Contract
|
Dated
as of May 10, 2006
among
The
Lenders Party Hereto,
and
XXXXXXX
XXXXX CREDIT PARTNERS L.P.,
as
Administrative Agent
___________________________
XXXXXXX
SACHS CREDIT PARTNERS L.P.
and
CREDIT
SUISSE SECURITIES (USA) LLC,
as
Joint Lead Arrangers and Joint Bookrunners,
CREDIT
SUISSE SECURITIES (USA) LLC,
as
Syndication Agent,
and
BANC
OF AMERICA BRIDGE LLC and
UBS
SECURITIES LLC,
as
Co-Documentation Agents
|
[CS&M
Ref. No. 5865-444]
ARTICLE
I
Definitions
and Accounting Terms
1.01 Defined
Terms
1.02 Other
Interpretive Provisions
1.03 Accounting
Terms
1.04 References
to Laws
1.05 Times
of
Day
1.06 Timing
of
Payment or Performance
ARTICLE
II
Loans
2.01 Commitments
2.02 Procedure
for Borrowing
2.03 Maturity;
Extended Loans; Exchange Notes
2.04 Optional
and Mandatory Prepayments
2.05 Repayment
of Loans
2.06 Interest
and Fees
2.07 Computation
of Interest and Fees
2.08 Evidence
of Indebtedness
2.09 Payments
Generally
2.10 Sharing
of Payments
2.11 Change
of
Control Offer
2.12 Asset
Sale Offer
ARTICLE
III
Taxes
and
Increased Costs Protection
3.01 Taxes
3.02 Increased
Cost and Reduced Return; Capital Adequacy
3.03 Certain
Losses
3.04 Matters
Applicable to All Requests for Compensation
3.05 Replacement
of Lenders Under Certain Circumstances
3.06 Survival
ARTICLE
IV
Conditions
Precedent To Effectiveness and to Making of the Initial Loans
4.01 Conditions
to Effectiveness
ARTICLE
V
Representations
and Warranties
5.01 Disclosure
5.02 Capitalization,
Organization, Powers and Authorization
5.03 Government
Authorization; Other Consents
5.04 No
Conflicts
5.05 Financial
Statements
5.06 Independent
Registered Accounting Firm
5.07 Litigation
5.08 Intellectual
Property; Licenses, Etc
5.09 No
Material Adverse Effect
5.10 Taxes
5.11 Margin
Regulations
5.12 Ownership
of Properties
5.13 No
Omissions
5.14 Environmental
Compliance
5.15 Labor
Matters
5.16 Insurance
5.17 ERISA
5.18 Internal
Controls
5.19 Investment
Company Act
5.20 FCPA
5.21 Xxxxxxxx-Xxxxx
ARTICLE
VI
Covenants
6.01 Corporate
Existence
6.02 Payment
of Taxes and Other Claims
6.03 Maintenance
of Properties and Insurance
6.04 Compliance
Certificate; Notice of Default
6.05 Waiver
of
Stay or Extension Laws
6.06 Incurrence
of Indebtedness and Issuance of Preferred Stock.
6.07 Limitation
on Restricted Payments
6.08 Limitation
on Liens
6.09 Asset
Sales
6.10 Limitation
on Transactions with Affiliates
6.11 Dividend
and Other Payment Restrictions Affecting Restricted Subsidiaries
6.12 Future
Guarantors
6.13 Reports.
6.14 Designation
of Restricted and Unrestricted Subsidiaries
6.15 Business
Activities
6.16 Merger,
Consolidation, or Sale of Assets
6.17 Exchange
Notes
ARTICLE
VII
Default
and Remedies
7.01 Events
of
Default
7.02 Acceleration
7.03 Other
Remedies
7.04 Waiver
of
Defaults
7.05 Control
by Majority
7.06 Limitation
on Suits
7.07 Rights
of
Lenders To Receive Payment
7.08 Collection
Suit by Administrative Agent
7.09 Priorities
7.10 Undertaking
for Costs
ARTICLE
VIII
Administrative
Agent
8.01 Appointment
and Authorization of Administrative Agent
8.02 Delegation
of Duties
8.03 Liability
of Administrative Agent
8.04 Reliance
by Administrative Agent
8.05 Notice
of
Default
8.06 Credit
Decision; Disclosure of Information by the Administrative Agent
8.07 Indemnification
of the Administrative Agent
8.08 Administrative
Agent in its Individual Capacity
8.09 Successor
Administrative Agent
8.10 Administrative
Agent May File Proofs of Claim
8.11 Other
Agents; Arrangers and Bookrunners
ARTICLE
IX
Miscellaneous
9.01 Amendments,
Etc
9.02 Notices
and Other Communications; Facsimile Copies
9.03 No
Waiver; Cumulative Remedies
9.04 Attorney
Costs, Expenses and Taxes
9.05 Indemnification
by the Borrower
9.06 Payments
Set Aside
9.07 Successors
and Assigns
9.08 Confidentiality
9.09 Setoff
9.10 Interest
Rate Limitation
9.11 Counterparts
9.12 Integration
9.13 Survival
of Representations and Warranties
9.14 Severability
9.15 Tax
Forms
9.16 Governing
Law
9.17 Waiver
of
Right to Trial by Jury
9.18 Binding
Effect
9.19 USA
PATRIOT Act Notice
SCHEDULES
2.01 Commitments
5.02(a-1) Capitalization
5.02(a-2) Capital
Stock
5.02(a-3) Restrictions
on Capital Stock
5.02(a-4) Subsidiaries
9.02 Administrative
Agent’s Office; Certain Addresses for Notices
EXHIBIT
A Form
of
Exchange Request
EXHIBIT
B Form
of
Interest Payment Election
BRIDGE
LOAN AGREEMENT dated as of May 10, 2006 (this “Agreement”),
among
NTK HOLDINGS, INC., a Delaware corporation (the “Borrower”),
the
Lenders (as defined in Article I), and XXXXXXX SACHS CREDIT PARTNERS
L.P., as administrative agent (in such capacity, the “Administrative
Agent”)
for
the Lenders.
The
Borrower has requested the Lenders to make Initial Loans (such term and each
other capitalized term used but not defined in this introductory statement
having the meaning given to it in Article I) on the Closing Date, in an
aggregate principal amount of $205.0 million, the proceeds of which,
together with cash on-hand of Nortek, will be used by the Borrower to
(a) make a distribution in respect of all outstanding Class A
membership interests of Investors LLC and a portion of the outstanding Class
B
membership interests of Investors LLC in an aggregate amount of approximately
$174.9 million, (b) cause Nortek Holdings, Inc. to make a payment to
participants under the Holdings Deferred Compensation Plan in an aggregate
amount of approximately $54.0 million and (c) pay related fees and
expenses (the transactions described in clauses (a) through (c) being
collectively referred to herein as the “Bridge
Loan Transactions”).
The
Lenders are willing to extend such credit to the Borrower on the terms and
subject to the conditions set forth herein. Accordingly, the parties hereto
agree as follows:
ARTICLE
I
DEFINITIONS
AND ACCOUNTING TERMS
1.01 Defined
Terms.
As used
in this Agreement, the following terms shall have the meanings set forth
below:
“Acquired
Debt”
means,
with respect to any specified Person: (1) Indebtedness of any other Person
existing at the time such other Person is merged with or into or became a
Subsidiary of such specified Person, whether or not such Indebtedness is
incurred in connection with, or in contemplation of, such other Person merging
with or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
“Adjusted
LIBO Rate”
means,
for any Interest Period, an interest rate per annum equal to the product of
(a) the LIBO Rate in effect for such Interest Period and (b) Statutory
Reserves.
“Administrative
Agent”
means
Xxxxxxx Xxxxx Credit Partners L.P. in its capacity as Administrative Agent
under
any of the Loan Documents, or any successor in such capacity.
“Administrative
Agent’s Office”
means
the Administrative Agent’s ad-dress and, as appropriate, account as set forth on
Schedule 9.02,
or such
other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.
“Administrative
Questionnaire”
means
an Administrative Questionnaire in a form supplied by the Administrative
Agent.
“Affiliate”
of
any
specified Person means any other Person directly or indirectly controlling
or
controlled by or under direct or indirect common control with such specified
Person. For purposes of this definition, “control,” as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.
For purposes of this definition, the terms “Controlling,” “Controlled By” and
“Under Common Control With” shall have correlative meanings.
“Affiliate
Transaction”
has
the
meaning specified in Section
6.10.
“Agent-Related
Persons”
means
the Administrative Agent, together with its Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Person and
Affiliates.
“Agents”
means,
collectively, the Administrative Agent, the Arrangers, the Syndication Agent
and
the Co-Documentation Agents.
“Agreement”
means
this Bridge Loan Agreement as amended, amended and restated or otherwise
modified from time to time.
“Amend”
means
amend, modify, supplement, restate or amend and restate, including successively;
and “Amending” and “Amended” have correlative meanings.
“Applicable
Extended Loan Percentage”
means,
with respect to any Extended Loan, 0 basis points during the Interest
Period beginning on the Initial Maturity Date, which amount shall increase
by 50
basis points at the beginning of the next succeeding Interest Period and by
an
additional 50 basis points at the beginning of each subsequent Interest
Period.
“Applicable
Initial Loan Percentage”
means,
with respect to any Initial Loan, 250 basis points for each of the first two
Interest Periods immediately following the Closing Date, and 350 basis points
for each of the two immediately succeeding Interest Periods.
“Approved
Fund”
means
any Fund that is administered or managed by (a) a Lender, (b) an Affiliate
of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.
“Arrangers”
means
Xxxxxxx Sachs Credit Partners L.P. and Credit Suisse Securities (USA) LLC,
in
their capacities as joint lead arrangers and joint bookrunners.
“Asset”
means
any asset or property, whether real, personal or other, tangible or
intangible.
“Asset
Acquisition”
means
(a) an Investment by the Borrower or any of its Restricted Subsidiaries in
any other Person if, as a result of such Investment, such Person shall become
a
Restricted Subsidiary of the Borrower, or shall be merged with or into the
Borrower or any Restricted Subsidiary of the Borrower, or (b) the
acquisition by the Borrower or any Restricted Subsidiary of the Borrower of
all
or substantially all of the assets of any other Person or any division or line
of business of any other Person.
“Asset
Sale”
means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights of the Borrower or any Restricted Subsidiary; provided
that the
sale, conveyance or other disposition of all or substantially all of the assets
of the Borrower and its Restricted Subsidiaries taken as a whole will be
governed by Section 2.11
and/or
Section 6.16
and not
by Section 6.09;
and
(2) the issuance or sale of Equity Interests in or by any of the Borrower’s
Restricted Subsidiaries (other than director’s qualifying shares or shares
required by applicable law to be held by Persons other than the Borrower or
a
Restricted Subsidiary).
Notwithstanding
the preceding, the following items shall not be deemed to be Asset
Sales:
(1) any
single transaction or series of related transactions that involves assets having
a fair market value of less than $5.0 million;
(2) a
transfer of assets between or among the Borrower and its Restricted
Subsidiaries;
(3) an
issuance of Equity Interests by a Restricted Subsidiary to the Borrower or
to
another Restricted Subsidiary;
(4) the
sale,
lease, sublease, license, sublicense or consignment of equipment, inventory
or
other assets in the ordinary course of business;
(5) the
sale
or other disposition of cash or Cash Equivalents;
(6) a
Restricted Payment or Permitted Investment that is permitted under Section 6.07;
(7) the
licensing of intellectual property to third Persons on customary terms as
determined by the Board of Directors of the Borrower in good faith;
(8) any
sale
of accounts receivable, or participations therein, in connection with any
Qualified Receivables Transaction;
(9) any
sale
or disposition of any property or equipment that has become damaged, worn-out,
obsolete, condemned, given over in lieu of deed or otherwise unsuitable or
not
required for the ordinary course of the business of the Borrower and its
Restricted Subsidiaries;
(10) any
sale
of Equity Interests in, or Indebtedness or other securities of, an Unrestricted
Subsidiary;
(11) any
foreclosures of assets; and
(12) any
disposition of an account receivable in connection with the collection or
compromise thereof.
“Asset
Sale Offer”
has
the
meaning specified in Section
2.12.
“Assignment
and Assumption”
means
an Assignment and Assumption entered into by a Lender and an assignee, and
accepted by the Administrative Agent, in a form as shall be approved by the
Administrative Agent.
“Attorney
Costs”
means
and includes all reasonable fees, expenses and disbursements of any law firm
or
other external counsel.
