Transactions with Shareholders and Affiliates................ 74
6.13. Conduct of Business.......................................... 74
6.14. Amendments or Waivers of Certain Related Agreements.......... 75
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6.15. Amendments of or Waivers with Respect to Certain
Indebtedness.............................................. 75
6.16. Fiscal Year.................................................. 75
6.17. Permitted Activities of Holdings............................. 75
SECTION 7. GUARANTY..................................................... 75
7.1. Guaranty of the Obligations.................................. 75
7.2. Contribution by Guarantors................................... 76
7.3. Payment by Guarantors........................................ 76
7.4. Liability of Guarantors Absolute............................. 76
7.5. Waivers by Guarantors........................................ 78
7.6. Guarantors' Rights of Subrogation, Contribution, Etc......... 79
7.7. Subordination of Other Obligations........................... 79
7.8. Continuing Guaranty.......................................... 79
7.9. Authority of Guarantors or Company........................... 80
7.10. Financial Condition of Company............................... 80
7.11. Bankruptcy, Etc.............................................. 80
7.12. Discharge of Guaranty upon Sale of Guarantor................. 81
SECTION 8. EVENTS OF DEFAULT............................................ 81
8.1. Events of Default............................................ 81
SECTION 9. AGENTS....................................................... 83
9.1. Appointment of Agents........................................ 83
9.2. Powers and Duties............................................ 84
9.3. General Immunity............................................. 84
9.4. Agents Entitled To Act as Lender............................. 85
9.5. Lenders' Representations, Warranties and Acknowledgment...... 85
9.6. Right to Indemnity........................................... 85
9.7. Successor Administrative Agent............................... 86
9.8. Collateral Documents and Guaranty............................ 86
SECTION 10. MISCELLANEOUS................................................ 87
10.1. Notices...................................................... 87
10.2. Expenses..................................................... 87
10.3. Indemnity.................................................... 88
10.4. Set-Off...................................................... 88
10.5. Amendments and Waivers....................................... 89
10.6. Successors and Assigns; Participations....................... 90
10.7. Independence of Covenants.................................... 93
10.8. Survival of Representations, Warranties and Agreements....... 93
10.9. No Waiver; Remedies Cumulative............................... 93
10.10. Marshalling; Payments Set Aside.............................. 93
10.11. Severability................................................. 94
10.12. Obligations Several; Independent Nature of Lenders' Rights... 94
10.13. Headings..................................................... 94
10.14. Applicable Law............................................... 94
10.15. Consent to Jurisdiction...................................... 94
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10.16. Waiver of Jury Trial......................................... 95
10.17. Confidentiality.............................................. 95
10.18. Usury Savings Clause......................................... 95
10.19. Counterparts................................................. 96
10.20. Effectiveness................................................ 96
10.21. Patriot Act.................................................. 96
10.22. Electronic Transmissions..................................... 96
10.23. Disclosure................................................... 97
APPENDICES: A Commitments
B Notice Addresses
SCHEDULES: 4.1 Jurisdictions of Organization and Qualification
4.2 Capital Stock and Ownership
4.13 Real Estate Assets
4.16 Material Contracts
5.14 Post-Closing Matters
6.1(j) Certain Indebtedness
6.1(u) Contingent Obligations
6.2 Certain Liens
6.7 Certain Investments
6.12 Transactions with Affiliates
EXHIBITS: A-1 Funding Notice
A-2 Conversion/Continuation Notice
B Second Lien Loan Note
C Compliance Certificate
X-0 Xxxxxxx xx Xxxxx & Xxxx XXX
X-0 Opinions of Local Counsel
E Assignment Agreement
F Certificate Re Non-Bank Status
G-1 Closing Date Certificate
G-2 Solvency Certificate
H Counterpart Agreement
I Pledge and Security Agreement
J Mortgage
K Perfection Certificate
L Perfection Certificate Supplement
M Intercreditor Agreement
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SECOND LIEN CREDIT AND GUARANTY AGREEMENT
This SECOND LIEN CREDIT AND GUARANTY AGREEMENT, dated as of December
23, 2005, is entered into by and among AMSCAN HOLDINGS, INC., a Delaware
corporation ("COMPANY"), AAH HOLDINGS CORPORATION, a Delaware corporation
("HOLDINGS"), certain subsidiaries of Company, as Guarantors, the Lenders party
hereto from time to time, XXXXXXX SACHS CREDIT PARTNERS L.P. ("GSCP"), as Joint
Lead Arranger and Joint Bookrunner, Syndication Agent (in such capacity, the
"SYNDICATION AGENT"), Administrative Agent (together with its permitted
successors in such capacity, "ADMINISTRATIVE AGENT") and Collateral Agent
(together with its permitted successors and permitted assigns in such capacity,
"COLLATERAL AGENT"), BANC OF AMERICA SECURITIES LLC ("BAS"), as Joint Lead
Arranger and Joint Bookrunner (each of GSCP and BAS in such capacity, an
"ARRANGER" and together, the "ARRANGERS"), and BANK OF AMERICA, N.A., as
Documentation Agent (in such capacity, the "DOCUMENTATION AGENT").
RECITALS:
WHEREAS, capitalized terms used in these Recitals and not otherwise
defined herein shall have the respective meanings set forth for such terms in
Section 1.1 hereof;
WHEREAS, (i) Company and BWP Acquisition, Inc., a Delaware corporation
("MERGER CO."), have entered into the Merger Agreement with Party City
Corporation, a Delaware corporation ("TARGET"), pursuant to which Company has
agreed to acquire (the "ACQUISITION") Target through a merger in which Merger
Co., a wholly-owned subsidiary of Company, will merge with and into Target with
Target being the surviving corporation and a wholly-owned subsidiary of Company
(the "MERGER"); and (ii) in connection with the transactions contemplated by the
Merger Agreement, Holdings shall have issued common or preferred equity to
Sponsor and management in an amount equal to not less than $155,000,000, and
Company shall have received the proceeds thereof as a contribution to its common
equity (the "EQUITY FINANCING");
WHEREAS, simultaneously herewith Company has requested that certain
lenders extend first lien credit facilities in an aggregate principal amount of
$410,000,000 consisting of $325,000,000 aggregate principal amount of first lien
term loans and up to $85,000,000 aggregate principal amount of revolving loans;
WHEREAS, Company has requested that the Lenders extend a second lien
term loan facility pursuant hereto in an aggregate principal amount of
$60,000,000;
WHEREAS, the full amount of the Loans will be used, together with the
proceeds of the Equity Financing and the initial borrowings under the First Lien
Credit Agreement, to satisfy the Merger Financing Requirements on the Closing
Date;
WHEREAS, Company has agreed to secure all of its Obligations by
granting to Collateral Agent, for the benefit of Secured Parties, a Second
Priority Lien on substantially all of its assets, including a pledge of all of
the Capital Stock of each of Company's Domestic Subsidiaries and not more than
66% of the Capital Stock of each of Company's first-tier Foreign Subsidiaries
and all intercompany debt owing to Company; and
WHEREAS, Guarantors have agreed to guarantee the obligations of
Company hereunder and to secure their respective Obligations by granting to
Collateral Agent, for the benefit of Secured Parties, a Second Priority Lien on
substantially all of their respective assets, including a pledge of all of the
Capital Stock of each of their respective Domestic Subsidiaries (including
Company) and not more than 66% of the Capital Stock of each of their respective
first-tier Foreign Subsidiaries and all intercompany debt owing to Guarantors.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS. The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:
"ACQUISITION" as defined in the recitals hereto.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum obtained by dividing (and rounding upward to the next whole multiple of
1/100 of 1%) (i) (a) the rate per annum (rounded to the nearest 1/100 of 1%)
equal to the rate determined by Administrative Agent to be the offered rate
which appears on the page of the Telerate Screen which displays an average
British Bankers Association Interest Settlement Rate (such page currently being
page number 3740 or 3750, as applicable) for deposits (for delivery on the first
day of such period) with a term equivalent to such period in Dollars, determined
as of approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (b) in the event the rate referenced in the preceding
clause (a) does not appear on such page or service or if such page or service
shall cease to be available, the rate per annum (rounded to the nearest 1/100 of
1%) equal to the rate determined by Administrative Agent to be the offered rate
on such other page or other service which displays an average British Bankers
Association Interest Settlement Rate for deposits (for delivery on the first day
of such period) with a term equivalent to such period in Dollars, determined as
of approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (c) in the event the rates referenced in the preceding
clauses (a) and (b) are not available, the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the offered quotation rate to first class banks in
the London interbank market by General Electric Capital Corporation for deposits
(for delivery on the first day of the relevant period) in Dollars of amounts in
same day funds comparable to the principal amount of the applicable Loan of
Administrative Agent, in its capacity as a Lender, for which the Adjusted
Eurodollar Rate is then being determined with maturities comparable to such
period as of approximately 11:00 a.m. (London, England time) on such Interest
Rate Determination Date, by (ii) an amount equal to (a) one minus (b) the
Applicable Reserve Requirement.
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADVERSE PROCEEDING" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or, to
the knowledge of Company or any of its Subsidiaries, threatened against or
affecting Company or any of its Subsidiaries or any property of Company or any
of its Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.15(b).
"AFFECTED LOANS" as defined in Section 2.15(b).
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"AFFILIATE" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For purposes of this definition, "CONTROL" (including, with correlative
meanings, the terms "CONTROLLING", "CONTROLLED BY" and "UNDER COMMON CONTROL
WITH"), as applied to any Person, means the possession, directly or indirectly,
of the power (i) to vote 10% or more of the Securities having ordinary voting
power for the election of directors of such Person or (ii) to direct or cause
the direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
"AGENT" means each of Syndication Agent, Administrative Agent,
Collateral Agent and Documentation Agent and their sub-agents.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.14.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Credit and Guaranty Agreement, dated as of
December 23, 2005, as it may be amended, supplemented or otherwise modified from
time to time.
"APPLICABLE MARGIN" shall mean (i) with respect to Loans that are
Eurodollar Rate Loans, 5.00% per annum; and (ii) with respect to Loans that are
Base Rate Loans, an amount equal to (a) the Applicable Margin for Eurodollar
Rate Loans as set forth in clause (i), above, as applicable, minus (b) 1.00% per
annum.
"APPLICABLE RESERVE REQUIREMENT" means, at any time, for any
Eurodollar Rate Loan, the maximum rate, expressed as a decimal, at which
reserves (including, without limitation, any basic marginal, special,
supplemental, emergency or other reserves) are required to be maintained with
respect thereto against "Eurocurrency liabilities" (as such term is defined in
Regulation D) under regulations issued from time to time by the Board of
Governors or other applicable banking regulator. Without limiting the effect of
the foregoing, the Applicable Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks with respect to (i) any
category of liabilities which includes deposits by reference to which the
applicable Adjusted Eurodollar Rate or any other interest rate of a Loan is to
be determined, or (ii) any category of extensions of credit or other assets
which include Eurodollar Rate Loans. A Eurodollar Rate Loan shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credit for proration, exceptions or
offsets that may be available from time to time to the applicable Lender. The
rate of interest on Eurodollar Rate Loans shall be adjusted automatically on and
as of the effective date of any change in the Applicable Reserve Requirement.
"ARRANGERS" as defined in the preamble hereto.
"ASSET SALE" means the sale by Holdings or any of its Subsidiaries to
any Person other than Company or any of its wholly-owned Subsidiaries of (i) any
of the Capital Stock of any of Holdings' Subsidiaries (including by issuance of
such Capital Stock), (ii) substantially all of the assets of any division or
line of business of Company or any of its Subsidiaries, or (iii) any other
assets (whether tangible or intangible) of Company or any of its Subsidiaries
(other than (a) inventory sold in the ordinary course of business, (b) sales of
Cash Equivalents for the fair market value thereof, and (c) any such other
assets to the extent that (x) the aggregate value of such assets sold in any
single transaction or related series of transactions is equal to $1,000,000 or
less and (y) the aggregate value of such assets sold is equal to $3,000,000 or
less in any Fiscal Year).
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"ASSIGNMENT AGREEMENT" means an Assignment and Assumption Agreement
substantially in the form of Exhibit E, with such amendments or modifications as
may be approved by Administrative Agent.
"AUTHORIZED OFFICER" means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president or one of its vice presidents (or the equivalent thereof),
and such Person's chief financial officer or treasurer.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"BAS" as defined in the preamble hereto.
"BASE RATE" means, for any day, a rate per annum equal to the greater
of (i) the Prime Rate in effect on such day and (ii) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
on the effective day of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.
"BASE RATE LOAN" means a Loan bearing interest at a rate determined by
reference to the Base Rate.
"BERKSHIRE" means Berkshire Partners LLC and shall include any fund
affiliated with Berkshire Partners LLC.
"BOARD OF GOVERNORS" means the Board of Governors of the United States
Federal Reserve System, or any successor thereto.
"BUSINESS DAY" means (i) any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is a day
on which banking institutions located in such state are authorized or required
by law or other governmental action to close and (ii) with respect to all
notices, determinations, fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, the term "Business Day" shall mean
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks in Dollar deposits in the London interbank
market.
"CAPITAL LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.
"CASH" means money, currency or a credit balance in any demand or
Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States
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Government or (b) issued by any agency of the United States the obligations of
which are backed by the full faith and credit of the United States, in each case
maturing within one year after such date; (ii) marketable direct obligations
issued by any state of the United States of America or any political subdivision
of any such state or any public instrumentality thereof, in each case maturing
within one year after such date and having, at the time of the acquisition
thereof, a rating of at least A-2 from S&P or at least P-2 from Xxxxx'x; (iii)
commercial paper maturing no more than one year from the date of creation
thereof and having, at the time of the acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from Xxxxx'x; (iv) certificates of deposit or
bankers' acceptances maturing within one year after such date and issued or
accepted by any Lender or by any commercial bank organized under the laws of the
United States of America or any state thereof or the District of Columbia that
has Tier 1 capital (as defined in the regulations of its primary federal banking
regulator) of not less than $100,000,000 (each Lender and each commercial bank
referred to herein as a "CASH EQUIVALENT BANK"); (v) shares of any money market
mutual fund that (a) has substantially all of its assets invested continuously
in the types of investments referred to in clauses (i) and (ii) above, (b) has
net assets of not less than $500,000,000, and (c) has the highest rating
obtainable from either S&P or Xxxxx'x; and (vi) with respect to Foreign
Subsidiaries, investments of the types described in clause (iv) above issued by
a Cash Equivalent Bank or any commercial bank of recognized international
standing chartered in the country where such Foreign Subsidiary is domiciled
having unimpaired capital and surplus of at least $500,000,000.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in
the form of Exhibit F.
"CHANGE OF CONTROL" means, at any time, (i) if Sponsor shall cease to
beneficially own and control 51% or more of the combined voting power of all of
the Capital Stock of Holdings, (ii) any Person or "group" (within the meaning of
Rules 13d-3 and 13d-5 under the Exchange Act) other than Sponsor shall have
after the Closing Date obtained the power (whether or not exercised) to elect a
majority of the members of the board of directors (or similar governing body) of
Holdings, (iii) the majority of the seats (other than vacant seats) on the board
of directors (or similar governing body) of Holdings cease to be occupied by
Persons who either (a) were members of the board of directors of Holdings on the
Closing Date or (b) were nominated for election by a majority of the board of
directors of Holdings, who were either (I) directors on the Closing Date or (II)
whose election or nomination for election was previously approved by a majority
of such directors or by Sponsor, (iv) Holdings shall cease to own 100% of the
Capital Stock of Company or (v) any "change of control" or similar event under
the Senior Subordinated Note Indenture shall occur.
"CHESTER DISTRIBUTION CENTER" means the distribution center located at
00 Xxxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxx.
"CHESTER DISTRIBUTION CENTER COLLATERAL" means the land and
improvements comprising the Chester Distribution Center.
"CHESTER DISTRIBUTION CENTER PERMANENT FINANCING" means Indebtedness
of Company pursuant to that certain mortgage dated December 20, 2001 with the
New York Job Development Authority in an individual principal amount, as of the
Closing Date, of $7,916,919, the proceeds of which have been used by Company to
finance a portion of the construction and development of the Xxxxxxx
Distribution Center.
"CIT" means The CIT Group/Commercial Services, Inc. or a replacement
counterparty under the CIT Factoring Agreement.
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"CIT FACTORING AGREEMENT" means the Factoring Agreement dated as of
June 27, 2005 by and between Party City Corporation and CIT (or any replacement
thereof that is on terms and conditions no less favorable to the Lenders as the
CIT Factoring Agreement as in effect on the Closing Date).
"CLOSING DATE" means the date on which the Loans are made.
"CLOSING DATE CERTIFICATE" means a Closing Date Certificate
substantially in the form of Exhibit G-1.
"COLLATERAL" means, collectively, all of the real, personal and mixed
property (including Capital Stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Secured Obligations.
"COLLATERAL AGENT" as defined in the preamble hereto.
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreement, the
Mortgages and all other instruments, documents and agreements delivered by any
Credit Party pursuant to this Agreement or any of the other Credit Documents in
order to grant to Collateral Agent, for the benefit of Lenders, a Lien on any
real, personal or mixed property of that Credit Party as security for the
Secured Obligations as provided for in such documents.
"COMMITMENT" means, with respect to each Lender, the amount set forth
on Appendix A opposite the name of such Lender. The aggregate amount of the
Commitments as of the Closing Date is $60,000,000.
"COMPANY" as defined in the preamble hereto.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate substantially
in the form of Exhibit C.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, an amount
determined for Holdings and its Subsidiaries on a consolidated basis equal to
the total of (I) Consolidated Net Income for such period plus (II) the sum,
without duplication, of (to the extent deducted in calculating Consolidated Net
Income) the amounts of:
(a) Consolidated Interest Expense;
(b) taxes paid and provisions for taxes based on income or profits;
(c) total depreciation expense;
(d) total amortization expense;
(e) other non-Cash items reducing Consolidated Net Income including
without limitation provisions for minority interests, and items resulting from
marking hedging obligations to market, purchase accounting and from compensation
charges due to stock awards or stock options (excluding any such non-Cash item
to the extent that it represents (x) an accrual or reserve for potential Cash
items in any future period, (y) amortization of a prepaid Cash item that was
paid in a prior period or (z) a reserve against or write-down or write-off of
inventory in accordance with GAAP);
(f) Transaction Costs;
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(g) any non-recurring or unusual Cash costs incurred in the relevant
period which are properly classified as such on the income statement of Holdings
in accordance with GAAP; provided that the aggregate amount of such
non-recurring or unusual Cash costs included in this clause (g) incurred (x)
during the Fiscal Year ending on or about December 31, 2006 shall not exceed
$8,000,000, and (y) in any subsequent Fiscal Year shall not exceed $5,000,000;
and
(h) Management Fees accrued or paid in such period (excluding any
Management Fees paid in such period to the extent they represent an accrual in a
prior period);
minus (III) non-Cash items increasing Consolidated Net Income for such period.
Notwithstanding anything to the contrary, it is agreed that for purposes of
calculating the covenants in Section 6.8 and for purposes of computing the
Leverage Ratio, for any period that includes the Fiscal Quarter ended on
September 30, 2005, Consolidated Adjusted EBITDA for the Fiscal Quarter ended on
September 30, 2005 shall be deemed to be $18,046,000 without giving effect to
any Permitted Acquisitions or Asset Sales consummated after the date hereof. In
addition (a) for the Fiscal Quarter ended on December 31, 2005, Consolidated
Adjusted EBITDA shall be adjusted to exclude the following: (i) rental payments
for Party City Corporation headquarters at 00 Xxxxx Xxxx Xxxx, Xxxxxxxx, Xxx
Xxxxxx and moving costs of consolidating such headquarters with Party City
Corporation's existing headquarters at 000 Xxxxxxx Xxx, Xxxxxxxx, Xxx Xxxxxx,
(ii) board of director fees for directors of, and costs of investor relations
for, Party City Corporation, and (iii) the cost of director's and officer's
insurance for Party City Corporation; provided that in each case, such amount
shall be substantially similar in amount and scope as the amounts actually
incurred therefor during the Fiscal Quarter ended September 30, 2005, and (b)
for any four Fiscal Quarter Period ending on or prior to the end of Fiscal Year
2006, the intercompany inventory profit elimination on sales of inventory by
Company and its Subsidiaries (other than Party City Corporation and its
Subsidiaries) to Party City Corporation and its Subsidiaries (which sales are in
the ordinary course of business and consistent with past practices of sales by
Company to Party City Corporation (other than to account for replacement of
third party suppliers)) recorded by Company in preparing consolidated financial
statements in accordance with GAAP for the last Fiscal Quarter in such period
shall be added back for purposes of Consolidated Adjusted EBITDA for such
period.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures of Holdings and its Subsidiaries during such
period determined on a consolidated basis that, in accordance with GAAP, are or
should be included in "purchase of property and equipment" or similar items
reflected in the consolidated statement of cash flows of Holdings and its
Subsidiaries. Notwithstanding the foregoing, Consolidated Capital Expenditures
shall not include (i) any amounts reinvested from Net Asset Sale Proceeds or Net
Insurance/Condemnation Proceeds, (ii) expenditures made with tenant allowances
received by Company or any of its Subsidiaries from landlords in the ordinary
course of business and subsequently capitalized, or (iii) any amounts spent in
connection with Investments permitted pursuant to Section 6.7 and Permitted
Acquisitions permitted pursuant to Section 6.9(f).
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period, excluding any amount not payable
currently in Cash, and excluding any amounts referred to in Section 2.8 or any
similar fees under the First Lien Credit Agreement.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of determination,
the total assets of Holdings and its Subsidiaries on a consolidated basis that
may properly be classified as current assets in conformity with GAAP, excluding
Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Holdings and its Subsidiaries on a
consolidated basis that may properly be classified as current
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liabilities in conformity with GAAP, excluding all revolving loans under the
First Lien Credit Agreement and the current portion of long term debt.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to:
(i) the sum, without duplication, of the amounts for such period of
(a) Consolidated Adjusted EBITDA, plus (b) the Consolidated Working Capital
Adjustment, minus
(ii) the sum, without duplication, of the amounts for such period of:
(a) scheduled repayments of Consolidated Total Debt;
(b) Consolidated Capital Expenditures (net of any proceeds of (x)
any related financings with respect to such expenditures and (y) any
sales of assets used to finance such expenditures);
(c) Consolidated Cash Interest Expense;
(d) up to $15,000,000 of expenditures during such period relating
to Permitted Acquisitions which are not paid for by borrowings or
financed with equity; provided that the Leverage Ratio calculated on a
Pro Forma Basis after giving effect to such Permitted Acquisitions
shall be less than 5.0:1.0;
(e) Transaction Costs and any non-recurring or unusual Cash costs
to the extent they were added back to derive Consolidated Adjusted
EBITDA;
(f) taxes based on income or profits of Holdings and its
Subsidiaries payable in Cash with respect to such period;
(g) Management Fees pursuant to clause (h) of the definition of
Consolidated Adjusted EBITDA;
(h) any amounts referred to in Section 2.8 or similar fees under
the First Lien Credit Agreement paid in Cash during such period, other
than agency fees payable after the Closing Date; and
(i) any amounts pursuant to the last sentence of the definition
of Consolidated Adjusted EBITDA to the extent they were added back to
derive Consolidated Adjusted EBITDA.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Holdings and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Holdings and
its Subsidiaries, including (i) all commissions, discounts and other fees and
charges owed with respect to letters of credit, (ii) any amounts referred to in
Section 2.8 or similar fees under the First Lien Credit Agreement other than
agency fees payable after the Closing Date and (iii) any commitment fees on the
unused portion of the revolving commitments as set forth in the First Lien
Credit Agreement. For avoidance of doubt, Consolidated Interest Expense shall be
net of payments made or received under Interest Rate Agreements.
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"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Holdings and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, provided
that there shall be excluded, without duplication, (a) the income (or loss) of
any Person (other than a Subsidiary of Company and other than Amscan de Mexico,
S.A. de C.V. for so long as it is treated as a consolidated subsidiary of
Company in accordance with GAAP) in which any other Person (other than Holdings
or any of its Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to Holdings or any of
its Subsidiaries by such Person during such period, (b) the income (or loss) of
any Person accrued prior to the date it becomes a Subsidiary of Holdings or is
merged into or consolidated with Holdings or any of its Subsidiaries or that
Person's assets are acquired by Holdings or any of its Subsidiaries, (c) the
income of any Subsidiary of Holdings to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, (d) any after-tax gains or losses
attributable to Asset Sales or returned surplus assets of any Pension Plan, and
(e) any net extraordinary gains or net extraordinary losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Holdings and its
Subsidiaries determined on a consolidated basis in accordance with GAAP;
provided, that, to the extent the aggregate amount of all contingent obligations
permitted by Section 6.1(u)(ii) hereof exceeds $23,000,000 the amount of such
excess shall be included in "Consolidated Total Debt" for purposes of the
Leverage Ratio.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of determination,
the excess of Consolidated Current Assets over Consolidated Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) equal to
Consolidated Working Capital as of the beginning of such period minus
Consolidated Working Capital as of the end of such period.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CONVERSION/CONTINUATION DATE" means the effective date of a
continuation or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a Conversion/Continuation
Notice substantially in the form of Exhibit A-2.
"COUNTERPART AGREEMENT" means a Counterpart Agreement substantially in
the form of Exhibit H delivered by a Credit Party pursuant to Section 5.10.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, if any, the
Collateral Documents, the Intercreditor Agreement, and all other documents,
instruments or agreements executed and delivered by a Credit Party for the
benefit of any Agent or any Lender in connection herewith.
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"CREDIT PARTY" means each Person (other than any Arranger, Agent or
any Lender or any other representative thereof) from time to time party to a
Credit Document.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party, each of which is for the purpose of hedging the foreign currency risk
associated with Company's and its Subsidiaries' operations and not for
speculative purposes.
"DEFAULT" means a condition or event that, after notice or lapse of
time or both, would constitute an Event of Default.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DISCHARGE OF FIRST LIEN OBLIGATIONS" as defined in the Intercreditor
Agreement.
"DISQUALIFIED CAPITAL STOCK" means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, (i) matures (excluding
any maturity as the result of an optional redemption by the issuer thereof) or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the first anniversary of the Loan Maturity Date, (ii) is convertible
into or exchangeable (unless at the sole option of the issuer thereof) for (a)
debt securities or (b) any Equity Interests referred to in (i) above, in each
case at any time on or prior to the first anniversary of the Loan Maturity Date,
or (iii) contains any repurchase obligation which may come into effect prior to
payment in full of all Obligations; provided, however, that any Capital Stock
that would not constitute Disqualified Capital Stock but for provisions thereof
giving holders thereof (or the holders of any security into or for which such
Capital Stock is convertible, exchangeable or exercisable) the right to require
the issuer thereof to redeem such Capital Stock upon the occurrence of a change
in control or an asset sale occurring prior to the first anniversary of the Loan
Maturity Date shall not constitute Disqualified Capital Stock if such Capital
Stock provides that the issuer thereof will not redeem any such Capital Stock
pursuant to such provisions prior to the repayment in full of the Obligations.
"DOCUMENTATION AGENT" as defined in the preamble hereto.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the laws of
the United States of America, any state thereof or the District of Columbia.
"EDEN PRAIRIE FACILITY" means that certain facility located at 0000
Xxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxxx 00000.
"E-FAX" means any system used to receive or transmit faxes
electronically.
"ELECTRONIC TRANSMISSION" means each document, instruction,
authorization, file, information and any other communication transmitted, posted
or otherwise made or communicated by e-mail or E Fax, or otherwise to or from an
E System or other equivalent service.
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"ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any Lender
and any Related Fund (any two or more Related Funds being treated as a single
Eligible Assignee for all purposes hereof), and (ii) any commercial bank,
insurance company, investment or mutual fund or other entity that is an
"accredited investor" (as defined in Regulation D under the Securities Act) and
which extends credit or buys loans as one of its businesses; provided neither
Holdings nor any of its Affiliates (including Sponsor) shall be an Eligible
Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to
by, or required to be contributed by, Company, any of its Subsidiaries or any of
their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Governmental Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law; (ii) in connection with any
Hazardous Material or any actual or alleged Hazardous Materials Activity; or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future foreign or
domestic, federal or state (or any subdivision of either of them), statutes,
ordinances, orders, rules, regulations, judgments, Governmental Authorizations,
or any other requirements of Governmental Authorities and the common law
relating to (i) environmental matters, including those relating to any Hazardous
Materials Activity; (ii) the generation, use, storage, transportation or
disposal of Hazardous Materials; or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal health
or welfare, in any manner applicable to Company or any of its Subsidiaries or
any Facility.
"EQUITY FINANCING" as defined in the recitals hereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
and (ii) any trade or business (whether or not incorporated) which is a member
of a group of trades or businesses under common control within the meaning of
Section 414(c) of the Internal Revenue Code of which that Person is a member.
Any former ERISA Affiliate of Company or any of its Subsidiaries shall continue
to be considered an ERISA Affiliate of Company or any such Subsidiary within the
meaning of this definition with respect to the period such entity was an ERISA
Affiliate of Company or such Subsidiary to the extent that the Company or such
Subsidiary would reasonably be expected to have any liability with respect to
obligations of such former ERISA Affiliate which arose during such period under
the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a no-
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xxxx of intent to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan
with two or more contributing sponsors or the termination of any such Pension
Plan resulting in liability to Company, any of its Subsidiaries or any of their
respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which could reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; (vi) the imposition of liability on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefore, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could reasonably be expected to give rise
to the imposition on Company, any of its Subsidiaries or any of their respective
ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43
of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l),
or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan with a material
likelihood of success; (x) receipt from the Internal Revenue Service of notice
of the failure of any Pension Plan (or any other Employee Benefit Plan intended
to be qualified under Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation under
Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.
"E-SIGNATURE" means the process of attaching to or logically
associating with an Electronic Transmission an electronic symbol, encryption,
digital signature or process (including the name or an abbreviation of the name
of the party transmitting the Electronic Transmission) with the intent to sign,
authenticate or accept such Electronic Transmission.
"E-SYSTEM" means any electronic system, including Intralinks(R) and
any other Internet or extranet based site, whether such electronic system is
owned, operated or hosted by Administrative Agent, any of its Related Persons or
any other Person providing for access to data protected by passcodes or other
security system.
"EURODOLLAR RATE LOAN" means a Loan or any portion thereof bearing
interest by reference to the Adjusted Eurodollar Rate.
"EVENT OF DEFAULT" means each of the conditions or events set forth in
Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXISTING CREDIT AGREEMENT" means the Credit and Guaranty Agreement,
dated as of April 30, 2004 (as amended through the date hereof), among Holdings,
Company, certain subsidiaries of Company, as guarantors, Xxxxxxx Sachs Credit
Partners L.P., as joint lead arranger, joint bookrunner and
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co-syndication agent, General Electric Capital Corporation, as administrative
agent and as collateral agent, and X.X. Xxxxxx Securities Inc., as joint lead
arranger, joint bookrunner and co-syndication agent.
"EXISTING NOTES" means the $175,000,000 in the aggregate principal
amount of 8.75% Senior Subordinated Notes of Company due 2014.
"FACILITY" means any real property (including all buildings, fixtures
or other improvements located thereon) now, hereafter or, except with respect to
Sections 5 and 6, heretofore owned, leased, operated or used by Company or any
of its Subsidiaries or any of their respective predecessors or Affiliates.
"FAIR SHARE" as defined in Section 7.2.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FAIR SHARE SHORTFALL" as defined in Section 7.2.