“Attributable
Debt”
in
respect of a sale and leaseback transaction means, at the time of determination,
the present value of the obligation of the lessee for net rental payments during
the remaining term of the lease included in such sale and leaseback transaction,
including any period for which such lease has been extended or may, at the
option of the lessor, be extended. Such present value shall be calculated using
a discount rate equal to the rate of interest implicit in such transaction,
determined in accordance with GAAP.
“Bankruptcy
Exceptions”
has
the
meaning specified in Section
5.02(c).
“Bankruptcy
Law”
means
Title 11, U.S. Code or any similar Federal, state or foreign law for
the relief of debtors.
“Beneficial
Owner”
has
the
meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that in calculating the beneficial ownership of any
particular “person” (as that term is used in Section 13(d)(3) of the
Exchange Act), such “person” shall be deemed to have beneficial ownership of all
securities that such “person” has the right to acquire by conversion or exercise
of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
“Beneficially Owns” and “Beneficially Owned” shall have a corresponding
meaning.
“Board”
means
the Board of Governors of the Federal Reserve System.
“Board
of Directors”
means:
(1) with respect to a corporation, the board of directors of the
corporation or a committee thereof authorized to exercise the power of the
board
of directors of such corporation; (2) with respect to a partnership, the
board of directors of the general partner of the partnership; and (3) with
respect to any other Person, the board or committee of such Person serving
a
similar function.
“Board
Resolution”
means,
with respect to any Person, a copy of a resolution certified by the Secretary
or
an Assistant Secretary of such Person to have been duly adopted by the Board
of
Directors of such Person and to be in full force and effect on the date of
such
certification, and delivered to the Administrative Agent.
“Borrower”
means
NTK Holdings, Inc., a Delaware corporation.
“Borrowing”
means
the incurrence of the Initial Loans.
“Borrowing
Base”
means,
as of any date, an amount equal to:
(1) 85%
of
the face amount of all accounts receivable owned by the Borrower and its
Restricted Subsidiaries as of the end of the most recent fiscal quarter
preceding such date that were not more than 90 days past due;
plus
(2) 65%
of
the book value of all inventory owned by the Borrower and its Restricted
Subsidiaries as of the end of the most recent fiscal quarter preceding such
date; all calculated on a consolidated basis and in accordance with
GAAP.
“Borrowing
Request”
means
a
request by the Borrower in accordance with Section 2.02,
in a
form reasonably satisfactory to the Administrative Agent.
“Bridge
Loan Transactions”
has
the
meaning specified in the preamble to this Agreement.
“Business
Day”
means
any day other than a Saturday, Sunday or any other day on which banking
institutions in the City of New York are required or authorized by law or
other governmental action to be closed.
“Calculation
Date”
has
the
meaning specified in the definition of the term “Fixed Charge Coverage Ratio”.
“Capital
Lease Obligation”
means,
at the time any determination thereof is to be made, the amount of the liability
in respect of a capital lease that would at that time be required to be
capitalized on a balance sheet in accordance with GAAP.
“Capital
Stock”
means:
(1) in the case of a corporation, corporate stock; (2) in the case of
an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of
corporate stock; (3) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited);
and (4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
“Cash
Equivalents”
means:
(1) United States dollars or, in the case of any Foreign Restricted
Subsidiary, such local currencies held by it from time to time in the ordinary
course of business; (2) securities issued or directly and fully guaranteed
or insured by the United States government or any agency or instrumentality
of
the United States, Canada or any member nation of the European Union having
maturities of not more than 360 days from the date of acquisition;
(3) certificates of deposit, time deposits and eurodollar time deposits
with maturities of twelve months or less from the date of acquisition, bankers’
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any domestic commercial bank having capital and
surplus in excess of $500.0 million; (4) repurchase obligations for
underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the qualifications
specified in clause (3) above; (5) commercial paper having the rating
of P-1 or better from Xxxxx’x or A-1 or better from S&P and in each case
maturing within twelve months after the date of acquisition; (6) readily
marketable direct obligations issued by any state of the United States or any
political subdivision thereof having one of the two highest rating categories
from either Xxxxx’x or S&P with maturities of twelve months or less from the
date of acquisition; (7) instruments equivalent to those referred to in
clauses (1) to (6) above denominated in euro or any other foreign
currency comparable in credit quality and tenor to those referred to above
and
customarily used by corporations for cash management purposes in any
jurisdiction outside the United States to the extent reasonably required in
connection with any business conducted by any Restricted Subsidiary organized
in
such jurisdiction; and (8) investments in funds which invest substantially
all of their assets in Cash Equivalents of the kinds described in
clauses (1) through (7) of this definition.
“CERCLA”
has
the
meaning specified in Section
5.14.
“Change
of Control”
means
the occurrence of any of the following: (1) the direct or indirect sale,
transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of the Borrower and its Restricted
Subsidiaries, taken as a whole, to any “person” (as that term is used in
Section 13(d)(3) of the Exchange Act) other than the Principals or Related
Parties of the Principals; (2) the adoption of a plan relating to the
liquidation or dissolution of the Borrower; (3) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than the Principals and
their Related Parties, becomes the Beneficial Owner, directly or indirectly,
of
more than 50% of the voting power of the Voting Stock of the Borrower or the
direct parent company of the Borrower, as the case may be; (4) the first
day on which a majority of the members of the Board of Directors of the direct
parent company of the Borrower or the Borrower are not Continuing Directors;
or
(5) the direct parent company of the Borrower or the Borrower consolidates
with, or merges with or into, any Person, or any Person consolidates with,
or
merges with or into, the direct parent company of the Borrower or the Borrower,
in any such event pursuant to a transaction in which any of the outstanding
Voting Stock of the direct parent company of the Borrower, the Borrower or
such
other Person is converted into or exchanged for cash, securities or other
property, other than any such transaction where (A) the Voting Stock of the
direct parent company of the Borrower or the Borrower outstanding immediately
prior to such transaction is converted into or exchanged for Voting
Stock (other than Disqualified Stock) of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting Stock of such
surviving or transferee Person (immediately after giving effect to such
issuance) and (B) immediately after such transaction, no “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act), other than the Principals and their Related Parties, becomes
the Beneficial Owner, directly or indirectly, of more than 50% of the voting
power of the Voting Stock of the surviving or transferee person.
“Change
of Control Offer”
has
the
meaning specified in Section
2.11.
“Change
of Control Prepayment”
has
the
meaning specified in Section 2.11.
“Change
of Control Prepayment Date”
has
the
meaning specified in Section
2.11.
“Closing
Date”
means
May 10, 2006.
“Co-Documentation
Agents”
means
Banc of America Bridge LLC and UBS Securities LLC, as Co-Documentation Agents
under the Loan Documents.
“Code”
means
the United States Internal Revenue Code of 1986, as amended from time to time,
and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code as in effect on the Closing Date and
any
subsequent provisions of the Code amendatory thereof, supplemental thereto
or
substituted therefor.
“Commission”
means
the Securities and Exchange Commission.
“Commitment”
means,
with respect to each Lender, the commitment of such Lender to make a Loan
hereunder as set forth on Schedule 2.01.
The
aggregate amount of the Lenders’ Commitments is
$205.0 million.
“Compensation
Period”
has
the
meaning specified in Section
2.09(c).
“Consolidated
Cash Flow”
means,
with respect to any specified Person for any period, the Consolidated Net Income
of such Person for such period and, without duplication, plus:
(1) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision
for
taxes was deducted in computing such Consolidated Net Income; plus
(2) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether or not paid or accrued and whether or
not
capitalized (including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges incurred
in
respect of letter of credit or bankers’ acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging Obligations), to
the
extent that any such expense was deducted in computing such Consolidated Net
Income; plus (3) depreciation, amortization (including amortization of the
step-up in inventory valuation arising from purchase accounting and other
intangibles) and other non-cash expenses (excluding any such non-cash expense
to
the extent that it represents an accrual of or reserve for cash expenses in
any
future period or amortization of a prepaid cash expense that was paid in a
prior
period) of such Person and its Restricted Subsidiaries for such period to the
extent that such depreciation, amortization and other non-cash expenses were
deducted in computing such Consolidated Net Income; plus (4) any management
fees paid by the Borrower or any Restricted Subsidiary to Xxxxx &
Company L.P. or Xxxxxx X. Xxx Partners, L.P., as the case may be, or their
respective Affiliates, in such period pursuant to management agreements entered
into in connection with the Original Transactions pursuant to the Stock Purchase
Agreement, to the extent that any such management fees were deducted in
computing such Consolidated Net Income; provided
that the
maximum aggregate amount of such management fees in any 12-month period payable
to Xxxxxx X. Xxx Partners, L.P. or its Affiliates shall not exceed the
amount described in the 2005 10-K; plus (5) any reasonable expenses, fees
or charges related to the Original Transactions or any acquisition or
Investment, in each case to the extent that any such expenses, fees or charges
were deducted in computing such Consolidated Net Income; plus (6) other
non-recurring cash charges not to exceed in the aggregate $3.0 million in
any fiscal year; minus (7) non-cash items increasing such Consolidated Net
Income for such period, excluding any items which represent the reversal of
any
accrual of, or cash reserve for, anticipated cash charges in any prior
period.
Notwithstanding
the preceding, the provision for taxes based on the income or profits of, and
the depreciation and amortization and other non-cash expenses of, a Restricted
Subsidiary of the Borrower shall be added to Consolidated Net Income to compute
Consolidated Cash Flow of the Borrower only to the extent that a corresponding
amount would be permitted at the date of determination to be dividended to
the
Borrower by such Restricted Subsidiary without prior governmental approval
(that
has not been obtained), and without direct or indirect restriction pursuant
to
the terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders unless (x) such restriction with
respect to the payment of dividends or similar distributions has been legally
waived or (y) such restriction is permitted by Section 6.11.
“Consolidated
Net Income”
means,
with respect to any specified Person for any period, the aggregate of the Net
Income of such Person and its Subsidiaries for such period, on a consolidated
basis, determined in accordance with GAAP; provided
that:
(1) the
Net
Income of any Person that is not a Restricted Subsidiary, or that is accounted
for by the equity method of accounting shall be excluded; provided
that, to
the extent not previously included, Consolidated Net Income shall be increased
by the amount of dividends or distributions paid in cash to the specified Person
or a Restricted Subsidiary thereof;
(2) the
Net
Income of any Restricted Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, unless
such restriction with respect to the payment of dividends or similar
distributions (x) has been legally waived or (y) is permitted by
Section 6.11;
provided
that
Consolidated Net Income of such Person shall be increased by the amount of
dividends or distributions or other payments that are actually paid in cash
(or
to the extent converted into cash) to such Person or a Restricted Subsidiary
thereof (subject to provisions of this clause (2)) during such period, to
the extent not previously included therein;
(3) the
Net
Income (or loss) of any Person acquired in a pooling of interests transaction
for any period prior to the date of such acquisition shall be
excluded;
(4) the
cumulative effect of a change in accounting principles shall be
excluded;
(5) non-cash
charges relating to employee benefit or other management compensation plans
of
any Parent (to the extent such non-cash charges relate to plans of any Parent
for the benefit of members of the Board of Directors of the Borrower or any
Restricted Subsidiary (in their capacity as such) or employees of the Borrower
or any Restricted Subsidiary), the Borrower or any of its Restricted
Subsidiaries or any non-cash compensation charge arising from any grant of
stock, stock options or other equity-based awards of any Parent (to the extent
such non-cash charges relate to plans of the Borrower or any Restricted
Subsidiary for the benefit of members of the Board of Directors of the Borrower
or any Restricted Subsidiary (in their capacity as such) or employees of the
Borrower or any Restricted Subsidiary), the Borrower or any of its Restricted
Subsidiaries (excluding in each case any non-cash charge to the extent that
it
represents an accrual of or reserve for cash expenses in any future period
or
amortization of a prepaid cash expense incurred in a prior period) in each
case,
to the extent that such non-cash charges are deducted in computing such
Consolidated Net Income shall be excluded;
(6) any
non-cash goodwill or other impairment charges resulting from the application
of
Statement of Financial Accounting Standards No. 142 or Statement of Financial
Accounting Standards No. 144, and non-cash charges relating to the amortization
of intangibles resulting from the application of Statement of Financial
Accounting Standards No. 141, shall be excluded;
(7) any
increase in cost of sales as a result of the step-up in inventory valuation
arising from applying the purchase method of accounting in accordance with
GAAP
in connection with the Original Transactions or any acquisition consummated
after February 15, 2005, net of taxes, shall be excluded;
(8) unrealized
gains and losses relating to hedging transactions and xxxx-to-market of
Indebtedness denominated in foreign currencies resulting from the application
of
Statement of Financial Accounting Standards No. 52 shall be excluded;
and
(9) all
restructuring charges, including severance, relocation and transition costs,
shall be excluded.