"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per annum
(expressed as a decimal rounded upwards, if necessary, to the next higher 1/100
of 1%) 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 by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided (i) if such day is not a
Business Day, the Federal Funds Effective Rate for such day shall be such rate
on such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (ii) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to Administrative Agent, in its capacity as a Lender, on
such day on such transactions as determined by Administrative Agent.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer of Company that such financial statements fairly
present, in all material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments.
"FINANCIAL PLAN" as defined in Section 5.1(i).
"FIRST LIEN CREDIT AGREEMENT" means (i) that certain credit and
guaranty agreement dated as of the date hereof among the Company, Holdings,
certain subsidiaries of Company, as Guarantors, the lenders party thereto from
time to time, GSCP, as Joint Lead Arranger and Joint Bookrunner and Syndication
Agent, BAS, as Joint Lead Arranger and Joint Bookrunner, Bank of America, N.A.,
as Documentation Agent and General Electric Capital Corporation, as
Administrative Agent and Collateral Agent, as amended, restated, supplemented or
modified from time to time to the extent permitted by this Agreement and the
Intercreditor Agreement and (ii) any other credit agreement, loan agreement,
note agreement, promissory note, indenture or other agreement or instrument
evidencing or governing the terms of any indebtedness or other financial
accommodation that has been incurred to extend, increase or refinance (subject
to the limitations set forth herein and in the Intercreditor Agreement) in whole
or in part the indebtedness and other obligations outstanding under the (x)
credit agreement referred to in clause (i) or (y) any subsequent First Lien
Credit Agreement, unless such agreement or instrument expressly provides that it
is not intended to be and is not a First Lien Credit Agreement hereunder. Any
ref-
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erence to the First Lien Credit Agreement hereunder shall be deemed a reference
to any First Lien Credit Agreement then in existence.
"FIRST LIEN DOCUMENTS" means the First Lien Credit Agreement and the
other Credit Documents as defined in the First Lien Credit Agreement, including
each mortgage and other security documents, guaranties and the notes issued
thereunder.
"FIRST LIEN OBLIGATIONS" has the meaning assigned to the term "Secured
Obligations" in the First Lien Credit Agreement.
"FIRST LIEN LOANS" means the loans made pursuant to the First Lien
Credit Agreement.
"FIRST LIEN TERM LOANS" means the term loans made pursuant to the
First Lien Credit Agreement.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Holdings and its Subsidiaries
ending on December 31 of each calendar year or the Saturday closest to December
31 of each calendar year.
"FLOOD HAZARD PROPERTY" means any Real Estate Asset subject to a
mortgage in favor of Collateral Agent, for the benefit of Lenders, and located
in an area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"FUNDING GUARANTORS" as defined in Section 7.2.
"FUNDING NOTICE" means a notice substantially in the form of Exhibit
A-1.
"GAAP" means, subject to the limitations on the application thereof
set forth in Xxxxxxx 0.0, Xxxxxx Xxxxxx generally accepted accounting principles
in effect as of the date of determination thereof.
"GOVERNMENTAL ACTS" means any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal, national
or other government, governmental department, commission, board, bureau, court,
agency or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any Governmental
Authority.
"GRANTOR" as defined in the Pledge and Security Agreement.
"GSCP" as defined in the preamble hereto.
"GUARANTEED OBLIGATIONS" as defined in Section 7.1.
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"GUARANTOR" means Holdings and each Domestic Subsidiary of Company.
"GUARANTOR SUBSIDIARY" means each Guarantor other than Holdings.
"GUARANTY" means the guaranty of each Guarantor set forth in Section
7.
"HAZARDOUS MATERIALS" means any chemical, material, substance or
waste, or any constituent thereof, exposure to which is prohibited, limited or
regulated by any Environmental Law or any Governmental Authority or which may or
could pose a hazard to the health and safety or to the indoor or outdoor
environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Material,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Material, and any corrective action or response action with respect to any of
the foregoing.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate, if any,
that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to any Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"HISTORICAL FINANCIAL STATEMENTS" means as of the Closing Date, (i)
the audited financial statements of Company and its Subsidiaries for the three
year period ended December 31, 2004, consisting of balance sheets and the
related consolidated statements of income, stockholders' equity and cash flows
for such period, (ii) the audited financial statements of Target and its
Subsidiaries for the three year period ended July 2, 2005, consisting of balance
sheets and the related consolidated statements of income, stockholders' equity
and cash flows for such period, (iii) the unaudited financial statements of
Company and its Subsidiaries for the nine month periods ended September 30, 2005
and 2004, consisting of a balance sheet and the related consolidated statements
of income, stockholders' equity and cash flows for such period, and (iv) the
unaudited financial statements of Target and its Subsidiaries for the fiscal
quarters ended October 1, 2005 and 2004, and, in the case of (x) clauses (i) and
(iii), certified by the chief financial officer of Company and (y) clauses (ii)
and (iv), certified by the chief financial officer of Target, that such
financial statements fairly present, in all material respects, the financial
condition of Company and its Subsidiaries as at the dates indicated and the
results of their respective operations and their respective cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments and in the case of interim financial statements, the absence of
footnotes.
"HOLDINGS" as defined in the preamble hereto.
"IMMATERIAL SUBSIDIARY" means, as of any date, any Subsidiary whose
total assets, as of that date, are less than $100,000 and whose total revenues
for the most recent twelve-month period do not exceed $100,000; provided that
the total asset value and total revenues of all Subsidiaries designated as such
shall not exceed $500,000 in the aggregate.
"INCREASED-COST LENDERS" as defined in Section 2.19.
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"INDEBTEDNESS", as applied to any Person, means, without duplication,
(i) all indebtedness for borrowed money; (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money; (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA), which purchase price is (a) due more than six months from the date
of incurrence of the obligation in respect thereof or twelve months in the case
of a bona fide trade payable or (b) evidenced by a note or similar written
instrument; (v) all indebtedness secured by any Lien on any property or asset
owned or held by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to the credit
of that Person; (vi) the face amount of any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings; (vii) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of the
obligation of another; (viii) any obligation of such Person the primary purpose
or intent of which is to provide assurance to an obligee that the obligation of
the obligor thereof will be paid or discharged, or any agreement relating
thereto will be complied with, or the holders thereof will be protected (in
whole or in part) against loss in respect thereof; (ix) any liability of such
Person for the obligation of another through any agreement (contingent or
otherwise) (a) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (b) to maintain the solvency or any balance sheet
item, level of income or financial condition of another if, in the case of any
agreement described under subclause (a) or (b) of this clause (ix), the primary
purpose or intent thereof is as described in clause (viii) above; and (x) all
obligations of such Person in respect of any exchange traded or over the counter
derivative transaction, including, without limitation, any Interest Rate
Agreement and Currency Agreement, whether or not entered into for hedging or
speculative purposes; provided in no event shall obligations under any Interest
Rate Agreement and any Currency Agreement be deemed "Indebtedness" for any
calculation of the Leverage Ratio under this Agreement. Any contingent earnout
obligations incurred pursuant to any acquisition agreements shall not constitute
Indebtedness until actually earned and thereafter shall constitute Indebtedness
until paid but shall not be treated as Indebtedness for Section 6.8 unless such
earned obligations remain unpaid for more than 30 days.
"INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, claims (including Environmental Claims), costs (including the
reasonable costs of any investigation, study, sampling, testing, abatement,
cleanup, removal, remediation or other response action necessary to remove,
remediate, clean up or xxxxx any Hazardous Materials Activity), expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any reasonable fees or expenses incurred by
Indemnitees in enforcing this indemnity), whether direct, indirect or
consequential and whether based on any federal, state or foreign laws, statutes,
rules or regulations (including securities and commercial laws, statutes, rules
or regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of (i) this
Agreement or the other Credit Documents or the transactions contemplated hereby
or thereby (including Lenders' agreement to make Loans or the use or intended
use of the proceeds thereof, or any enforcement of any of the Credit Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Guaranty)); (ii) the statements contained
in the commitment letter delivered by any Lender to Company
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with respect to the transactions contemplated by this Agreement; or (iii) any
Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, land
ownership, or practice of Company or any of its Subsidiaries.
"INDEMNITEE" as defined in Section 10.3.
"INTERCREDITOR AGREEMENT" means an Intercreditor Agreement
substantially in the form of Exhibit M, as it may be amended, supplemented or
otherwise modified from time to time.
"INTEREST COVERAGE RATIO" means the ratio as of the last day of any
Fiscal Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter
period then ended, to (ii) Consolidated Cash Interest Expense for such
four-Fiscal Quarter period.
"INTEREST PAYMENT DATE" means with respect to (i) any Base Rate Loan,
each March 31, June 30, September 30 and December 31 of each year, commencing on
the first such date to occur after the Closing Date, and the final maturity date
of such Loan; and (ii) any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided, in the case of each Interest Period of
longer than three months, "Interest Payment Date" shall also include each date
that is three months, or an integral multiple thereof, after the commencement of
such Interest Period.
"INTEREST PERIOD" means, with respect to any Eurodollar Rate Loan,
each period commencing on a LIBOR Business Day and ending one, two, three or six
months thereafter (or nine or twelve months to the extent agreed to by all
applicable Lenders), as selected by Company in the applicable Funding Notice or
Conversion/Continuation Notice; provided that the foregoing provision relating
to Interest Periods is subject to the following:
(a) if any Interest Period would otherwise end on a day that is not a
LIBOR Business Day, such Interest Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding LIBOR Business
Day;
(b) any Interest Period that begins on the last LIBOR Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last LIBOR Business Day of a calendar month;
(c) Company shall select Interest Periods so that there shall be no
more than 5 separate Eurodollar Rate Loans in existence at any one time;
and
(d) no Interest Period with respect to any portion of the Loans shall
extend beyond the Loan Maturity Date.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedging agreement or other similar agreement or arrangement to which Company or
any of its Subsidiaries is a party, each of which is for the purpose of hedging
the interest rate exposure associated with Company's and its Subsidiaries'
operations and not for speculative purposes.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the date that is two Business Days prior to the first day of such
Interest Period.
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"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (other than the Company
or a Guarantor Subsidiary); (ii) any direct or indirect redemption, retirement,
purchase or other acquisition for value, by any Subsidiary of Holdings from any
Person (other than Holdings, Company or any Guarantor Subsidiary), of any
Capital Stock of such Subsidiary; and (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution by Holdings or any of its Subsidiaries to any other Person
(other than Holdings, Company or any Guarantor Subsidiary), including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, pursuant to which, among other things, the landlord
consents to the granting of a Mortgage on such Leasehold Property by the Credit
Party tenant, such Landlord Consent and Estoppel to be in form and substance
acceptable to the Collateral Agent in its reasonable discretion, but in any
event sufficient for the Collateral Agent to obtain a Title Policy with respect
to such Mortgage.
"LEASEHOLD PROPERTY" means any leasehold interest of any Credit Party
as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Collateral Agent in its sole discretion
as not being required to be included in the Collateral.
"LENDER" means each financial institution listed on the signature
pages hereto as a Lender, and any other Person that becomes a party hereto
pursuant to an Assignment Agreement.
"LEVERAGE RATIO" means the ratio as of the last day of any Fiscal
Quarter or other date of determination of (i) Consolidated Total Debt as of such
day to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period
ended on such date (or if such date of determination is not the last day of a
Fiscal Quarter, for the four-Fiscal Quarter period ended as of the most recently
concluded Fiscal Quarter).
"LIBOR BUSINESS DAY" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIEN" means (i) any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, and
any lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing and (ii) in the
case of Securities, any purchase option, call or similar right of a third party
with respect to such Securities.
"LOAN" means a loan made by a Lender to Company pursuant to Section
2.1(b).
"LOAN EXPOSURE" means, with respect to any Lender, as of any date of
determination, the outstanding principal amount of the Loans of such Lender;
provided, at any time prior to the making of the Loans, the Loan Exposure of any
Lender shall be equal to such Lender's Commitment.
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"LOAN MATURITY DATE" means the earlier of (i) December 23, 2013, and
(ii) the date that all Loans shall become due and payable in full hereunder,
whether by acceleration or otherwise.
"MANAGEMENT AGREEMENT" means the management agreement by and among
Berkshire Partners LLC, Weston Presidio Service Company LLC and Company dated
April 30, 2004.
"MANAGEMENT FEES" means the fees paid by Company to Berkshire Partners
LLC and Weston Presidio Service Company LLC under the Management Agreement in
exchange for services provided to Company under the Management Agreement as in
effect on the date hereof.
"MARGIN STOCK" as defined in Regulation U of the Board of Governors of
the Federal Reserve System as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse change in the
condition (business, financial or otherwise), assets or results of operations of
Holdings or any of its Subsidiaries, taken as a whole, or (ii) the impairment
(other than as a result of circumstances of the type described in clause (i)
above) in any material respect of the ability of the Credit Parties, taken as a
whole, to perform, or of Administrative Agent, Collateral Agent or Lenders to
enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Credit Documents
or other agreements evidencing or relating to Indebtedness) for which breach,
nonperformance, cancellation or failure to renew could reasonably be expected to
have a Material Adverse Effect.
"MATERIAL REAL ESTATE ASSET" means (i) any fee-owned Real Estate Asset
(other than the Old Xxxxxxx Facility and the Eden Prairie Facility) or (ii) any
Real Estate Asset (other than the Old Xxxxxxx Facility and the Eden Prairie
Facility) not included in clause (i) above; provided, however, that (i) no
Leasehold Property with respect to which the aggregate payments under the lease
are during any one Fiscal Year less than $500,000 and (ii) no fee-owned Real
Estate Asset having a fair market value of less than $1,000,000 as of the date
of acquisition thereof shall be a "Material Real Estate Asset".
"MERGER" as defined in the recitals hereto.
"MERGER AGREEMENT" means that certain Agreement and Plan of Merger
dated as of September 26, 2005, by and among Company, Merger Co. and Target, as
amended as of October 11, 2005.
"MERGER CO." as defined in the recitals hereto.
"MERGER FINANCING REQUIREMENTS" means the amounts necessary (i) to pay
the cash portion of the purchase price to be paid in connection with the Merger,
(ii) to repay in full all Indebtedness outstanding under the Existing Credit
Agreement and Target's Existing Credit Agreement, (iii) to pay all other amounts
payable as of the Closing Date pursuant to the Merger Agreement and (iv) to pay
Transaction Costs.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MORTGAGE" means a Mortgage substantially in the form of Exhibit J, as
it may be amended, supplemented or otherwise modified from time to time or in
such other form as may be approved by Collateral Agent in its sole discretion,
in each case with such changes thereto as may be rec-
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ommended by Collateral Agent's local counsel based on local laws or customary
local mortgage or deed of trust practice. "MORTGAGES" means all such instruments
collectively.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means The National Association of Insurance Commissioners, and
any successor thereto.
"NARRATIVE REPORT" means, with respect to the financial statements for
which such narrative report is required, a narrative report describing the
operations of Holdings and its Subsidiaries in the form prepared for
presentation to senior management thereof for the applicable Fiscal Quarter or
Fiscal Year and for the period from the beginning of the then current Fiscal
Year to the end of such period to which such financial statements relate.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, an
amount equal to: (i) cash payments (including any Cash received by way of
deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received by Holdings or any of its
Subsidiaries from such Asset Sale, minus (ii) any bona fide direct costs
(including, without limitation, transaction costs) incurred in connection with
such Asset Sale, including (a) all income or gains taxes payable at any time by
the seller as a result of any gain recognized in connection with such Asset
Sale, (b) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Loans) that is secured by
a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale and (c) a reasonable
reserve for any indemnification payments (fixed or contingent) attributable to
seller's indemnities and representations and warranties to purchaser in respect
of such Asset Sale undertaken by Holdings or any of its Subsidiaries in
connection with such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal to: (i)
any Cash payments or proceeds received by Holdings or any of its Subsidiaries
(a) under any casualty insurance policy in respect of a covered loss thereunder
or (b) as a result of the taking of any assets of Holdings or any of its
Subsidiaries by any Person pursuant to the power of eminent domain, condemnation
or otherwise, or pursuant to a sale of any such assets to a purchaser with such
power under threat of such a taking, minus (ii) (a) any actual and reasonable
costs incurred by Holdings or any of its Subsidiaries in connection with the
adjustment or settlement of any claims of Holdings or such Subsidiary in respect
thereof, and (b) any bona fide direct costs incurred in connection with any sale
of such assets as referred to in clause (i)(b) of this definition, including
income taxes payable as a result of any gain recognized in connection therewith
and (c) any amounts required to be applied to the repayment of any Indebtedness
secured by a Lien which is prior to any Liens of the Lenders on the asset or
assets that are subject to the taking, condemnation or casualty but excluding,
however, in each case any payments or proceeds relating to assets having a value
of $1,500,000 or less in any single transaction or related series of
transactions.
"NON-CONSENTING LENDER" as defined in Section 2.19.
"NON-US LENDER" as defined in Section 2.17(c).
"NOTE" means a promissory note in the form of Exhibit B, as it may be
amended, supplemented or otherwise modified from time to time.
"NOTICE" means each of a Funding Notice or a Conversion/Continuation
Notice.
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"OBLIGATIONS" means all obligations of every nature of each Credit
Party from time to time owed to the Agents, the Lenders or any of them, under
any Credit Document, whether for principal, interest (including interest which,
but for the filing of a petition in bankruptcy with respect to such Credit
Party, would have accrued on any Obligation, whether or not a claim is allowed
against such Credit Party for such interest in the related bankruptcy
proceeding), fees, expenses, indemnification or otherwise.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"OFFER" as defined in Section 2.10(c)(ii).
"OFFER LOANS" as defined in Section 2.10(c)(ii).
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents and by its chief
financial officer or its treasurer.
"OLD CHESTER FACILITY" means that certain facility located at 00 Xxxxx
Xxxx, Xxxxxxx, Xxx Xxxx 00000.
"OLD CHESTER TRANSACTION" means a sale or sale and leaseback of the
Old Chester Facility.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any corporation,
its certificate or articles of incorporation or organization, as amended, and
its by-laws, as amended, (ii) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (iii) with respect to any general partnership, its partnership
agreement, as amended, and (iv) with respect to any limited liability company,
its articles of organization or certificate of formation, as amended, and its
operating agreement, as amended. In the event any term or condition of this
Agreement or any other Credit Document requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"PATRIOT ACT" as defined in Section 4.25.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERFECTION CERTIFICATE" means a certificate in the form of Exhibit K
or any other form approved by Collateral Agent, as the same shall be
supplemented from time to time by a Perfection Certificate Supplement or
otherwise.
"PERFECTION CERTIFICATE SUPPLEMENT" means a certificate supplement in
the form of Exhibit L or any other form approved by Collateral Agent.
"PERMITTED ACQUISITION" means any acquisition by Company or any of its
Subsidiaries, whether by purchase, merger or otherwise, of all or substantially
all of the assets of, all or substantially all of the Capital Stock of, or a
business line or unit or a division of, any Person; provided that
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(i) immediately prior to, and after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing or would result
therefrom;
(ii) all transactions in connection therewith shall be consummated, in
all material respects, in accordance with all applicable laws and in
conformity with all applicable Governmental Authorizations;
(iii) in the case of the acquisition of Capital Stock, all of the
Capital Stock (except for any such Securities in the nature of directors'
qualifying shares required pursuant to applicable law) acquired or
otherwise issued by such Person or any newly formed Subsidiary of Company
in connection with such acquisition shall be owned by Company or a
Subsidiary thereof, and Company shall have taken, or caused to be taken, as
of the date such Person becomes a Subsidiary of Company, each of the
actions set forth in Sections 5.10 and/or 5.11, as applicable;
(iv) Holdings and its Subsidiaries shall be in compliance with the
financial covenants set forth in Section 6.8 on a Pro Forma Basis after
giving effect to such acquisition as of the last day of the Fiscal Quarter
most recently ended;
(v) Company shall have delivered to Administrative Agent at least ten
(10) Business Days prior to such acquisition, a Compliance Certificate
evidencing compliance with Section 6.8 as required under clause (iv) above,
together with (A) all relevant financial information with respect to such
acquired assets, including, without limitation, the aggregate consideration
for such acquisition and any other information required to demonstrate
compliance with clause (iv) above and (B) an Officers' Certificate stating
that any related incurrence of Indebtedness is permitted pursuant to this
Agreement; and
(vi) any Person or assets or division as acquired in accordance
herewith shall be in the same business or lines of business in which
Holdings and/or its Subsidiaries are engaged as of the Closing Date or
similar or related businesses.
"PERMITTED LIENS" means each of the Liens permitted pursuant to
Section 6.2.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.
"PHASE I REPORT" means, with respect to any Facility, a report that
(i) conforms to the ASTM Standard Practice for Environmental Site Assessments:
Phase I Environmental Site Assessment Process, E 1527, (ii) was conducted no
more than six months prior to the date such report is required to be delivered
hereunder, by one or more environmental consulting firms reasonably satisfactory
to Administrative Agent, (iii) includes an assessment of asbestos-containing
materials at such Facility, (iv) is accompanied by (a) an estimate of the
reasonable worst-case cost of investigating and remediating any Hazardous
Materials Activity identified in the Phase I Report as giving rise to an actual
or potential material violation of any Environmental Law or as presenting a
material risk of giving rise to a material Environmental Claim, and (b) a
current compliance audit setting forth an assessment of Company's, its
Subsidiaries' and such Facility's current and past compliance with Environmental
Laws and an estimate of the cost of rectifying any non-compliance with current
Environmental Laws identified therein and the cost of compliance with reasonably
anticipated future Environmental Laws identified therein.
-22-
"PLEDGE AND SECURITY AGREEMENT" means the Second Lien Pledge and
Security Agreement to be executed by Company and each Guarantor substantially in
the form of Exhibit I, as it may be amended, supplemented or otherwise modified
from time to time.
"PRIME RATE" means the rate of interest quoted in The Wall Street
Journal, Money Rates Section as the Prime Rate (currently defined as the base
rate on corporate loans posted by at least 75% of the nation's thirty (30)
largest banks), as in effect from time to time. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Administrative Agent and any other Lender may make commercial
loans or other loans at rates of interest at, above or below the Prime Rate.
"PRINCIPAL OFFICE" means the Administrative Agent's "Principal Office"
as set forth on Appendix B, or such other office as the Administrative Agent may
from time to time designate in writing to Company and each Lender.
"PRO FORMA BASIS" means with respect to determining compliance with
the financial covenants set forth in Section 6.8 after giving effect to
Permitted Acquisitions and Asset Sales and the incurrence or assumption of any
Indebtedness in connection therewith (each, a "SUBJECT TRANSACTION"),
Consolidated Adjusted EBITDA shall be calculated with respect to such period on
a pro forma basis (including pro forma adjustments arising out of events which
are directly attributable to such Subject Transactions or which are to be
implemented by the business subject to the Subject Transaction or by Company and
its Subsidiaries as a result of the Subject Transaction, are factually
supportable and are expected to have a continuing impact, which would include
cost savings resulting from head count reduction, closure of facilities and
similar restructuring charges and raw material and other cost savings expected
to be realized in connection with the Subject Transaction, which pro forma
adjustments are certified by an Officers' Certificate and which are determined
(i) on a basis consistent with Article 11 of Regulation S-X promulgated under
the Securities Act and as interpreted by the staff of the Securities and
Exchange Commission or (ii) solely in the case of additional pro forma
adjustments to Consolidated Adjusted EBITDA not determined in a manner
consistent with clause (i) above (for all Subject Transactions during the period
of determination) not to exceed 5.0% of pro forma Consolidated Adjusted EBITDA
(as reformulated) and realizable within one year of the date of determination
for the period of determination, on such other basis as may be certified by
Officers' Certificate to be in compliance with the requirements of this
definition), using the historical financial statements of any business so
acquired or to be acquired or sold or to be sold and the consolidated financial
statements of Company and its Subsidiaries which shall be reformulated as if
such Subject Transaction, and any Indebtedness incurred or repaid in connection
therewith, had been consummated or incurred or repaid at the beginning of such
period (and assuming that such Indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant acquisition at the
weighted average of the interest rates applicable to outstanding Loans incurred
during such period). In addition, in calculating compliance with Section 6.8, to
the extent Company or any of its Subsidiaries has entered into a letter of
intent approved by the Board of Directors or a definitive agreement to sell
within one year of the date of calculation any operations that it has classified
as a "discontinued operation", such discontinued operations will be given pro
forma effect as follows: (1) Consolidated Adjusted EBITDA attributable to such
discontinued operation, as determined in accordance with GAAP shall be excluded,
and (2) interest expense attributable to discontinued operations, as determined
in accordance with GAAP, shall be excluded, but only to the extent that the
obligations giving rise to such interest expense are not and will not be
obligations of Company or any of its Subsidiaries following the calculation
date.
For purposes of such calculations any Indebtedness incurred under
Section 6.1(o) or otherwise incurred or assumed in connection with Permitted
Acquisitions subsequent to the beginning of the
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four quarter calculation period, but on or prior to the date of calculation of
the Leverage Ratio, shall be deemed to have been incurred or assumed at the
beginning of such four quarter calculation period. In addition, Permitted
Acquisitions that have been made or are being made by Company or any of its
Subsidiaries during the four-quarter reference period or subsequent to such
reference period and on or prior to the calculation date (including through
mergers or consolidations and including any related financing transactions)
shall be deemed to have occurred on the first day of the four-quarter reference
period.
"PRO RATA SHARE" means the percentage obtained by dividing (a) the
Loan Exposure of that Lender by (b) the aggregate Loan Exposure of all Lenders.
"PROJECTIONS" as defined in Section 4.8.
"QUALIFIED CAPITAL STOCK" of any Person means any Capital Stock of
such Person that is not Disqualified Capital Stock.
"REAL ESTATE ASSET" means, at any time of determination, any interest
(fee, leasehold or otherwise) then owned by any Credit Party in any real
property.
"RECORD DOCUMENT" means, with respect to any Leasehold Property, (i)
the lease evidencing such Leasehold Property or a memorandum thereof, executed
and acknowledged by the owner of the affected real property, as lessor, or (ii)
if such Leasehold Property was acquired or subleased from the holder of a
Recorded Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient to
give constructive notice upon recordation and otherwise in form reasonably
satisfactory to Collateral Agent.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with respect
to which a Record Document has been recorded in all places necessary or
desirable, in Administrative Agent's reasonable judgment, to give constructive
notice of such Leasehold Property to third-party purchasers and encumbrances of
the affected real property.
"REGISTER" as defined in Section 2.4(b).
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RELATED AGREEMENTS" means the Merger Agreement, the Management
Agreement, the Senior Subordinated Note Indenture, the Stockholders Agreement
and the definitive documentation governing the Equity Financing.
"RELATED FUND" means, with respect to any Lender that is an investment
fund, any other investment fund that invests in commercial loans and that is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"RELATED PERSONS" means, with respect to any specified Person, such
Person's Affiliates and the directors, officers, employees, agents, trustees,
advisors of such Person and any Person that possesses, directly or indirectly,
the power to direct or cause the direction of the management or policies of such
Person, whether through the ability to exercise voting power, by contract or
otherwise.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of any Hazardous Material
-24-
into the indoor or outdoor environment (including the abandonment or disposal of
any barrels, containers or other closed receptacles containing any Hazardous
Material), including the movement of any Hazardous Material through the air,
soil, surface water or groundwater.
"REPLACEMENT LENDER" as defined in Section 2.19.
"REQUIREMENTS OF LAW" means, with respect to any Person, collectively,
the common law and all federal, state, local, foreign, multinational or
international laws, statutes, codes, treaties, standards, rules and regulations,
guidelines, ordinances, orders, judgments, writs, injunctions, decrees
(including administrative or judicial precedents or authorities) and the
interpretation or administration thereof by, and other determinations,
directives, requirements or requests of, any Governmental Authority, in each
case whether or not having the force of law and that are applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.
"REQUISITE LENDERS" means one or more Lenders having or holding Loan
Exposure and representing more than 50% of the sum of the aggregate Loan
Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Holdings or Company now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class; (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of Holdings or Company now or hereafter outstanding; (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of Holdings or Company now
or hereafter outstanding; (iv) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, Subordinated Indebtedness; and (v) any payment of management or
similar fees to Sponsor or any of its Affiliates.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw
Hill Companies, Inc.
"SECOND PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such Lien is
second in priority only to the Liens created under the First Lien Documents,
other than any Permitted Lien.
"SECURED OBLIGATIONS" shall mean the Obligations.
"SECURED PARTIES" has the meaning assigned to that term in the Pledge
and Security Agreement.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing; provided that
"Securities" shall not include any earnout agreement or obligation or any
employee bonus or other incentive compensation plan or agreement.
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"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SENIOR SUBORDINATED NOTE INDENTURE" means the indenture pursuant to
which the Senior Subordinated Notes were issued, as such indenture may hereafter
be amended from time to time to the extent permitted under Section 6.15.
"SENIOR SUBORDINATED NOTES" means the $175,000,000 in the aggregate
principal amount of 8.75% Senior Subordinated Notes due 2014 of Company issued
pursuant to the Senior Subordinated Note Indenture.
"SETTLEMENT CONFIRMATION" as defined in Section 10.6(b).
"SETTLEMENT SERVICE" as defined in Section 10.6(d).
"SOLVENCY CERTIFICATE" means a Solvency Certificate of the chief
financial officer of Company substantially in the form of Exhibit G-2.
"SOLVENT" means, with respect to any Credit Party, that as of the date
of determination both (i) (a) the sum of such Credit Party's debt (including
contingent liabilities) does not exceed the present fair saleable value of such
Credit Party's present assets; (b) such Credit Party's capital is not
unreasonably small in relation to its business as contemplated on the Closing
Date and reflected in the Projections or with respect to any transaction
contemplated or undertaken after the Closing Date; and (c) such Person has not
incurred and does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) such Person is "solvent"
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability (irrespective of whether such contingent liabilities
meet the criteria for accrual under Statement of Financial Accounting Standard
No. 5).
"SPONSOR" means collectively Berkshire and Weston.
"SPONSOR EQUITY CONTRIBUTIONS" means equity contributions made on or
after the Closing Date by Sponsor or its Affiliates and any other stockholder of
Holdings on the Closing Date to Holdings.
"STOCKHOLDERS AGREEMENT" means the stockholders agreement dated April
30, 2004 by and among Holdings and the Stockholders (as defined therein), as
amended as of the date hereof.
"SUBORDINATED INDEBTEDNESS" means (i) Indebtedness of Company
evidenced by the Senior Subordinated Notes and (ii) any other Indebtedness of
Company subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules, covenants,
defaults, remedies, subordination provisions and other material terms in form
and substance satisfactory to Administrative Agent and Requisite Lenders.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
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any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
"qualifying share" of the former Person shall be deemed to be outstanding.
References to Subsidiaries of Holdings or Company include Target unless
expressly specified otherwise.
"SYNDICATION AGENT" as defined in the preamble hereto.
"TARGET" as defined in the recitals hereto.
"TARGET MATERIAL ADVERSE EFFECT" means any event, change, effect,
development, occurrence or state of facts that either individually or in the
aggregate, when taken together with all other events, changes, effects,
developments, occurrences or states of facts, (i) is materially adverse to the
business, assets, operations, properties, condition (financial or otherwise),
liabilities or results of operations of Target and its Subsidiaries taken as a
whole, or (ii) materially and adversely affects the ability of Target to
consummate the Acquisition and the Merger or prevent or delay the consummation
of the Acquisition and the Merger; provided, however, that none of the following
shall be deemed, either alone or in combination, to constitute, and none of the
following shall be taken into account in determining whether there has been or
will be, a Target Material Adverse Effect: (a) any adverse event, change,
effect, development, occurrence or state of facts to the extent primarily
attributable to (I) the announcement or pendency of the Merger Agreement or the
Acquisition and Merger, (II) the identity of Holdings or Merger Co. or (III) any
actions taken in compliance herewith or otherwise with the consent of Holdings,
including, without limitation, the impact on the relationships of Target with
any customer, vendor, distributor, supplier, franchisee, landlord, tenant,
consultant, employee or independent contractor with whom Target has any
relationship; (b) any adverse event, change, effect, development, occurrence or
state of facts attributable to conditions generally affecting (I) the retail
party supply industry or (II) the United States or world economy as a whole,
including, but not limited to, changes in economic, financial market, regulatory
or political conditions, whether resulting from acts of terrorism, war or
otherwise, except in each case, any adverse event, change, effect, development,
occurrence or state of facts that has had or is reasonably likely to have a
disproportionate effect on Target and its Subsidiaries taken as a whole as
compared to other Persons in the industry in which Target and its Subsidiaries
conduct their business; or (c) any adverse event, change, effect, development,
occurrence or state of facts arising from or relating to any change in generally
accepted accounting principles or any change in applicable laws, in each case,
proposed, adopted or enacted after the date hereof or the interpretation or
enforcement thereof.
"TARGET'S EXISTING CREDIT AGREEMENT" means the Loan and Security
Agreement dated as of January 9, 2003 among Target, Xxxxx Fargo Retail Finance,
LLC, as arranger, collateral agent and administrative agent and Bank of America,
N.A., as the documentation agent, as amended by the First Amendment Agreement,
dated as of February 10, 2005, by the Second Amendment Agreement, dated as of
June 23, 2005 and by the Third Amendment Agreement, dated as of July 15, 2005.
"TAX" means any present or future tax, levy, impost, duty, assessment,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided "Tax on the overall net income" of a Person shall be (i)
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or any political subdivision thereof or as a result of that
Person's applicable principal office (and/or, in the case of a Lender, its
lending office) is located or in which that Person (and/or, in the case of a
Lender, its lending office) is deemed to be doing business (a "RELEVANT TAX
JURISDICTION") on all or part of the net
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income or profits or gains (whether worldwide, or only insofar as such income
(or franchise or other taxes imposed in lieu thereof), profits or gains are
considered to arise in or to relate to a particular jurisdiction, or otherwise)
of that Person (and/or, in the case of a Lender, its applicable lending office)
and (ii) include all franchise taxes, branch taxes, taxes on doing business or
taxes on the overall capital or net worth of any such Person (and/or in the case
of a Lender, its Principal Office), in each case imposed by any Relevant Tax
Jurisdiction in lieu of income, profits or gains taxes.
"TERMINATED LENDER" as defined in Section 2.19.
"TITLE POLICY" shall have the meaning set forth in Section 5.11(b).
"TRANSACTION COSTS" means the fees, costs and expenses payable by
Company on or before the Closing Date in connection with the transactions
contemplated by the Credit Documents, the First Lien Documents and the Related
Agreements including without limitation, compensation paid to option holders to
the extent expensed on the income statement, the write-off of deferred financing
costs and interest and investment banking, advisory and other fees paid to
financing sources and others in connection with said transactions.
"TYPE OF LOAN" means the character of a Loan as either a Base Rate
Loan or a Eurodollar Rate Loan.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"UNREINVESTED NET ASSET SALE PROCEEDS" shall have the meaning set
forth in Section 2.11(a).
"WESTON" means Weston Presidio Service Company LLC and shall include
any fund affiliated with Weston Presidio Service Company LLC.
1.2. ACCOUNTING TERMS. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to Sections 5.1(a),
5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable). Subject to the
foregoing, calculations in connection with the definitions, covenants and other
provisions hereof shall utilize accounting principles and policies in conformity
with those used to prepare the Historical Financial Statements for the period
ended December 31, 2004.
1.3. INTERPRETATION, ETC. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. References herein to any Section, Appendix, Schedule or Exhibit
shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein of the word
"include" or "including," when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
The term "documents" means all writings, however evidenced and whether in
physical or elec-
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tronic form, including all documents, instruments, agreements, notices, demands,
certificates, forms, financial statements, opinions and reports.
SECTION 2. LOANS
2.1. LOANS.
(a) Commitments. Subject to the terms and conditions hereof, each
Lender severally agrees to make, on the Closing Date, a Loan to Company in an
amount equal to such Lender's Commitment; provided however that the aggregate
amount funded by each Lender on the Closing Date shall be equal to 97.5% of the
Commitments (it being understood and agreed that the funding of such amount
shall be deemed to be 100.0% of the Lenders' Commitments). Company may make only
one borrowing under the Commitments which shall be on the Closing Date. Any
amount borrowed under this Section 2.1(a) and subsequently repaid or prepaid may
not be reborrowed. Subject to Sections 2.10(a) and 2.11, all amounts owed
hereunder with respect to the Loans shall be paid in full no later than the Loan
Maturity Date. Each Lender's Commitment shall terminate immediately and without
further action on the Closing Date after giving effect to the funding of such
Lender's Commitment on such date.
(b) Borrowing Mechanics for Loans.
(i) Company shall deliver to Administrative Agent a fully executed
Funding Notice no later than one (1) Business Day prior to the Closing Date.
Promptly upon receipt by Administrative Agent of the Funding Notice,
Administrative Agent shall notify each Lender of the proposed borrowing.
(ii) Each Lender shall make its Loan available to Administrative Agent
not later than 12:00 noon (New York City time) on the Closing Date, by wire
transfer of same day funds in Dollars, at Administrative Agent's Principal
Office. Upon satisfaction or waiver of the conditions precedent specified
herein, Administrative Agent shall make the proceeds of the Loans available to
Company on the Closing Date by causing an amount of same day funds in Dollars
equal to the proceeds of all such Loans received by Administrative Agent from
Lenders to be credited to the account of Company at Administrative Agent's
Principal Office or to such other account as may be designated in writing to
Administrative Agent by Company.
2.2. PRO RATA SHARES; AVAILABILITY OF FUNDS.
(a) Pro Rata Shares. All Loans shall be made, and all participations
purchased, by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in such other Lender's obligation to make a Loan
requested hereunder nor shall any Commitment of any Lender be increased or
decreased as a result of a default by any other Lender in such other Lender's
obligation to make a Loan requested hereunder.
(b) Availability of Funds. Unless Administrative Agent shall have been
notified by any Lender prior to the Closing Date that such Lender does not
intend to make available to Administrative Agent the amount of such Lender's
Loan requested on the Closing Date, Administrative Agent may assume that such
Lender has made such amount available to Administrative Agent on the Closing
Date and Administrative Agent may, in its sole discretion, but shall not be
obligated to, make available to Company a corresponding amount on the Closing
Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from the
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Closing Date until the date such amount is paid to Administrative Agent, at the
customary rate set by Administrative Agent for the correction of errors among
banks for three Business Days and thereafter at the Base Rate. If such Lender
does not pay such corresponding amount forthwith upon Administrative Agent's
demand therefor, Administrative Agent shall promptly notify Company and Company
shall immediately pay such corresponding amount to Administrative Agent together
with interest thereon, for each day from the Closing Date until the date such
amount is paid to Administrative Agent, at the rate payable hereunder for Base
Rate Loans. Nothing in this Section 2.2(b) shall be deemed to relieve any Lender
from its obligation to fulfill its Commitment hereunder or to prejudice any
rights that Company may have against any Lender as a result of any default by
such Lender hereunder.
2.3. USE OF PROCEEDS. The proceeds of the Loans shall be applied by Company
on the Closing Date to pay a portion of the Merger Financing Requirements. No
portion of the proceeds of any Loan shall be used in any manner that causes or
might cause such Loans or the application of such proceeds to violate Regulation
T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation thereof or to violate the Exchange Act.
2.4. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on its
internal records an account or accounts evidencing the Indebtedness of Company
to such Lender, including the amounts of the Loans made by it and each repayment
and prepayment in respect thereof. Any such recordation shall be conclusive and
binding on Company, absent manifest error; provided failure to make any such
recordation, or any error in such recordation, shall not affect Company's
Obligations in respect of any applicable Loans; and provided, further, in the
event of any inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern.
(b) Register. Administrative Agent shall maintain at its Principal
Office a register for the recordation of the names and addresses of Lenders and
Loans of each Lender from time to time (the "REGISTER"). At any reasonable time
and from time to time upon reasonable prior notice, (i) the Register shall be
available for inspection by Company and the Arrangers and (ii) information in
the Register in respect of a Lender shall be available for inspection by such
Lender. Administrative Agent shall record in the Register the Loans, and each
repayment or prepayment in respect of the principal amount of the Loans, and any
such recordation shall be conclusive and binding on Company and each Lender,
absent manifest error; provided failure to make any such recordation, or any
error in such recordation, shall not affect Company's Obligations to repay any
Obligation. Company hereby designates GSCP to serve as Company's agent solely
for purposes of maintaining the Register as provided in this Section 2.4, and
Company hereby agrees that, to the extent GSCP serves in such capacity, GSCP and
its officers, directors, employees, agents and affiliates shall constitute
"INDEMNITEES."
(c) Notes. If so requested by any Lender by written notice to Company
(with a copy to Administrative Agent) at least two Business Days prior to the
Closing Date, or at any time after the Closing Date, Company shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to Section
10.6) on the Closing Date (or, if such notice is delivered after the Closing
Date, promptly after Company's receipt of such notice) a Note or Notes to
evidence such Lender's Loan.
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2.5. INTEREST ON LOANS.
(a) Except as otherwise set forth herein, each Loan shall bear
interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as follows:
(i) if a Base Rate Loan, at the Base Rate plus the Applicable Margin;
or
(ii) if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus
the Applicable Margin.
(b) The basis for determining the rate of interest with respect to any
Loan, and the Interest Period with respect to any Eurodollar Rate Loan, shall be
selected by Company and notified to Administrative Agent and Lenders pursuant to
the applicable Funding Notice or Conversion/Continuation Notice, as the case may
be; provided that the Loans initially shall be made as (1) Eurodollar Rate Loans
having an Interest Period of no longer than one month or (2) Base Rate Loans. If
on any day a Loan is outstanding with respect to which a Funding Notice or
Conversion/Continuation Notice has not been delivered to Administrative Agent in
accordance with the terms hereof specifying the applicable basis for determining
the rate of interest, then for that day such Loan shall be Base Rate Loan.
(c) In connection with Eurodollar Rate Loans there shall be no more
than five (5) Interest Periods outstanding at any time. In the event Company
fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in the
applicable Funding Notice or Conversion/Continuation Notice, such Loan (if
outstanding as a Eurodollar Rate Loan) will be automatically converted into a
Base Rate Loan on the last day of the then-current Interest Period for such Loan
(or if outstanding as a Base Rate Loan will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan). In the event Company fails to
specify an Interest Period for any Eurodollar Rate Loan in the applicable
Funding Notice or Conversion/Continuation Notice, Company shall be deemed to
have selected an Interest Period of one month. As soon as practicable after
10:00 a.m. (New York time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
(d) Interest payable pursuant to Section 2.5(a) shall be computed (i)
in the case of Base Rate Loans on the basis of a 365-day or 366-day year, as the
case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a
360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that, if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on that Loan.
(e) Except as otherwise set forth herein, interest on each Loan shall
be payable (i) in arrears on and to each Interest Payment Date applicable to
that Loan; (ii) upon any prepayment of that Loan, whether voluntary or
mandatory, to the extent accrued on the amount being prepaid; and (iii) at
maturity, including final maturity.
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2.6. CONVERSION/CONTINUATION.
(a) Subject to Section 2.15 and so long as no Default or Event of
Default shall have occurred and then be continuing (which the Requisite Lenders
have notified Company will prevent the following), Company shall have the
option:
(i) to convert at any time all or any part of any Loan equal to (y)
$1,000,000 and integral multiples of $100,000 in excess of that amount from
a Base Rate Loan to a Eurodollar Rate Loan and (z) $100,000 and integral
multiples of $100,000 in excess of that amount from a Eurodollar Rate Loan
to a Base Rate Loan; provided a Eurodollar Rate Loan may only be converted
on the expiration of the Interest Period applicable to such Eurodollar Rate
Loan unless Company shall pay all amounts due under Section 2.15 in
connection with any such conversion; or
(ii) upon the expiration of any Interest Period applicable to any
Eurodollar Rate Loan, to continue all or any portion of such Loan equal to
$1,000,000 and integral multiples of $100,000 in excess of that amount as a
Eurodollar Rate Loan.
(b) Company shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (New York time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate Loans shall be irrevocable on and after the related Interest
Rate Determination Date, and Company shall be bound to effect a conversion or
continuation in accordance therewith.
2.7. DEFAULT INTEREST. The principal amount of all Loans and, to the extent
permitted by applicable law, any interest payments on the Loans not paid when
due or any fees or other amounts not paid when due, shall thereafter bear
interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate
that is 2% per annum in excess of the interest rate otherwise payable hereunder
with respect to the applicable Loans (or, in the case of any such fees and other
amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable hereunder for Base Rate Loans); provided, in the case of
Eurodollar Rate Loans, upon the expiration of the Interest Period in effect at
the time any such increase in interest rate is effective such Eurodollar Rate
Loans shall thereupon become Base Rate Loans and shall thereafter bear interest
payable upon demand at a rate which is 2% per annum in excess of the interest
rate otherwise payable hereunder for Base Rate Loans. Payment or acceptance of
the increased rates of interest provided for in this Section 2.7 is not a
permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.
2.8. FEES. Company agrees to pay to Agents such other fees in the amounts
and at the times separately agreed upon.
2.9. REPAYMENT. Company shall repay the entire principal amount of
outstanding loans, together with all other amounts owed hereunder with respect
thereto, on the Loan Maturity Date. For the avoidance of doubt, all payments
required by this Section 2.9, Section 2.10, Section 2.11 or any other clause of
this Agreement shall be for the full principal amount of the applicable Loans
regardless of whether original issue discount is applicable to such Loans.
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2.10. VOLUNTARY PREPAYMENTS.
(a) Voluntary Prepayments.
(i) Subject to the terms of Section 2.10(b):
(1) with respect to Base Rate Loans, Company may prepay any
such Loans on any Business Day in whole or in part, in an
aggregate minimum amount of $1,000,000 and integral multiples of
$100,000 in excess of that amount); and
(2) with respect to Eurodollar Rate Loans, Company may
prepay any such Loans on any Business Day in whole or in part in
an aggregate minimum amount of $1,000,000 and integral multiples
of $100,000 in excess of that amount.
(ii) All such prepayments shall be made:
(1) upon not less than one Business Day's prior written or
telephonic notice in the case of Base Rate Loans; and
(2) upon not less than three Business Days' prior written or
telephonic notice in the case of Eurodollar Rate Loans.
(b) Prepayment Restriction; Prepayment Premium.
(i) In no event may the Company prepay any Loan pursuant to Section
2.10(a) on or prior to the second anniversary of the Closing Date or at any
time if such prepayment is prohibited by the First Lien Credit Agreement.
If, notwithstanding the foregoing, any Loan is prepaid on or prior to the
second anniversary of the Closing Date in a proceeding described in Section
8.1(f) or (g), such prepayment shall be subject to a premium (expressed as
a percentage of the prepayment amount) of 3%.
(ii) In the event that the Loans are prepaid or repaid either pursuant
to Section 2.10 (other than Section 2.10(c)) or 2.11 in whole or in part on
or prior to the fifth anniversary of the Closing Date, Company shall pay to
Lenders a prepayment premium (expressed as a percentage of the prepayment
amount) on the amount so prepaid or repaid as follows:
Period Prepayment Premium
------ ------------------
Closing Date-December 23, 2008 3%
December 24, 2008-December 23, 2009 2%
December 24, 2009-December 23, 2010 1%
(c) Certain Permitted Loan Repurchases. Notwithstanding anything to
the contrary contained in this Section 2.10 or any other provision of this
Agreement, so long as (i) there is no Default, (ii) there is no Event of Default
and (iii) no Default or Event of Default would result therefrom, Company may
repurchase outstanding Loans on the following basis:
(i) Company may repurchase all or any portion of the Loans of one or
more Lenders pursuant to an Assignment Agreement, between Company and such
Lender or Lenders in an ag-
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gregate principal amount not to exceed 35% of the initial aggregate
principal amount of Loans with respect to all such repurchases pursuant to
this clause (i); provided that, with respect to such repurchases, Company
shall simultaneously provide a copy of such Assignment Agreement and any
other agreements between Company and such Lender with respect to such
repurchase to the Administrative Agent and Syndication Agent;
(ii) In addition, Company may make one or more offers (each, an
"OFFER") to repurchase all or any portion of the Loans (such Loans, the
"OFFER LOANS") of the Lenders, provided that (A) Company delivers a notice
of such Offer to the Administrative Agent and all Lenders no later than
noon (New York time) at least five (5) Business Days in advance of a
proposed consummation date of such Offer indicating (1) the last date on
which such Offer may be accepted, (2) the maximum dollar amount of the
Offer, (3) the repurchase price per dollar of principal amount of such
Offer Loans at which Company is willing to repurchase the Offer Loans and
(4) the instructions, consistent with this Section 2.10(c) with respect to
the Offer (which shall be reasonably acceptable to Company, the
Administrative Agent and the Syndication Agent), that a Lender must follow
in order to have its Offer Loans repurchased; (B) the maximum dollar amount
of the Offer shall be no less than an aggregate of $1,000,000; (C) Company
shall hold the Offer open for a minimum period of two (2) Business Days;
(D) a Lender who elects to participate in the Offer may choose to tender
all or part of such Lender's Offer Loans; and (E) the Offer shall be made
to Lenders holding the Offer Loans on a pro rata basis in accordance with
their Pro Rata Shares; provided, further, that if any Lender elects not to
participate in the Offer, either in whole or in part, the amount of such
Lender's Offer Loans not being tendered shall be excluded in calculating
the pro rata amount applicable to the balance of such Offer Loans;
(iii) With respect to all repurchases made by Company pursuant to this
Section 2.10(c), (A) Company shall pay all accrued and unpaid interest, if
any, on the repurchased Loans to the date of repurchase of such Loans, (B)
the repurchase of such Loans by Company shall not be taken into account in
the calculation of Consolidated Excess Cash Flow or the prepayment required
pursuant to Section 2.11(e), (C) Company shall only make such repurchases
during the time period which is within thirty (30) days following the date
on which Company files a 10K, 10Q or any other material filing with the
SEC, (D) such repurchases shall not be deemed to be voluntary prepayments
pursuant to this Section 2.10, Section 2.12 or 2.13 hereunder and (E) such
repurchase of Loans pursuant to Section 2.10(c)(ii) shall be applied on a
pro rata basis to Lenders selling Offer Loans in accordance with the Offer
Loans being sold or offered for sale by such Lenders; and
(iv) Following repurchase by Company pursuant to this Section 2.10(c),
the Loans so repurchased shall be deemed cancelled for all purposes and no
longer outstanding (and may not be resold by Company), for all purposes of
this Agreement and all other Credit Documents, including, but not limited
to (A) the making of, or the application of, any payments to the Lenders
under this Agreement or any other Credit Document, (B) the making of any
request, demand, authorization, direction, notice, consent or waiver under
this Agreement or any other Credit Document or (C) the determination of
Requisite Lenders, or for any similar or related purpose, under this
Agreement or any other Credit Document. Any payment made by Company in
connection with a repurchase permitted by this Section 2.10(c) shall not be
subject to the provisions of either Section 2.13(a) or Section 2.14.
Failure by Company to make any payment to a Lender required by an agreement
permitted by this Section 2.10(c) shall not constitute an Event of Default
under Section 8.1(a).
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Notwithstanding any of the provisions set forth in this Agreement to the
contrary, the Company, the Lenders and Agents hereby agree that nothing in this
Agreement shall be understood to mean or suggest that the Loans constitute
"securities" for purposes of either the Securities Act or the Exchange Act.
2.11. MANDATORY PREPAYMENTS. Subject to the provisions of Section 2.11(f)
and (g) below:
(a) Asset Sales. No later than the first Business Day following the
date of receipt by Holdings or any of its Subsidiaries of any Net Asset Sale
Proceeds, Company shall prepay the Loans as set forth in Section 2.12(a) in an
aggregate amount equal to such Net Asset Sale Proceeds; provided that so long as
no Default or Event of Default shall have occurred and be continuing,
(i) to the extent that Net Asset Sale Proceeds (x) from the Closing
Date through the applicable date of determination do not exceed $10,000,000
in the aggregate (excluding such Net Asset Sale Proceeds described in the
following clauses (ii) and (iii)), Company shall have the option, directly
or through one or more of its Subsidiaries, to invest or commit to invest
Net Asset Sale Proceeds within three hundred sixty (360) days of receipt
thereof in long-term productive assets of the general type used in the
business of Company and its Subsidiaries;
(ii) to the extent that any such Net Asset Sale Proceeds (excluding
such Net Asset Sale Proceeds described in clause (i) above) are from the
Old Xxxxxxx Transaction, Company shall have the option, directly or through
one or more of its Subsidiaries, to invest or commit to invest such Net
Asset Sale Proceeds within four hundred fifty (450) days of receipt thereof
in long-term productive assets of the general type used in the business of
Company and its Subsidiaries; provided that if a Responsible Officer of the
Company delivers a certificate to the Administrative Agent within such
450-day period specifying in reasonable detail that the Company or its
Subsidiaries have previously made capital expenditures in respect of the
Xxxxxxx Distribution Center, the aggregate amount and the dates of such
capital expenditures and such other facts as may be reasonably requested by
the Administrative Agent, than the aggregate amount of such capital
expenditures shall be off-set against the Net Asset Sale Proceeds from the
Old Xxxxxxx Transaction and shall otherwise not be subject to the
reinvestment provisions of this clause (ii);
(iii) to the extent that any such Net Asset Sale Proceeds (excluding
such Net Asset Sale Proceeds described in clause (i) above) are from the
sale of specified retail stores otherwise permitted pursuant to Section
6.9, Company shall have the option, directly or through one or more of its
Subsidiaries, to invest or commit to invest such Net Asset Sale Proceeds
within three hundred sixty (360) days of receipt thereof in long-term
productive assets of the general type used in the business of Company and
its Subsidiaries;
provided, further, that, with respect to an Asset Sale of any asset owned by a
Foreign Subsidiary, any Net Asset Sale Proceeds in respect thereof which have
not been reinvested or committed to be reinvested (the "UNREINVESTED NET ASSET
SALE PROCEEDS") shall be applied (i) first, to the extent such Unreinvested Net
Asset Sale Proceeds may be repatriated to the United States without in the
reasonable judgment of the Company resulting in a material tax liability to
Company in relation to the amount of proceeds to be repatriated, to prepay the
Loans as set forth in Section 2.12(a), (ii) second, to the extent of any
remaining portion of such Unreinvested Net Asset Sale Proceeds, to finance the
general corporate purposes of such Foreign Subsidiary so long as the aggregate
of all such amounts so applied by all Foreign Subsidiaries with respect to Asset
Sales consummated after the Closing Date does not exceed $5,000,000, and (iii)
third, to the extent of any remaining portion of such Unreinvested Net Asset
Sale Proceeds, to prepay the Loans as set forth in Section 2.12(a). Concurrently
with any determination by Company that any portion of any Unreinvested Net Asset
Sale Proceeds of any Foreign Subsidiary will be applied as described in clause
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(ii) of the immediately preceding proviso, Company shall deliver to Agent an
Officers' Certificate (x) certifying that such Unreinvested Net Asset Sale
Proceeds cannot be repatriated to the United States without resulting in a
material tax liability to Company and the reasons therefor, (y) specifying the
amount of Unreinvested Net Asset Sale Proceeds to be retained by such Foreign
Subsidiary as described in said clause (ii) and the cumulative aggregate amount
of all such Unreinvested Net Asset Sale Proceeds so retained by all Foreign
Subsidiaries since the date of this Agreement and (z) demonstrating the
derivation of the Unreinvested Net Asset Sale Proceeds of the correlative Asset
Sale from the gross sales price thereof.
(b) Insurance/Condemnation Proceeds. No later than the first Business
Day following the date of receipt by Holdings or any of its Subsidiaries, or
Administrative Agent as loss payee, of any Net Insurance/Condemnation Proceeds,
Company shall prepay the Loans as set forth in Section 2.12(a) in an aggregate
amount equal to such Net Insurance/Condemnation Proceeds; provided (i) so long
as no Default or Event of Default shall have occurred and be continuing, and
(ii) to the extent that aggregate Net Insurance/Condemnation Proceeds from the
Closing Date through the applicable date of determination do not exceed
$10,000,000 in the aggregate, Company shall have the option, directly or through
one or more of its Subsidiaries to invest or commit to invest such Net
Insurance/Condemnation Proceeds within three hundred sixty (360) days of receipt
thereof in long term productive assets of the general type used in the business
of Company and its Subsidiaries, which investment may include the repair,
restoration or replacement of the applicable assets thereof.
(c) Issuance of Equity Securities. On the date of receipt by Holdings
of any Cash proceeds from a capital contribution to, or the issuance of any
Capital Stock of, Holdings to any Person other than any of its Subsidiaries
(other than with respect to the receipt of any such proceeds pursuant to (i) any
employee stock or stock option compensation plan, (ii) any Sponsor Equity
Contributions or (iii) any equity issued by Holdings in connection with
Permitted Acquisitions including, without limitation, any equity issued in
connection with Section 6.9(f)), Company shall prepay the Loans as set forth in
Section 2.12(a) in an aggregate amount equal to 50% of such proceeds, net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses; provided,
during any period in which the Leverage Ratio (determined for any such period by
reference to the most recent Compliance Certificate delivered pursuant to
Section 5.1(d) calculating the Leverage Ratio) shall be 2.50:1.00 or less,
Company shall only be required to make the prepayments and/or reductions
otherwise required hereby in an amount equal to 25% of such Cash proceeds.
(d) Issuance of Debt. No later than the first Business Day following
receipt by Holdings or any of its Subsidiaries of any Cash proceeds from the
incurrence of any Indebtedness of Holdings or any of its Subsidiaries (other
than with respect to any Indebtedness permitted to be incurred pursuant to
Section 6.1), Company shall prepay the Loans as set forth in Section 2.12(a) in
an aggregate amount equal to 100% of such proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses.
(e) Consolidated Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing with Fiscal Year
2006), Company shall, no later than one hundred and five (105) days after the
end of such Fiscal Year, prepay the Loans as set forth in Section 2.12(a) in an
aggregate amount equal to (i) 50% of such Consolidated Excess Cash Flow minus
(ii) the sum of (x) the voluntary prepayments of Loans (but not repurchases of
Loans pursuant to Section 2.10(c)) and (y) any voluntary prepayments or
repurchases applied to any term loans under the First Lien Credit Agreement and
any voluntary prepayments of any revolving loans, to the extent accompanied by
corresponding reductions in the applicable commitment amount, under the First
Lien Credit Agreement; provided, during any period in which the Leverage Ratio
(determined for any such period by reference to the
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most recent Compliance Certificate delivered pursuant to Section 5.1(d)
calculating the Leverage Ratio) shall be 2.50:1.00 or less, Company shall only
be required to make the prepayments and/or reductions otherwise required hereby
in an amount equal to 25% of such Consolidated Excess Cash Flow.
(f) Restriction on Prepayments. Notwithstanding anything to the
contrary, (i) no prepayments of Loans shall be required or permitted pursuant to
this Section 2.11 if such prepayment is prohibited by the First Lien Credit
Agreement and (ii) no prepayments of Loans shall be required pursuant to Section
2.11(a), (b), (c), (d) or (e) except to the extent of the amount of Net Asset
Sale Proceeds, Net Insurance/Condemnation Proceeds, Cash proceeds or Excess Cash
Flow, as the case may be, required to be applied toward such prepayment
remaining after the Discharge of First Lien Obligations or the waiver of
prepayment obligations under the First Lien Credit Agreement (it being
understood that amounts actually applied toward prepayment of First Lien
Obligations (accompanied, in the case of revolving loans (including swingline
loans) by permanent reduction in commitments under the First Lien Credit
Agreement) shall reduce the amount required to be applied toward prepayments
hereunder).
(g) Prepayment Premium. Any prepayments made pursuant to this Section
2.11 shall be subject to the provisions of Section 2.10(b)(ii).
(h) Prepayment Certificate. Concurrently with any prepayment of the
Loans pursuant to Sections 2.11(a) through 2.11(e), Company shall deliver to
Administrative Agent a certificate of an Authorized Officer demonstrating the
calculation of the amount of the applicable net proceeds or Consolidated Excess
Cash Flow, as the case may be. In the event that Company shall subsequently
determine that the actual amount received exceeded the amount set forth in such
certificate, Company shall promptly make an additional prepayment of the Loans
in an amount equal to such excess, and Company shall concurrently therewith
deliver to Administrative Agent a certificate of an Authorized Officer
demonstrating the derivation of such excess.
2.12. APPLICATION OF PREPAYMENTS.
(a) Application of Prepayments by Type of Loans. Any prepayment of
Loans pursuant to Section 2.10(a) or Section 2.11(a) through (e) shall be
applied to repay the Loans on a pro rata basis; provided, each Lender may
decline any prepayment pursuant to Section 2.11 (in which event the Company may
use any amount not applied toward such prepayment for any purpose not prohibited
by the Credit Documents).
(b) Application of Prepayments of Loans to Base Rate Loans and
Eurodollar Rate Loans. Any prepayment thereof shall be applied first to Base
Rate Loans to the full extent thereof before application to Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of any payments
required to be made by Company pursuant to Section 2.15(c).
2.13. GENERAL PROVISIONS REGARDING PAYMENTS.
(a) All payments by Company of principal, interest, fees and other
Obligations shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 noon (New York time) on the date due
at the Administrative Agent's Principal Office for the account of Lenders; funds
received by Administrative Agent after that time on such due date shall be
deemed to have been paid by Company on the next succeeding Business Day.
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(b) All payments in respect of the principal amount of any Loan shall
include payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments (and, in any event, any payments in respect of
any Loan on a date when interest is due and payable with respect to such Loan)
shall be applied to the payment of interest before application to principal.
(c) Administrative Agent shall promptly distribute to each Lender at
such address as such Lender shall indicate in writing, such Lender's applicable
Pro Rata Share of all payments and prepayments of principal and interest due
hereunder, together with all other amounts due thereto, including, without
limitation, all fees payable with respect thereto, to the extent received by
Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if pursuant to
this Agreement any Conversion/Continuation Notice is withdrawn as to any
Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its
Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give
effect thereto in apportioning payments received thereafter.
(e) Subject to the provisos set forth in the definition of "Interest
Period", whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the fees hereunder.
(f) Company hereby authorizes Administrative Agent to charge Company's
accounts with Administrative Agent in order to cause timely payment to be made
to Administrative Agent of all principal, interest, fees and expenses due
hereunder (subject to sufficient funds being available in its accounts for that
purpose).
(g) Administrative Agent shall deem any payment by or on behalf of
Company hereunder that is not made in same day funds prior to 12:00 noon (New
York time) to be a non-conforming payment. Any such payment shall not be deemed
to have been received by Administrative Agent until the later of (i) the time
such funds become available funds, and (ii) the applicable next Business Day.