“Consolidated
Tangible Assets”
means,
with respect to any Person, the consolidated total assets of such Person and
its
Restricted Subsidiaries determined in accordance with GAAP, less all goodwill,
trade names, trademarks, patents and other similar intangibles properly
classified as intangibles in accordance with GAAP, all as shown on the most
recent balance sheet for such Person.
“Continuing
Directors”
means,
as of any date of determination, any member of the Board of Directors of the
Borrower or any Parent, as the case may be, who: (1) was a member of such
Board of Directors on February 15, 2005; (2) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time
of
such nomination or election; or (3) was designated or appointed by the
Principals and the Related Parties of the Principals.
“Contracts”
has
the
meaning specified in Section
5.03.
“Credit
Facilities”
means
one or more debt facilities (including, without limitation, the Nortek
Credit Agreement), commercial paper facilities or indentures, in each case
with
banks or other institutional lenders or a trustee providing for revolving credit
loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow
from
such lenders against such receivables), letters of credit or issuances of notes,
in each case as amended, modified, renewed, refunded, replaced, restated,
substituted or refinanced in whole or in part from time to time.
“Debtor
Relief Laws”
means
the Bankruptcy Code of the United States, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors
generally.
“Default”
means
any event that is, or with the passage of time or the giving of notice or both
would be, an Event of Default.
“Default
Rate”
means
an interest rate equal to the interest rate otherwise applicable to the Loans
plus 2.0% per annum, to the fullest extent permitted by applicable
Laws.
“Designated
Noncash Consideration”
means
the fair market value of noncash consideration received by the Borrower or
any
of its Restricted Subsidiaries in connection with an Asset Sale that is so
designated as Designated Noncash Consideration pursuant to an Officers’
Certificate setting forth the basis of such valuation, less the amount of cash
or Cash Equivalents received in connection with a subsequent sale of such
Designated Noncash Consideration.
“Disqualified
Stock”
means
any Capital Stock that, by its terms (or by the terms of any security into
which
it is convertible, or for which it is exchangeable, in each case at the option
of the holder thereof), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or
redeemable at the option of the holder thereof, in whole or in part, on or
prior
to the date that is 91 days after the Final Maturity Date; provided
that if
such Capital Stock is issued to any employee or to any plan for the benefit
of
employees of the Borrower or any of its Subsidiaries or by any such plan to
such
employees, such Capital Stock shall not constitute Disqualified Stock solely
because it may be required to be repurchased by the Borrower or such Subsidiary
in order to satisfy applicable statutory or regulatory obligations; and
provided
further
that any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Borrower or any of its Restricted
Subsidiaries to repurchase such Capital Stock upon the occurrence of a change
of
control or an asset sale shall not constitute Disqualified Stock if the terms
of
such Capital Stock provided that the Borrower or any such Restricted Subsidiary
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 6.07.
“Dollar”,
“$”
and
“U.S.
Dollar”
mean
the lawful money of the United States.
“Domestic
Subsidiary”
means
any Restricted Subsidiary that was formed under the laws of the United States
or
any state thereof or the District of Columbia.
“Environmental
Laws”
has
the
meaning specified in Section
5.14.
“Environmental
Liability”
means
any liability or costs, contingent or otherwise (including any liability for
damages, costs of environmental remediation, fines, penalties or indemnities),
of the Borrower, any other Loan Party or any of their respective Subsidiaries
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the Release or threatened Release of any Hazardous Materials
into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
“Equity
Interests”
means
Capital Stock and all warrants, options or other rights to acquire Capital
Stock
(but excluding any debt security that is convertible into, or exchangeable
for,
Capital Stock).
“Equity
Sponsor”
means
Xxxxxx X. Xxx Partners, L.P., a Delaware limited partnership.
“ERISA”
means
the Employee Retirement Income Security Act of 1974.
“ERISA
Affiliate”
means
any trade or business (whether or not incorporated) under common control
with the Borrower within the meaning of Section 414(b) or (c) of the Code
(and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).
“Event
of Default”
has
the
meaning specified in Section 7.01.
“Excess
Proceeds”
has
the
meaning specified in Section
2.12.
“Excess
Proceeds Prepayment”
has
the
meaning specified in Section
2.12.
“Excess
Proceeds Prepayment Date”
has
the
meaning specified in Section
2.12.
“Exchange”
has
the
meaning specified in Section 2.03(b)(i).
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder.
“Exchange
Date”
has
the
meaning specified in Section 2.03(b)(ii).
“Exchange
Note Indenture”
means
an Exchange Note Indenture, prepared by the Administrative Agent and reasonably
acceptable to the Borrower and the Trustee, to be entered into pursuant to
Section 6.17,
among
the Borrower and the Trustee, relating to the issuance of the Exchange
Notes.
“Exchange
Notes”
means
any notes (or, if more than one such note is outstanding, all such notes,
including any Increasing Rate Exchange Notes and Fixed Rate Exchange
Notes (unless the context otherwise requires)) issued under the Exchange
Note Indenture in exchange for one or more Loans, substantially in the form
attached as an exhibit to the Exchange Note Indenture.
“Exchange
Request”
has
the
meaning specified in Section
2.03(b)(iii).
“Excluded
Contributions”
means
the net cash proceeds received by the Borrower after August 27, 2004 from
(a) contributions to its common equity capital and (b) the
sale (other than to a Subsidiary or to any management equity plan or stock
option plan or any other management or employee benefit plan or agreement of
the
Borrower or any of its Subsidiaries) of Capital Stock (other than
Disqualified Stock) of the Borrower, in each case designated within 60 days
of the receipt of such net cash proceeds as Excluded Contributions pursuant
to
an Officers’ Certificate, the cash proceeds of which are excluded from the
calculation set forth in Section 6.07(a)(3).
“Existing
Indebtedness”
means
Indebtedness outstanding on the Closing Date, other than under this Agreement
and the Nortek Credit Agreement.
“Extended
Loans”
has
the
meaning specified in Section
2.03(a).
“Federal
Funds Rate”
means,
for any day, the rate per annum equal to the weighted average of the rates
on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day;
provided
that
(a) if such day is not a Business Day, the Federal Funds 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 (b) if no such rate is
so published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average (rounded upward, if necessary, to a whole
multiple of 1/100 of 1%) of the quotations for the day for such transactions
received by the Administrative Agent from three federal funds brokers of
recognized standing selected by it.
“Fee
Letter”
means
the Fee Letter dated May 10, 2006, among the Borrower, the Initial Lenders
and
the Arrangers.
“Fees”
means
any and all fees payable to the Administrative Agent or any Lender pursuant
to
the Agreement, the Fee Letter or any of the other Loan Documents.
“Final
Maturity Date”
means
March 1, 2014.
“Financing
Obligations”
means
any principal, interest, penalties, fees, indemnifications, reimbursements,
damages, costs, expenses and other liabilities payable under the documentation
governing any Indebtedness.
“Fixed
Charge Coverage Ratio”
means
with respect to any specified Person for any period, the ratio of the
Consolidated Cash Flow of such Person for such period to the Fixed Charges
of
such Person for such period. In the event that the specified Person or any
of
its Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases
or
redeems any Indebtedness or issues, repurchases or redeems Disqualified Stock
or
preferred stock subsequent to the commencement of the period for which the
Fixed
Charge Coverage Ratio is being calculated and on or prior to the date on which
the event for which the calculation of the Fixed Charge Coverage Ratio is
made (the “Calculation
Date”),
then
the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to
such incurrence, assumption, Guarantee, repayment, repurchase, or redemption
of
Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock
or preferred stock and the use of the proceeds therefrom as if the same had
occurred at the beginning of the applicable four-quarter reference
period.
In
addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) the
Investments, acquisitions, dispositions, mergers, consolidations and
discontinued operations (as determined in accordance with GAAP) that have
been made by the Borrower or any Restricted Subsidiary of the Borrower during
the four-quarter reference period or subsequent to such reference period and
on
or prior to or simultaneously with the Calculation Date shall be calculated
on a
pro forma basis including Pro Forma Cost Savings assuming that all such
Investments, acquisitions, dispositions, mergers, consolidations and
discontinued operations (and the change in any associated fixed charge
obligations and the change in EBITDA resulting therefrom) had occurred on the
first day of the four-quarter reference period. If since the beginning of such
period any Person (that subsequently became a Restricted Subsidiary of the
Borrower or was merged with or into the Borrower or any Restricted Subsidiary
of
the Borrower since the beginning of such period) shall have made any Investment,
acquisition, disposition, merger, consolidation or discontinued operation that
would have required adjustment pursuant to this definition, then the Fixed
Charge Coverage Ratio shall be calculated giving pro forma effect thereto for
such period as if such Investment, acquisition, disposition, merger,
consolidation or discontinued operation had occurred at the beginning of the
applicable four-quarter period; and
(2) in
calculating Fixed Charges attributable to interest on any Indebtedness computed
on a pro forma basis, (a) interest on outstanding Indebtedness determined
on a fluctuating basis as of the Calculation Date and which will continue to
be
so determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in effect on the
Calculation Date; (b) if interest on any Indebtedness actually incurred on
the Calculation Date may optionally be determined at an interest rate based
upon
a factor of a prime or similar rate, a eurocurrency interbank offered rate,
or
other rates, then the interest rate in effect on the Calculation Date will
be
deemed to have been in effect during the four-quarter period; and
(c) notwithstanding clause (a) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by
agreements relating to interest rate swaps, caps or collars, shall be deemed
to
accrue at the rate per annum resulting after giving effect to the operation
of
such agreement.
“Fixed
Charges”
means,
with respect to any specified Person for any period, the sum, without
duplication of: (1) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs and original issue
discount, noncash interest payments (other than the amortization of discount
or
imputed interest arising as a result of purchase accounting), the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers’ acceptance financings, and
net of the effect of all payments made or received pursuant to Hedging
Obligations; plus (2) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a
Lien on assets of such Person or one of its Restricted Subsidiaries, whether
or
not such Guarantee or Lien is called upon; plus (4) all dividends and
distributions, whether paid or accrued and whether or not in cash, on any series
of preferred stock or Disqualified Stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable solely in Equity
Interests of the Borrower (other than Disqualified Stock) or to the Borrower
or
a Restricted Subsidiary of the Borrower; minus (5) the amortization or
expensing of financing fees (including any write-off of unamortized debt
discount) incurred by the Borrower and its Restricted Subsidiaries in connection
with the Original Transactions or the Bridge Loan Transactions and recognized
in
the applicable period; minus (6) interest income actually received by the
Borrower or any Restricted Subsidiary in cash for such period.
“Fixed
Rate Exchange Note”
has
the
meaning specified in Section 6.17.
“Foreign
Lender”
has
the
meaning specified in Section 9.15(a)(i).
“Foreign
Restricted Subsidiary”
means
any Restricted Subsidiary of the Borrower organized in any jurisdiction outside
the United States.
“Fund”
means
any Person (other than a natural person) that is engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course.
“GAAP”
means
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute
of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity
as
have been approved by a significant segment of the accounting profession, which
were in effect on August 27, 2004.
“Governmental
Authority”
means
any nation or government, any state or other political subdivision thereof,
any
agency, authority, instrumentality, regulatory body, court, administrative
tribunal, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
“Granting
Lender”
has
the
meaning specified in Section 9.07(g).
“Guarantee”
means
a
guarantee other than by endorsement of negotiable instruments for collection
in
the ordinary course of business, direct or indirect, in any manner including,
without limitation, by way of a pledge of assets or through letters of credit
or
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness, and the term “Guaranteed” shall have a correlative
meaning.
“Guarantors”
means
each Person that is required to, or at the election of the Borrower does, become
a Guarantor by the terms of this Agreement after the Closing Date, in each
case,
until such Person is released from its Loan Guarantee in accordance with
Section 6.12.
“Hazardous
Materials”
means
all pollutants, contaminants, chemicals, constituents substances, or wastes,
including petroleum or petroleum products, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes,
of any nature regulated pursuant to or which can give rise to liability under
any Environmental Law.