Administrative Agent shall give prompt telephonic notice to Company and each
applicable Lender (confirmed in writing) if any payment is non-conforming. Any
non-conforming payment may constitute or become a Default or Event of Default in
accordance with the terms of Section 8.1(a). Interest shall continue to accrue
on any principal as to which a non-conforming payment is made until such funds
become available funds (but in no event less than the period from the date of
such payment to the next succeeding applicable Business Day) at the rate
determined pursuant to Section 2.7 from the date such amount was due and payable
until the date such amount is paid in full.
(h) Subject to the terms of the Intercreditor Agreement, if an Event
of Default shall have occurred and not otherwise been waived, and the maturity
of the Obligations shall have been accelerated pursuant to Section 8.1, all
payments or proceeds received by Agents hereunder in respect of any of the
Obligations, shall be applied in accordance with Section 2.20.
2.14. RATABLE SHARING. Subject to the terms of the Intercreditor Agreement,
lenders hereby agree among themselves that, except as otherwise provided in the
Collateral Documents with respect to amounts realized from the exercise of
rights with respect to Liens on the Collateral, if any of them shall, whether by
voluntary payment (other than a voluntary prepayment of Loans made and applied
in accordance with the terms hereof), through the exercise of any right of
set-off or banker's lien, by counterclaim or cross action or by the enforcement
of any right under the Credit Documents or otherwise, or as adequate protection
of a deposit treated as cash collateral under the Bankruptcy Code, receive
payment or reduction of a proportion of the aggregate amount of principal,
interest, fees and other amounts then due
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and owing to such Lender hereunder or under the other Credit Documents
(collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which is greater than
the proportion received by any other Lender in respect of the Aggregate Amounts
Due to such other Lender, then the Lender receiving such proportionately greater
payment shall (a) notify Administrative Agent and each other Lender of the
receipt of such payment and (b) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; provided that, if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
2.15. MAKING OR MAINTAINING EURODOLLAR RATE LOANS.
(a) Inability To Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist, and (ii) any Funding Notice or
Conversion/Continuation Notice given by Company with respect to the Loans in
respect of which such determination was made shall be deemed to be rescinded by
Company.
(b) Illegality or Impracticability of Eurodollar Rate Loans. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful), or (ii) has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely affect the London
interbank market or the position of such Lender in that market, then, and in any
such event, such Lender shall be an "AFFECTED LENDER" and it shall on that day
give notice (by telefacsimile or by telephone confirmed in writing) to Company
and Administrative Agent of such determination (which notice Administrative
Agent shall promptly transmit to each other Lender). Thereafter (1) the
obligation of the Affected Lender to make Loans as, or to convert Loans to,
Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by
the Affected Lender, (2) to the extent such determination by the Affected Lender
relates to a Eurodollar Rate Loan then being requested by Company pursuant to a
Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall
make such Loan as (or continue such Loan as or convert such Loan to, as the case
may be) a Base Rate Loan, (3) the Affected Lender's obligation to maintain its
outstanding Eurodollar Rate Loans (the "AFFECTED LOANS") shall be terminated at
the earlier to occur of the expiration of the Interest Period then in effect
with respect
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to the Affected Loans or when required by law, and (4) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan then being requested
by Company pursuant to a Funding Notice or a Conversion/Continuation Notice,
Company shall have the option, subject to the provisions of Section 2.15(c), to
rescind such Funding Notice or Conversion/Continuation Notice as to all Lenders
by giving notice (by telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this Section 2.15(b)
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms hereof.
(c) Compensation for Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by such Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by such
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Loans and any loss, expense or liability sustained by such Lender in connection
with the liquidation or re-employment of such funds but excluding loss of
anticipated profits, including, without limitation, the Applicable Margin) which
such Lender may sustain: (i) if for any reason (other than a default by such
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Funding Notice or a telephonic request for borrowing, or
a conversion to or continuation of any Eurodollar Rate Loan does not occur on a
date specified therefor in a Conversion/Continuation Notice or a telephonic
request for conversion or continuation; (ii) if any prepayment or other
principal payment or any conversion of any of its Eurodollar Rate Loans occurs
on a date prior to the last day of an Interest Period applicable to that Loan
(including, without limitation, pursuant to Section 2.10(c) hereof); or (iii) if
any prepayment of any of its Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by Company.
(d) Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of such Lender.
(e) Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this Section 2.15 and under
Section 2.16(a) shall be made as though such Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a LIBOR deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such LIBOR deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of America;
provided, however, each Lender may fund each of its Eurodollar Rate Loans in any
manner it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this Section 2.15 and under
Section 2.16(a).
2.16. INCREASED COSTS; CAPITAL ADEQUACY.
(a) Compensation for Increased Costs and Taxes. Subject to the
provisions of Section 2.17 (which shall be controlling with respect to the
matters covered thereby and to the extent a Lender is not entitled to payment
under the terms of Section 2.17, it shall not be entitled to such payment
pursuant to this Section 2.16(a)), in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or
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governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or Governmental Authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other governmental or quasi-Governmental Authority (whether or
not having the force of law): (i) subjects such Lender (or its applicable
lending office) to any additional Tax (other than any Tax on the overall net
income of such Lender) with respect to this Agreement or any of the other Credit
Documents or any of its obligations hereunder or thereunder or any payments to
such Lender (or its applicable lending office) of principal, interest, fees or
any other amount payable hereunder; (ii) imposes, modifies or holds applicable
any reserve (including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, Federal Deposit Insurance
Corporation insurance or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, or advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect to
Eurodollar Rate Loans that are reflected in the definition of Adjusted
Eurodollar Rate); or (iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable lending office)
or its obligations hereunder or the London interbank market; and the result of
any of the foregoing is to increase the cost to such Lender of agreeing to make,
making or maintaining Loans hereunder or to reduce any amount received or
receivable by such Lender (or its applicable lending office) with respect
thereto by an amount considered by the Lender to be material; then, in any such
case, Company shall promptly pay to such Lender, upon receipt of the statement
referred to in the next sentence, such additional amount or 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 may be
necessary to compensate such Lender for any such increased cost or reduction in
amounts received or receivable hereunder. Such Lender shall deliver to Company
(with a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts owed to such
Lender under this Section 2.16(a), which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
(b) Capital Adequacy Adjustment. In the event that any Lender shall
have determined that the adoption, effectiveness, phase-in or applicability
after the Closing Date of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or other obligations hereunder with respect to the Loans
to a level below that which such Lender or such controlling corporation could
have achieved but for such adoption, effectiveness, phase-in, applicability,
change or compliance (taking into consideration the policies of such Lender or
such controlling corporation with regard to capital adequacy) by an amount
considered by the Lender to be material, then from time to time, within five
Business Days after receipt by Company from such Lender of the statement
referred to in the next sentence, Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Company (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis for calculating the additional amounts owed
to Lender under this Section 2.16(b), which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
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(c) Notification. Notwithstanding the foregoing, the Company shall not
be required to compensate a Lender pursuant to this Section for any increased
costs incurred or reductions suffered more than nine months prior to the date
that such Lender notifies the Company of the change giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor (except that, if the change giving rise to such increased
costs or reductions is retroactive, then the nine-month period referred to above
shall be extended to include the period of retroactive effect thereof).
2.17. TAXES; WITHHOLDING, ETC..
(a) Payments To Be Free and Clear. All sums payable by any Credit
Party hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of any Credit Party or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time of
payment.
(b) Withholding of Taxes. If any Credit Party or any other Person is
required by law to make any deduction or withholding on account of any such Tax
from any sum paid or payable by any Credit Party to Administrative Agent or any
Lender under any of the Credit Documents: (i) Company shall notify
Administrative Agent of any such requirement or any change in any such
requirement as soon as Company becomes aware of it; (ii) Company shall pay any
such Tax before the date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on any Credit Party) for its own
account or (if that liability is imposed on Administrative Agent or such Lender,
as the case may be) on behalf of and in the name of Administrative Agent or such
Lender; (iii) the sum payable by such Credit Party in respect of which the
relevant deduction, withholding or payment is required shall be increased to the
extent necessary to ensure that, after the making of that deduction, withholding
or payment, Administrative Agent or such Lender, as the case may be, receives on
the due date a net sum equal to what it would have received had no such
deduction, withholding or payment been required or made; and (iv) within thirty
(30) days after paying any sum from which it is required by law to make any
deduction or withholding, and within thirty (30) days after the due date of
payment of any Tax which it is required by clause (ii) above to pay, Company
shall deliver to Administrative Agent evidence satisfactory to the other
affected parties of such deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority; provided, no such additional
amount shall be required to be paid to any Lender under clause (iii) above
except to the extent that any change after the date hereof (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or after the
effective date of the Assignment Agreement pursuant to which such Lender became
a Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date hereof or at the date of such Assignment Agreement, as the
case may be, in respect of payments to such Lender.
(c) Evidence of Exemption from U.S. Withholding Tax. Each Lender that
is not a United States Person (as such term is defined in Section 7701(a)(30) of
the Internal Revenue Code) for U.S. federal income tax purposes (a "NON-US
LENDER") shall deliver to Administrative Agent for transmission to Company, on
or prior to the Closing Date (in the case of each Lender listed on the signature
pages hereof on the Closing Date) or on or prior to the date of the Assignment
Agreement pursuant to which it becomes a Lender (in the case of each other
Lender), and at such other times as may be necessary in the determination of
Administrative Agent in the reasonable exercise of its discretion, (i) two
original copies of Internal Revenue Service Form W-8BEN or W-8ECI (or any
successor forms), properly
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completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by Company to
establish that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such Lender of
principal, interest, fees or other amounts payable under any of the Credit
Documents, or (ii) if such Lender is not a "bank" or other Person described in
Section 881(c)(3) of the Internal Revenue Code and cannot deliver either
Internal Revenue Service Form W-8BEN or W-8ECI pursuant to clause (i) above, a
Certificate Re Non-Bank Status together with two original copies of Internal
Revenue Service Form W-8 (or any successor form), properly completed and duly
executed by such Lender, and such other documentation required under the
Internal Revenue Code and reasonably requested by Company to establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of interest payable under
any of the Credit Documents. Each Lender required to deliver any forms,
certificates or other evidence with respect to United States federal income tax
withholding matters pursuant to this Section 2.17(c) hereby agrees, from time to
time after the initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in circumstances renders such
forms, certificates or other evidence obsolete or inaccurate in any material
respect, that such Lender shall promptly deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue Service Form
W-8BEN or W-8ECI, or a Certificate Re Non-Bank Status and two original copies of
Internal Revenue Service Form W-8, as the case may be, properly completed and
duly executed by such Lender, and such other documentation required under the
Internal Revenue Code and reasonably requested by Company to confirm or
establish that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to payments to such Lender under the
Credit Documents, or notify Administrative Agent and Company of its inability to
deliver any such forms, certificates or other evidence. Company shall not be
required to pay any additional amount to any Non-US Lender under Section
2.17(b)(iii) if such Lender shall have failed (1) to deliver the forms,
certificates or other evidence referred to in the second sentence of this
Section 2.17(c), or (2) to notify Administrative Agent and Company of its
inability to deliver any such forms, certificates or other evidence, as the case
may be; provided, if such Lender shall have satisfied the requirements of the
first sentence of this Section 2.17(c) on the Closing Date or on the date of the
Assignment Agreement pursuant to which it became a Lender, as applicable,
nothing in this last sentence of Section 2.17 (c) shall relieve Company of its
obligation to pay any additional amounts pursuant to Section 2.17(b)(iii) in the
event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding as
described herein.
2.18. OBLIGATION TO MITIGATE. Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans becomes aware of the occurrence of an event or the existence of a
condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender to receive payments under Section 2.15, 2.16 or 2.17,
it will, to the extent not inconsistent with the internal policies of such
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts to (a) make, issue, fund or maintain its Loans, including any Affected
Loans, through another office of such Lender, or (b) take such other measures as
such Lender may deem reasonable, if as a result thereof the circumstances which
would cause such Lender to be an Affected Lender would cease to exist or the
additional amounts which would otherwise be required to be paid to such Lender
pursuant to Section 2.15, 2.16 or 2.17 would be materially reduced and if, as
determined by such Lender in its sole discretion, the making, issuing, funding
or maintaining of such Loans through such other office or in accordance with
such other measures, as the case may be, would not otherwise materially
adversely affect such Loans or the interests of such Lender; provided that such
Lender will not be obligated to utilize such other office pursuant to this
Section 2.18 unless Company agrees to pay all in-
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cremental expenses incurred by such Lender as a result of utilizing such other
office as described in clause (a) above. A certificate as to the amount of any
such expenses payable by Company pursuant to this Section 2.18 (setting forth in
reasonable detail the basis for requesting such amount) submitted by such Lender
to Company (with a copy to Administrative Agent) shall be conclusive absent
manifest error.
2.19. REMOVAL OR REPLACEMENT OF A LENDER. Anything contained herein to the
contrary notwithstanding, in the event that (a) (i) any Lender (an
"INCREASED-COST LENDER") shall give notice to Company that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.15, 2.16 or 2.17, (ii) the circumstances which have caused such Lender
to be an Affected Lender or which entitle such Lender to receive such payments
shall remain in effect, and (iii) such Lender shall fail to withdraw such notice
within five Business Days after Company's request for such withdrawal; or (b) in
connection with any proposed amendment, modification, termination, waiver or
consent with respect to any of the provisions hereof as contemplated by Section
10.5(b), the consent of Requisite Lenders shall have been obtained but the
consent of one or more of such other Lenders (each a "NON-CONSENTING LENDER")
whose consent is required shall not have been obtained; then, with respect to
each such Increased-Cost Lender or Non-Consenting Lender (the "TERMINATED
LENDER"), Company may, by giving written notice to Administrative Agent and any
Terminated Lender of its election to do so, elect to cause such Terminated
Lender (and such Terminated Lender hereby irrevocably agrees) to assign its
outstanding Loans, if any, in full to one or more Eligible Assignees (each a
"REPLACEMENT LENDER") in accordance with the provisions of Section 10.6 and
Terminated Lender shall pay any fees payable thereunder in connection with such
assignment; provided (1) on the date of such assignment, the Replacement Lender
shall pay to Terminated Lender an amount equal to the sum of (A) an amount equal
to the principal of, and all accrued interest on, all outstanding Loans of the
Terminated Lender and (B) an amount equal to all accrued, but theretofore unpaid
fees owing to such Terminated Lender pursuant to Section 2.8; (2) on the date of
such assignment, Company shall pay any amounts payable to such Terminated Lender
pursuant to Section 2.10(b), 2.15(c), 2.16 or 2.17 or otherwise as if it were a
voluntary prepayment; and (3) in the event such Terminated Lender is a
Non-Consenting Lender, each Replacement Lender shall consent, at the time of
such assignment, to each matter in respect of which such Terminated Lender was a
Non-Consenting Lender; if any, such Terminated Lender shall no longer constitute
a "Lender" for purposes hereof; provided that any rights of such Terminated
Lender to indemnification hereunder shall survive as to such Terminated Lender.
2.20. APPLICATION OF PROCEEDS. Subject to the terms of the Intercreditor
Agreement, the proceeds received by Collateral Agent in respect of any sale of,
collection from or other realization upon all or any part of the Collateral
pursuant to the exercise by Collateral Agent of its remedies shall be applied,
in full or in part, together with any other sums then held by Collateral Agent
pursuant to this Agreement, promptly by Collateral Agent as follows:
(a) First, to the payment of all reasonable costs and expenses, fees,
commissions and taxes of such sale, collection or other realization
including reasonable costs, fees, and expenses of the Agents and their
agents and counsel, and all expenses, liabilities and advances made or
incurred by the Agents in connection therewith and all amounts for which
the Agents are entitled to indemnification pursuant to the provisions of
any Credit Document, together with interest on each such amount at the
highest rate then in effect under this Agreement from and after the date
such amount is due, owing or unpaid until paid in full;
(b) Second, to the payment of all other reasonable costs and expenses
of such sale, collection or other realization including reasonable costs,
fees and expenses of the other Secured Parties and their agents and counsel
and all costs, liabilities and advances made or incurred by the other
Secured Parties in connection therewith, together with interest on each
such amount at the
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highest rate then in effect under this Agreement from and after the date
such amount is due; owing or unpaid until paid in full;
(c) Third, without duplication of amounts applied pursuant to clauses
(a) and (b) above, to the payment in full in cash, pro rata, of interest
and other amounts constituting Obligations (other than principal and any
premium thereon), in each case equally and ratably in accordance with the
respective amounts thereof then due and owing;
(d) Fourth, to the payment in full in cash, pro rata, of principal
amount of the Obligations and any premium thereon; and
(e) Fifth, the balance, if any, to the person lawfully entitled
thereto (including the applicable Credit Party or its successors or
assigns) or as a court of competent jurisdiction may direct.
In the event that any such proceeds are insufficient to pay in full
the items described in clauses (a) through (c) of this Section 2.20, the Credit
Parties shall remain liable, jointly and severally, for any deficiency. Each
Credit Party acknowledges the relative rights, priorities and agreements of the
Secured Parties under this Agreement and the other Credit Documents and the
secured parties under the First Lien Credit Agreement and the other First Lien
Documents, as set forth in the Intercreditor Agreement and this Agreement,
including as set forth in this Section 2.20.
2.21. ORIGINAL ISSUE DISCOUNT. Company shall deliver to Administrative
Agent and each Lender all original issue discount information relating to the
Loans as may be required by applicable law.
SECTION 3. CONDITIONS PRECEDENT
3.1. CLOSING DATE. The obligation of any Lender to make a Loan on the
Closing Date is subject to the satisfaction, or waiver in accordance with
Section 10.5, of the following conditions on or before the Closing Date:
(a) Credit Documents. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered
by each applicable Credit Party for each Lender.
(b) Organizational Documents; Incumbency. Administrative Agent shall
have received (i) sufficient copies of each Organizational Document
executed and delivered by each Credit Party, as applicable, and, to the
extent applicable, certified as of a recent date by the appropriate
governmental official, for each Lender, each dated the Closing Date or a
recent date prior thereto; (ii) signature and incumbency certificates of
the officers of such Person executing the Credit Documents to which it is a
party; (iii) resolutions of the Board of Directors or similar governing
body of each Credit Party approving and authorizing the execution, delivery
and performance of this Agreement and the other Credit Documents to which
it is a party or by which it or its assets may be bound as of the Closing
Date, certified as of the Closing Date by its secretary or an assistant
secretary as being in full force and effect without modification or
amendment; (iv) a good standing certificate from the applicable
Governmental Authority of each Credit Party's jurisdiction of
incorporation, organization or formation and in each jurisdiction in which
it is qualified as a foreign corporation or other entity to do business,
each dated a recent date prior to the Closing Date; and (v) such other
documents as Administrative Agent may reasonably request.
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(c) Organizational and Capital Structure; Management. The
organizational structure and capital structure of Holdings and its
Subsidiaries shall be as set forth on Schedule 4.1.
(d) Patriot Act. At least five Business Days prior to the Closing
Date, the Lenders shall have received all documentation and other
information required by regulatory authorities under applicable "know your
customer" and anti-money laundering rules and regulations, including
without limitation, the Patriot Act.
(e) Governmental Authorizations and Consents. All Governmental
Authorizations that are required by the Merger Agreement as a condition to
closing shall have been obtained by each Credit Party, or with the approval
of the Arrangers, waived. All consents of other Persons required by the
Merger Agreement to be obtained as a condition to closing shall have been
obtained or, with the approval of the Arrangers, waived. The financing for
the Acquisition and the Merger shall not violate any material contract or
agreement to which Holdings, Target or any of their respective subsidiaries
is a party, except as would not reasonably be expected to have a Material
Adverse Effect.
(f) [Reserved].
(g) Personal Property Collateral. In order to create in favor of
Collateral Agent, for the benefit of Secured Parties, a valid, perfected
Second Priority security interest in the personal property Collateral,
Collateral Agent shall have received:
(i) evidence satisfactory to the Collateral Agent of the
compliance by each Credit Party of their obligations under the Pledge
and Security Agreement and the other Collateral Documents (including,
without limitation, their obligations to execute and deliver UCC
financing statements, originals of securities, instruments and chattel
paper and any agreements governing deposit and/or securities accounts
as provided therein);
(ii) a completed Perfection Certificate dated the Closing Date
and executed by an Authorized Officer of each Credit Party, together
with all attachments contemplated thereby, including (A) the results
of a recent search, by a Person satisfactory to Collateral Agent, of
all effective UCC financing statements, judgment, tax and bankruptcy
liens (or equivalent filings) made with respect to any personal or
mixed property of any Credit Party in the jurisdictions specified in
the Perfection Certificate, together with copies of all such filings
disclosed by such search, and (B) UCC termination statements (or
similar documents) duly executed by all applicable Persons for filing
in all applicable jurisdictions as may be necessary to terminate any
effective UCC financing statements (or equivalent filings) disclosed
in such search (other than any such financing statements or equivalent
filing in respect of Permitted Liens);
(iii) opinions of counsel (which counsel shall be reasonably
satisfactory to Collateral Agent) with respect to the creation and
perfection of the security interests in favor of Collateral Agent in
any Collateral with an aggregate value in excess of $500,000 and such
other matters governed by the laws of each jurisdiction in which any
Credit Party or any personal property Collateral is located as
Collateral Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Collateral Agent; and
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(iv) a certificate from Company's insurance broker or other
evidence satisfactory to it that all insurance required to be
maintained pursuant to Section 5.5 is in full force and effect and
that Collateral Agent, for the benefit of Lenders has been named as
additional insured and loss payee thereunder to the extent required
under Section 5.5.
(h) Funding Notice, Etc. Administrative Agent shall have received a
Funding Notice and an indemnity letter (in respect of any Eurodollar
Borrowings) relating to the Loans to be made on the Closing Date.
(i) Financial Statements. Lenders shall have received from Company (i)
the Historical Financial Statements, (ii) monthly management financial
reports of the Company and the Target (including "flash reports") for each
fiscal month after the last fiscal quarter covered by unaudited quarterly
financial statements provided to the Lenders, which financial reports shall
be delivered as soon as reasonably possible and consistent with past
practice, but in no event later than 35 days after the end of each such
month, and (iii) all financial statements for all other recent, probable or
pending acquisitions (including pro forma financial statements) that would
be required for a registration statements on Form S-1 filed by Company in
connection with the Merger and which meet the requirements of Regulation
S-X under the Exchange Act and which shall have been prepared in a manner
consistent with past practice.
(j) Equity Financing. Company shall have received the proceeds of the
Equity Financing. The terms of the Equity Financing and agreements relating
thereto shall be satisfactory in all respects to the Agents.
(k) Consummation of the Merger.
(i) As of the Closing Date, the representations and warranties
under and covenants under the Merger Agreement shall be true and
correct and complied with.
(ii) The Agents shall have received evidence reasonably
satisfactory to the Agents that all conditions to the Merger shall
have been satisfied or the fulfillment of any such conditions shall
have been waived with the consent of the Agents (such consent not to
be unreasonably withheld or delayed) such that the Merger is effective
immediately upon filing of a Certificate of Merger in Delaware.
(l) Existing Indebtedness and Related Liens.
(i) On the Closing Date, Company and its Subsidiaries shall have
(x) repaid in full all Indebtedness of Company, Target and their
respective Subsidiaries other than the Indebtedness set forth on
Schedule 6.1(j) and the First Lien Loans, (y) terminated any
commitments to lend or make other extensions of credit thereunder and
(z) delivered to Administrative Agent all documents or instruments
necessary to release all Liens securing such repaid Indebtedness or
other obligations of Company, Target and their respective Subsidiaries
thereunder.
(ii) There shall not exist (pro forma for the Merger and the
financing thereof) any default or event of default under the Senior
Subordinated Note Indenture or any other material Indebtedness of
Holdings or any of its Subsidiaries or Target.
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(m) Maximum Leverage Ratio. The Agents shall have received
satisfactory evidence that as of the Closing Date and after giving effect
to the Merger and the borrowings made on the Closing Date, the Leverage
Ratio determined on a Pro Forma Basis for the latest twelve-month period
ended more than 45 days prior to the Closing Date (for which unaudited
financial statements are then available) is not greater than 5.95:1.00.
(n) Opinions of Counsel to Credit Parties. Lenders and their
respective counsel shall have received originally executed copies of the
favorable written opinions of (i) Ropes & Xxxx LLP, in the form of Exhibit
D-1, and (ii) opinions of local counsel for Credit Parties, in the form of
Exhibit D-2, and in each case as to such other matters as the Agents may
reasonably request, dated as of the Closing Date and otherwise in form and
substance reasonably satisfactory to the Administrative Agent (and each
Credit Party hereby instructs such counsel to deliver such opinions to the
Agents and Lenders).
(o) Fees. Company shall have paid to Agents, the fees payable on the
Closing Date referred to in Section 2.8.
(p) Solvency. On the Closing Date, Agents shall have received (i) a
Solvency Certificate from Company dated the Closing Date and addressed to
Agents and Lenders, and in form, scope and substance satisfactory to the
Arrangers, and (ii) to the extent received by Holdings or any of its
Subsidiaries in connection with the Acquisition, a copy of any opinion of a
third party issued in connection with the Merger that after giving effect
to the Merger and the related transactions contemplated hereby, Holdings
and its Subsidiaries when taken as a whole on a consolidated basis, and the
Company and its Subsidiaries when taken as a whole are Solvent.
(q) Closing Date Certificate. Company shall have delivered to
Administrative Agent an originally executed Closing Date Certificate,
together with all attachments thereto.
(r) Credit Rating. The credit facilities provided for under this
Agreement shall have been assigned a credit rating by S&P and Xxxxx'x.
(s) No Litigation. There shall be no statute, regulation, injunction,
restraining order or decree of any nature of any court or governmental
authority or body of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the Merger or the financing
thereof.
(t) No Target Material Adverse Effect. Since July 2, 2005, no event,
change, effect, development or occurrence has occurred that has had or
could reasonably be expected to have a Target Material Adverse Effect (as
determined by the Arrangers).
(u) Completion of Proceedings. All partnership, corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously
found acceptable by Agents and their counsel shall be satisfactory in form
and substance to Agents and such counsel, and Agents and such counsel shall
have received all such counterpart originals or certified copies of such
documents as Agents may reasonably request.
(v) First Lien Term Loans. Company shall have received $321,750,000
from borrowings under the First Lien Credit Agreement.
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Each Lender, by delivering its signature page to this Agreement and funding a
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.
3.2. FURTHER CONDITIONS TO LOANS.
(a) Conditions Precedent. The obligation of each Lender to make a Loan
on the Closing Date, is subject to the satisfaction, or waiver in accordance
with Section 10.5, of the following additional conditions precedent:
(i) Administrative Agent shall have received a fully executed and
delivered Funding Notice;
(ii) the representations and warranties contained herein and in the
other Credit Documents shall be true and correct in all material respects
on and as of the Closing Date to the same extent as though made on and as
of that date; provided that on the Closing Date only, (x) the
representation and warranty in Section 4.9 shall not apply and (y) the
representations and warranties in Sections 4.7, 4.10, 4.11, 4.12, 4.13
(other than the first sentence of clause (b)), 4.14, 4.15, 4.16, 4.19 and
4.20 shall exclude Target; and
(iii) as of the Closing Date, no event shall have occurred and be
continuing or would result from the consummation of the applicable Loan
that would constitute an Event of Default or a Default.
Any Agent or Requisite Lenders shall be entitled, but not obligated to, request
and receive, prior to the making of any Loan, additional information reasonably
satisfactory to the requesting party confirming the satisfaction of any of the
foregoing if, in the good faith judgment of such Agent or Requisite Lender such
request is warranted under the circumstances.
(b) Notices. Any Notice shall be executed by an Authorized Officer in
a writing delivered to Administrative Agent. In lieu of delivering a Notice,
Company may give Administrative Agent telephonic notice by the required time of
the borrowing on the Closing Date or any conversion/continuation, as the case
may be; provided each such notice shall be promptly confirmed in writing by
delivery of the applicable Notice to Administrative Agent on or before the
Closing Date or the applicable date of continuation/conversion. Neither
Administrative Agent nor any Lender shall incur any liability to Company in
acting upon any telephonic notice referred to above that Administrative Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized on behalf of Company or for otherwise acting in good faith.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Loans, each Credit Party represents and warrants to each Lender, on the
Closing Date, that the following statements are true and correct:
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION. Each of
Holdings and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization as identified
in Schedule 4.1, (b) has all requisite power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter
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into the Credit Documents to which it is a party and to carry out the
transactions contemplated thereby, and (c) is qualified to do business and in
good standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case, except where
the failure to be so qualified or in good standing or a lack of such power and
authority has not had, and could not be reasonably expected to have, a Material
Adverse Effect.
4.2. CAPITAL STOCK AND OWNERSHIP. The Capital Stock of each of Holdings and
its Subsidiaries has been duly authorized and validly issued and is fully paid
and non-assessable. Except as set forth on Schedule 4.2, as of the date hereof,
there is no existing option, warrant, call, right, commitment or other agreement
to which Holdings or any of its Subsidiaries is a party requiring, and there is
no membership interest or other Capital Stock of Holdings or any of its
Subsidiaries outstanding which upon conversion or exchange would require, the
issuance by Holdings or any of its Subsidiaries of any additional membership
interests or other Capital Stock of Holdings or any of its Subsidiaries or other
Securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase, a membership interest or other Capital Stock of
Holdings or any of its Subsidiaries. Schedule 4.2 correctly sets forth the
ownership interest of Holdings and each of its Subsidiaries in their respective
Subsidiaries as of the Closing Date.
4.3. DUE AUTHORIZATION. The execution, delivery and performance of the
Credit Documents have been duly authorized by all necessary action on the part
of each Credit Party that is a party thereto.
4.4. NO CONFLICT. The execution, delivery and performance by Credit Parties
of the Credit Documents to which they are parties and the consummation of the
transactions contemplated by the Credit Documents do not and will not (a)
violate any provision of any law or any governmental rule or regulation
applicable to Holdings or any of its Subsidiaries, any of the Organizational
Documents of Holdings or any of its Subsidiaries, or any order, judgment or
decree of any court or other agency of government binding on Holdings or any of
its Subsidiaries; (b) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any Contractual Obligation
of Holdings or any of its Subsidiaries except for any breach or default which
could not reasonably be expected to have a Material Adverse Effect; (c) result
in or require the creation or imposition of any Lien upon any of the properties
or assets of Holdings or any of its Subsidiaries (other than (x) the Liens
securing the Secured Obligations pursuant to the Credit Documents and (y) the
Liens created under the First Lien Documents securing the First Lien
Obligations); or (d) require any approval of stockholders, members or partners
or, subject to the Intercreditor Agreement, any approval or consent of any
Person under any Contractual Obligation of Holdings or any of its Subsidiaries,
except for such approvals or consents which will be obtained on or before the
Closing Date and disclosed in writing to Lenders and such consents the failure
of which to receive could not reasonably be expected to have a Material Adverse
Effect.
4.5. GOVERNMENTAL CONSENTS. Except for filings and recordings with respect
to the Collateral to be made, or otherwise delivered to Collateral Agent for
filing and/or recordation, as of the Closing Date, the execution, delivery and
performance by Credit Parties of the Credit Documents to which they are parties
and the consummation of the transactions contemplated by the Credit Documents do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any Governmental Authority except
where the failure of which to receive could not reasonably be expected to cause
a Material Adverse Effect.
4.6. BINDING OBLIGATION. Each Credit Document has been duly executed and
delivered by each Credit Party that is a party thereto and is the legally valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its respective terms, except as may be
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limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
4.7. HISTORICAL FINANCIAL STATEMENTS. The Historical Financial Statements
were prepared in conformity with GAAP and fairly present, in all material
respects, the financial position, on a consolidated basis, of the Persons
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows, on a consolidated basis, of the
entities described therein for each of the periods then ended, subject, in the
case of any such unaudited financial statements, to changes resulting from audit
and normal year-end adjustments and in the case of interim statements the
absence of footnotes. As of the Closing Date, neither Holdings nor any of its
Subsidiaries has any contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
Historical Financial Statements or the notes thereto and which in any such case
is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Holdings and any of its
Subsidiaries taken as a whole.
4.8. PROJECTIONS. On and as of the Closing Date, the Projections of Company
and its Subsidiaries for the period Fiscal Year 2005 through and including
Fiscal Year 2010 (the "PROJECTIONS") are based on good faith estimates and
assumptions made by the management of Holdings; provided that the Projections
are not to be viewed as facts and that actual results during the period or
periods covered by the Projections may differ from such Projections and that the
differences may be material; provided, further, as of the Closing Date,
management of Holdings believed that the Projections were reasonable and
attainable.
4.9. NO MATERIAL ADVERSE CHANGE. Since December 31, 2004, no event, change,
effect, development or occurrence has occurred that has had or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
4.10. NO RESTRICTED JUNIOR PAYMENTS. Since December 31, 2004, neither
Holdings nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted pursuant to Section 6.5.
4.11. ADVERSE PROCEEDINGS, ETC. There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to result in
a Material Adverse Effect. Neither Holdings nor any of its Subsidiaries (a) is
in violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (b) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any
Government Authority, domestic or foreign, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
4.12. PAYMENT OF TAXES. Except as otherwise permitted under Section 5.3,
all material tax returns and reports of Holdings and its Subsidiaries required
to be filed by any of them have been timely filed, and all taxes shown on such
tax returns to be due and payable and all assessments, fees and other
governmental charges upon Holdings and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Holdings knows of no proposed
material tax assessment against Holdings or any of its Subsidiaries which is not
being actively contested by Holdings or such Subsidiary in good faith and by
appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
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4.13. PROPERTIES.
(a) Title. Each of Holdings and its Subsidiaries has (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in their
respective Historical Financial Statements referred to in Section 4.7 or in the
most recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under Section 6.9. Except
as permitted by this Agreement, all such properties and assets are free and
clear of Liens.
(b) Real Estate. As of the Closing Date, Schedule 4.13 contains a
true, accurate and complete list of (i) all Real Estate Assets, and (ii) all
leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Real Estate Asset of any Credit Party, regardless of whether such Credit
Party is the landlord or tenant (whether directly or as an assignee or successor
in interest) under such lease, sublease or assignment. As of the Closing Date,
each agreement listed in clause (ii) of the immediately preceding sentence is in
full force and effect and neither Holdings nor Company has knowledge of any
material default that has occurred and is continuing thereunder, and each such
agreement constitutes the legally valid and binding obligation of each
applicable Credit Party, enforceable against such Credit Party in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles.
4.14. ENVIRONMENTAL MATTERS. Neither Holdings nor any of its Subsidiaries
nor any of their respective Facilities or operations are subject to any
outstanding written order, consent decree or settlement agreement with any
Person relating to any Environmental Law, any Environmental Claim, or any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Neither Holdings nor
any of its Subsidiaries has received any letter or request for information under
Section 104 of the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9604) or any comparable state law. There are
and, to each of Holdings' and its Subsidiaries' knowledge, have been, no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim against
Holdings or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. Neither Holdings
nor any of its Subsidiaries nor, to any Credit Party's knowledge, any
predecessor of Holdings or any of its Subsidiaries has filed any notice under
any Environmental Law indicating past or present treatment of Hazardous
Materials at any Facility, and none of Holdings' nor any of its Subsidiaries'
operations involves the generation, transportation, treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any
state equivalent except in material compliance with Environmental Laws.
Compliance with all current or reasonably foreseeable future requirements
pursuant to or under Environmental Laws will not, individually or in the
aggregate, have a reasonable possibility of giving rise to a Material Adverse
Effect. No event or condition has occurred or is occurring with respect to
Holdings or any of its Subsidiaries relating to any Environmental Law, any
Release of Hazardous Materials, or any Hazardous Materials Activity which
individually or in the aggregate has had, or could reasonably be expected to
have, a Material Adverse Effect.
4.15. NO DEFAULTS. Neither Holdings nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists which, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a Material Adverse
Effect.
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4.16. MATERIAL CONTRACTS. Schedule 4.16 contains a true, correct and
complete list of all the Material Contracts in effect on the Closing Date, and
except as described thereon, all such Material Contracts are in full force and
effect and no defaults currently exist thereunder, other than any such defaults
or failure to be in force and effect which could not reasonably be expected to
result in a Material Adverse Effect.
4.17. GOVERNMENTAL REGULATION. Neither Holdings nor any of its Subsidiaries
is subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable. Neither Holdings nor any of its Subsidiaries is a "registered
investment company" or a company "controlled" by a "registered investment
company" or a "principal underwriter" of a "registered investment company" as
such terms are defined in the Investment Company Act of 1940.
4.18. MARGIN STOCK. Neither Holdings nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the Loans made to such Credit Party will be used to purchase or
carry any such Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any such Margin Stock or for any purpose that violates,
or is inconsistent with, the provisions of Regulation T, U or X of said Board of
Governors.
4.19. EMPLOYEE MATTERS. Neither Holdings nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (a) no unfair labor practice complaint pending
against Holdings or any of its Subsidiaries, or to the best knowledge of
Holdings, threatened against any of them before the National Labor Relations
Board and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement that is so pending against Holdings or any of
its Subsidiaries or to the best knowledge of Holdings, threatened against any of
them, (b) no strike or work stoppage in existence or threatened involving
Holdings or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect, and (c) to the best knowledge of Holdings, no union
representation question existing with respect to the employees of Holdings or
any of its Subsidiaries and, to the best knowledge of Holdings, no union
organization activity that is taking place, except (with respect to any matter
specified in clause (a), (b) or (c) above, either individually or in the
aggregate) such as is not reasonably likely to have a Material Adverse Effect.
4.20. EMPLOYEE BENEFIT PLANS. Holdings and each of its Subsidiaries are in
compliance with all applicable provisions and requirements of ERISA and the
Internal Revenue Code and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all of
their obligations under each Employee Benefit Plan, other than any noncompliance
that is not reasonably expected to have a Material Adverse Effect. Each Employee
Benefit Plan which is intended to qualify under Section 401(a) of the Internal
Revenue Code has received a favorable determination letter from the Internal
Revenue Service indicating that such Employee Benefit Plan is so qualified and
to the knowledge of Holdings, nothing has occurred subsequent to the issuance of
such determination letter which would reasonably be expected to cause such
Employee Benefit Plan to lose its qualified status. No liability to the PBGC
(other than required premium payments), the Internal Revenue Service, any
Employee Benefit Plan or any trust established under Title IV of ERISA has been
or is expected to be incurred by Holdings, any of its Subsidiaries or any of
their ERISA Affiliates except as would not reasonably be expected to cause a
Material Adverse Effect. No ERISA Event has occurred or is reasonably expected
to occur which would reasonably be expected to result in liability of Holdings
and its Subsidiaries in excess of $5,000,000 during the term hereof. Except to
the extent required under Section 4980B of the Internal Revenue Code or similar
state laws, no Employee Benefit Plan provides health or welfare bene-
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fits (through the purchase of insurance or otherwise) for any retired or former
employee of Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates. Holdings, each of its Subsidiaries and each of their ERISA
Affiliates have complied with the requirements of Section 515 of ERISA with
respect to each Multiemployer Plan and are not in material "default" (as defined
in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan. Holdings and its Subsidiaries are in compliance (i) with all applicable
provisions of law and all applicable regulations and published interpretations
thereunder with respect to any employee pension benefit plan or other employee
benefit plan governed by the laws of a jurisdiction other than the United States
and (ii) with the terms of any such plan, except, in each case, for such
noncompliance that could not reasonably be expected to have a Material Adverse
Effect.
4.21. CERTAIN FEES. No broker's or finder's fee or commission will be
payable with respect hereto or any of the transactions contemplated hereby.
4.22. SOLVENCY. Each Credit Party is and, upon the incurrence of any
Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.
4.23. COMPLIANCE WITH STATUTES, ETC. Each of Holdings and its Subsidiaries
is in compliance with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all Governmental Authorities, in respect
of the conduct of its business and the ownership of its property (including
compliance with all applicable Environmental Laws with respect to any Real
Estate Asset or governing its business and the requirements of any permits
issued under such Environmental Laws with respect to any such Real Estate Asset
or the operations of Holdings or any of its Subsidiaries), except such
non-compliance that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
4.24. DISCLOSURE. No representation or warranty of any Credit Party
contained in any Credit Document or in any other documents, certificates or
written statements furnished to Lenders by or on behalf of Holdings or any of
its Subsidiaries for use in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact (known to Holdings, in the case of any document not furnished by either of
them) necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Holdings to be
reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results. There are no facts known (or which should upon the
reasonable exercise of diligence be known) to Holdings (other than matters of a
general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
4.25. PATRIOT ACT. To the extent applicable, each Credit Party is in
compliance, in all material respects, with the (i) Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
other enabling legislation or executive order relating thereto, and (ii) Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA Patriot Act of 2001) (the "PATRIOT ACT"). No part of
the proceeds of the Loans will be used, directly or indirectly, for any payments
to any governmental official or employee, political party, official of a
political party, candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct
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business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.
4.26. FIRST LIEN DOCUMENTS. Company has delivered to Agents complete and
correct copies of the First Lien Documents. Each of the representations and
warranties given by any Credit Party in any First Lien Document is true and
correct in all material respects as of the Closing Date (or as of any earlier
date to which such representation and warranty specifically relates).
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that until payment in full of
all Obligations, each Credit Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 5.
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS. Company will deliver to
Administrative Agent for delivery to each Lender (which may be delivered via
Electronic Transmission or posting on any E-System):
(a) Monthly Reports. As soon as available, and in any event within
thirty-five (35) days after the end of each fiscal month ending after the
Closing Date (or within forty-five (45) days after the end of each month
(x) which ends a Fiscal Quarter or (y) for the first six months after the
Closing Date), the consolidated balance sheet of Company and its
Subsidiaries as at the end of such month and the related consolidated
statements of income, stockholders' equity and cash flows of Company and
its Subsidiaries for such month and for the period from the beginning of
the then current Fiscal Year to the end of such month, setting forth in
each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, to the extent
prepared on a monthly basis, all in reasonable detail, together with a
Financial Officer Certification with respect thereto;
(b) Quarterly Financial Statements. As soon as available, and in any
event within forty-five (45) days after the end of each of the first three
Fiscal Quarters of each Fiscal Year, the consolidated and consolidating
balance sheets of Company and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated (and with respect to statements of
income, consolidating) statements of income, stockholders' equity and cash
flows of Company and its Subsidiaries for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of
such Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures from the Financial Plan for the current
Fiscal Year, all in reasonable detail, together with a Financial Officer
Certification and a Narrative Report with respect thereto;
(c) Annual Financial Statements. As soon as available, and in any
event within ninety (90) days after the end of each Fiscal Year, (i) the
consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Year and the related consolidated
(and with respect to statements of income, consolidating) statements of
income, stockholders' equity and cash flows of Company and its Subsidiaries
for such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding
figures from the Financial Plan for the Fiscal Year covered by such
financial statements, in reasonable detail, together with a Financial
Officer Certification and a Narrative Report with respect thereto; and (ii)
with respect such consolidated financial statements a report thereon
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of Ernst & Young LLP or other independent certified public accountants of
recognized national standing selected by Company, and reasonably
satisfactory to Administrative Agent (which report shall be unqualified as
to going concern and scope of audit, and shall state that such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows
for the periods indicated in conformity with accounting principles
generally accepted in the United States and that the examination by such
accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards)
together with a written statement by the independent certified public
accountants giving the report thereon (a) stating that their audit
examination has included a review of the terms of this Agreement and the
other Credit Documents as they relate to accounting matters, (b) stating
whether, in connection with their audit examination, any condition or event
that constitutes an Event of Default or Default has come to their attention
and, if such a condition or event has come to their attention, specifying
the nature and period of existence thereof; provided that such accountants
shall not be liable by reason of any failure to obtain knowledge of any
such Event of Default or Default that would not be disclosed in the course
of their audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to believe
either or both that the information contained in the certificates delivered
therewith pursuant to this Section 5.1(c) above is not correct or that the
matters set forth in the Compliance Certificates delivered therewith
pursuant to Section 5.1(d) for the applicable Fiscal Year are not stated in
accordance with the terms of this Agreement;
(d) Compliance Certificate. Together with each delivery of financial
statements of Company and its Subsidiaries pursuant to Sections 5.1(b) and
5.1(c), a duly executed and completed Compliance Certificate demonstrating
in reasonable detail (1) compliance during and at the end of the applicable
accounting periods with the restrictions contained in Section 6, in each
case to the extent compliance with such restrictions is required to be
tested at the end of the applicable accounting period and (2) with respect
to any Net Asset Sale Proceeds received by Company or any of its
Subsidiaries during the second Fiscal Quarter immediately preceding the
Fiscal Quarter in which the applicable accounting period ends, whether or
not all or any portion of such Net Asset Sale Proceeds have been
re-invested or committed to be re-invested pursuant to Section 2.11(a);
(e) Statements of Reconciliation After Change in Accounting
Principles. If, as a result of any change in accounting principles and
policies from those used in the preparation of the Historical Financial
Statements for the period ended December 31, 2004, the consolidated
financial statements of Company and its Subsidiaries delivered pursuant to
Section 5.1(b) or 5.1(c) will differ in any material respect from the
consolidated financial statements that would have been delivered pursuant
to such subdivisions had no such change in accounting principles and
policies been made, then, together with the first delivery of such
financial statements after such change, one or more a statements of
reconciliation in form and substance satisfactory to Administrative Agent;
(f) Notice of Default. Promptly upon any officer of Holdings or
Company obtaining knowledge (i) of any condition or event that constitutes
a Default or an Event of Default or that notice has been given to Company
with respect thereto; (ii) that any Person has given any notice to Company
or any of its Subsidiaries or taken any other action with respect to any
event or condition set forth in Section 8.1(b); or (iii) of the occurrence
of any event or change that has caused or evidences, either in any case or
in the aggregate, a Material Adverse Effect, a certificate of its
Authorized Officers specifying the nature and period of existence of such
condition, event or
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change, or specifying the notice given or action taken by any such Person
and the nature of such claimed Event of Default, Default, default, event or
condition, and what action Company has taken, is taking and proposes to
take with respect thereto;
(g) Notice of Litigation. Promptly upon any officer of Holdings or
Company obtaining knowledge of (i) the institution of, or non-frivolous
threat of, any Adverse Proceeding not previously disclosed in writing by
Company to Lenders, or (ii) any material development in any Adverse
Proceeding that, in the case of either (i) or (ii) if adversely determined,
could be reasonably expected to have a Material Adverse Effect, or seeks to
enjoin or otherwise prevent the consummation of, or to recover any damages
or obtain relief as a result of, the transactions contemplated hereby,
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters;
(h) ERISA. (i) Promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action Company, any of its Subsidiaries or any of
their respective ERISA Affiliates has taken, is taking or proposes to take
with respect thereto and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto; and (ii) with reasonable promptness, copies of (1) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by
Company, any of its Subsidiaries or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension
Plan; (2) all notices received by Company, any of its Subsidiaries or any
of their respective ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event; and (3) copies of such other documents or
governmental reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(i) Financial Plan. As soon as practicable and in any event no later
than forty-five (45) days after the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year and each
Fiscal Year (or portion thereof) through the final maturity date of the
Loans (a "FINANCIAL PLAN"), including (i) a forecasted consolidated balance
sheet and forecasted consolidated statements of income and cash flows of
Company and its Subsidiaries for each such Fiscal Year, together with pro
forma Compliance Certificates for each such Fiscal Year and an explanation
of the assumptions on which such forecasts are based, (ii) forecasted
consolidated statements of income and cash flows of Company and its
Subsidiaries for each month of the first such Fiscal Year, and (iii)
forecasts demonstrating projected compliance with the requirements of
Section 6.8 through the final maturity date of the Loans;
(j) Insurance Report. Together with the financial statements required
by Section 5.1(c) for each Fiscal Year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Company and its
Subsidiaries and all material insurance coverage planned to be maintained
by Company and its Subsidiaries in the immediately succeeding Fiscal Year;
(k) Notice of Change in Board of Directors. With reasonable
promptness, written notice of any change in the board of directors (or
similar governing body) of Holdings;
(l) Notice Regarding Material Contracts. Promptly, and in any event
within ten (10) Business Days (i) after any Material Contract of Company or
any of its Subsidiaries is terminated or amended in a manner that is
materially adverse to Company or such Subsidiary, as the case may be, or
(ii) any new Material Contract is entered into, a written statement
describing such
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event, with copies of such material amendments or new contracts, to be
delivered only to Administrative Agent (to the extent such delivery is
permitted by the terms of any such Material Contract, provided, no such
prohibition on delivery shall be effective if it were bargained for by
Company or its applicable Subsidiary with the intent of avoiding compliance
with this Section 5.1(l)), and an explanation of any actions being taken
with respect thereto to be delivered to Administrative Agent and Lenders;
(m) [Reserved];
(n) Information Regarding Collateral. Company will furnish to the
Collateral Agent prompt written notice of any change (i) in any Credit
Party's corporate name, (ii) in any Credit Party's identity or corporate
structure, (iii) in any Credit Party's jurisdiction of organization (to the
extent permitted by the Pledge and Security Agreement) or (iv) in any
Credit Party's Federal Taxpayer Identification Number or organizational
identification number. Company agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order
for the Collateral Agent to continue at all times following such change to
have a valid, legal and perfected security interest in all the Collateral
as contemplated in the Collateral Documents. Company also agrees promptly
to notify the Collateral Agent if any material portion of the Collateral is
damaged or destroyed;
(o) Annual Collateral Verification. Each year, at the time of delivery
of annual financial statements with respect to the preceding Fiscal Year
pursuant to Section 5.1(c), Company shall deliver to the Collateral Agent a
Perfection Certificate Supplement either confirming that there has been no
change in such information since the date of the Perfection Certificate
delivered on the Closing Date or the date of the most recent certificate
delivered pursuant to this Section and/or identifying such changes; and
(p) Other Information. (A) Promptly upon their becoming available,
copies of (i) all financial statements, reports, notices and proxy
statements sent or made available generally by Company to its security
holders acting in such capacity or by any Subsidiary of Company to its
security holders other than Company or another Subsidiary of Company, (ii)
all regular and periodic reports and all registration statements (other
than on Form S-8 or similar form) and prospectuses, if any, filed by
Company or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private
regulatory authority, (iii) all press releases and other statements made
available generally by Company or any of its Subsidiaries to the public
concerning material developments in the business of Company or any of its
Subsidiaries, and (B) such other information and data with respect to
Company or any of its Subsidiaries as from time to time may be reasonably
requested by Administrative Agent or any Lender.
5.2. EXISTENCE. Except as otherwise permitted under Section 6.9, each
Credit Party will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its existence and all rights and
franchises, licenses and permits material to its business; provided, no Credit
Party or any of its Subsidiaries shall be required to preserve any such
existence, right or franchise, licenses and permits if such Person's board of
directors (or similar governing body) shall determine that the preservation
thereof is no longer desirable in the conduct of the business of such Person,
and that the loss thereof is not disadvantageous in any material respect to such
Person or to Lenders.
5.3. PAYMENT OF TAXES AND CLAIMS. Each Credit Party will, and will cause
each of its Subsidiaries to, pay all material Taxes imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims
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its income, businesses or franchises before any penalty or fine accrues thereon,
and all claims (including claims for labor, services, materials and supplies)
for sums that have become due and payable and that by law have or may become a
Lien upon any of its properties or assets, prior to the time when any penalty or
fine shall be incurred with respect thereto; provided, no such Tax or claim need
be paid if it is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as (a) adequate reserve or
other appropriate provision, as shall be required in conformity with GAAP, shall
have been made therefor, and (b) in the case of a Tax or claim which has or may
become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such Tax or claim. No Credit Party will, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Holdings or any of its Subsidiaries).
5.4. MAINTENANCE OF PROPERTIES. Each Credit Party will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Company and its Subsidiaries and
from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof except where the failure to maintain such
properties could not reasonably be expected in any individual case or in the
aggregate to have a Material Adverse Effect.
5.5. INSURANCE. Holdings will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Holdings and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons. Without limiting the generality of the foregoing, Company will maintain
or cause to be maintained (a) flood insurance with respect to each Flood Hazard
Property that is located in a community that participates in the National Flood
Insurance Program, in each case in compliance with any applicable regulations of
the Board of Governors of the Federal Reserve System, and (b) replacement value
casualty insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times carried or maintained under similar circumstances by
Persons of established reputation engaged in similar businesses. Each such
policy of insurance shall (i) name Collateral Agent, on behalf of Lenders as an
additional insured thereunder as its interests may appear and (ii) in the case
of each casualty insurance policy, contain a loss payable clause or endorsement,
satisfactory in form and substance to Collateral Agent, that names Collateral
Agent, on behalf of Lenders as the loss payee thereunder for any covered loss in
excess of $1,500,000 and provides for at least thirty (30) days' prior written
notice to Collateral Agent of any modification or cancellation of such policy.
5.6. INSPECTIONS. Each Credit Party will, and will cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of any Credit Party and any of its
respective Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested;
provided, however, that each Lender shall at all times coordinate with the
Administrative Agent regarding the frequency and timing of such visits and
inspections so as to reasonably minimize the burden imposed on the Credit
Parties.
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5.7. LENDERS MEETINGS. Company will, upon the request of Administrative
Agent or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or at such other location as may be agreed to by Company and Administrative
Agent) at such time as may be agreed to by Company and Administrative Agent.
5.8. COMPLIANCE WITH LAWS. Each Credit Party will comply, and shall cause
each of its Subsidiaries and all other Persons, if any, on or occupying any
Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.9. ENVIRONMENTAL.
(a) Environmental Disclosure. Company will deliver to Administrative
Agent and Lenders:
(i) as soon as practicable following receipt thereof, copies of all
environmental audits, investigations, analyses and reports of any kind or
character, whether prepared by personnel of Company or any of its
Subsidiaries or by independent consultants, governmental authorities or any
other Persons, with respect to significant environmental matters at any
Facility or with respect to any Environmental Claims that might reasonably
be expected to have a Material Adverse Effect;
(ii) promptly upon the occurrence thereof, written notice describing
in reasonable detail (1) any Release required to be reported by Company or
any of its Subsidiaries to any federal, state or local governmental or
regulatory agency under any applicable Environmental Laws, (2) any remedial
action taken by Company or any of its Subsidiaries or any other Persons of
which Company has knowledge in response to (A) any Hazardous Materials
Activities the existence of which has a reasonable possibility of resulting
in one or more Environmental Claims having, individually or in the
aggregate, a Material Adverse Effect, or (B) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of
resulting in a Material Adverse Effect, and (3) Company's discovery of any
occurrence or condition on any real property adjoining or in the vicinity
of any Facility that reasonably could be expected to cause such Facility or
any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any
Environmental Laws;
(iii) as soon as practicable following the sending or receipt thereof
by Company or any of its Subsidiaries, a copy of any and all written
communications with respect to (1) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect, (2) any Release required to be reported
by Company or any of its Subsidiaries to any federal, state or local
governmental or regulatory agency, and (3) any request made to Company or
any of its Subsidiaries for information from any governmental agency that
suggests such agency is investigating whether Company or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity which is reasonably expected to have a Material Adverse Effect;
(iv) prompt written notice describing in reasonable detail (1) any
proposed acquisition of stock, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to (A) expose Company or any
of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse
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Effect or (B) result in Company or any of its Subsidiaries failing to
maintain in full force and effect all material Governmental Authorizations
required under any Environmental Law for their respective operations and
(2) any proposed action to be taken by Company or any of its Subsidiaries
to modify current operations in a manner that could reasonably be expected
to subject Company or any of its Subsidiaries to any additional material
obligations or requirements under any Environmental Law; and
(v) with reasonable promptness, such other documents and information
as from time to time may be reasonably requested by Administrative Agent in
relation to any matters disclosed pursuant to this Section 5.9(a).
(b) Hazardous Materials Activities, Etc. Each Credit Party shall
promptly take, and shall cause each of its Subsidiaries promptly to take, any
and all actions necessary to (i) cure any violation of applicable Environmental
Laws by such Credit Party or its Subsidiaries that could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, and (ii)
make an appropriate response to any Environmental Claim against such Credit
Party or any of its Subsidiaries and discharge any obligations it may have to
any Person thereunder where failure to do so could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.10. SUBSIDIARIES(a). Subject to the terms of the Intercreditor Agreement,
in the event that any Person becomes a Domestic Subsidiary (other than an
Immaterial Subsidiary) of Company or any Domestic Subsidiary of Company ceases
to be an Immaterial Subsidiary, Company shall (a) cause such Domestic Subsidiary
to become a Guarantor hereunder and a Grantor under the Pledge and Security
Agreement by executing and delivering to Administrative Agent and Collateral
Agent a Counterpart Agreement, and (b) take all such actions and execute and
deliver, or cause to be executed and delivered, all such documents, instruments,
agreements and certificates with respect to such Collateral as are similar to
those described in Sections 3.1(b), 3.1(g), 3.1(n) and 5.11(b) and deliver
reports and other information (including Phase I Reports to the extent
available), in form, scope and substance satisfactory to Collateral Agent, that
Collateral Agent shall reasonably request; provided that any such Collateral
shall exclude such assets in respect of which Administrative Agent and Arrangers
shall have reasonably determined that the cost of obtaining a Second Priority
security interest therein exceeds the benefits to Lenders afforded thereby. In
the event that any Person becomes a Foreign Subsidiary of Company, and the
ownership interests of such Foreign Subsidiary are owned by Company or by any
Domestic Subsidiary thereof, Company shall, or shall cause such Domestic
Subsidiary to, subject to the terms of the Intercreditor Agreement, deliver, all
such documents, instruments, agreements, and certificates with respect to
Collateral as are similar to those described in Section 3.1(b), and Company
shall take, or shall cause such Domestic Subsidiary to take, all of the actions
referred to in Section 3.1(g)(i) necessary to grant and to perfect a Second
Priority Lien in favor of Collateral Agent, for the benefit of Secured Parties,
under the Pledge and Security Agreement in sixty-six percent (66%) of such
ownership interests (or such lesser amount if Company owns less than 66%). With
respect to each such Subsidiary, Company shall send to Administrative Agent
written notice setting forth with respect to such Person (i) the date on which
such Person became a Subsidiary of Company, and (ii) all of the data required to
be set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of
Company; provided that (x) such written notice shall be deemed to supplement
Schedules 4.1 and 4.2 for all purposes hereof and (y) all actions and
deliverables pursuant to this Section 5.10 shall be completed on or prior to the
30th day after any such Person becomes a Domestic Subsidiary, a Foreign
Subsidiary or ceases to be an Immaterial Subsidiary. Prior to the Discharge of
First Lien Obligations, (i) the requirements of this Section 5.10 to deliver to
the Collateral Agent any Collateral the security interest in which may be
perfected only by possession or control by a single person shall be deemed
satisfied by the delivery of possession or control of such Collateral to the
First Lien Collateral Agent (as provided in the Intercreditor Agreement) and
(ii) Holdings and Company shall, and shall cause each Subsidiary to, com-
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ply with the requirements of this Section 5.10 with respect to the Obligations
hereunder only to the same extent that Holdings, Company and such Subsidiaries
are required to comply with provisions analogous to this Section 5.10 with
respect to the First Lien Obligations in the First Lien Credit Agreement.
5.11. ADDITIONAL MATERIAL REAL ESTATE ASSETS. (a) Subject to the terms
of the Intercreditor Agreement, in the event that any Credit Party acquires a
Material Real Estate Asset or a Real Estate Asset owned or leased on the Closing
Date becomes a Material Real Estate Asset and such interest has not otherwise
been made subject to the Lien of the Collateral Documents in favor of Collateral
Agent, for the benefit of Secured Parties, then such Credit Party, as soon as
practicable but in no event later than thirty (30) days after acquiring such
Material Real Estate Asset, shall take all such actions and execute and deliver,
or cause to be executed and delivered, all such mortgages, documents,
instruments, agreements, opinions and certificates with respect to such
Collateral as are similar to those described in Sections 3.1(g) and 3.1(n), and
as set forth in clause (b) below, and deliver reports and other information
(including Phase I Reports to the extent available), in form, scope and
substance satisfactory to the Collateral Agent, with respect to each such
Material Real Estate Asset that Collateral Agent shall reasonably request, to
create in favor of Collateral Agent, for the benefit of Secured Parties, a valid
and, subject to any filing and/or recording referred to herein, perfected Second
Priority security interest in such Material Real Estate Assets; provided that
(i) any such Collateral shall exclude such assets in respect of which the
Administrative Agent and Arrangers shall have reasonably determined that the
cost of obtaining a Second Priority security interest therein exceeds the
benefits to Lenders afforded thereby and (ii) with respect to any Material Real
Estate Asset that is leased, Company shall be required to use its commercially
reasonable efforts to comply with the provisions of this Section 5.11. In
addition to the foregoing, Company shall, at the request of Requisite Lenders,
deliver, from time to time, to Administrative Agent such appraisals as are
required by law or regulation of Real Estate Assets with respect to which
Collateral Agent has been granted a Lien.
(b) In order to create in favor of Collateral Agent, for the benefit
of Secured Parties, a valid and, subject to any filing and/or recording referred
to herein, perfected Second Priority security interest in a Material Real Estate
Asset described in clause (a) above, Collateral Agent shall have received from
Company and each applicable Guarantor:
(i) fully executed and notarized Mortgages, in proper form for
recording in all appropriate places in all applicable jurisdictions,
encumbering each Material Real Estate Asset;
(ii) an opinion of counsel (which counsel shall be reasonably
satisfactory to Collateral Agent) in each state in which such Material Real
Estate Asset is located with respect to the enforceability of the form(s)
of Mortgages to be recorded in such state and such other matters as
Collateral Agent may reasonably request, in each case in form and substance
reasonably satisfactory to Collateral Agent;
(iii) (A) ALTA mortgagee title insurance policies or unconditional
commitments therefor issued by one or more title companies reasonably
satisfactory to Collateral Agent with respect to such Material Real Estate
Asset (each, a "TITLE POLICY"), in an agreed amount, together with a title
report issued by a title company with respect thereto, dated not more than
thirty (30) days prior to the date of deliver and copies of all recorded
documents listed as exceptions to title or otherwise referred to therein,
each in form and substance reasonably satisfactory to Collateral Agent and
(B) evidence satisfactory to Collateral Agent that such Credit Party has
paid to the title company or to the appropriate Governmental Authorities
all expenses and premiums of the title company and all other sums required
in connection with the issuance of each Title Policy and all recording and
stamp taxes (including mortgage recording and intangible taxes) payable in
con-
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nection with recording the Mortgages for each such Material Real Estate
Asset in the appropriate real estate records;
(iv) evidence of flood insurance with respect to each Flood Hazard
Property that is located in a community that participates in the National
Flood Insurance Program, in each case in compliance with any applicable
regulations of the Board of Governors of the Federal Reserve System, in
form and substance reasonably satisfactory to Collateral Agent; and
(v) ALTA surveys of all such Material Real Estate Asset, certified to
Collateral Agent and dated not more than thirty (30) days prior to the date
of delivery. Prior to the Discharge of First Lien Obligations, (i) the
requirements of this Section 5.11 to deliver to the Collateral Agent any
Collateral the security interest in which may be perfected only by
possession or control by a single person shall be deemed satisfied by the
delivery of possession or control of such Collateral to the First Lien
Collateral Agent (as provided in the Intercreditor Agreement) and (ii)
Holdings and Company shall, and shall cause each Subsidiary to, comply with
the requirements of this Section 5.11 with respect to the Obligations
hereunder only to the same extent that Holdings, Company and such
Subsidiaries are required to comply with provisions analogous to this
Section 5.11 with respect to the First Lien Obligations in the First Lien
Credit Agreement.