“Hedging
Obligations”
means,
with respect to any specified Person, the obligations of such Person
under:
(1) interest
rate swap agreements, interest rate cap agreements, interest rate collar
agreements and other agreements or arrangements designed for the purpose of
fixing, hedging or swapping interest rate risk;
(2) commodity
swap agreements, commodity option agreements, forward contracts and other
agreements or arrangements designed for the purpose of fixing, hedging or
swapping commodity price risk; and
(3) foreign
exchange contracts, currency swap agreements and other agreements or
arrangements designed for the purpose of fixing, hedging or swapping foreign
currency exchange rate risk.
“Holdings
Deferred Compensation Plan”
means
the Nortek Holdings, Inc. Deferred Compensation Plan, effective as of
August 27, 2004, and any replacement plan adopted by the Borrower or any of
its Subsidiaries, which provides for the right to receive payments to be made
to
participants thereunder in amounts determined in relation to amounts distributed
to direct or indirect equity holders of the Borrower.
“Increasing
Rate Exchange Note”
means
any Exchange Note other than a Fixed Rate Exchange Note.
“Incur”
has
the
meaning specified in Section 6.06.
“Indebtedness”
means,
with respect to any specified Person, any indebtedness of such Person, whether
or not contingent, in respect of:
(1) borrowed
money;
(2) evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);
(3) banker’s
acceptances;
(4) representing
Capital Lease Obligations;
(5) the
balance deferred and unpaid of the purchase price of any property, except any
such balance that constitutes an accrued expense or trade payable;
or
(6) representing
any Hedging Obligations,
if
and to
the extent any of the preceding items (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of the specified
Person prepared in accordance with GAAP. In addition, the term “Indebtedness”
includes all Indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, the Guarantee by the
specified Person of any obligations constituting Indebtedness.
The
amount of any Indebtedness outstanding as of any date shall be:
(1) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount;
(2) the
principal amount thereof, together with any interest thereon that is more than
30 days past due, in the case of any other Indebtedness; and
(3) with
respect to Indebtedness of another Person secured by a Lien on the assets of
the
Borrower or any of its Restricted Subsidiaries, the lesser of the fair market
value of the property secured or the amount of the secured
Indebtedness.
“Indemnified
Liabilities”
has
the
meaning specified in Section
9.05.
“Indemnitees”
has
the
meaning specified in Section
9.05.
“Independent
Financial Advisor”
has
the
meaning specified in Section 6.07(c).
“Information”
has
the
meaning specified in Section
9.08.
“Initial
Lender”
means
each of Xxxxxxx Xxxxx Credit Partners L.P., Credit Suisse, Banc of America
Bridge LLC and UBS Loan Finance LLC.
“Initial
Loans”
has
the
meaning specified in Section 2.01(a).
“Initial
Maturity Date”
means
May 10, 2007.
“Interest
Payment Date”
means,
with respect to any Loan, the last day of each Interest Period applicable to
such Loan, the Initial Maturity Date and the day on which such Loan is repaid
or
prepaid.
“Interest
Period”
means
the period commencing on the Closing Date and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the
last
day) in the calendar month that is three months thereafter, and each successive
three-month period commencing on the last day of the preceding interest period
and ending on the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is three months
thereafter; provided,
however,
that if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
“Interest
Rate Cap”
has
the
meaning specified in Section
2.06(a).
“Investments”
means,
with respect to any Person, all direct or indirect investments by such Person
in
other Persons (including Affiliates) in the forms of loans (including Guarantees
or other obligations), advances or capital contributions (excluding accounts
receivable, trade credit, advances to customers, commission, travel and similar
advances to officers and employees made consistent with past practices),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Borrower or any Restricted Subsidiary of the Borrower sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Borrower such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Borrower, the Borrower
shall be deemed to have made a Restricted Investment on the date of any such
sale or disposition equal to the fair market value of the Equity Interests
of
such Restricted Subsidiary not sold or disposed of in an amount determined
as
provided in Section 6.07(c).
The
acquisition by the Borrower or any Restricted Subsidiary of the Borrower of
a
Person that holds an Investment in a third Person shall be deemed to be an
Investment by the Borrower or such Restricted Subsidiary in such third Person
in
an amount equal to the fair market value of the Investment held by the acquired
Person in such third Person in an amount determined as provided in Section 6.07(c).
For
purposes of the definition of “Unrestricted Subsidiary” and Section 6.07,
(i)
Investments shall include the portion (proportionate to the Borrower’s equity
interest in such Subsidiary) of the fair market value of the net assets of
a
Subsidiary of the Borrower at the time such Subsidiary is designated an
Unrestricted Subsidiary; provided,
however,
that
upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Borrower
shall be deemed to continue to have a permanent “Investment” in an Unrestricted
Subsidiary in an amount (if positive) equal to (x) the Borrower’s “Investment”
in such Subsidiary at the time of such redesignation less (y) the portion
(proportionate to the Borrower’s equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Borrower.
“Investors
LLC”
means
THL-Nortek Investors, LLC, a Delaware limited liability company.
“IRS”
means
the U.S. Internal Revenue Service.
“Laws”
means,
collectively, all international, foreign, Federal, state and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes and administrative
or judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations
and
permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of law.
“Lender”
means
(a) the persons listed on Schedule 2.01
(other
than any such Person that has ceased to be a party hereto pursuant to an
Assignment and Assumption) and (b) any Person that has become a party
hereto pursuant to an Assignment and Assumption.
“Lending
Office”
means,
as to any Lender, the office or offices of such Lender described as such in
such
Lender’s Administrative Questionnaire, or such other office or offices as a
Lender may from time to time notify the Borrower and the Administrative
Agent.
“LIBO
Rate”
means,
with respect to any Loan for any Interest Period, the rate appearing on
Page 3750 of the Dow Xxxxx Market Service (or on any successor or
substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement
of such Interest Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not available
at such time for any reason, then the “LIBO Rate” for such Interest Period shall
be the rate (rounded upwards, if necessary, to the next 1/100 of 1%) at
which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
“Lien”
means,
with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset, whether or not filed,
recorded or otherwise perfected under applicable law, including any conditional
sale or other title retention agreement, any lease (other than an operating
lease), any option or other agreement to sell or give a security interest in
and
any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.
“Loan
Documents”
means
the Agreement, the promissory notes, if any, executed and delivered pursuant
to
Section 2.08(a),
and the
Fee Letter.
“Loan
Facility”
means,
at any time, the aggregate Loans of all Lenders at such time under this
Agreement.
“Loan
Guarantee”
means
the Guarantee by each Guarantor of the Borrower’s payment Obligations under this
Agreement and the Loans, executed pursuant to the provisions of this
Agreement.
“Loan
Parties”
means,
collectively, the Borrower and each Guarantor (if any).
“Loans”
means
the loans made by the Lenders to the Borrower pursuant to this Agreement,
including the Initial Loans and the Extended Loans.
“Mandatory
Prepayment Termination Date”
has
the
meaning specified in Section
2.04(b).
“Material
Adverse Effect”
has
the
meaning specified in Section
5.02(b).
“Maximum
Rate”
has
the
meaning specified in Section 9.10.
“Minority
Lenders”
has
the
meaning specified in Section 9.01.
“Moody’s”
means
Xxxxx’x Investors Service, Inc. or any successor to the rating agency business
thereof.
“Net
Income”
means,
with respect to any specified Person, the net income (loss) of such Person,
determined in accordance with GAAP and before any reduction in respect of
preferred stock dividends, excluding, however: (1) any gain (or loss), together
with any related provision for taxes on such gain (or loss), realized in
connection with: (a) any Asset Sale (without reference to the $5.0 million
limitation); or (b) the disposition of any other assets by such Person or any
of
its Restricted Subsidiaries (other than in the ordinary course of business)
or
the extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries; (2) any extraordinary or nonrecurring gains, losses or charges,
together with any related provision for taxes on such gain, loss or charge;
and
(3) any gains, losses, or charges of the Borrower and its Subsidiaries incurred
in connection with the Original Transactions, including severance, bonus, change
of control payments and other compensation charges arising therefrom, together
with any related provision for taxes on such gain, loss, or charge.
“Net
Proceeds”
means
(a) with respect to any Asset Sale, the aggregate cash proceeds received by
the
Borrower or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any noncash consideration received in any Asset Sale), net of
the
direct costs relating to such Asset Sale or disposition of such noncash
consideration, including, without limitation, legal, accounting and investment
banking fees, and sales commissions, and any relocation expenses incurred as
a
result thereof, taxes paid or payable as a result thereof, in each case, after
taking into account any available tax credits or deductions and any tax sharing
arrangements, and amounts required to be applied to the repayment of
Indebtedness (other than revolving credit Indebtedness, unless there is a
required reduction in commitments) secured by a Lien on the asset or assets
that
were the subject of such Asset Sale and any (1) reserve for adjustment in
respect of the sale price of such asset or assets established in accordance
with
GAAP and (2) any reserve or payment with respect to any liabilities associated
with such asset or assets and retained by the Borrower after such sale or other
disposition thereof, including, without limitation, severance costs, pension
and
other post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated
with
such transaction and (b) with respect to any Incurrence of Specified
Indebtedness or Specified Equity Issuance, the cash proceeds thereof, net of
all
investment banking fees, underwriting discounts and commissions, taxes and
other
out-of-pocket expenses and other customary expenses incurred in connection
therewith.
“Non-Recourse
Debt”
means
Indebtedness:
(1) as
to
which neither the Borrower nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), or (b) is
directly or indirectly liable as a guarantor or otherwise; and
(2) as
to
which the lenders have been notified in writing that they will not have any
recourse to the stock or assets of the Borrower or any of its Restricted
Subsidiaries.
“Nortek”
means
Nortek, Inc., a Delaware corporation, and its successors and
assigns.
“Nortek
Credit Agreement”
means
that certain Credit Agreement, dated as of August 27, 2004, as amended and
restated on April 3, 2006, by and among Nortek, UBS AG Stamford Branch, as
U.S. Administrative Agent and Canadian Administrative Agent, and the other
Lenders named therein providing for up to $700.0 million in term loan
borrowings and $200.0 million of revolving credit borrowings, including any
related notes, Guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced, restated, substituted or refinanced in whole or
in
part from time to time, including any agreement extending the maturity of,
refinancing, replacing or otherwise restructuring (including increasing the
amount of available borrowings thereunder or adding Subsidiaries of Nortek
as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement,
including any agreement governing Credit Facilities incurred pursuant to
clause (1) or (15) of Section 6.06(b),
and
whether by the same or any other agent, lender or group of lenders.
“NTK
Senior Discount Notes”
means
the 10¾ senior discount notes of the Borrower due 2014 having an aggregate
accreted value at maturity of $403,000,000 issued on February 15, 2005, and
any exchange notes issued in exchange therefor, in each case pursuant to the
NTK
Senior Discount Notes Indenture.
“NTK
Senior Discount Notes Indenture”
means
the Indenture dated as of February 15, 2005 among U.S. Bank National
Association, as trustee, and the Borrower.
“Obligations”
means
all advances to, and debts, liabilities, obligations, covenants and duties
of,
any Loan Party arising under any Loan Document or otherwise with respect to
any
Loan, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against
any Loan Party of any proceeding under any Debtor Relief Laws naming such Person
as the debtor in such proceeding, regardless of whether such interest and fees
are allowed claims in such proceeding. Without limiting the generality of the
foregoing, the Obligations of the Loan Parties under the Loan Documents include
(a) the obligation to pay principal, interest, charges, expenses, fees, Attorney
Costs, indemnities and other amounts payable by any Loan Party under any Loan
Document and (b) the obligation of any Loan Party to reimburse any amount in
respect of any of the foregoing that any Lender, in its sole discretion, may
elect to pay or advance on behalf of such Loan Party in accordance with the
terms of the Loan Documents.
“Officer”
means
the Chairman of the Board, the Chief Executive Officer, Chief Financial Officer
or Chief Accounting Officer, the President, any Executive Vice President, Senior
Vice President or Vice President, the Treasurer or the Secretary of the
Borrower.
“Officers’
Certificate”
means,
with respect to any Person, a certificate signed by the Chief Executive Officer
or President and by the Treasurer, Chief Financial Officer or Chief Accounting
Officer of such Person; provided
that any
such certificate delivered on the Closing Date shall be signed by the Chief
Executive Officer, President, Treasurer, Chief Financial Officer or Chief
Accounting Officer of such Person
“Old
Nortek Holdings”
means
Nortek Holdings, Inc., a Delaware corporation, as in existence prior to the
consummation of the Original Transactions completed on August 27,
2004.