5.12. FURTHER ASSURANCES(a). Subject to the terms of the Intercreditor
Agreement, at any time or from time to time upon the reasonable request of
Administrative Agent, each Credit Party will, at its expense, promptly execute,
acknowledge and deliver such further documents and do such other acts and things
as Administrative Agent or Collateral Agent may reasonably request in order to
effect fully the purposes of the Credit Documents. In furtherance and not in
limitation of the foregoing, each Credit Party shall take such actions as
Administrative Agent or Collateral Agent may reasonably request from time to
time to ensure that the Obligations are guarantied by the Guarantors and are
secured by substantially all of the assets of Company, and its Subsidiaries and
all of the outstanding Capital Stock of Company and its Subsidiaries (subject to
limitations contained in the Credit Documents with respect to Foreign
Subsidiaries and certain other specified assets). Prior to the Discharge of
First Lien Obligations, (i) the requirements of this Section 5.12 to deliver to
the Collateral Agent any Collateral the security interest in which may be
perfected only by possession or control by a single person shall be deemed
satisfied by the delivery of possession or control of such Collateral to the
First Lien Collateral Agent (as provided in the Intercreditor Agreement) and
(ii) Holdings and Company shall, and shall cause each Subsidiary to, comply with
the requirements of this Section 5.12 with respect to the Obligations hereunder
only to the same extent that Holdings, Company and such Subsidiaries are
required to comply with provisions analogous to this Section 5.12 with respect
to the First Lien Obligations in the First Lien Credit Agreement.
5.13. INTEREST RATE PROTECTION. Within sixty (60) days following the
Closing Date, Company shall obtain protection against fluctuations in interest
rates pursuant to one or more Interest Rate Agreements and otherwise in form and
substance reasonably satisfactory to Administrative Agent, in order to ensure
that not less than 50% of the aggregate principal amount of Consolidated Total
Debt outstanding as of Closing Date is either (i) subject to such Interest Rate
Agreements or (ii) fixed rate Indebtedness, in each case for a period of not
less than three years.
5.14. POST-CLOSING COVENANT. Company shall take all such actions to deliver
and/or execute the certificates or documents set forth on Schedule 5.14 within
the time frames specified on Schedule 5.14.
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SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that until payment in full of
all Obligations such Credit Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.
6.1. INDEBTEDNESS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(a) the Obligations;
(b) Indebtedness under the First Lien Credit Agreement in an aggregate
principal amount of not more than $410.0 million at any time, less the sum
of (x) the amount of all repayments and prepayments applied to any First
Lien Term Loans and (y) the amount of all repayments and prepayments of any
revolving loans, to the extent accompanied by corresponding reductions in
the applicable commitment amount, under the First Lien Credit Agreement,
other than, in either case, to the extent such repayments or prepayments
occur in connection with a refinancing of the First Lien Credit Agreement
and such loans are replaced substantially concurrently therewith by loans
under a new First Lien Credit Agreement and the collateral agent thereunder
enters into the Intercreditor Agreement with the Collateral Agent; provided
that the First Lien Documents shall not include any provisions, terms or
conditions that would not be permitted, under Section 8.3 of the
Intercreditor Agreement in any amendment of the First Lien Documents;
(c) (i) Indebtedness of any Guarantor Subsidiary to Company or to any
other Guarantor Subsidiary, or of Company to any Guarantor Subsidiary;
provided (A) all such Indebtedness shall be evidenced by promissory notes
and all such notes shall be subject to a Second Priority Lien pursuant to
the Pledge and Security Agreement, (B) all such Indebtedness shall be
unsecured and subordinated in right of payment to the Obligations pursuant
to the terms of the applicable promissory notes or an intercompany
subordination agreement that in any such case is reasonably satisfactory to
Administrative Agent and (C) any payment by any such wholly-owned Guarantor
Subsidiary under any guaranty of the Obligations shall result in a pro
tanto reduction of the amount of any Indebtedness owed by such Guarantor
Subsidiary to Company or to any of its Guarantor Subsidiaries for whose
benefit such payment is made and (ii) any Indebtedness owed by a Foreign
Subsidiary to a Credit Party; provided that (A) all such Indebtedness shall
be evidenced by promissory notes and all such notes shall be subject to a
Second Priority Lien pursuant the Pledge and Security Agreement and (B) the
aggregate amount of Indebtedness of, and Investments in, Foreign
Subsidiaries pursuant to this Section 6.1(c)(ii), Section 6.1(k), Section
6.1(r)(ii) and Section 6.7(g) shall not exceed $23,000,000;
(d) the Senior Subordinated Notes;
(e) Indebtedness incurred by Company or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of
purchase price or similar obligations, contingent earnout obligations
incurred in connection with Asset Sales or other sales or purchases of
assets, or from guaranties or letters of credit, surety bonds or
performance bonds securing the performance of Company or any such
Subsidiary pursuant to such agreements, in connection with Permitted
Acquisitions or permitted dispositions of any business, assets or
Subsidiary of Company or any of its Subsidiaries;
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(f) Indebtedness which may be deemed to exist pursuant to any
guaranties or performance, surety, statutory, appeal or similar obligations
incurred in the ordinary course of business;
(g) Indebtedness in respect of netting services, overdraft protections
and otherwise in connection with Deposit Accounts;
(h) guaranties of the obligations of suppliers, customers, franchisees
and licensees by Company and its Subsidiaries in the ordinary course of
business and consistent with past practice;
(i) guaranties by Company of Indebtedness or other obligations of a
Guarantor Subsidiary or guaranties by a Subsidiary of Company of
Indebtedness or other obligations of Company or a Guarantor Subsidiary with
respect, in each case, to Indebtedness otherwise permitted to be incurred
pursuant to this Section 6.1 or obligations not prohibited by this
Agreement;
(j) Indebtedness described in Schedule 6.1(j);
(k) Company's Foreign Subsidiaries may become and remain liable with
respect to Indebtedness; provided that the aggregate amount of Indebtedness
of, and Investments in, Foreign Subsidiaries pursuant to Section
6.1(c)(ii), this Section 6.1(k), Section 6.1(r)(ii) and Section 6.7(g)
shall not exceed $23,000,000;
(l) Indebtedness of Company and its Subsidiaries with respect to the
Xxxxxxx Distribution Center Permanent Financing;
(m) Indebtedness with respect to the Old Xxxxxxx Transaction;
(n) Indebtedness with respect to Capital Leases and purchase money
Indebtedness, in each case incurred within 180 days of the acquisition or
completion of construction or installation of the assets acquired in
connection with the incurrence of such Indebtedness in an aggregate amount
not to exceed at any time $17,250,000 (including any Indebtedness acquired
in connection with a Permitted Acquisition); provided any such Indebtedness
(i) shall be secured only to the asset acquired in connection with the
incurrence of such Indebtedness and (ii) shall constitute not less than 50%
of the aggregate consideration paid with respect to such asset;
(o) Indebtedness of a Person that becomes a Subsidiary after the
Closing Date; provided that (i) such Indebtedness existed at the time such
Person became a Subsidiary and was not created in anticipation thereof and
(ii) the aggregate amount of such Indebtedness shall not exceed $17,250,000
at any time outstanding;
(p) Indebtedness of Holdings owed to stockholders to repurchase stock
or options from such stockholders; provided that (i) such Indebtedness
shall be subordinated in right of payment to the Obligations on terms and
conditions satisfactory to the Administrative Agent and the Arrangers, (ii)
matures after the Loan Maturity Date, (iii) requires no scheduled payment
of principal or cash interest payments prior to its maturity and (iv) the
aggregate amount of such Indebtedness shall not exceed $5,750,000 in any
Fiscal Year and $23,000,000 in the aggregate from the Closing Date to the
date of determination;
(q) Company and its Subsidiaries may become and remain liable for any
Indebtedness replacing or refinancing any Indebtedness permitted under
clauses (j), (k), (l), (m), (n), (o)
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and (u) of this Section 6.1; provided that (i) the principal amount of such
Indebtedness does not exceed the principal amount of the Indebtedness being
refinanced or replaced, (ii) such Indebtedness has a final maturity on or
later than the final maturity of the Indebtedness being refinanced or
replaced and a weighted average life to maturity equal to or greater than
the weighted average life to maturity of the Indebtedness being refinanced
or replaced, (iii) the interest rate (or, where applicable, interest rate
margin) and fees applicable to such Indebtedness are not higher than those
applicable to the Indebtedness being refinanced or replaced, (iv) the
covenants, defaults and prepayment provisions, taken as a whole, are not
more burdensome or restrictive on Company and its Subsidiaries than those
applicable to the Indebtedness being refinanced or replaced, (v) such
Indebtedness is secured only by Liens permitted under Section 6.2 for the
Indebtedness being refinanced or replaced, (vi) such Indebtedness is
incurred by Company or the Subsidiary that is the obligor on the
Indebtedness being refinanced or replaced and (vii) if the Indebtedness
being refinanced or replaced is subordinated to the Obligations, such
Indebtedness is subordinated to the Obligations on terms not less favorable
to the Lenders than those applicable to the Indebtedness being refinanced
or replaced;
(r) (i) Company and its Domestic Subsidiaries may become and remain
liable with respect to Indebtedness in respect of other commercial letters
of credit in an aggregate amount not to exceed at any time $5,175,000 and
Indebtedness in respect of other standby letters of credit in an aggregate
amount not to exceed at any time $3,450,000; and (ii) Foreign Subsidiaries
may become and remain liable with respect to Indebtedness in respect of
other commercial letters of credit obtained in the ordinary course of
business; provided that the aggregate amount of Indebtedness of, and
Investments in, Foreign Subsidiaries pursuant to Section 6.1(c)(ii),
Section 6.1(k), this Section 6.1(r)(ii) and Section 6.7(g) shall not exceed
$23,000,000;
(s) guaranties by Company of Indebtedness of a Foreign Subsidiary that
is permitted to be incurred pursuant to Section 6.1(k);
(t) Indebtedness under any hedge agreements entered into for the
purpose of hedging risks associated with Holdings' and its Subsidiaries'
operations and not for speculative purposes;
(u) contingent obligations in respect of corporate leases assigned,
sold or otherwise transferred to a franchisee (i) set forth on Schedule
6.1(u); and (ii) incurred or created after the date hereof in connection
with the sale of specified retail stores; provided that in the case of
clause (ii) above, (x) to the extent the aggregate amount of all contingent
obligations incurred thereunder exceeds $23,000,000 the amount of such
excess shall be included as Consolidated Total Debt for purposes of the
Leverage Ratio; and (y) all such contingent obligations shall be unsecured
and shall not permit a cross-default to this Agreement; and
(v) other Indebtedness of Company and its Subsidiaries in an aggregate
amount not to exceed at any time $23,000,000.
6.2. LIENS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
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(a) Liens granted pursuant to the Collateral Documents to secure the
Secured Obligations;
(b) Liens for Taxes not then due or if due obligations with respect to
such Taxes that are not at such time required to be paid pursuant to
Section 5.3 or which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted;
(c) statutory Liens of landlords, banks (and rights of set-off),
carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and
other Liens imposed by law (other than any such Lien imposed pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), in
each case incurred in the ordinary course of business (i) for amounts not
yet overdue or (ii) for amounts that are overdue and that (in the case of
any such amounts overdue for a period in excess of fifteen days) are being
contested in good faith by appropriate proceedings, so long as such
reserves or other appropriate provisions, if any, as shall be required by
GAAP shall have been made for any such contested amounts;
(d) Liens incurred in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
trade contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money or
other Indebtedness), so long as no foreclosure, sale or similar proceedings
have been commenced with respect to any portion of the Collateral on
account thereof;
(e) easements, rights-of-way, restrictions, encroachments, and other
minor defects or irregularities in title, in each case which do not and
will not interfere in any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries;
(f) any (i) interest or title of a lessor or sublessor under any lease
of real estate permitted hereunder, (ii) restriction or encumbrance that
the interest or title of such lessor or sublessor may be subject to or
(iii) subordination of the interest of the lessee or sublessee under such
lease to any restriction or encumbrance referred to in the preceding clause
(ii), so long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under such lease;
(g) Liens solely on any xxxx xxxxxxx money deposits made by Company or
any of its Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder;
(h) purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases of personal
property entered into in the ordinary course of business;
(i) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(j) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(k) (i) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the
ordinary course of business and not interfering in
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any material respect with the ordinary conduct of the business of Company
or such Subsidiary and (ii) leases or subleases granted by Holdings or any
of its Subsidiaries to third parties in respect of surplus property which
is not fundamental to the operation of the business in the ordinary course
of business; provided that such leases and subleases are on arm's-length
commercial terms and are otherwise satisfactory to the Administrative
Agent;
(l) Liens described in Schedule 6.2 or on a title report delivered
pursuant to Section 3.1(g)(iv);
(m) Liens on the Xxxxxxx Distribution Center Collateral securing the
Xxxxxxx Distribution Center Permanent Financing; provided that (i) such
Liens attach only to the Xxxxxxx Distribution Center Collateral and (ii)
such Liens shall be on a second priority basis to any Liens granted to the
Collateral Agent on the Xxxxxxx Distribution Center Collateral;
(n) (i) Liens securing Indebtedness permitted pursuant to Sections
6.1(l), (m) and (n); provided that any such Lien shall encumber only the
asset acquired with the proceeds of such Indebtedness; and (ii) Liens
securing Indebtedness permitted pursuant to Section 6.1(q) (solely with
respect to the permitted refinancing of Indebtedness permitted pursuant to
Sections 6.1(l), (m) and (n)); provided that any such Lien not extend to
any asset not covered by the Lien securing the Indebtedness that is
refinanced;
(o) (i) Indebtedness incurred pursuant to Section 6.1(o) may be
secured by Liens on assets acquired or financed through the incurrence of
such Indebtedness or on the assets of the newly acquired Subsidiary;
provided that such Indebtedness was not created in contemplation of the
acquisition of such Subsidiary by Company or one of its Subsidiaries; and
(ii) Liens securing Indebtedness incurred pursuant to Section 6.1(q)
(solely with respect to the permitted refinancing of Indebtedness permitted
pursuant to Section 6.1(o)); provided that such Lien shall not extend to
any asset not covered by the Lien securing the Indebtedness that is
refinanced;
(p) Liens that are contractual rights of setoff relating to the
establishment of depositary relations with banks not given in connection
with the issuance of Indebtedness;
(q) Liens on foreign assets securing Indebtedness permitted pursuant
to Section 6.1(k);
(r) Liens securing obligations (other than obligations representing
Indebtedness for borrowed money) under operating, reciprocal easement or
similar agreements entered into in the ordinary course of business of
Company and its Subsidiaries;
(s) Liens securing the First Lien Obligations and subject to the
Intercreditor Agreement;
(t) Liens in favor of CIT with respect to those accounts transferred
by Company or any of its Subsidiaries pursuant to Section 6.9(h); and
(u) other Liens on assets securing Indebtedness in an aggregate amount
not to exceed $5,750,000 at any time outstanding.
6.3. EQUITABLE LIEN. If any Credit Party or any of its Subsidiaries shall
create or assume any Lien upon any of its properties or assets, whether now
owned or hereafter acquired, other than Permitted
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Liens, it shall make or cause to be made effective provisions whereby the
Obligations will be secured by such Lien equally and ratably with any and all
other Indebtedness secured thereby as long as any such Indebtedness shall be so
secured; provided, notwithstanding the foregoing, this covenant shall not be
construed as a consent by Requisite Lenders to the creation or assumption of any
such Lien not otherwise permitted hereby.
6.4. NO FURTHER NEGATIVE PLEDGES. Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to a permitted Asset Sale; (b)
restrictions contained in agreements with respect to Indebtedness incurred by
Foreign Subsidiaries in accordance with this Agreement (provided that such
restrictions are limited to the property or assets of such Foreign Subsidiary
and its Subsidiaries); (c) restrictions contained in the Senior Subordinated
Notes Indenture; (d) restrictions by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses and
similar agreements entered into in the ordinary course of business (provided
that such restrictions are limited to the property or assets secured by such
Liens or the property or assets subject to such leases, licenses or similar
agreements, as the case may be); (e) Liens permitted to be incurred under
Section 6.2 and restrictions in the agreements relating thereto that limit the
right of Company or any of its Subsidiaries to dispose of or transfer the assets
subject to such Liens; (f) provisions limiting the disposition or distribution
of assets or property in joint venture agreements, sale-leaseback agreements,
stock sale agreements and other similar agreements, which limitation is
applicable only to the assets that are the subject of such agreements; (g) any
encumbrance or restriction in connection with an acquisition of property, so
long as such encumbrance or restriction relates solely to the property so
acquired and was not created in connection with or in anticipation of such
acquisition; and (h) restrictions imposed by customary provisions in partnership
agreements, limited liability company organizational governance documents, joint
venture agreements and other similar agreements that restrict the transfer of
ownership interests in such partnership, limited liability company, joint
venture or similar Person, no Credit Party nor any of its Subsidiaries shall
enter into any agreement prohibiting the creation or assumption of any Lien upon
any of its properties or assets, whether now owned or hereafter acquired.
6.5. RESTRICTED JUNIOR PAYMENTS. No Credit Party shall, nor shall it permit
any of its Subsidiaries or Affiliates through any manner or means or through any
other Person to, directly or indirectly, declare, order, pay, make or set apart,
or agree to declare, order, pay, make or set apart, any sum for any Restricted
Junior Payment, except that (a) Company may make regularly scheduled payments of
interest in respect of any Subordinated Indebtedness in accordance with the
terms of, and only to the extent required by, and subject to the subordination
provisions contained in, the indenture or other agreement pursuant to which such
Subordinated Indebtedness was issued as such indenture or other agreement may be
amended from time to time to the extent permitted under Section 6.14; (b) so
long as no Default or Event of Default shall have occurred and be continuing or
shall be caused thereby, Company may make Restricted Junior Payments (i) in an
aggregate amount not to exceed $500,000 in any Fiscal Year, to the extent
necessary to permit Holdings to pay general administrative costs and expenses
and (ii) to the extent necessary to permit Holdings to discharge the
consolidated tax liabilities of Holdings and its Subsidiaries, in each case so
long as Holdings applies the amount of any such Restricted Junior Payment for
such purpose; (c) so long as no Default or Event of Default shall have occurred
and be continuing or be caused thereby, Holdings may repurchase stock and
options from any stockholder (x) in exchange for notes issued pursuant to
Section 6.1(p), (y) in exchange for Capital Stock of Holdings or (z) in exchange
for Cash and Cash Equivalents (and Company may make Restricted Junior Payments
to Holdings) in an amount not to exceed $5,750,000 in any Fiscal Year and
$23,000,000 in the aggregate from the Closing Date to the date of determination
and (d) the Company may make payments in respect of Management Fees.
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6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as provided herein,
in the Senior Subordinated Note Indenture or (with respect to encumbrances or
restrictions on the ability of any Foreign Subsidiary of Holdings only) in any
documentation evidencing the local lines of credit of Foreign Subsidiaries
expressly permitted by Sections 6.1(k), (r)(ii) and (u), no Credit Party shall,
nor shall it permit any of its Subsidiaries to, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any Subsidiary of Company to (a) pay dividends or
make any other distributions on any of such Subsidiary's Capital Stock owned by
Company or any other Subsidiary of Company, (b) repay or prepay any Indebtedness
owed by such Subsidiary to Company or any other Subsidiary of Company, (c) make
loans or advances to Company or any other Subsidiary of Company, or (d) transfer
any of its property or assets to Company or any other Subsidiary of Company
other than restrictions (i) in agreements evidencing Indebtedness permitted by
Section 6.1(l), (m), (n), (o) or (q) (solely with respect to the permitted
refinancing of Indebtedness permitted pursuant to Section 6.1(l), (m), (n), or
(o)) that impose restrictions on the property so acquired; (ii) by reason of
customary provisions restricting assignments, subletting or other transfers
contained in leases, licenses, joint venture agreements and similar agreements
entered into in the ordinary course of business; (iii) that are or were created
by virtue of any transfer of, agreement to transfer or option or right with
respect to any property, assets or Capital Stock not otherwise prohibited under
this Agreement; (iv) in any instrument governing Indebtedness or Capital Stock
of a Person acquired by Company or any of its Subsidiaries as in effect at the
time of such acquisition (except to the extent such Indebtedness or Capital
Stock was incurred in connection with or in contemplation of such
acquisition),which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by Section 6.1 to be incurred; (v)
in any agreement for the sale or other disposition of a Subsidiary that
restricts distributions by that Subsidiary pending the sale or other
disposition; and (vi) in provisions in agreements or instruments which prohibit
the payment of dividends or the making of other distributions with respect to
any class of Capital Stock of a Person other than on a pro rata basis.
6.7. INVESTMENTS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person except:
(a) Cash Equivalents;
(b) equity Investments owned as of the Closing Date in any Subsidiary
and Investments made after the Closing Date in wholly-owned Subsidiaries of
Company organized under the laws of the United States of America, any state
thereof or the District of Columbia;
(c) Investments in (i) any Securities received in satisfaction or
partial satisfaction thereof from financially troubled account debtors and
(ii) deposits, prepayments and other credits to suppliers, in each case
received or made in the ordinary course of business consistent with the
past practices of Company and its Subsidiaries;
(d) intercompany loans to the extent permitted under Section 6.1(c)(i)
and intercompany guaranties to the extent permitted under Sections 6.1(i)
and (s);
(e) Investments in any Person organized under the laws of the United
States of America, any state thereof or the District of Columbia of which
at least 80% of the capital stock and voting stock thereof will be owned by
the Company or any Guarantor Subsidiary after giving effect to such
Investment; provided that the amount of all such Investments does not
exceed $16,000,000 in the aggregate for all such Investments since the
Closing Date;
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(f) Investments made in connection with Permitted Acquisitions
permitted pursuant to Section 6.9;
(g) Company and its wholly-owned Domestic Subsidiaries may make
additional Investments in their respective Foreign Subsidiaries; provided
that the aggregate amount of Indebtedness of, and Investments in, Foreign
Subsidiaries pursuant to Section 6.1(c)(ii), Section 6.1(k) and (r)(ii) and
this Section 6.7(g) shall not exceed $23,000,000;
(h) Investments described in Schedule 6.7 and Investments to the
extent permitted under Section 6.1(u)(ii);
(i) Investments received in lieu of Cash in connection with Asset
Sales expressly permitted by Section 6.9; and
(j) other Investments in any Person organized under the laws of the
United States of America, any state thereof or the District of Columbia in
an aggregate amount not to exceed at any time $16,000,000.
Notwithstanding the foregoing, in no event shall any Credit Party make
any Investment which results in or facilitates in any manner any Restricted
Junior Payment not otherwise permitted under the terms of Section 6.5.
6.8. FINANCIAL COVENANTS.
(a) Interest Coverage Ratio. Company shall not permit the Interest
Coverage Ratio as of the last day of any Fiscal Quarter ending on or about the
dates set forth below, beginning with the Fiscal Quarter ending June 30, 2006 to
be less than the correlative ratio indicated:
FISCAL QUARTER INTEREST COVERAGE RATIO
-------------- -----------------------
June 30, 2006 1.50:1.00
September 30, 2006 1.50:1.00
December 31, 2006 1.58:1.00
March 31, 2007 1.63:1.00
June 30, 2007 1.72:1.00
September 30, 2007 1.80:1.00
December 31, 2007 1.89:1.00
March 31, 2008 1.89:1.00
June 30, 2008 1.89:1.00
September 30, 2008 1.89:1.00
December 31, 2008 2.20:1.00
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FISCAL QUARTER INTEREST COVERAGE RATIO
-------------- -----------------------
March 31, 2009 2.20:1.00
June 30, 2009 2.20:1.00
September 30, 2009 2.20:1.00
December 31, 2009 2.42:1.00
March 31, 2010 2.42:1.00
June 30, 2010 2.42:1.00
September 30, 2010 2.42:1.00
December 31, 2010 and each Fiscal
Quarter ending thereafter 2.64:1.00
(b) Leverage Ratio. Company shall not permit the Leverage Ratio as of
the last day of any Fiscal Quarter ending on or about the dates set forth below,
beginning with the Fiscal Quarter ending June 30, 2006 to exceed the correlative
ratio indicated:
FISCAL QUARTER LEVERAGE RATIO
-------------- --------------
June 30, 2006 7.25:1.00
September 30, 2006 7.25:1.00
December 31, 2006 6.65:1.00
March 31, 2007 6.65:1.00
June 30, 2007 6.45:1.00
September 30, 2007 6.25:1.00
December 31, 2007 5.50:1.00
March 31, 2008 5.50:1.00
June 30, 2008 5.50:1.00
September 30, 2008 5.50:1.00
December 31, 2008 4.75:1.00
March 31, 2009 4.75:1.00
June 30, 2009 4.75:1.00
September 30, 2009 4.75:1.00
December 31, 2009 4.25:1.00
March 31, 2010 4.25:1.00
June 30, 2010 4.25:1.00
September 30, 2010 4.25:1.00
December 31, 2010 3.75:1.00
March 31, 2011 3.75:1.00
June 30, 2011 3.75:1.00
September 30, 2011 3.75:1.00
December 31, 2011 and each Fiscal
Quarter ending thereafter 3.25:1.00
(c) Certain Calculations. With respect to any period during which a
Subject Transaction (as defined in the definition of Pro Forma Basis) has
occurred, the financial covenants set forth in this Section 6.8 shall be
calculated with respect to such period on a Pro Forma Basis after giving effect
to such Subject Transaction.
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6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS. No Credit
Party shall, nor shall it permit any of its Subsidiaries to, enter into any
transaction of merger or consolidation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease or sublease
(as lessor or sublessor), transfer or otherwise dispose of, in one transaction
or a series of transactions, all or any part of its business, assets or property
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, or acquire by purchase or
otherwise (other than purchases or other acquisitions of inventory, materials,
supplies and equipment in the ordinary course of business) the business,
property or fixed assets of, or stock or other evidence of beneficial ownership
of, any Person or any division or line of business or other business unit of any
Person, except:
(a) any Subsidiary of Holdings may be merged with or into Company or
any Guarantor Subsidiary, or be liquidated, wound up or dissolved, or all
or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a
series of transactions, to Company or any Guarantor Subsidiary; provided,
in the case of such a merger, Company or such Guarantor Subsidiary, as
applicable, shall be the continuing or surviving Person and the Lien on and
security interest in such Collateral granted or to be granted in favor of
Collateral Agent under the Collateral Documents shall be maintained or
created in accordance with Section 5.11 or 5.12, as applicable;
(b) any Foreign Subsidiary of Company may be merged with or into any
other Foreign Subsidiary of Company, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions to Company or any wholly-owned
Subsidiary; provided, in the case of such a merger, a wholly-owned
Subsidiary shall be the continuing or surviving Person; provided, further,
in the case of a merger of a Foreign Subsidiary with or into a Domestic
Subsidiary, a Domestic Subsidiary shall be the continuing or surviving
Person;
(c) sales or other dispositions of assets that do not constitute Asset
Sales;
(d) Asset Sales, the proceeds of which (valued at the principal amount
thereof in the case of non-Cash proceeds consisting of notes or other debt
Securities and valued at fair market value in the case of other non-Cash
proceeds), when aggregated with the proceeds of all other Asset Sales made
within the same Fiscal Year, are less than $17,250,000; provided (1) the
consideration received for such assets shall be in an amount at least equal
to the fair market value thereof (determined in good faith by the board of
directors of Company (or similar governing body)), (2) no less than 75%
thereof shall be paid in Cash or Cash Equivalents and (3) the Net Asset
Sale Proceeds thereof shall be applied as required by Section 2.11(a);
(e) disposals of obsolete, worn out or property and any assets
acquired in connection with the acquisition of another Person or a division
or line of business of such Person which Company reasonably determines are
surplus assets;
(f) Permitted Acquisitions; provided that such Permitted Acquisitions
shall be financed in whole or in part with (i) Cash, Cash Equivalents and
Indebtedness in an amount not to exceed $28,750,000 in the aggregate in any
Fiscal Year, (ii) Qualified Capital Stock of Holdings (or in the case of a
Foreign Subsidiary that acquires all or any part of another foreign entity,
the Capital Stock of such Foreign Subsidiary) issued or transferred to the
seller and/or (iii) proceeds of additional cash Sponsor Equity
Contributions to Holdings; provided that to the extent the amount in clause
(i) exceeds $17,250,000, the Leverage Ratio on a Pro Forma Basis after
giving
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effect to such acquisition shall be at least 0.25 "turns" less than the
Leverage Ratio was required to be under Section 6.8(b) as of the last day
of the four-Fiscal Quarter period ended as of the most recently concluded
Fiscal Quarter prior to the date of determination;
(g) other acquisitions or expenditures that constitute Investments
that are permitted to be made pursuant to Section 6.7; and
(h) non-recourse transfers by Company and its Subsidiaries of
specified accounts pursuant to the CIT Factoring Agreement; provided that
(i) all such transfers are in the ordinary course of business and
consistent with past practice and (ii) such transfers shall not result in
the incurrence of any Indebtedness to CIT.
6.10. DISPOSAL OF SUBSIDIARY INTERESTS. Except for any sale of all of its
interests in the Capital Stock of any of its Subsidiaries in compliance with the
provisions of Section 6.9 and except for issuances of Capital Stock by Foreign
Subsidiaries to make Permitted Acquisitions pursuant to Section 6.9(f) and
except for Liens created under the First Lien Documents and subject to the
Intercreditor Agreement, no Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except (i)
to qualify directors if required by applicable law; or (ii) to another Credit
Party (subject to the restrictions on such disposition otherwise imposed
hereunder), or to qualify directors if required by applicable law.
6.11. SALES AND LEASE-BACKS. No Credit Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, which such Credit Party (a) has sold or transferred or is to sell or
to transfer to any other Person (other than Company or any of its Subsidiaries),
or (b) intends to use for substantially the same purpose as any other property
which has been or is to be sold or transferred by such Credit Party to any
Person (other than Company or any of its Subsidiaries) in connection with such
lease; provided that notwithstanding anything in the foregoing to the contrary,
the Credit Parties may enter into the Old Xxxxxxx Transaction.