“Original
Transactions”
means
(1) the purchase by THL Buildco, Inc. of all the outstanding Capital Stock
of Old Nortek Holdings pursuant to the Stock Purchase Agreement, (2) the
merger of THL Buildco, Inc. with and into Old Nortek Holdings with Old Nortek
Holdings continuing as the surviving corporation, and the subsequent merger
of
Old Nortek Holdings with and into Nortek, with Nortek continuing as the
surviving corporation, (3) the tender offers to purchase for cash all of
Old Nortek Holdings’ outstanding 10% senior discount notes due 2011, Nortek’s
outstanding senior floating rate notes due 2010 and Nortek’s outstanding 9-7/8%
senior subordinated notes due 2011, (4) the repurchase or rollover of
management stock options and severance, transaction bonuses and change of
control payments to management, and all related transactions in connection
with
the foregoing and (5) other than for purposes of clause (15) of
Section 6.07(b),
the
offering and sale of the NTK Senior Discount Notes and the use of proceeds
thereof as described in the 2005 10-K.
“Other
Taxes”
has
the
meaning specified in Section 3.01(b).
“Outstanding
Amount”
means,
on any date, the aggregate outstanding principal amount of the Loans on such
date.
“Parent”
means
any direct or indirect parent company of the Borrower.
“Participant”
has
the
meaning specified in Section 9.07(d).
“Payment
Default’ has
the
meaning specified in Section 7.01.
“PBGC”
means
the Pension Benefit Guaranty Corporation.
“Permits”
means
permits, licenses or other approvals.
“Permitted
Business”
means
any business conducted or proposed to be conducted as described in the 2005
10-K
by the Borrower and its Restricted Subsidiaries on the Closing Date and other
businesses reasonably related or ancillary thereto.
“Permitted
Debt”
has
the
meaning specified in Section
6.06(b).
“Permitted
Investments”
means:
(1) any
Investment in the Borrower or in a Restricted Subsidiary of the
Borrower;
(2) any
Investment in Cash Equivalents;
(3) any
Investment by the Borrower or any Restricted Subsidiary of the Borrower in
a
Person, if as a result of such Investment:
(a) such
Person becomes a Restricted Subsidiary of the Borrower; or
(b) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Borrower
or a Restricted Subsidiary of the Borrower;
(4) any
Investment made as a result of the receipt of noncash consideration from an
Asset Sale or other sale of assets that was made pursuant to and in compliance
with Section 6.09.
(5) any
Investment the payment for which consists of Equity Interests (other than
Disqualified Stock) of the Borrower or any Parent (which Investment, in the
case
of any Parent, is contributed to the common equity capital of the Borrower;
provided
that any
such contribution shall be excluded from Section 6.07(a)(3)(b));
(6) Hedging
Obligations;
(7) any
Investment to the extent such Investment, when taken together with all other
Investments made pursuant to this clause (7) and outstanding on the date of
such Investment, do not exceed the greater of (x) $50.0 million or (y) 5%
of Consolidated Tangible Assets of the Borrower;
(8) any
Investment of the Borrower or any of its Restricted Subsidiaries existing on
February 15, 2005; and any extension, modification or renewal of any such
Investment, but only to the extent not involving additional advances,
contributions or other Investments of cash or other assets or other increases
thereof (other than as a result of the accrual or accretion of interest or
original issue discount or the issuance of pay-in-kind securities, in each
case,
pursuant to the terms of such Investment as in effect on February 15,
2005);
(9) loans
to
employees that are approved in good faith by a majority of the Board of
Directors of the Borrower (or the Board of Directors of Nortek in the case
of
Nortek and its Restricted Subsidiaries) in an amount not to exceed
$5.0 million outstanding at any time;
(10) any
Investment acquired by the Borrower or any of its Restricted
Subsidiaries:
(a) in
exchange for any other Investment or accounts receivable held by the Borrower
or
any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of a Person,
or
(b) as
a
result of a foreclosure by the Borrower or any of its Restricted Subsidiaries
with respect to any secured Investment or other transfer of title with respect
to any secured Investment in default;
(11) Investments
consisting of the licensing or contribution of intellectual property pursuant
to
joint marketing arrangements with other Persons;
(12) Investments
in joint ventures engaged in a Permitted Business not in excess of the greater
of (x) $25.0 million or (y) 2.5% of Consolidated Tangible Assets
of the Borrower, in the aggregate outstanding at any one time;
(13) Investments
in Unrestricted Subsidiaries not in excess of the greater of
(x) $25.0 million or (y) 2.5% of Consolidated Tangible Assets of
the Borrower, in the aggregate outstanding at any one time;
(14) Investments
by the Borrower or a Restricted Subsidiary of the Borrower in a Receivables
Subsidiary or any Investment by a Receivables Subsidiary in any other Person,
in
each case, in connection with a Qualified Receivables Transaction;
and
(15) any
Guarantee otherwise permitted under this Agreement.
The
amount of Investments outstanding at any time pursuant to clauses (7), (12)
and (13) of this definition shall be reduced by an amount equal to the net
reduction in Investments by the Borrower and its Restricted Subsidiaries,
subsequent to February 15, 2005, resulting from payments of interest on
Indebtedness, dividends, repayments of loans or advances or other transfers
of
assets, in each case to the Borrower or any such Restricted Subsidiary from
any
such Investment, or from the net cash proceeds from the sale of any such
Investment, or from a redesignation of an Unrestricted Subsidiary to a
Restricted Subsidiary, not to exceed, in the case of any Investment, the amount
of the Investment previously made by the Borrower or any Restricted Subsidiary
in such Person or Unrestricted Subsidiary.
“Permitted
Liens”
means:
(1) Liens
on
the assets of the Borrower securing Indebtedness and other obligations
(including Guarantees) incurred pursuant to clause (1),
(15)
or (20)
of
Section 6.06(b);
(2) Liens
on
the assets of a Restricted Subsidiary securing Indebtedness (other than a
Guarantee of Indebtedness of the Borrower) and other obligations of such
Restricted Subsidiary otherwise permitted under this Agreement;
(3) Liens
in
favor of the Borrower or any Restricted Subsidiary of the Borrower;
(4) Liens
on
property of a Person existing at the time such Person is merged with or into
or
consolidated with the Borrower or any Restricted Subsidiary of the Borrower;
provided
that
such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with the Borrower or the Restricted
Subsidiary;
(5) Liens
on
property existing at the time of acquisition thereof by the Borrower or any
Restricted Subsidiary of the Borrower; provided
that
such Liens were in existence prior to the contemplation of such acquisition
and
do not extend to any property other than the property so acquired by the
Borrower or the Restricted Subsidiary;
(6) Liens
to
secure Indebtedness (including Capital Lease Obligations) permitted by
Section 6.06(b)(4)
covering
only the assets acquired with such Indebtedness;
(7) Liens
of
the Borrower and its Restricted Subsidiaries existing on the Closing
Date;
(8) Liens
incurred in the ordinary course of business of the Borrower or any Restricted
Subsidiary of the Borrower with respect to obligations that do not exceed
$10.0 million at any one time outstanding;
(9) Liens
to
secure the performance of statutory obligations, surety or appeal bonds,
performance bonds or other similar obligations (exclusive of obligations for
the
payment of borrowed money) incurred in the ordinary course of
business;
(10) Liens
upon specific items of inventory, or other goods and proceeds of any Person
securing such Person’s obligations in respect of bankers’ acceptances issued or
created for the account of such Person to facilitate the purchase, shipment
or
storage of such inventory or other goods;
(11) Liens
incurred or deposits made in the ordinary course of business in connection
with
workers’ compensation, unemployment insurance and other types of social
security, including any Lien securing letters of credit issued in the ordinary
course of business consistent with past practice in connection
therewith;
(12) Liens
to
secure Indebtedness of any Foreign Restricted Subsidiary permitted by
Section 6.06(b)(16)
covering
only the assets of such Foreign Restricted Subsidiary;
(13) Liens
on
assets of a Receivables Subsidiary arising in connection with a Qualified
Receivables Transaction;
(14) Liens
for
taxes, assessments, governmental charges or claims that are not yet due or
are
being contested in good faith by appropriate legal proceedings; provided
that any
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor;
(15) statutory
Liens of landlords and carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen or other similar Liens arising in the ordinary course
of
business and with respect to amounts not yet delinquent or being contested
in
good faith by appropriate legal proceedings; provided
that any
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor;
(16) easements,
rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the ordinary course of business of the Borrower or any of its
Subsidiaries, taken as a whole;
(17) leases
or
subleases or licenses granted to others in the ordinary course of business
of
the Borrower or any of its Restricted Subsidiaries, taken as a
whole;
(18) Liens
encumbering property or assets under construction arising from progress or
partial payments by a customer of the Borrower or any of its Restricted
Subsidiaries relating to such property or assets;
(19) any
interest or title of a lessor in the property subject to any Capital Lease
Obligation;
(20) Liens
arising from filing Uniform Commercial Code financing statements regarding
leases;
(21) Liens
on
property of, or on shares of stock or Indebtedness of, any Person existing
at
the time (A) such Person becomes a Restricted Subsidiary of the Borrower or
(B) such Person or such property is acquired by the Borrower or any
Restricted Subsidiary;
(22) Liens
arising from the rendering of a final judgment or order against the Borrower
or
any Restricted Subsidiary that does not give rise to an Event of
Default;
(23) Liens
securing reimbursement obligations with respect to letters of credit that
encumber documents and other property relating to such letters of credit and
the
products and proceeds thereof;
(24) 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;
(25) Liens
encumbering customary initial deposits and margin deposits, and other Liens
that
are either within the general parameters customary in the industry and incurred
in the ordinary course of business or otherwise permitted under the terms of
the
Credit Facilities, in each case securing Indebtedness under commodity
agreements, interest rate agreements and currency agreements;
(26) Liens
solely on any xxxx xxxxxxx money deposits made by the Borrower or any of its
Restricted Subsidiaries in connection with any letter of intent or purchase
agreement permitted under this Agreement;
(27) Liens
(i) of a collection bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection and (ii) in favor of a
banking institution arising as a matter of law encumbering
deposits (including the right of set-off) and which are within the general
parameters customary in the banking industry; and
(28) Liens
encumbering reasonable customary initial deposits and margin deposits and
similar Liens attaching to brokerage accounts incurred in the ordinary course
of
business and not for speculative purposes.
“Permitted
Refinancing Indebtedness”
means
any Indebtedness of the Borrower or any of its Restricted Subsidiaries issued
in
exchange for, or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund other Indebtedness of the Borrower or any of its
Restricted Subsidiaries (other than intercompany Indebtedness); provided
that:
(1) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus all accrued interest thereon and the amount
of any reasonably determined premium and other amounts necessary to accomplish
such refinancing and such reasonable fees and expenses incurred in connection
therewith);
(2) such
Permitted Refinancing Indebtedness has a final maturity date equal to or later
than the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if
the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Loans, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Loans on terms at least as
favorable to the Lenders as those contained in the documentation governing
the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(4) such
Indebtedness is incurred either by the Borrower or by the Restricted Subsidiary
who is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
“Person”
means
any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability
company or government or other entity.
“PIK
Interest”
has
the
meaning specified in Section
2.06(b).
“PIK
Option”
has
the
meaning specified in Section 2.06(b).
“Plan”
means
any “employee benefit plan” (as such term is defined in Section 3(3)
of ERISA) established by the Borrower or, with respect to any such plan that
is
subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
“Portal”
has
the
meaning specified in Section 6.17.
“Principals”
means
the Equity Sponsor and its Affiliates.
“Pro
Forma Cost Savings”
means,
with respect to any period, the reduction in net costs and related adjustments
that (i) were directly attributable to an Asset Acquisition that occurred
during the four-quarter period or after the end of the four-quarter period
and
on or prior to the Calculation Date and calculated on a basis that is consistent
with Regulation S-X under the Securities Act as in effect and applied as of
August 27, 2004, (ii) were actually implemented by the business that was
the subject of any such Asset Acquisition within six months after the date
of
the Asset Acquisition and prior to the Calculation Date that are supportable
and
quantifiable by the underlying accounting records of such business or
(iii) relate to the business that is the subject of any such Asset
Acquisition and that the Borrower reasonably determines are probable based
upon
specifically identifiable actions to be taken within six months of the date
of
the Asset Acquisition and, in the case of each of (i), (ii) and (iii)
of this definition, are described, as provided below, in an Officers’
Certificate, as if all such reductions in costs had been effected as of the
beginning of such period. Pro Forma Cost Savings described above shall be
accompanied by a certificate delivered to the Administrative Agent from the
Borrower’s Chief Financial Officer that outlines the specific actions taken or
to be taken, the net cost savings achieved or to be achieved from each such
action and that, in the case of clause (iii) above, such savings have been
determined to be probable.
“Pro
Rata Share”
means,
with respect to each Lender at any time, a fraction (expressed as a percentage,
carried out to the ninth decimal place), the numerator of which is the principal
amount of the Loans of such Lender at such time and the denominator of which
is
the Outstanding Amount. The initial Pro Rata Share of each Lender is set forth
opposite the name of such Lender on Schedule 2.01
or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable.
“Public
Equity Offering”
means
an offer and sale for cash of common stock (other than Disqualified Stock)
of the Borrower or any Parent pursuant to a registration statement that has
been
declared effective, by the Commission pursuant to the Securities Act (other
than
a registration statement on Form S-8 or otherwise relating to equity
securities issuable under any employee benefit plan of the
Borrower).
“Purchase
Money Note”
means
a
promissory note evidencing a line of credit, or evidencing other Indebtedness,
owed to the Borrower or any Restricted Subsidiary of the Borrower in connection
with a Qualified Receivables Transaction, which note shall be repaid from cash
available to the maker of such note, other than amounts required to be
established as reserves pursuant to agreement, amounts paid to investors in
respect of interest, principal and other amounts owing to such investors and
amounts paid in connection with the purchase of newly generated
receivables.
“Qualified
Receivables Transaction”
means
any transaction or series of transactions that may be entered into by the
Borrower or by any Restricted Subsidiary of the Borrower pursuant to which
the
Borrower or any Restricted Subsidiary of the Borrower may sell, convey or
otherwise transfer to a Receivables Subsidiary, any accounts
receivable (whether now existing or arising in the future) of the Borrower
or any Restricted Subsidiary of the Borrower and any asset related thereto,
including, without limitation, all collateral securing such accounts receivable,
and all Guarantees or other obligations in respect of such accounts receivable,
proceeds of such accounts receivable and other assets that are customarily
transferred, or in respect of which security interests are customarily granted,
in connection with an asset securitization transaction involving accounts
receivable.
“Receivables
Subsidiary”
means
a
Subsidiary of the Borrower (other than a Guarantor) that engages in no
activities other than in connection with the financing of accounts receivables
and that is designated by the Board of Directors of the Borrower (as provided
below) as a Receivables Subsidiary (a) no portion of the Indebtedness or
any other Financing Obligations (contingent or otherwise) of which (i) is
Guaranteed by the Borrower or any other Restricted Subsidiary of the Borrower
(excluding Guarantees of obligations (other than the principal of, and interest
on, Indebtedness) pursuant to Standard Securitization Undertakings),
(ii) is recourse to or obligates the Borrower or any other Restricted
Subsidiary of the Borrower in any way other than pursuant to Standard
Securitization Undertakings or (iii) subjects any property or asset of the
Borrower or any other Restricted Subsidiary of the Borrower, directly or
indirectly, contingently or otherwise to the satisfaction thereof, other than
pursuant to Standard Securitization Undertakings, (b) with which neither
the Borrower nor any other Restricted Subsidiary of the Borrower has any
material contract, agreement, arrangement or understanding (except in connection
with a Purchase Money Note or Qualified Receivables Transaction) other than
on
terms no less favorable to the Borrower or such other Restricted Subsidiary
of
the Borrower than those that might be obtained at the time from Persons that
are
not Affiliates of the Borrower, other than fees payable in the ordinary course
of business in connection with servicing accounts receivable, and (c) to
which neither the Borrower nor any other Restricted Subsidiary of the Borrower
has any obligation to maintain or preserve such entity’s financial condition or
cause such entity to achieve a certain level of operating results. Any such
designation by the Board of Directors of the Borrower shall be evidenced to
the
Administrative Agent by filing with the Administrative Agent a certified copy
of
the resolution of the Board of Directors of the Borrower giving effect to such
designation and an Officers’ Certificate certifying, to the best of such
officer’s knowledge and belief after consulting with counsel, that such
designation complied with the foregoing conditions.
“Register”
has
the
meaning specified in Section 9.07(c).
“Related
Party”
means
(1) any controlling stockholder, partner, member, 80% (or more) owned
Subsidiary, or immediate family member (in case of an individual) of any
Principal or (2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding
an
80% or more controlling interest of which consist of any one or more Principals
and/or such other Persons referred to in the immediately preceding
clause.
“Release”
means
any spilling, leaking, seepage, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing or depositing
in,
into or onto the environment.
“Replacement
Assets”
means
(1) noncurrent tangible assets that will be used or useful in a Permitted
Business or (2) all or substantially all of the assets of a Permitted
Business or a majority of the Voting Stock of any Person engaged in a Permitted
Business that will become on the date of acquisition thereof a Restricted
Subsidiary.
“Required
Lenders”
means,
as of any date of determination, Lenders having more than 50% of Outstanding
Amount.
“Restricted
Investment”
means
an Investment other than a Permitted Investment.
“Restricted
Payments”
has
the
meaning specified in Section 6.07(a).
“Restricted
Subsidiary”
of
a
Person means any Subsidiary of the referent Person that is not an Unrestricted
Subsidiary.
“Rollover
Fee”
has
the
meaning specified in Section
2.06(f).
“S&P”
means
Standard & Poor’s Ratings Services, or any successor to the rating agency
business thereof.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations of
the Commission promulgated thereunder.
“Senior
Subordinated Notes”
means
the 8.50% unsecured senior subordinated notes of Nortek due 2014 in an aggregate
principal amount of $625,000,000 issued on August 27, 2004, and any
exchange notes issued in exchange therefor, in each case, pursuant to the Senior
Subordinated Notes Indenture.
“Senior
Subordinated Notes Indenture”
means
the Indenture dated as of August 27, 2004 among U.S. Bank National Association,
as trustee, Nortek and the guarantors.
“Significant
Subsidiary”
means
any Subsidiary that would be a “significant subsidiary” as defined in
Article I, Rule 1-02 of Regulation S-X, promulgated pursuant to
the Securities Act, as such Regulation is in effect on August 27,
2004.
“Solvent”
and
“Solvency”
mean,
with respect to any Person on any date of determination, that on such date
(a) the fair value of the property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent liabilities,
of
such Person, (b) the present fair salable value of the assets of such
Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured,
(c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and
liabilities as they mature, and (d) such Person is not engaged in business
or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
“SPC”
has
the
meaning specified in Section 9.07(g).
“Specified
Equity Issuance”
means
the sale or issuance by the Borrower or any Parent of any of its Equity
Interests in a Public Equity Offering.
“Specified
Indebtedness”
means
any Indebtedness Incurred by the Borrower after the Closing Date pursuant to
Section
6.06(a),
Section
6.06(b)(1),
Section
6.06(b)(5)
(to the
extent the net proceeds of the applicable Permitted Refinancing Indebtedness
are
used to refund, refinance or replace Indebtedness that is permitted by this
Agreement to be incurred under Section
6.06(a),
Section
6.06(b)(2),
Section
6.06(b)(3)
or
Section
6.06(b)(15))
or
Section
6.06(b)(15).
“Sponsor
Management Agreement”
means
the Management Agreement dated August 27, 2004 between THL Managers V, LLC
and Nortek Holdings, Inc.
“Standard
Securitization Undertakings”
means
representations, warranties, covenants and indemnities entered into by the
Borrower or any Restricted Subsidiary of the Borrower that are reasonably
customary in an accounts receivable transaction.
“Statutory
Reserves”
means
a
fraction (expressed as a decimal), the numerator of which is the number one
and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Board and
any
other banking authority, domestic or foreign, to which the Administrative Agent
or any Lender (including any branch, Affiliate or other fronting office making
or holding a Loan) is subject for Eurocurrency Liabilities (as defined in
Regulation D of the Board). The Loans shall be deemed to constitute
Eurocurrency Liabilities (as defined in Regulation D of the Board) and to
be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to
any
Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
“Stock
Purchase Agreement”
means
the Stock Purchase Agreement, dated as of July 15, 2004, by and among Xxxxx
Investment Associates VI, L.P., the other sellers named therein, THL
Buildco Holdings, Inc. and THL Buildco, Inc.
“Subsidiary”
means,
with respect to any specified Person: (1) any corporation, association or
other business entity of which more than 50% of the total voting power of shares
of Capital Stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by such Person or one or
more
of the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
“Super
Majority Lenders”
has
the
meaning specified in Section 9.01.
“Syndication
Agent”
means
Credit Suisse Securities (USA) LLC, as Syndication Agent under the Loan
Documents.
“Taxes”
has
the
meaning specified in Section 3.01(a).
“Trustee”
has
the
meaning assigned to such term in the Exchange Note Indenture.
“2005
10-K”
means
the Annual Report on Form 10-K for the fiscal year ended December 31, 2005,
filed by the Borrower with the Commission on March 10, 2006.
“2006
10-Q”
means
the Quarterly Report on Form 10-Q for the fiscal quarter ended April 1,
2006, filed by the Borrower with the Commission on the Closing
Date.
“United
States”
and
“U.S.”
mean
the United States of America.
“Unrestricted
Subsidiary”
means
any Subsidiary of the Borrower that is designated by the Board of Directors
of
the Borrower as an Unrestricted Subsidiary pursuant to a Board Resolution,
but
only to the extent that such Subsidiary:
(1) has
no
Indebtedness other than Non-Recourse Debt;
(2) is
a
Person with respect to which neither the Borrower nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels
of
operating results; and
(3) is
not a
guarantor or does not otherwise directly or indirectly provide credit support
for any Indebtedness of the Borrower or any of its Restricted Subsidiaries
at
the time of such designation unless such Guarantee or credit support is released
upon such designation.
Any
designation of a Restricted Subsidiary of the Borrower as an Unrestricted
Subsidiary shall be evidenced to the Administrative Agent by filing with the
Administrative Agent a certified copy of the Board Resolution giving effect
to
such designation and an Officers’ Certificate certifying that such designation
complied with the preceding conditions and was permitted by Section 6.07.
If, at
any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be
an
Unrestricted Subsidiary for purposes of this Agreement and any Indebtedness
of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of
the
Borrower as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 6.06,
the
Borrower shall be in default.
“USA
PATRIOT Act”
means
The Uniting and Strengthening America by Providing Appropriate Tools Required
to
Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub.
L. No. 107-56 (signed into law on October 26,
2001)).
“Voting
Stock”
of
any
Person as of any date means the Capital Stock of such Person that is at the
time
entitled to vote in the election of the Board of Directors of such
Person.
“Weighted
Average Life to Maturity”
means,
when applied to any Indebtedness at any date, the number of years obtained
by
dividing: (1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity,
in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment;
by (2) the then outstanding principal amount of such
Indebtedness.
1.02 Other
Interpretive Provisions.
With
reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:
(a)
The
meanings of defined terms are equally applicable to the singular and plural
forms of the defined terms.
(b)
(i)
The
words
“herein,” “hereto,” “hereof” and “hereunder” and words of similar import when
used in any Loan Document shall refer to such Loan Document as a whole and
not
to any particular provision thereof.
(ii)
Article,
Section, Exhibit and Schedule references are to the Loan Document in which
such
reference appears.
(iii)
The
term
“including” is by way of example and not limitation.
(iv)
The
term
“documents” includes any and all instruments, documents, agreements,
certificates, notices, reports, financial statements and other writings, however
evidenced, whether in physical or electronic form.
(v)
The
term
“principal” with respect to any Loan includes the original principal amount of
such Loan on the Closing Date and any increase thereof as a result of the
payment of PIK Interest.
(c)
In
the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including”; the words “to” and “until” each mean
“to but excluding”; and the word “through” means “to and
including.”
(d)
Section
headings herein and in the other Loan Documents are included for convenience
of
reference only and shall not affect the interpretation of this Agreement or
any
other Loan Document.
1.03 Accounting
Terms.
All
accounting terms not specifically or completely defined herein shall be
construed in conformity with GAAP.
1.04 References
to Laws. Unless otherwise expressly provided herein, references to any Law
shall
include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such Law.
1.05 Times
of
Day. Unless otherwise specified, all references herein to times of day shall
be
references to Eastern time (daylight or standard, as
applicable).
1.06 Timing
of
Payment or Performance. When the payment of any obligation or the performance
of
any covenant, duty or obligation is stated to be due or performance required
on
a day which is not a Business Day, the date of such payment (other than as
described in the definition of Interest Period) or performance shall extend
to
the immediately succeeding Business Day.