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. No Credit Party shall,
nor shall it permit any of its Subsidiaries to, directly or indirectly, enter
into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any holder of 10%
or more of any class of Capital Stock of Holdings or any of its Subsidiaries or
with any Affiliate of Company or of any such holder on terms that are less
favorable to Company or that Subsidiary, as the case may be, than those that
might be obtained at the time from a Person who is not such a holder or
Affiliate; provided that the foregoing restriction shall not apply to (a) any
transaction between or among (x) Company and/or one or more Guarantor
Subsidiaries or (y) one or more Foreign Subsidiaries; (b) reasonable and
customary fees paid to members of the board of directors (or similar governing
body) of Holdings and its Subsidiaries; (c) compensation arrangements for
officers and other employees of Holdings and its Subsidiaries entered into in
the ordinary course of business; (d) transactions permitted in Sections 6.1(p)
and 6.5(b), (c) and (d); (e) the transaction described on Schedule 6.12; and (f)
commercial transactions between or among Company and/or one or more Subsidiaries
in the ordinary course of business and consistent with past practices.
6.13. CONDUCT OF BUSINESS. From and after the Closing Date, no Credit Party
shall, nor shall it permit any of its Subsidiaries to, engage in any business
other than (i) the businesses engaged in by any Credit Party on the Closing Date
and similar or related businesses and (ii) such other lines of business as may
be consented to by Requisite Lenders.
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6.14. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS. Except as set
forth in Section 6.15, no Credit Party shall, nor shall it permit any of its
Subsidiaries to, agree to any material amendment, restatement, supplement or
other modification to, or waiver of, any of its material rights under (i) any
Related Agreement and (ii) the CIT Factoring Agreement, in each case in a manner
that is materially adverse to the Lenders, in each case after the Closing Date
without in each case obtaining the prior written consent of Requisite Lenders to
such amendment, restatement, supplement or other modification or waiver.
6.15. AMENDMENTS OF OR WAIVERS WITH RESPECT TO CERTAIN INDEBTEDNESS. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, amend or
otherwise change the terms of (i) any Subordinated Indebtedness, or make any
payment consistent with an amendment thereof or change thereto, if the effect of
such amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof or change the
subordination provisions of such Subordinated Indebtedness (or of any guaranty
thereof), or if the effect of such amendment or change, together with all other
amendments or changes made, is to increase materially the obligations of the
obligor thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to any Credit Party or Lenders or (ii) any First Lien
Document other than in accordance with the Intercreditor Agreement.
6.16. FISCAL YEAR. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, change its Fiscal Year-end to a date other than December 31 or
the Saturday closest to December 31.
6.17. PERMITTED ACTIVITIES OF HOLDINGS. Holdings shall not (a) incur,
directly or indirectly, any Indebtedness or any other obligation or liability
whatsoever other than the Indebtedness and obligations under the Related
Agreements, the First Lien Documents and as may be permitted under Section 6.1;
(b) create or suffer to exist any Lien upon any property or assets now owned or
hereafter acquired by it other than the Liens created under the Collateral
Documents or, subject to the Intercreditor Agreement, the First Lien Documents
to which it is a party or permitted to it pursuant to Section 6.2; (c) engage in
any business or activity or own any assets other than (i) holding 100% of the
Capital Stock of Company, (ii) performing its obligations and activities
incidental thereto under the Credit Documents and the First Lien Documents, and
to the extent not inconsistent therewith, the Related Agreements and (iii)
making Restricted Junior Payments and Investments to the extent permitted to it
by this Agreement; (d) consolidate with or merge with or into, or convey,
transfer or lease all or substantially all its assets to, any Person; (e) sell
or otherwise dispose of any Capital Stock of any of its Subsidiaries; (f) create
or acquire any Subsidiary or make or own any Investment in any Person other than
Company; or (g) fail to hold itself out to the public as a legal entity separate
and distinct from all other Persons.
SECTION 7. GUARANTY
7.1. GUARANTY OF THE OBLIGATIONS. Subject to the provisions of Section 7.2
and the Intercreditor Agreement, Guarantors jointly and severally hereby
irrevocably and unconditionally guaranty to Administrative Agent for the ratable
benefit of Secured Parties the due and punctual payment in full of all Secured
Obligations when the same shall become due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)) (collectively,
the "GUARANTEED OBLIGATIONS").
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7.2. CONTRIBUTION BY GUARANTORS. All Guarantors desire to allocate among
themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor (a
"FUNDING GUARANTOR") under this Guaranty that exceeds its Fair Share as of such
date, such Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in the amount of such other Contributing
Guarantor's Fair Share Shortfall as of such date, with the result that all such
contributions will cause each Contributing Guarantor's Aggregate Payments to
equal its Fair Share as of such date. "FAIR SHARE" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. "FAIR
SHARE SHORTFALL" means, with respect to a Contributing Guarantor as of any date
of determination, the excess, if any, of the Fair Share of such Contributing
Guarantor over the Aggregate Payments of such Contributing Guarantor. "FAIR
SHARE CONTRIBUTION AMOUNT" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any comparable applicable provisions of state law; provided, solely for
purposes of calculating the "Fair Share Contribution Amount" with respect to any
Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (1)
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 7.2. The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 7.2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor is a third party beneficiary to the contribution agreement set forth
in this Section 7.2.
7.3. PAYMENT BY GUARANTORS. Subject to Section 7.2 and the Intercreditor
Agreement, Guarantors hereby jointly and severally agree, in furtherance of the
foregoing and not in limitation of any other right which any Secured Party may
have at law or in equity against any Guarantor by virtue hereof, that upon the
failure of Company to pay any of the Guaranteed Obligations when and as the same
shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. Section 362(a)), Guarantors will upon demand pay,
or cause to be paid, in Cash, to Administrative Agent for the ratable benefit of
Secured Parties, an amount equal to the sum of the unpaid principal amount of
all Guaranteed Obligations then due as aforesaid, accrued and unpaid interest on
such Guaranteed Obligations (including interest which, but for Company's
becoming the subject of a case under the Bankruptcy Code, would have accrued on
such Guaranteed Obligations, whether or not a claim is allowed against Company
for such interest in the related bankruptcy case) and all other Guaranteed
Obligations then owed to Secured Parties as aforesaid.
7.4. LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and to the extent permitted by applicable law
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shall not be affected by any circumstance which constitutes a legal or equitable
discharge of a guarantor or surety other than payment in full of the Guaranteed
Obligations. In furtherance of the foregoing and without limiting the generality
thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and
not merely a contract of surety;
(b) the obligations of each Guarantor hereunder are independent of the
obligations of Company and the obligations of any other guarantor
(including any other Guarantor) of the obligations of Company, and a
separate action or actions may be brought and prosecuted against such
Guarantor whether or not any action is brought against Company or any of
such other guarantors and whether or not Company is joined in any such
action or actions;
(c) payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guaranteed Obligations which
has not been paid. Without limiting the generality of the foregoing, if
Administrative Agent is awarded a judgment in any suit brought to enforce
any Guarantor's covenant to pay a portion of the Guaranteed Obligations,
such judgment shall not be deemed to release such Guarantor from its
covenant to pay the portion of the Guaranteed Obligations that is not the
subject of such suit, and such judgment shall not, except to the extent
satisfied by such Guarantor, limit, affect, modify or abridge any other
Guarantor's liability hereunder in respect of the Guaranteed Obligations;
(d) any Secured Party, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability hereof or giving rise to any reduction, limitation,
impairment, discharge or termination of any Guarantor's liability
hereunder, from time to time may (i) renew, extend, accelerate, increase
the rate of interest on, or otherwise change the time, place, manner or
terms of payment of the Guaranteed Obligations; (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with
respect to, or substitutions for, the Guaranteed Obligations or any
agreement relating thereto and/or subordinate the payment of the same to
the payment of any other obligations; (iii) request and accept other
guaranties of the Guaranteed Obligations and take and hold security for the
payment hereof or of the Guaranteed Obligations; (iv) release, surrender,
exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for
payment of the Guaranteed Obligations, any other guaranties of the
Guaranteed Obligations, or any other obligation of any Person (including
any other Guarantor) with respect to the Guaranteed Obligations, provided
that no Credit Document to which such Guarantor is a party may be amended
without its written consent; (v) enforce and apply any security now or
hereafter held by or for the benefit of such Secured Party in respect
hereof or the Guaranteed Obligations and direct the order or manner of sale
thereof, or exercise any other right or remedy that such Secured Party may
have against any such security, in each case as such Secured Party in its
discretion may determine consistent herewith and any applicable security
agreement, including foreclosure on any such security pursuant to one or
more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable, and even though such action operates to
impair or extinguish any right of reimbursement or subrogation or other
right or remedy of any Guarantor against Company or any security for the
Guaranteed Obligations; and (vi) exercise any other rights available to it
under the Credit Documents; and
(e) this Guaranty and the obligations of Guarantors hereunder shall be
valid and enforceable and to the extent permitted by applicable law shall
not be subject to any reduction, limi-
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tation, impairment, discharge or termination for any reason (other than
payment in full of the Guaranteed Obligations), including the occurrence of
any of the following, whether or not any Guarantor shall have had notice or
knowledge of any of them: (i) any failure or omission to assert or enforce
or agreement or election not to assert or enforce, or the stay or
enjoining, by order of court, by operation of law or otherwise, of the
exercise or enforcement of, any claim or demand or any right, power or
remedy (whether arising under the Credit Documents, at law, in equity or
otherwise) with respect to the Guaranteed Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security for
the payment of the Guaranteed Obligations; (ii) any rescission, waiver,
amendment or modification of, or any consent to departure from, any of the
terms or provisions (including provisions relating to events of default)
hereof, any of the other Credit Documents or any agreement or instrument
executed pursuant thereto, or of any other guaranty or security for the
Guaranteed Obligations, in each case whether or not in accordance with the
terms hereof or of such Credit Document or any agreement relating to such
other guaranty or security; (iii) the Guaranteed Obligations, or any
agreement relating thereto, at any time being found to be illegal, invalid
or unenforceable in any respect; (iv) the application of payments received
from any source (other than payments received pursuant to the other Credit
Documents or from the proceeds of any security for the Guaranteed
Obligations, except to the extent such security also serves as collateral
for indebtedness other than the Guaranteed Obligations) to the payment of
indebtedness other than the Guaranteed Obligations, even though any Secured
Party might have elected to apply such payment to any part or all of the
Guaranteed Obligations; (v) any Secured Party's consent to the change,
reorganization or termination of the corporate structure or existence of
Company or any of its Subsidiaries and to any corresponding restructuring
of the Guaranteed Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures any of
the Guaranteed Obligations; (vii) any defenses, set-offs or counterclaims
which Company may allege or assert against any Secured Party in respect of
the Guaranteed Obligations, including failure of consideration, breach of
warranty, payment, statute of frauds, statute of limitations, accord and
satisfaction and usury; and (viii) any other act or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to
any extent vary the risk of any Guarantor as an obligor in respect of the
Guaranteed Obligations.
7.5. WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the benefit
of Secured Parties to the extent permitted by applicable law, (a) any right to
require any Secured Party, as a condition of payment or performance by such
Guarantor, to (i) proceed against Company, any other guarantor (including any
other Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed
against or exhaust any security held from Company, any such other guarantor or
any other Person, (iii) proceed against or have resort to any balance of any
Deposit Account or credit on the books of any Secured Party in favor of Company
or any other Person, or (iv) pursue any other remedy in the power of any Secured
Party whatsoever; (b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company or any other Guarantor,
including any defense based on or arising out of the lack of validity or the
unenforceability of the Guaranteed Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of Company or
any other Guarantor from any cause other than payment in full of the Guaranteed
Obligations; (c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; (d) any defense based
upon any Secured Party's errors or omissions in the administration of the
Guaranteed Obligations, except behavior which amounts to bad faith; (e) (i) any
principles or provisions of law, statutory or otherwise, which are or might be
in conflict with the terms hereof and any legal or equitable discharge of such
Guarantor's obligations hereunder, (ii) the benefit of any statute of
limitations affecting such Guarantor's liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv)
promptness,
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hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv)
promptness, diligence and any requirement that any Secured Party protect,
secure, perfect or insure any security interest or lien or any property subject
thereto; (f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
hereof, notices of default hereunder or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the Guaranteed
Obligations or any agreement related thereto, notices of any extension of credit
to Company and notices of any of the matters referred to in Section 7.4 and any
right to consent to any thereof; and (g) any defenses or benefits that may be
derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms hereof.
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Until the
Guaranteed Obligations shall have been indefeasibly paid in full, each Guarantor
hereby waives any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against Company or any other Guarantor
or any of its assets in connection with this Guaranty or the performance by such
Guarantor of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including without limitation (a) any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
have against Company with respect to the Guaranteed Obligations, (b) any right
to enforce, or to participate in, any claim, right or remedy that any Secured
Party now has or may hereafter have against Company, and (c) any benefit of, and
any right to participate in, any collateral or security now or hereafter held by
any Secured Party. In addition, until the Guaranteed Obligations shall have been
indefeasibly paid in full, each Guarantor shall withhold exercise of any right
of contribution such Guarantor may have against any other guarantor (including
any other Guarantor) of the Guaranteed Obligations, including, without
limitation, any such right of contribution as contemplated by Section 7.2. Each
Guarantor further agrees that, to the extent the waiver or agreement to withhold
the exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation, reimbursement
or indemnification such Guarantor may have against Company or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Secured Party may have against Company, to all right, title and interest any
Secured Party may have in any such collateral or security, and to any right any
Secured Party may have against such other guarantor. If any amount shall be paid
to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guaranteed
Obligations shall not have been finally and indefeasibly paid in full, such
amount shall be held in trust for Administrative Agent on behalf of Secured
Parties and shall forthwith be paid over to Administrative Agent for the benefit
of Secured Parties to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.
7.7. SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of Company or any
Guarantor now or hereafter held by any Guarantor (the "OBLIGEE GUARANTOR") is
hereby subordinated in right of payment to the Guaranteed Obligations, and any
such Indebtedness collected or received by the Obligee Guarantor after an Event
of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Secured Parties and shall forthwith be paid
over to Administrative Agent for the benefit of Secured Parties to be credited
and applied against the Guaranteed Obligations but without affecting, impairing
or limiting in any manner the liability of the Obligee Guarantor under any other
provision hereof.
7.8. CONTINUING GUARANTY. This Guaranty is a continuing guaranty and shall
remain in effect until all of the Guaranteed Obligations shall have been paid in
full. Each Guarantor hereby irrevocably waives any right to revoke this Guaranty
as to future transactions giving rise to any
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xxx waives any right to revoke this Guaranty as to future transactions giving
rise to any Guaranteed Obligations.
7.9. AUTHORITY OF GUARANTORS OR COMPANY. It is not necessary for any
Secured Party to inquire into the capacity or powers of any Guarantor or Company
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
7.10. FINANCIAL CONDITION OF COMPANY. Any Loan may be made to Company or
continued from time to time without notice to or authorization from any
Guarantor regardless of the financial or other condition of Company at the time
of any such grant or continuation. No Secured Party shall have any obligation to
disclose or discuss with any Guarantor its assessment, or any Guarantor's
assessment, of the financial condition of Company. Each Guarantor has adequate
means to obtain information from Company on a continuing basis concerning the
financial condition of Company and its ability to perform its obligations under
the Credit Documents, and each Guarantor assumes the responsibility for being
and keeping informed of the financial condition of Company and of all
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations.
Each Guarantor hereby waives and relinquishes any duty on the part of any
Secured Party to disclose any matter, fact or thing relating to the business,
operations or conditions of Company now known or hereafter known by any Secured
Party.
7.11. BANKRUPTCY, ETC.
(a) So long as any Guaranteed Obligations remain outstanding, no
Guarantor shall, without the prior written consent of Administrative Agent
acting pursuant to the instructions of Requisite Lenders, commence or join with
any other Person in commencing any bankruptcy, reorganization or insolvency case
or proceeding of or against Company or any other Guarantor. The obligations of
Guarantors hereunder shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any case or proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of Company or any other Guarantor or by any defense
which Company or any other Guarantor may have by reason of the order, decree or
decision of any court or administrative body resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Guaranteed Obligations which accrues after the commencement of
any case or proceeding referred to in clause (a) above (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Secured Parties that
the Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto
should be determined without regard to any rule of law or order which may
relieve Company of any portion of such Guaranteed Obligations. Guarantors will
permit any trustee in bankruptcy, receiver, debtor in possession, assignee for
the benefit of creditors or similar person to pay Administrative Agent, or allow
the claim of Administrative Agent in respect of, any such interest accruing
after the date on which such case or proceeding is commenced.
(c) In the event that all or any portion of the Guaranteed Obligations
is paid by Company, the obligations of Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Secured Party as a preference, fraudulent
transfer or otherwise, and any such payments which are so rescinded or recovered
shall constitute Guaranteed Obligations for all purposes hereunder.
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7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the Capital
Stock of any Guarantor or any of its successors in interest hereunder shall be
sold or otherwise disposed of (including by merger or consolidation) in
accordance with the terms and conditions hereof, the Guaranty of such Guarantor
or such successor in interest, as the case may be, hereunder shall automatically
be discharged and released without any further action by any Secured Party or
any other Person effective as of the time of such Asset Sale; provided that the
guaranty of such Guarantor under the First Lien Documents is also discharged.
SECTION 8. EVENTS OF DEFAULT
8.1. EVENTS OF DEFAULT. If any one or more of the following conditions or
events shall occur:
(a) Failure To Make Payments When Due. Failure by Company to pay (i)
when due any installment of principal of any Loan, whether at stated
maturity, by acceleration, by notice of voluntary prepayment, by mandatory
prepayment or otherwise; or (ii) any interest on any Loan or any fee or any
other amount due hereunder within five (5) days after the date due; or
(b) Default in Other Agreements. (i) Failure of any Credit Party or
any of their respective Subsidiaries to pay when due any principal of or
interest on or any other amount payable in respect of one or more items of
Indebtedness (other than Indebtedness referred to in Section 8.1(a)) with
an aggregate principal amount of $8,625,000 or more, in each case beyond
the grace period, if any, provided therefor; or (ii) breach or default by
any Credit Party with respect to any other material term of (1) one or more
items of Indebtedness in the individual or aggregate principal amounts
referred to in clause (i) above or (2) any loan agreement, mortgage,
indenture or other agreement relating to such item(s) of Indebtedness, in
each case beyond the grace period, if any, provided therefor, if the effect
of such breach or default is to cause, or to permit the holder or holders
of that Indebtedness (or a trustee on behalf of such holder or holders) to
cause, that Indebtedness to become or be declared due and payable (or
redeemable) prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; provided that with respect to
any failure to observe, perform or comply with any covenant, term or
condition in the First Lien Documents, such event shall only constitute an
Event of Default under this Agreement if (i) such failure to observe,
perform or comply is not related to a financial maintenance covenant and
has not been cured or waived within 90 days of its occurrence or (ii) the
Indebtedness outstanding under the First Lien Credit Agreement has been
accelerated; or
(c) Breach of Certain Covenants. Failure of any Credit Party to
perform or comply with any term or condition contained in Section 2.3,
Section 5.2 or Section 6; or
(d) Breach of Representations, Etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party in
any Credit Document or in any statement or certificate at any time given by
any Credit Party or any of its Subsidiaries in writing pursuant hereto or
thereto or in connection herewith or therewith shall be false in any
material respect as of the date made or deemed made; or
(e) Other Defaults Under Credit Documents. Any Credit Party shall
default in the performance of or compliance with any term contained herein
or any of the other Credit Documents, other than any such term referred to
in any other Section of this Section 8.1, and such default shall not have
been remedied or waived within thirty (30) days after the earlier of (i) an
executive officer of such Credit Party becoming aware of such default or
(ii) receipt by Company of notice from Administrative Agent or any Lender
of such default; or
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(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (i) A court
of competent jurisdiction shall enter a decree or order for relief in
respect of Holdings or any of its Subsidiaries (other than an Immaterial
Subsidiary) in an involuntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief
shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against Holdings or any of its
Subsidiaries (other than an Immaterial Subsidiary) under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law
now or hereafter in effect; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers
over Holdings or any of its Subsidiaries other than its Immaterial
Subsidiaries, or over all or a substantial part of its property, shall have
been entered; or there shall have occurred the involuntary appointment of
an interim receiver, trustee or other custodian of Holdings or any of its
Subsidiaries other than its Immaterial Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Holdings or any of its Subsidiaries other than its Immaterial
Subsidiaries, and any such event described in this clause (ii) shall
continue for sixty (60) days without having been dismissed, bonded or
discharged; or
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (i) Holdings
or any of its Subsidiaries shall have an order for relief entered with
respect to it or shall commence a voluntary case under the Bankruptcy Code
or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief
in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of
or taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Holdings or any of its Subsidiaries
shall make any assignment for the benefit of creditors; or (ii) Holdings or
any of its Subsidiaries shall be unable, or shall fail generally, or shall
admit in writing its inability, to pay its debts as such debts become due;
or the board of directors (or similar governing body) of Holdings or any of
its Subsidiaries (or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to
herein or in Section 8.1(f); or
(h) Judgments and Attachments. Any one or more money judgments, writs
or warrants of attachment or similar process involving in the aggregate at
any time an amount in excess of $8,625,000 (in either case to the extent
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed
against Company or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of sixty (60) days (or in any event later than five days prior to
the date of any proposed sale thereunder); or
(i) Dissolution. Any order, judgment or decree shall be entered
against any Credit Party decreeing the dissolution or split up of such
Credit Party and such order shall remain undischarged or unstayed for a
period in excess of thirty (30) days; or
(j) Employee Benefit Plans. (i) There shall occur one or more ERISA
Events which individually or in the aggregate result in or would reasonably
be expected to result in liability of Holdings or any of its Subsidiaries
in excess of $5,750,000 during the term hereof; or (ii) there shall occur
the imposition of a Lien or security interest under Section 412(n) of the
Internal Revenue Code or under ERISA; or
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(k) Change of Control. A Change of Control shall occur; or
(l) Guaranties, Collateral Documents and Other Credit Documents. At
any time after the execution and delivery thereof (i) other than set forth
in the Intercreditor Agreement, the Guaranty for any reason, other than the
satisfaction in full of all Obligations, shall cease to be in full force
and effect (other than in accordance with its terms) or shall be declared
to be null and void or any Guarantor shall repudiate its obligations
thereunder, (ii) other than as set forth in the Intercreditor Agreement,
this Agreement or any Collateral Document ceases to be in full force and
effect (other than by reason of a release of Collateral in accordance with
the terms hereof or thereof or the satisfaction in full of the Obligations
in accordance with the terms hereof or any other termination of such
Collateral Document in accordance with the terms thereof) or shall be
declared null and void, or Collateral Agent shall not have or shall cease
to have a valid and perfected Lien in any Collateral purported to be
covered by the Collateral Documents with the priority required by the
relevant Collateral Document, in each case for any reason other than the
failure of Collateral Agent or any Secured Party to take any action within
its control or (iii) any Credit Party shall contest the validity or
enforceability of any Credit Document in writing or deny in writing that it
has any further liability, including with respect to future advances by
Lenders, under any Credit Document to which it is a party;
THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) upon the occurrence of any other Event
of Default, at the request of (or with the consent of) Requisite Lenders, upon
notice to Company by Administrative Agent, (A) each of the following shall
immediately become due and payable, in each case without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by each Credit Party: (I) the unpaid principal amount of and accrued
interest on the Loans and (II) all other Secured Obligations and (B) subject to
the Intercreditor Agreement, the Administrative Agent may cause Collateral Agent
to enforce any and all Liens and security interests created pursuant to
Collateral Documents.
SECTION 9. AGENTS
9.1. APPOINTMENT OF AGENTS. GSCP is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes Syndication Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents. GSCP
is hereby appointed Administrative Agent hereunder, and each Lender hereby
authorizes Administrative Agent to act as such in accordance with the terms
hereof and the other Credit Documents. GSCP is hereby appointed Collateral Agent
hereunder, and each Lender hereby authorizes Collateral Agent to act as such in
accordance with the terms hereof and the other Credit Documents. Each Agent
hereby agrees to act upon the express conditions contained herein and the other
Credit Documents, as applicable. The provisions of this Section 9 are solely for
the benefit of Agents and Lenders and no Credit Party shall have any rights as a
third party beneficiary of any of the provisions thereof. In performing its
functions and duties hereunder, each Agent shall act solely for the benefit of
the Lenders with duties that are entirely administrative in nature,
notwithstanding the use of the defined term "Administrative Agent", the terms
"agent", "administrative agent" and "collateral agent" and similar and related
terms in any Credit Document, which terms are used for title purposes only and
does not assume and shall not be deemed to have assumed any obligation towards
or relationship of agency or trust with or for Company or any of its
Subsidiaries. Syndication Agent, without consent of or notice to any party
hereto, may assign any and all of its rights or obligations hereunder to any of
its Affiliates. As of the Closing Date, neither GSCP, in its capacity as a
Syndication Agent, Joint Lead Arranger and Joint Bookrunner, nor BAS, in its
capacity as Joint Lead Arranger, Joint Bookrunner nor Bank of America, N.A. in
its capacity as Documentation Agent, shall have any obligations but shall be
entitled to all benefits of this Section 9.
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9.2. POWERS AND DUTIES. Each Lender irrevocably authorizes each Agent to
take such action on such Lender's behalf and to exercise such powers, rights and
remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or
employees. No Agent shall have, by reason hereof or any of the other Credit
Documents, a fiduciary relationship in respect of any Lender; and nothing herein
or any of the other Credit Documents, express or implied, is intended to or
shall be so construed as to impose upon any Agent any function, duty,
responsibility, obligation or other liability in respect hereof or any of the
other Credit Documents except as expressly set forth herein or therein.
9.3. GENERAL IMMUNITY.
(a) No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectability or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any Agent to Lenders or by or on behalf of any
Credit Party to any Agent or any Lender or any person providing the Settlement
Service to any Agent or Lender in connection with the Credit Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of any Credit Party or any other Person liable for the payment of any
Obligations, nor shall any Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Credit Documents or as to the use of the
proceeds of the Loans or as to the existence or possible existence of any Event
of Default or Default or to make any disclosures with respect to the foregoing.
Anything contained herein to the contrary notwithstanding, Administrative Agent
shall not have any liability arising from confirmations of the amount of
outstanding Loans.
(b) Exculpatory Provisions. No Agent nor any of its officers,
partners, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by any Agent under or in connection with any of the
Credit Documents except to the extent caused primarily by such Agent's gross
negligence or willful misconduct (as determined in a final, non-appealable
judgment by a court of competent jurisdiction). Each Agent shall be entitled to
refrain from any act or the taking of any action (including the failure to take
an action) in connection herewith or any of the other Credit Documents or from
the exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until such Agent shall have received instructions in
respect thereof from Requisite Lenders (or such other Lenders as may be required
to give such instructions under Section 10.5) and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be),
such Agent shall be entitled to act or (where so instructed) refrain from
acting, or to exercise such power, discretion or authority, in accordance with
such instructions. Without prejudice to the generality of the foregoing, (i)
each Agent shall be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper Person or Persons,
including any Settlement Confirmation, any electronic transmission (including
any information or document transmitted electronically by any means), any
telephone message or any other communication issued by any Settlement Service,
and shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Company and its Subsidiaries),
accountants, experts and other professional advisors selected by it and shall
not be responsible for any action of any sub-agent selected by it without gross
negligence or willful misconduct; and (ii) no person shall have any right of
action whatsoever against any Agent as a result of such Agent acting or (where
so instructed) refraining
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from acting hereunder or any of the other Credit Documents in accordance with
the instructions of Requisite Lenders (or such other Lenders as may be required
to give such instructions under Section 10.5), each of which shall be deemed an
authorization from all Lenders to such Agent and shall be binding on all
Lenders.
9.4. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans, each Agent and its Affiliates
shall have the same rights and powers hereunder as any other Lender and may
exercise the same as if they were not performing the duties and functions
delegated to them hereunder, and the term "Lender" shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may accept deposits from, lend money to, own securities
of, and generally engage in any kind of banking, trust, financial advisory or
other business with Company or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection herewith and otherwise
without having to account for the same to Lenders.
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.
(a) Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans hereunder and that
it has made and shall continue to make its own appraisal of the creditworthiness
of Company and its Subsidiaries. No Agent shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender 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, and no Agent
shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
(b) Each Lender, by delivering its signature page to this Agreement
and funding its Loan on the Closing Date, shall be deemed to have acknowledged
receipt of, and consented to and approved, each Credit Document and each other
document required to be approved by any Agent, Requisite Lenders or Lenders, as
applicable on the Closing Date. Notwithstanding anything herein to the contrary,
each Lender also acknowledges that the lien and security interest granted to
Collateral Agent pursuant to the Pledge and Security Agreement and each Mortgage
and the exercise of any right or remedy by Collateral Agent thereunder are
subject to the provisions of the Intercreditor Agreement. In the event of any
conflict between the terms of the Intercreditor Agreement and the Pledge and
Security Agreement or a Mortgage, the terms of the Intercreditor Agreement shall
govern and control.
9.6. RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify each Agent, to the extent that such Agent shall
not have been reimbursed by any Credit Party, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including advisors' fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in connection with any Credit Document or with any of its
powers, rights and remedies or performing its duties hereunder or under the
other Credit Documents or otherwise in its capacity as such Agent in any way
relating to or arising out of this Agreement or the other Credit Documents or
the preparation thereof or any amendment, modification or termination thereof;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements primarily resulting from such Agent's gross negligence
or willful misconduct (as determined in a final, non-
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appealable judgment by a court of competent jurisdiction). If any indemnity
furnished to any Agent for any purpose shall, in the opinion of such Agent, be
insufficient or become impaired, such Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished; provided that in no event shall this sentence
require any Lender to indemnify any Agent against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement in
excess of such Lender's Pro Rata Share thereof; and provided, further, that this
sentence shall not be deemed to require any Lender to indemnify any Agent
against any liability, obligation, loss, damage, penalty, action, judgment,
suit, cost, expense or disbursement described in the proviso in the immediately
preceding sentence.
9.7. SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign at any
time by giving thirty (30) days' prior written notice thereof to Lenders and
Company, and Administrative Agent may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to Company
and Administrative Agent and signed by Requisite Lenders. Upon any such notice
of resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' notice to Company, to appoint a successor Administrative
Agent. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent and the retiring or
removed Administrative Agent shall promptly (i) transfer to such successor
Administrative Agent all sums, Securities and other items of Collateral held
under the Collateral Documents, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Administrative Agent under the Credit Documents, and (ii) execute and
deliver to such successor Administrative Agent such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Administrative Agent of the
security interests created under the Collateral Documents, whereupon such
retiring or removed Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring or removed Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent hereunder.
9.8. COLLATERAL DOCUMENTS AND GUARANTY.
(a) Agents Under Collateral Documents and Guaranty. Each Lender hereby
further authorizes Administrative Agent or Collateral Agent, as applicable, on
behalf of and for the benefit of Lenders (i) to be the agent for and
representative of Lenders with respect to the Guaranty, the Collateral and the
Collateral Documents, (ii) to act as collateral agent for Secured Parties, for
purposes of perfection of all Liens created by the Collateral Documents and for
other purposes stated therein (including managing, supervising and dealing with
the Collateral), (iii) to enter into the Collateral Documents and each Lender
agrees to be bound by the terms of the Collateral Documents, (iv) to file and
prove claims and other documents necessary or desirable to allow the claims of
Secured Parties with respect to any Guaranteed Obligation in any proceeding
described in Sections 8.1(f) and (g) and any other similar proceedings, and (v)
to execute any amendment, consent or waiver under the Credit Documents to the
extent the consents of the Lenders required by Section 10.5 have been received.