ARTICLE
II
LOANS
2.01 Commitments.
(a)
Subject
to the terms and conditions and relying upon the representations and warranties
herein set forth, each Lender agrees, severally and not jointly, to make a
loan (individually, an “Initial
Loan”
and
collectively, the “Initial
Loans”)
to the
Borrower on the Closing Date in a principal amount not to exceed its Commitment.
Amounts repaid or prepaid in respect of the Loans may not be
reborrowed.
(b)
The
Commitments shall terminate on the earliest of (i) the making of the
Initial Loans on the Closing Date or (ii) 5:00 p.m., New York
City time, on May 12, 2006, if the Initial Loans are not made on or before
such date. The Borrower may terminate or reduce the Commitments at any time
by
providing irrevocable written or fax notice thereof to the Administrative
Agent.
2.02 Procedure
for Borrowing.
In
order to request the Borrowing to be made on the Closing Date, the Borrower
shall notify the Administrative Agent of such request by telephone, not later
than 12:00 noon (New York City time) one Business Day before the
Closing Date. Such telephonic borrowing request shall be confirmed promptly
in
writing by hand delivery or fax to the Administrative Agent of a written
Borrowing Request, signed by or on behalf of the Borrower and each such
telephonic borrowing request and written Borrowing Request shall specify the
following information: (i) the date of such Borrowing (which shall be a
Business Day), (ii) the number and location of the account to which funds
are to be disbursed and (iii) the amount of such Borrowing. The
Administrative Agent shall promptly advise the Lenders of any notice given
pursuant to this Section 2.02 (and the contents thereof), and of each
Lender’s portion of the requested Borrowing.
2.03 Maturity;
Extended Loans; Exchange Notes. (a)
The
Initial Loans will mature on the Initial Maturity Date; provided,
however,
that if the Initial Loans have not been repaid on or prior to the Initial
Maturity Date, the maturity date of each Initial Loan outstanding on such date
shall automatically be extended, without the need for any action by any party
hereto, until the Final Maturity Date (any Initial Loan so extended, an
“Extended
Loan”).
(b)
(i)
Each
Lender will have the option at any time on or after the Initial Maturity Date
to
receive Exchange Notes in exchange for all (but not a portion of) the Extended
Loans of such Lender (including any interest thereon not required to be
paid in cash) then outstanding pursuant to Section 6.17
(each
such event being referred to herein as an “Exchange”);
provided
that the
Borrower shall not be required to issue Exchange Notes until it shall have
received Exchange Requests to issue not less than $25,000,000 aggregate
principal amount of Exchange Notes.
(ii)
The
principal amount of the Exchange Notes will equal 100.0% of the aggregate
principal amount (including any accrued interest not required to be paid in
cash) of the Loans for which they are exchanged. The Exchange Notes will rank
pari
passu
with the
Extended Loans and will have the terms set forth in the Exchange Note Indenture.
On any date an Exchange occurs (an “Exchange
Date”),
the
Borrower shall, pursuant to the provisions of this Article II, pay any
accrued and unpaid interest required to be paid on the Loans so exchanged.
If a
Default shall have occurred and be continuing on any Exchange Date, any notices
given or cure periods commenced while the Loan was outstanding shall be deemed
given or commenced (as of the actual dates thereof) for all purposes with
respect to the Exchange Notes (with the same effect as if the Exchange
Notes had been outstanding as of the actual dates thereof). Receipt by a Lender
of the Exchange Notes and all amounts due in respect of the corresponding Loans
through the Exchange Date shall be in satisfaction of, and shall constitute
the
discharge of, the corresponding Loans and the Borrower will have no further
obligations in respect of such Loans.
(iii)
In
order
to effect an Exchange, a Lender shall provide the Administrative Agent and
the
Borrower written or fax notice (an “Exchange
Request”)
in the
form attached hereto as Exhibit A at least seven Business Days prior to an
Exchange Date selected by such Lender for an Exchange in compliance with
clause (ii) above, together with such other information as may be
reasonably requested by the Administrative Agent. Each Exchange Request shall
specify (A) the Lender’s legal name; (B) the Exchange Date selected by
such Lender; (C) the principal amount of the Loans to be exchanged pursuant
to the applicable notice and (D) the principal amount of such Exchange Notes
to
be represented by Fixed Rate Exchange Notes (whether in connection with the
sale
thereof to a third party or as otherwise provided by this Agreement) and
Increasing Rate Exchange Notes. Upon receipt of an Exchange Request, the
Administrative Agent shall send, on the date that is five Business Days prior
to
the Exchange Date specified in such Exchange Request, written or fax notice
of
such proposed Exchange to the Depositary (as defined in the Exchange Note
Indenture), with a copy to the Borrower, that shall specify the information
contained in such Exchange Request.
2.04 Optional
and Mandatory Prepayments.
(a)
The
Borrower shall have the right at any time and from time to time to prepay the
Loans, in whole or in part, without premium or penalty, upon at least one
Business Day’s prior written or fax notice (or telephone notice promptly
confirmed by written or fax notice) to the Administrative Agent before
12:30 p.m., New York City time; provided, however, that each partial
optional prepayment shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000. If such notice is given by the
Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein.
(b)
In
the
event and on each occasion at any time on or prior to the date on which any
Loans or Increasing Rate Exchange Notes commence to accrue interest at a rate
per annum equal to the Interest Rate Cap (the “Mandatory
Prepayment Termination Date”)
that
(a) a Specified Equity Issuance occurs or (b) the Borrower incurs or
issues any Specified Indebtedness, the Borrower shall promptly, but in any
event
within five Business Days after the receipt thereof by the Borrower or any
Parent, apply 100% of the Net Proceeds therefrom to prepay outstanding
Loans.
(c)
If
the
Borrower shall optionally redeem any Exchange Notes (other than any Fixed Rate
Exchange Notes) pursuant to the terms of the Exchange Note Indenture, then
the
Borrower shall, promptly, but in any event within five Business Days after
such
redemption, prepay Loans on a pro rata
basis
with the Exchange Notes so redeemed.
(d)
All
optional and mandatory prepayments under this Section 2.04
shall be
subject to Section 3.02
but
otherwise without premium or penalty. All optional and mandatory prepayments
under this Section 2.04
shall be
accompanied by accrued and unpaid interest on the principal amount to be prepaid
to, but excluding, the date of payment.
(e)
Notwithstanding
the foregoing, the Borrower may rescind or postpone any notice of prepayment
under Section 2.04(a)
if such
prepayment would have resulted from a refinancing of all of the Loans, which
refinancing shall not be consummated or otherwise shall be delayed.
2.05 Repayment
of Loans.
The
Borrower shall repay to the Administrative Agent for the ratable account of
each
Lender on the Final Maturity Date the aggregate principal amount of all Loans
outstanding on such date.
2.06 Interest
and Fees
(a)
(i)
Subject to the provisions of Section 2.06(c),
the
Initial Loans shall bear interest on the outstanding principal amount thereof
for each Interest Period at a rate per annum equal to the Adjusted LIBO Rate
for
such Interest Period plus
the
Applicable Initial Loan Percentage.
(ii)
Subject
to the provisions of Sections 2.06(c),
Extended Loans (and Increasing Rate Exchange Notes) shall bear interest for
each
Interest Period on the unpaid principal thereof at a rate per annum equal to
the
interest rate in effect with respect to the Initial Loans on the Business Day
immediately preceding the Initial Maturity Date plus
100
basis points plus
the
Applicable Extended Loan Percentage.
(iii)
Notwithstanding
the foregoing clauses (i) and (ii) (but subject to the provisions in
Section 2.06(c)),
the
interest rate borne by the Loans (and Increasing Rate Exchange Notes) in any
Interest Period shall not exceed 11.00% per annum (the “Interest
Rate Cap”).
(iv)
Except
as
otherwise provided in Section
2.06(b),
interest on the Initial Loans and Extended Loans (and Increasing Rate Exchange
Notes) shall be payable entirely in cash.
(b)
(i)
Notwithstanding anything to the contrary in Section 2.06(a),
the
Borrower may elect, at its option (the “PIK
Option”),
to
pay interest on the Loans on any Interest Payment Date entirely by increasing
the principal amount of the Loans by the amount accrued on the outstanding
principal amount of the Loans (including principal amounts representing
capitalized interest under this paragraph) during the applicable Interest Period
at a rate as set forth in Section 2.06(a)
(the
“PIK
Interest”).
If
the Borrower exercises the PIK Option with respect to any Interest Period,
an
amount equal to the unpaid interest accrued on each Lender’s Loan during such
Interest Period will be added to the principal amount of such Loan on the
applicable Interest Payment Date, and such accrued interest will be deemed
to
have been paid with the increase of the principal amount of such Loan in such
amount. Following an increase in the principal amount of the Loans as a result
of the payment of PIK Interest, the Loans shall bear interest on such increased
principal amount from and after the date of such payment of PIK Interest. The
Borrower must elect the form of interest payment for each Interest Period by
delivering a notice to the Administrative Agent, in the form of Exhibit B
at least five Business Days prior to the end of such Interest Period. The
Administrative Agent shall promptly deliver a corresponding notice to all
Lenders. In the absence of the due exercise by the Borrower of the PIK Option,
interest on the Loans will be payable entirely in cash.
(ii)
Notwithstanding
the foregoing, the Borrower shall make payments of accrued interest in cash
in
an amount and at a time such that the Extended Loans outstanding will not be
considered “an applicable high yield discount obligation” within the meaning of
Section 163(i)(2) of the Code. As such, the Borrower shall pay by the end
of the first Interest Payment Date ending after the fifth anniversary of the
Closing Date, and to the extent necessary on any Interest Payment Date
thereafter an amount such that at no time during the continued term of the
Extended Loans will there be accrued but unpaid interest on the Extended Loans
exceeding an amount equal to the product of (i) the original “issue price”
of the Initial Loans as of the Closing Date (within the meaning of
Section 1273(b) and Section 1274(a) of the Code) and (ii) the
Extended Loans’ yield to maturity.
(iii)
Notice
of
the mandatory payment to be made pursuant to this Section 2.06(b)
shall be
given in the manner provided for in Section 9.02
not less
than 30 days nor more than 60 days prior to the date of such payment,
to the Administrative Agent and each Lender receiving such payment. At the
Borrower’s request, the Administrative Agent shall give notice of the mandatory
payment in the Borrower’s name and at the Borrower’s expense; provided,
however,
that
the Borrower shall deliver to the Administrative Agent, at least 45 days
prior to the payment date, an Officers’ Certificate requesting that the
Administrative Agent give such notice at the Borrower’s expense and setting
forth the information to be stated in such notice as provided as
follows:
(A)
the
date
of such payment; and
(B)
the
amount of such payment.
(iv)
The
mandatory payment under this Section 2.06(b)
shall be
made on a pro rata basis among the Lenders, by lot or by such other method
as
the Administrative Agent in its sole discretion shall deem fair and appropriate
(and in such manner as complies with applicable legal requirements);
provided,
however,
that no
such payment shall reduce the portion of the principal amount at maturity of
a
Loan to less than $1,000.
(v)
Prior
to
12:30 p.m., New York City time, on the mandatory payment date, the Borrower
shall deposit with the Administrative Agent the amount of money required to
be
paid pursuant to this Section 2.06(b).
(c)
Any
past
due amount of the Obligations shall accrue interest at a rate per annum at
all
times equal to the Default Rate. Accrued and unpaid interest on past due amounts
(including interest on past due interest) shall be due and payable upon
demand.
(d)
Interest
on each Loan shall be due and payable in arrears (either in cash or, to the
extent permitted by clause (b) above, by adding to the then outstanding
principal amount of such Loan) on each Interest Payment Date applicable thereto
and at such other times as may be specified herein. Interest hereunder shall
be
due and payable in accordance with the terms hereof before and after judgment,
and before and after the commencement of any proceeding under any Debtor Relief
Law.
(e)
The
Borrower agrees to pay to the Administrative Agent, for its own account, the
administration fee provided for in the Fee Letter at the times, in the amounts
and on the terms set forth therein.
(f)
If
the
Initial Loans have not been repaid in full on or prior to the Initial Maturity
Date, the Borrower shall pay on the Initial Maturity Date a rollover fee (the
“Rollover
Fee”)
to
each Lender in an amount equal to 2.00% of the aggregate principal amount of
the
Initial Loans of such Lender outstanding on the Initial Maturity Date. If any
of
the Loans (or related Exchange Notes) are repaid, redeemed or repurchased,
as
applicable, by the Borrower on or prior to the 180th day after the Initial
Maturity Date, the applicable Lender on the Initial Maturity Date
(notwithstanding any assignment of any Loans by such Lender subsequent to the
Initial Maturity Date but prior to the date of such repayment, redemption or
repurchase) will refund to the Borrower an amount equal to 50% of the Rollover
Fee actually received by such Lender from the Borrower in respect of the Loans
(or related Exchange Notes) repaid, redeemed or repurchased.