Subject to Section 10.5, without further written consent or authorization from
Lenders, Administrative Agent or Collateral Agent, as applicable, may execute
any documents or instruments necessary to (i) release any Lien encumbering any
item of Collateral that is the subject of a sale or other disposition of assets
permitted hereby or to which Requisite Lenders (or such other Lenders as may be
required to give such consent under Section 10.5) have otherwise consented or as
required under the Intercreditor Agreement or (ii) release any Guarantor from
the Guaranty pursuant to Section 7.12 or in connection with a sale or other
disposition (including by merger or consolidation) of such Guarantor to which
Requisite Lenders (or such other Lenders as may be re-
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quired to give such consent under Section 10.5) have consented or as required
under the Intercreditor Agreement; provided that such Guaranty or Lien is also
released under the First Lien Documents.
(b) Right To Realize on Collateral and Enforce Guaranty. Anything
contained in any of the Credit Documents to the contrary notwithstanding,
Company, Administrative Agent, Collateral Agent and each Lender hereby agree
that (i) no Lender shall have any right individually to realize upon any of the
Collateral or to enforce the Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by Administrative
Agent, on behalf of Lenders in accordance with the terms hereof and all powers,
rights and remedies under the Collateral Documents may be exercised solely by
Collateral Agent, and (ii) in the event of a foreclosure by Collateral Agent on
any of the Collateral pursuant to a public or private sale, Collateral Agent or
any Lender may be the purchaser of any or all of such Collateral at any such
sale and Collateral Agent, as agent for and representative of Secured Parties
(but not any Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing), shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by Collateral Agent at such sale.
SECTION 10. MISCELLANEOUS
10.1. NOTICES. Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given to a Credit Party,
Syndication Agent, Collateral Agent, Administrative Agent or Documentation Agent
shall be sent to such Person's address as set forth on Appendix B or in the
other relevant Credit Document, and in the case of any Lender, the address as
indicated on Appendix B or otherwise indicated to Administrative Agent in
writing. Each notice hereunder shall be in writing and may be personally served,
telexed or sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by courier
service and signed for against receipt thereof, upon receipt of telefacsimile or
telex, or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided that no notice to any Agent
shall be effective until received by such Agent. Each such notice may also be
(i) posted to Intralinks(R) (to the extent such system is available and set up
by or at the direction of Administrative Agent prior to posting) in a reasonably
appropriate location by uploading such notice, demand, request, direction or
other communication to xxx.xxxxxxxxxx.xxx, faxing it to 000-000-0000 with an
appropriate bar-coded coversheet or using such other means of posting to
Intralinks(R) as may be available and reasonably acceptable to Administrative
Agent prior to such posting or (ii) posted to any other E System set up by or at
the direction of Administrative Agent in an appropriate location; provided no
notice to any Agent shall be effective until received by such Agent. Each such
posting shall be effective on the later of the date of such posting in an
appropriate location and the date access to such posting is given to the
recipient thereof in accordance with the standard procedures applicable to such
E System. Transmission by electronic mail (including E Fax, even if transmitted
to the fax number set forth above) shall not be sufficient or effective to
transmit any notice required or expressly authorized to be delivered hereunder
unless such transmission is an available means to post to any E System.
10.2. EXPENSES. Whether or not the transactions contemplated hereby shall
be consummated, Company agrees to pay promptly (a) all the actual and reasonable
costs and expenses of preparation of the Credit Documents and any consents,
amendments, waivers or other modifications thereto; (b) all the costs of
furnishing all opinions by counsel for Company and the other Credit Parties; (c)
the reasonable fees, expenses and disbursements of counsel to Agents (in each
case including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Credit Documents
and any consents, amendments, waivers or other modifications thereto and any
other documents or
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matters requested by Company; (d) all the actual costs and reasonable expenses
of creating and perfecting Liens in favor of Collateral Agent, for the benefit
of Lenders pursuant hereto, including filing and recording fees, expenses and
taxes, stamp or documentary taxes, search fees, title insurance premiums and
reasonable fees, expenses and disbursements of counsel to each Agent and of
counsel providing any opinions that any Agent or Requisite Lenders may request
in respect of the Collateral or the Liens created pursuant to the Collateral
Documents; (e) all the actual costs and reasonable fees, expenses and
disbursements of any auditors, accountants, consultants or appraisers retained
by any Agent with the prior consent of Company (not to be unreasonably
withheld); (f) all the actual costs and reasonable expenses (including the
reasonable fees, expenses and disbursements of any appraisers, consultants,
advisors and agents employed or retained by Collateral Agent and its counsel) in
connection with the custody or preservation of any of the Collateral; (g) all
other actual and reasonable costs and expenses incurred by each Agent in
connection with the syndication of the Loans and Commitments and the
negotiation, preparation and execution of the Credit Documents and any consents,
amendments, waivers or other modifications thereto and the transactions
contemplated thereby; and (h) after the occurrence of a Default or an Event of
Default, all costs and expenses, including reasonable attorneys' fees (including
allocated costs of internal counsel) and costs of settlement, incurred by any
Agent and Lenders in enforcing any Obligations of or in collecting any payments
due from any Credit Party hereunder or under the other Credit Documents by
reason of such Default or Event of Default (including in connection with the
sale of, collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy cases or proceedings.
10.3. INDEMNITY.
(a) In addition to the payment of expenses pursuant to Section 10.2,
whether or not the transactions contemplated hereby shall be consummated, each
Credit Party agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless each Agent and Lender and the officers,
partners, directors, trustees, employees, agents and Affiliates of each Agent
and each Lender (each, an "INDEMNITEE"), from and against any and all
Indemnified Liabilities; provided that no Credit Party shall have any obligation
to any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise from the gross negligence or willful
misconduct of that Indemnitee. To the extent that the undertakings to defend,
indemnify, pay and hold harmless set forth in this Section 10.3 may be
unenforceable in whole or in part because they are violative of any law or
public policy, the applicable Credit Party shall contribute the maximum portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.
(b) To the extent permitted by applicable law, neither Company nor any
of its Subsidiaries or Affiliates shall assert, and hereby waives, any claim
against any Lender or any of their Affiliates, directors, employees, attorneys
or agents, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) (whether or not the
claim therefor is based on contract, tort or duty imposed by any applicable
legal requirement) arising out of, in connection with, as a result of or in any
way related to this Agreement or any Credit Document or any agreement or
instrument contemplated hereby or thereby, the transactions contemplated hereby
or thereby, any Loan or the use of the proceeds thereof or any act or omission
or event occurring in connection therewith, and Company hereby waives, releases
and agrees not to xxx upon any such claim or any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
10.4. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, subject to the
terms of the Intercreditor Agreement, upon the oc-
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xxxxxxxx of any Event of Default each Lender is hereby authorized by each Credit
Party at any time or from time to time subject to the consent of Administrative
Agent (such consent not to be unreasonably withheld or delayed), without notice
to any Credit Party or to any other Person (other than Administrative Agent),
any such notice being hereby expressly waived, to set off and to appropriate and
to apply any and all deposits (general or special, including Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time held or owing
by such Lender to or for the credit or the account of any Credit Party against
and on account of the obligations and liabilities of any Credit Party to such
Lender hereunder and under the other Credit Documents, including all claims of
any nature or description arising out of or connected hereto or with any other
Credit Document, irrespective of whether or not (a) such Lender shall have made
any demand hereunder or (b) the principal of or the interest on the Loans or any
other amounts due hereunder shall have become due and payable pursuant to
Section 2 and although such obligations and liabilities, or any of them, may be
contingent or unmatured. Each Credit Party hereby further grants to
Administrative Agent and each Lender a security interest in all Deposit Accounts
maintained with Administrative Agent or such Lender as security for the
Obligations.
10.5. AMENDMENTS AND WAIVERS.
(a) Requisite Lenders' Consent. Subject to Sections 10.5(b), 10.5(c)
and the terms of the Intercreditor Agreement, no amendment, modification,
termination or waiver of any provision of the Credit Documents, or consent to
any departure by any Credit Party therefrom, shall in any event be effective
without the written concurrence of Requisite Lenders.
(b) Affected Lenders' Consent. Without the written consent of each
Lender that would be affected thereby, no amendment, modification, termination,
or consent shall be effective if the effect thereof would:
(i) extend the scheduled final maturity of any Loan or Note;
(ii) waive, reduce or postpone any scheduled repayment (but not
prepayment);
(iii) reduce the rate of interest on any Loan (other than any waiver
of any increase in the interest rate applicable to any Loan pursuant to
Section 2.7), any premium payable under Section 2.10(b) or any fee payable
under Section 2.8;
(iv) extend the time for payment of any such interest or fees;
(v) reduce the principal amount of any Loan;
(vi) amend, modify, terminate or waive any provision of this Section
10.5;
(vii) amend the definition of "Requisite Lenders" or "Pro Rata Share";
provided, with the consent of Requisite Lenders, additional extensions of
credit pursuant hereto may be included in the determination of "Requisite
Lenders" or "Pro Rata Share" on substantially the same basis as the
Commitments and the Loans are included on the Closing Date;
(viii) release all or substantially all of the Collateral or all or
substantially all of the Guarantors from the Guaranty except as expressly
provided in the Credit Documents; or
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(ix) consent to the assignment or transfer by any Credit Party of any
of its rights and obligations under any Credit Document.
(c) Other Consents. No amendment, modification, termination or waiver
of any provision of the Credit Documents, or consent to any departure by any
Credit Party therefrom, shall:
(i) increase any Commitment of any Lender over the amount thereof then
in effect without the consent of such Lender; provided that no amendment,
modification or waiver of any condition precedent, covenant, Default or
Event of Default shall constitute an increase in any Commitment of any
Lender;
(ii) extend the length of any Interest Period or provide for nine
month or twelve month Interest Periods without the consent of each Lender
affected thereby; or
(iii) amend, modify, terminate or waive any provision of Section 9 as
the same applies to any Agent, or any other provision of any Credit
Document as the same applies to the rights or obligations of any Agent, in
each case without the consent of such Agent.
(d) Execution of Amendments, Etc. Administrative Agent may, but shall
have no obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of such Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 10.5 shall be binding
upon each Lender at the time outstanding, each future Lender and, if signed by a
Credit Party, on such Credit Party; provided that the Intercreditor Agreement
may be amended, modified or waived by an agreement or agreements in writing
consented to by the Collateral Agent, the Administrative Agent, the Requisite
Lenders hereunder and the requisite lenders under the First Lien Credit
Agreement (without the consent of any Credit Party, so long as such amendment,
waiver or modification does not impose any additional duties or obligations on
the Credit Parties or alter or impair any right of any Credit Party under the
Credit Documents).
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Generally. This Agreement shall be binding upon the parties hereto
and their respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of Lenders. No Credit Party's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by any Credit Party without the prior written consent of all Lenders.
Nothing in this Agreement, express or implied, shall be construed to confer upon
any Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby,
Affiliates of each of the Agents and Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
(b) Register. Company, Administrative Agent and Lenders shall deem and
treat the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Loans listed therein for all purposes hereof, and no
assignment or transfer of any such Loan shall be effective, in each case, unless
and until a Settlement Confirmation or an Assignment Agreement effecting the
assignment or transfer thereof shall have been delivered to and accepted by
Administrative Agent and recorded in the Register, as applicable, following
receipt of (x) a written or electronic confirmation of an assignment issued by a
Settlement Service pursuant to Section 10.6(d) (a "SETTLEMENT CONFIRMATION") or
(y) an As-
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signment Agreement effecting the assignment or transfer thereof, in each case,
as provided in Section 10.6(e). Prior to such recordation, all amounts owed with
respect to the applicable Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding Loans.
(c) Right To Assign. Each Lender shall have the right at any time to
sell, assign or transfer all or a portion of its rights and obligations under
this Agreement, including, without limitation, all or a portion of its Loans
owing to it or other Obligation (provided, however, that each such assignment
shall be of a uniform, and not varying, percentage of all rights and obligations
under and in respect of any Loan):
(i) to any Person meeting the criteria of clause (i) of the definition
of the term "Eligible Assignee" upon the giving of notice to Company and
Administrative Agent; and
(ii) to any Person meeting the criteria of clause (ii) of the
definition of the term "Eligible Assignee" and consented to by each of
Company and Administrative Agent; provided that (x) no consent of Company
shall be required at any time a Default or Event of Default shall have
occurred and then be continuing or during the syndication of the Loans and
Commitments hereunder and (y) no such consent shall be unreasonably
withheld or delayed (it being understood that failure by Company to respond
within three Business Days of such request shall be deemed to be consent);
provided, further, each such assignment pursuant to this Section
10.6(c)(ii) shall be in an aggregate amount of not less than $1,000,000 (or
such lesser amount as may be agreed to by Company and Administrative Agent
or as shall constitute the aggregate amount of the Loan of the assigning
Lender).
(d) Mechanics. Assignments of Loans by Lenders may be made via an
electronic settlement system acceptable to Administrative Agent as designated in
writing from time to time to Lenders by Administrative Agent (the "Settlement
Service"). Each such assignment shall be effected by the assigning Lender and
proposed assignee pursuant to the procedures then in effect under the Settlement
Service, which procedures shall be consistent with the other provisions of this
Section 10.6. Each assignor Lender and proposed assignee shall comply with the
requirements of the Settlement Service in connection with effecting any transfer
of Loans pursuant to the Settlement Service. Administrative Agent's consent
shall be deemed to have been granted pursuant to Section 10.6(c)(ii) with
respect to any transfer effected through the Settlement Service; provided that
Company's consent shall be governed by Section 10.6(c)(ii). Subject to the other
requirements of this Section 10.6, assignments and assumptions of Loans may also
be effected by manual execution and delivery to Administrative Agent of an
Assignment Agreement, with the prior written consent of Administrative Agent and
Company. The assigning Lender and the assignee thereof shall execute and deliver
to Administrative Agent an Assignment Agreement two (2) Business Days prior to
the effective date thereof, together with such forms, certificates or other
evidence, if any, with respect to United States federal income tax withholding
matters as the assignee under such Assignment Agreement may be required to
deliver to Administrative Agent pursuant to Section 2.17(c). Notwithstanding
anything herein, in any Assignment Agreement, or any transfer pursuant to the
Settlement Service to the contrary and (i) unless notice to the contrary is
delivered to the Lenders from Administrative Agent or (ii) so long as no Default
or Event of Default has occurred and is continuing, payment to the assignor by
the assignee in respect of the settlement of an assignment of any Loan shall
include such compensation to the assignor as may be agreed upon by the assignor
and the assignee with respect to all unpaid interest which has accrued on such
Loan to but excluding the effective date of the Assignment Agreement or any
transfer pursuant to the Settlement Service.
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(e) Notice of Assignment. Upon its receipt of a duly executed and
completed Assignment Agreement (and any forms, certificates or other evidence
required by this Agreement in connection therewith), Administrative Agent shall
record the information contained in such Assignment Agreement in the Register,
shall give prompt notice thereof to Company and shall maintain a copy of such
Assignment Agreement.
(f) Representations and Warranties of Assignee. Each Lender, upon
execution and delivery hereof or upon executing and delivering an Assignment
Agreement, as the case may be, represents and warrants as of the Closing Date or
as of the applicable Effective Date (as defined in the applicable Assignment
Agreement) that (i) it is an Eligible Assignee; (ii) it has experience and
expertise in the making of or investing in loans such as the Loans; and (iii) it
will make or invest in, as the case may be, its Loans for its own account in the
ordinary course of its business and without a view to distribution of such Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of this
Section 10.6, the disposition of such Loans or any interests therein shall at
all times remain within its exclusive control).
(g) Effect of Assignment. Subject to the terms and conditions of this
Section 10.6, as of the "Effective Date" specified in the applicable Assignment
Agreement (which shall be no sooner than two (2) Business Days after delivery to
Administrative Agent of the Assignment Agreement and related documents required
by subsection (d) above), (i) the assignee thereunder shall have the rights and
obligations of a "Lender" hereunder to the extent such rights and obligations
hereunder have been assigned to it pursuant to such Assignment Agreement and
shall thereafter be a party hereto and a "Lender" for all purposes hereof; (ii)
the assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned thereby pursuant to such Assignment Agreement,
relinquish its rights (other than any rights which survive the termination
hereof under Section 10.8) and be released from its obligations hereunder (and,
in the case of an Assignment Agreement covering all or the remaining portion of
an assigning Lender's rights and obligations hereunder, such Lender shall cease
to be a party hereto; provided that anything contained in any of the Credit
Documents to the contrary notwithstanding, such assigning Lender shall continue
to be entitled to the benefit of all indemnities hereunder as specified herein
with respect to matters arising out of the prior involvement of such assigning
Lender as a Lender hereunder and shall continue to be entitled to the benefits
of Section 2.17 with respect to facts and circumstances occurring prior to the
effective date of such Assignment Agreement); and (iii) if any such assignment
occurs after the issuance of any Note hereunder, the assigning Lender shall,
upon the effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Administrative Agent for
cancellation, and thereupon Company shall issue and deliver new Notes, if so
requested by the assignee and/or assigning Lender, to such assignee and/or to
such assigning Lender, with appropriate insertions, to reflect the new
outstanding Loans of the assignee and/or the assigning Lender.
(h) Participations. Each Lender shall have the right at any time to
sell one or more participations to any Person (other than Company, any of its
Subsidiaries or any of its Affiliates) in all or any part of its Loans or in any
other Obligation. The holder of any such participation, other than an Affiliate
of the Lender granting such participation, shall not be entitled to require such
Lender to take or omit to take any action hereunder except with respect to any
amendment, modification or waiver that would (i) extend the final scheduled
maturity of any Loan or Note in which such participant is participating, or
reduce the rate or extend the time of payment of interest or fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) 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
shall not constitute a change in the terms of such participation, and that an
increase in any Loan shall be permitted without the consent of any
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participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by any Credit Party of any
of its rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under the Collateral Documents (except as
expressly provided in the Credit Documents) supporting the Loans hereunder in
which such participant is participating. The Company agrees that each
participant shall be entitled to the benefits of Sections 2.15(c), 2.16 and 2.17
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (c) of this Section; provided that (i) a
participant shall not be entitled to receive any greater payment under Section
2.16 or 2.17 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such participant, unless the sale of the
participation to such participant is made with the Company's prior written
consent and (ii) a participant that would be a Non-US Lender if it were a Lender
shall not be entitled to the benefits of Section 2.17 unless Company and such
participant agrees, for the benefit of Company, to comply with Section 2.17(c)
as though it were a Lender. To the extent permitted by law, each participant
also shall be entitled to the benefits of Section 10.4 as though it were a
Lender, provided such participant agrees to be subject to Section 2.14 as though
it were a Lender.
(i) Certain Other Assignments. In addition to any other assignment
permitted pursuant to this Section 10.6, any Lender may assign and/or pledge all
or any portion of its Loans, the other Obligations owed by or to such Lender,
and its Notes, if any, to secure obligations of such Lender, including, without
limitation, to any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
operating circular issued by such Federal Reserve Bank; provided that no Lender,
as between Company and such Lender, shall be relieved of any of its obligations
hereunder as a result of any such assignment and pledge; and provided, further,
that in no event shall the applicable Federal Reserve Bank or trustee be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
10.7. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Loan. Notwithstanding
anything herein or implied by law to the contrary, the agreements of each Credit
Party set forth in Sections 2.15(c), 2.16, 2.17, 10.2, 10.3 and 10.4 and the
agreements of Lenders set forth in Sections 2.14, 9.3(b) and 9.6 shall survive
the payment of the Loans and the termination hereof.
10.9. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
any Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Credit Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. The rights, powers and remedies given to each Agent and each Lender
hereby are cumulative and shall be in addition to and independent of all rights,
powers and remedies existing by virtue of any statute or rule of law or in any
of the other Credit Documents. Any forbearance or failure to exercise, and any
delay in exercising, any right, power or remedy hereunder shall not impair any
such right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.
10.10. MARSHALLING; PAYMENTS SET ASIDE. Neither any Agent nor any Lender
shall be under any obligation to marshal any assets in favor of any Credit Party
or any other Person or against or in payment of any or all of the Obligations.
To the extent that any Credit Party makes a payment or pay-
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ments to Administrative Agent or Lenders (or to Administrative Agent, on behalf
of Lenders), or Administrative Agent or Lenders enforce any security interests
or exercise their rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
10.11. SEVERABILITY. In case any provision in or obligation hereunder or
any Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations of any other Lender hereunder. Nothing contained herein or
in any other Credit Document, and no action taken by Lenders pursuant hereto or
thereto, shall be deemed to constitute Lenders as a partnership, an association,
a joint venture or any other kind of entity. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out hereof
and it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
10.13. HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
10.14. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF.
10.15. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT,
OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT
PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES AGENTS AND
LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.
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10.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT
EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR
ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.17. CONFIDENTIALITY. Each Lender shall hold all non-public information
regarding Company and its business and obtained by such Lender pursuant to the
requirements hereof in accordance with such Lender's customary procedures for
handling confidential information of such nature, it being understood and agreed
by Company that, in any event, a Lender may make (i) disclosures of such
information to Affiliates of such Lender and to their agents and advisors (and
to other Persons authorized by a Lender or Agent to organize, present or
disseminate such information in connection with disclosures otherwise made in
accordance with this Section 10.17), (ii) disclosures of such information
reasonably required by any bona fide or potential assignee, transferee or
participant in connection with the contemplated assignment, transfer or
participation by such Lender of any Loans or any participations therein (so long
as such Persons agree in advance in writing to keep such information
confidential), (iii) disclosure to any rating agency when required by it,
provided that, prior to any disclosure, such rating agency shall undertake in
writing to preserve the confidentiality of any confidential information relating
to the Credit Parties received by it from any of the Agents or any Lender, and
(iv) disclosures required or requested by any governmental agency or
representative thereof or by the NAIC or pursuant to legal or judicial process;
provided that unless specifically prohibited by applicable law or court order,
each Lender shall make reasonable efforts to notify Company of any request by
any governmental agency or representative thereof (other than any such request
in connection with any examination of the financial condition or other routine
examination of such Lender by such governmental agency) for disclosure of any
such non-public information prior to disclosure of such information.
10.18. USURY SAVINGS CLAUSE. Notwithstanding any other provision herein,
the aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law, shall not exceed the Highest Lawful Rate. If the
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Loans made hereunder shall bear
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interest at the Highest Lawful Rate until the total amount of interest due
hereunder equals the amount of interest which would have been due hereunder if
the stated rates of interest set forth in this Agreement had at all times been
in effect. In addition, if when the Loans made hereunder are repaid in full the
total interest due hereunder (taking into account the increase provided for
above) is less than the total amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at all
times been in effect, then to the extent permitted by law, Company shall pay to
Administrative Agent an amount equal to the difference between the amount of
interest paid and the amount of interest which would have been paid if the
Highest Lawful Rate had at all times been in effect. Notwithstanding the
foregoing, it is the intention of Lenders and Company to conform strictly to any
applicable usury laws. Accordingly, if any Lender contracts for, charges or
receives any consideration which constitutes interest in excess of the Highest
Lawful Rate, then any such excess shall be cancelled automatically and, if
previously paid, shall at such Lender's option be applied to the outstanding
amount of the Loans made hereunder or be refunded to Company.
10.19. COUNTERPARTS. This Agreement may be executed in counterparts (and by
different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Agreement or any document or instrument delivered in connection herewith by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement or such other document or instrument, as applicable.
10.20. EFFECTIVENESS. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Company and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
10.21. PATRIOT ACT. Each Lender hereby notifies Company that, pursuant to
the requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies Company, which information includes the name and
address of Company and other information that will allow such Lender to identify
Company in accordance with the Patriot Act.
10.22. ELECTRONIC TRANSMISSIONS.
(a) Authorization. Subject to the provisions of Section 10.1, Company,
each Agent and Lender and each of their affiliates and sub-agents and each of
their respective employees, agents, officers and directors is authorized (but
not required) to transmit, post or otherwise make or communicate, in its sole
discretion, Electronic Transmissions in connection with any Credit Document and
the transactions contemplated therein. Each Credit Party and each Agent and
Lender hereby acknowledges and agrees that the use of Electronic Transmissions
is not necessarily secure and that there are risks associated with such use,
including risks of interception, disclosure and abuse, and each indicates it
assumes and accepts such risks by hereby authorizing the transmission of
Electronic Transmissions.
(b) Signatures. Without limiting the generality of the foregoing,
(i)(A) no posting to any E-System shall be denied legal effect merely because it
is made electronically, (B) each E-Signature on any such posting shall be deemed
sufficient to satisfy any requirement for a "signature" and (C) each such
posting shall be deemed sufficient to satisfy any requirement for a "writing",
in each case including pursuant to any Credit Document, any applicable provision
of any Uniform Commercial Code, the federal Uniform Electronic Transactions Act,
the Electronic Signatures in Global and National Commerce Act and any
substantive or procedural Requirement of Law governing such subject matter, (ii)
each such posting that is not readily capable of bearing either a signature or a
reproduction of a signature may be signed, and shall be deemed signed, by
attaching to, or logically associating with, such posting an E-Signature,
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upon which each Secured Party and Credit Party may rely and assume the
authenticity thereof, (iii) each such posting containing a signature, a
reproduction of a signature or an E-Signature shall, for all intents and
purposes, have the same effect and weight as a signed paper original and (iv)
each party hereto or beneficiary hereof agrees not to contest the validity or
enforceability of any posting on any E-System or E-Signature on any such posting
under the provisions of any applicable Requirement of Law requiring certain
documents to be in writing or signed; provided, however, that nothing herein
shall limit such party's or beneficiary's right to contest whether any posting
to any E-System or E-Signature has been altered after transmission.
(c) Separate Agreements. All uses of an E-System shall be governed by
and subject to, in addition to this Agreement, separate terms and conditions
posted or referenced in such E-System and related Contractual Obligations
executed by Secured Parties and Credit Parties in connection with the use of
such E-System.
(d) LIMITATION OF LIABILITY. ALL E-SYSTEMS AND ELECTRONIC
TRANSMISSIONS SHALL BE PROVIDED "AS IS" AND "AS AVAILABLE". NO AGENT OR ANY OF
ITS SUB-AGENTS OR AFFILIATES AND NONE OF THEIR RESPECTIVE EMPLOYEES, AGENTS,
DIRECTORS OR OFFICERS WARRANTS THE ACCURACY, ADEQUACY OR COMPLETENESS OF ANY
E-SYSTEMS OR ELECTRONIC TRANSMISSION AND EACH DISCLAIMS ALL LIABILITY FOR ERRORS
OR OMISSIONS THEREIN. NO WARRANTY OF ANY KIND IS MADE BY ANY AGENT OR ANY OF ITS
AFFILIATES OR SUB-AGENTS OR ANY OF ITS EMPLOYEES, AGENTS, DIRECTORS OR OFFICERS
IN CONNECTION WITH ANY E-SYSTEMS OR ELECTRONIC COMMUNICATION, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT
OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS. Each Credit
Party and each Secured Party agrees that the Agents have no responsibility for
maintaining or providing any equipment, software, services or any testing
required in connection with any Electronic Transmission or otherwise required
for any E-System.
10.23. DISCLOSURE. Each Credit Party agrees that it shall not, and none of
its Affiliates shall, issue any press release or other public disclosure (other
than any document filed with any Governmental Authority relating to a public
offering of the Securities of any Credit Party) using the name, logo or
otherwise referring to GSCP or any of its Affiliates, the Credit Documents or
any transaction contemplated therein to which the Secured Parties are party
without at least 2 Business Days' prior notice to GSCP and without the prior
consent of GSCP except to the extent required to do so under applicable
Requirements of Law and then only after consulting with GSCP prior thereto.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
AAH HOLDINGS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
AMSCAN HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
----------------------------------
Title: Vice President and Treasurer
---------------------------------
AMSCAN INC.
AM-SOURCE, LLC
ANAGRAM EDEN PRAIRIE PROPERTY
HOLDINGS LLC
ANAGRAM INTERNATIONAL LLC
ANAGRAM INTERNATIONAL HOLDINGS, INC.
ANAGRAM INTERNATIONAL, INC.
JCS PACKAGING, INC.
M&D INDUSTRIES, INC.
PARTY CITY CORPORATION
SSY REALTY CORP.
TRISAR, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
----------------------------------
Title: Assistant Treasurer
---------------------------------
AMSCAN HOLDINGS, INC.
SECOND LIEN CREDIT AGREEMENT
SIGNATURE PAGE
S-1
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Joint Lead Arranger, Joint
Bookrunner, Syndication Agent,
Administrative Agent, Collateral Agent
and a Lender
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------------------
Title: Managing Director
---------------------------------
AMSCAN HOLDINGS, INC.
SECOND LIEN CREDIT AGREEMENT
SIGNATURE PAGE
S-2
BANC OF AMERICA SECURITIES LLC,
as Joint Lead Arranger and Joint
Bookrunner
By: /s/ X. Xxxxx Wall
------------------------------------
Name: X. Xxxxx Wall
----------------------------------
Title: Vice President
---------------------------------
AMSCAN HOLDINGS, INC.
SECOND LIEN CREDIT AGREEMENT
SIGNATURE PAGE
S-3
BANK OF AMERICA, N.A.,
as Documentation Agent
By: /s/ X. Xxxxx Wall
------------------------------------
Name: X. Xxxxx Wall
----------------------------------
Title: Vice President
---------------------------------
AMSCAN HOLDINGS, INC.
SECOND LIEN CREDIT AGREEMENT
SIGNATURE PAGE
S-4
APPENDIX A
TO CREDIT AND GUARANTY AGREEMENT
COMMITMENTS
PRO
LENDER COMMITMENT RATA SHARE
---------------------------------- -------------- ----------
Xxxxxxx Sachs Credit Partners L.P. $60,000,000.00 100.000%
-------------- -------
TOTAL $60,000,000.00 100.000%
xxxxxxxxxxxxxx xxxxxxx
XXXXXXXX X-0
XXXXXXXX X
TO CREDIT AND GUARANTY AGREEMENT
NOTICE ADDRESSES
AMSCAN HOLDINGS, INC.
00 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxxx
Telecopier: 000-000-0000
AMSCAN INC.
AM-SOURCE, LLC
ANAGRAM EDEN PRAIRIE PROPERTY HOLDINGS LLC
ANAGRAM INTERNATIONAL HOLDINGS, INC.
ANAGRAM INTERNATIONAL, INC.
ANAGRAM INTERNATIONAL LLC
JCS PACKAGING, INC.
M&D INDUSTRIES, INC.
PARTY CITY CORPORATION
SSY REALTY CORP.
TRISAR, INC.
00 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxxx
Telecopier: 000-000-0000
in each case, with a copy of material notices to:
Ropes & Xxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxx, Esq.
Telecopier: 000-000-0000
APPENDIX B-1
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Joint Lead Arranger, Joint Bookrunner,
Syndication Agent, Administrative Agent,
Collateral Agent and a Lender
Principal Office:
Xxxxxxx Sachs Credit Partners L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxxxx
Telecopier: (000) 000-0000
with a copy of material notices to:
Xxxxxx Xxxxxx & Xxxxxxx LLP
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier: 212-269-5420
APPENDIX B-2
BANC OF AMERICA SECURITIES LLC,
as Joint Lead Arranger and Joint Bookrunner
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx
Telecopier: (000) 000-0000
BANK OF AMERICA, N.A.,
as Documentation Agent
000 Xxxxx Xxxxx Xxxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 28255-0001
Attention: Xxxxxxx Xxxxxxxxxxxx
Telecopier: (000) 000-0000
APPENDIX B-3