2.07 Computation
of Interest and Fees.
All
computations of fees and interest shall be made on the basis of a three hundred
and sixty (360) day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of
a
three hundred and sixty-five (365) day year). Interest shall accrue on each
Loan for the day on which the Loan is made, and shall not accrue on a Loan,
or
any portion thereof, for the day on which the Loan or such portion is paid
in
accordance with the terms of this Agreement. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.
2.08 Evidence
of Indebtedness
(a)
The
Loans
made by each Lender shall be evidenced by one or more accounts or records
maintained by such Lender and evidenced by one or more entries in the Register
maintained by the Administrative Agent (and the Administrative Agent shall
act
solely for purposes of Treasury Regulation Section 5f.103-1(c), as agent for
the
Borrower), in each case in the ordinary course of business, in which it shall
record (i) the amount of each Loan made hereunder (including any principal
amounts accrued pursuant to an exercise of the PIK Option), (ii) the amount
of any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder for the account of the Lenders
and each Lender’s share thereof. The accounts or records maintained by the
Administrative Agent and each Lender shall be prima
facie
evidence
absent manifest error of the amount of the Loans made by the Lenders to the
Borrower and the interest and payments thereon. Any failure to so record or
any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, the Borrower shall execute and
deliver to such Lender (through the Administrative Agent) a promissory note
payable to such Lender, which shall evidence such Lender’s Loans in addition to
such accounts or records. Each Lender may attach schedules to its promissory
note and endorse thereon the date, amount and maturity of its Loans and payments
with respect thereto.
(a)
Entries
made in good faith by the Administrative Agent in the Register pursuant to
Section
2.08(a),
and by
each Lender in its account or accounts pursuant to Section
2.08(a),
shall
be prima
facie
evidence
of the amount of principal and interest due and payable or to become due and
payable from the Borrower to, in the case of the Register, each applicable
Lender and, in the case of such account or accounts, such Lender, under this
Agreement and the other Loan Documents, absent manifest error; provided
that the
failure of the Administrative Agent or such Lender to make an entry, or any
finding that an entry is incorrect, in the Register or such account or accounts
shall not limit or otherwise affect the Obligations of the
Borrower.
2.09 Payments
Generally
(a)
All
payments to be made by the Borrower shall be made without condition or deduction
for any counterclaim, defense, recoupment or setoff. Except as otherwise
expressly provided herein, all payments by the Borrower hereunder shall be
made
to the Administrative Agent, for the account of the respective Lenders to which
such payment is owed, at the Administrative Agent’s Office. All payments shall
be made in U.S. Dollars not later than 2:00 p.m. (New York City time)
on the date specified herein. The Administrative Agent will promptly distribute
to each Lender its Pro Rata Share of such payment in like funds as received
by
wire transfer to such Lender’s Lending Office. All payments received by the
Administrative Agent after 2:00 p.m. (New York City time) shall be deemed
received on the next succeeding Business Day and any applicable interest or
fee
shall continue to accrue.
(b)
If
any
payment to be made by the Borrower shall come due on a day other than a Business
Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the
case
may be; provided,
however,
that,
if such extension would cause payment of interest on or principal of Loans
to be
made in the next succeeding calendar month, such payment shall be made on the
immediately preceding Business Day.
(c)
Unless
the Borrower or any Lender has notified the Administrative Agent, prior to
the
date any payment is required to be made by it to the Administrative Agent
hereunder, that the Borrower or Lender, as the case may be, will not make such
payment, the Administrative Agent may assume that the Borrower or such Lender,
as the case may be, has timely made such payment and may (but shall not be
so
required to), in reliance thereon, make available a corresponding amount to
the
Person entitled thereto. If and to the extent that such payment was not in
fact
made to the Administrative Agent in immediately available funds,
then:
(i)
if
the
Borrower failed to make such payment, each Lender shall forthwith on demand
repay to the Administrative Agent the portion of such assumed payment that
was
made available to such Lender in immediately available funds, together with
interest thereon in respect of each day from and including the date such amount
was made available by the Administrative Agent to such Lender to the date such
amount is repaid to the Administrative Agent in immediately available funds
at
the Federal Funds Rate from time to time in effect or, if greater, a rate
determined by the Administrative Agent in accordance with banking industry
rules
on interbank compensation; and
(ii)
if
any
Lender failed to make such payment, such Lender shall forthwith on demand pay
to
the Administrative Agent the amount thereof in immediately available funds,
together with interest thereon for the period from the date such amount was
made
available by the Administrative Agent to the Borrower to the date such amount
is
recovered by the Administrative Agent (the “Compensation
Period”)
at a
rate per annum equal to the Federal Funds Rate from time to time in effect
or,
if greater, a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation. When such Lender makes payment
to the Administrative Agent (together with all accrued interest thereon), then
such payment amount (excluding the amount of any interest which may have accrued
and been paid in respect of such late payment) shall constitute such Lender’s
Loan included in the Borrowing. If such Lender does not pay such amount
forthwith upon the Administrative Agent’s demand therefor, the Administrative
Agent may make a demand therefor upon the Borrower, and the Borrower shall
pay
such amount to the Administrative Agent, together with interest thereon for
the
Compensation Period at a rate per annum equal to the rate of interest applicable
to the Borrowing. Nothing herein shall be deemed to relieve any Lender from
its
obligation to fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a result
of
any default by such Lender hereunder.
A
notice
of the Administrative Agent to any Lender or any Borrower with respect to any
amount owing under this Section
2.09(c)
shall be
conclusive, absent manifest error.
(d)
If
any
Lender makes available to the Administrative Agent funds for any Initial Loan
to
be made by such Lender as provided in the foregoing provisions of this
Article
II,
and
such funds are not made available to the Borrower by the Administrative Agent
because the conditions precedent to the making of the Initial Loans set forth
in
Article
IV
are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall promptly return such funds (in like funds as received from such
Lender) to such Lender, without interest.
(e)
The
obligations of the Lenders hereunder to make Initial Loans are several and
not
joint. The failure of any Lender to make the Initial Loans on the Closing Date
shall not relieve any other Lender of its corresponding obligation to do so
on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Initial Loan.
(f)
Nothing
herein shall be deemed to obligate any Lender to obtain the funds for the
Initial Loan of such Lender in any particular place or manner or to constitute
a
representation by any Lender that it has obtained or will obtain the funds
for
such Initial Loan in any particular place or manner.
(g)
Whenever
any payment received by the Administrative Agent under this Agreement or any
of
the other Loan Documents is insufficient to pay in full all amounts due and
payable to the Administrative Agent and the applicable Lenders under or in
respect of this Agreement and the other Loan Documents on any date, such payment
shall be distributed by the Administrative Agent and applied by such
Administrative Agent and the Lenders in the order of priority set forth in
Section
7.09.
If the
Administrative Agent receives funds for application to the Obligations of the
Loan Parties under or in respect of the Loan Documents under circumstances
for
which the Loan Documents do not specify the manner in which such funds are
to be
applied, the Administrative Agent shall distribute such funds to each of the
Lenders in accordance with such Lender’s Pro Rata Share, in repayment or
prepayment of such of the outstanding Loans or other applicable Obligations
then
owing to such Lender.
2.10 Sharing
of Payments.
If,
other than as expressly provided elsewhere herein, any Lender shall obtain
on
account of the Loans made by it any payment (whether voluntary, involuntary,
through the exercise of any right of setoff, or otherwise) in excess of its
ratable share thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders
such
participations in the Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment in respect of such Loans, pro
rata
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from the purchasing Lender under any of the
circumstances described in Section 9.06 (including pursuant to any settlement
entered into by the purchasing Lender in its discretion), such purchase shall
to
that extent be rescinded and each other Lender shall repay to the purchasing
Lender the purchase price paid therefor, together with an amount equal to such
paying Lender’s ratable share (according to the proportion of (i) the amount of
such paying Lender’s required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid
or
payable by the purchasing Lender in respect of the total amount so recovered,
without further interest thereon. The Borrower agrees that any Lender so
purchasing a participation from another Lender may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to Section 9.09) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation. The Administrative Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of participations
purchased under this Section 2.10 and will in each case notify the Lenders
following any such purchases or repayments. Each Lender that purchases a
participation pursuant to this Section 2.10 shall from and after such purchase
have the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.
2.11 Change
of
Control Offer. (a)
Upon
the
occurrence of a Change of Control, each Lender shall have the right to require
the Borrower to prepay all or any part of such Lender’s Loans pursuant to an
offer (the “Change
of Control Offer”)
on the
terms set forth in this Agreement. In the Change of Control Offer, the Borrower
shall offer to all Lenders to prepay all Loans by making a cash payment equal
to
100% of the principal amount thereof, plus accrued and unpaid interest, thereon,
to the date of prepayment (the “Change
of Control Prepayment”).
All
prepayments of Loans under this Section 2.11 shall be subject to Section
3.03.
(b)
Within
30 days following any Change of Control, the Borrower shall mail a notice
to the Administrative Agent and to each Lender stating:
(i)
that
the
Change of Control Offer is being made pursuant to this Section 2.11
and that
all Loans of all Lenders properly accepting such offer of prepayment will be
prepaid;
(ii)
the
amount of the Change of Control Prepayment and the prepayment date (the
“Change
of Control Prepayment Date”),
which
may not be earlier than 30 days nor later than 60 days from the date
such notice is mailed;
(iii)
that
any
Loans as to which such offer is not properly accepted will remain outstanding
and will continue to accrue interest;
(iv)
that,
unless the Borrower defaults in the payment of the prepayment price of any
Loans
as to which the Change of Control Offer shall have been accepted, all Loans
accepted for prepayment pursuant to the Change of Control Offer will cease
to
accrue interest on and after the Change of Control Prepayment Date;
(v)
that
Lenders electing to have any Loans prepaid pursuant to a Change of Control
Offer
will be required to notify the Administrative Agent prior to the close of
business on the third Business Day preceding the Change of Control Prepayment
Date; and
(vi)
that
Lenders will be entitled to withdraw their election to require the Borrower
to
prepay their Loans on the terms and conditions set forth in such
notice.
(c)
On
the
Change of Control Prepayment Date, the Borrower shall, to the extent
lawful:
(i)
prepay
all Loans, or portions thereof, as to which the Change of Control Offer was
accepted and not withdrawn; and
(ii)
deposit
with the Administrative Agent an amount equal to the Change of Control
Prepayment in respect of all Loans or portions thereof, as to which the Change
of Control Offer was accepted and not withdrawn.
(d)
If
the
terms of the Nortek Credit Agreement prohibit the Borrower from making a Change
of Control Offer or from prepaying the Loans pursuant thereto, prior to the
mailing of the notice to Lenders described in clause (b) above, but in any
event within 90 days following any Change of Control, the Borrower shall
either:
(i)
repay
in
full all Indebtedness outstanding under the Nortek Credit Agreement or offer
to
repay in full all such Indebtedness and repay the Indebtedness of each lender
who has accepted such offer; or
(ii)
obtain
the requisite consent under the Nortek Credit Agreement to permit the prepayment
of the Loans as described above.
The
Borrower must first comply with this Section 2.11(d)
before
it shall be required to prepay any Loans in the event of a Change of
Control.
(e)
Notwithstanding
the foregoing, the Borrower shall not be required to make a Change of Control
Offer upon a Change of Control if (1) a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Agreement applicable to a Change of Control
Offer
made by the Borrower and prepays all Loans as to which such Change of Control
Offer was accepted and not withdrawn or (2) a notice of prepayment has been
given pursuant to Section
2.04
unless
and until there is a Default with respect to such prepayment or such notice
has
been rescinded or postponed pursuant to Section
2.04(e).
A
Change of Control Offer may be made in advance of a Change of Control,
conditional upon such Change of Control, if a definitive agreement is in place
for the Change of Control at the time of making of the Change of Control
Offer.
(f)
The
Borrower shall publicly announce the results of the Change of Control Offer
on
or as soon as practicable after the Change of Control Prepayment
Date.
2.12 Asset
Sale Offer
(a)
Any
Net
Proceeds from Asset Sales that are not applied or invested as provided in
Section 6.09(b)
shall
constitute “Excess
Proceeds.”
When
the aggregate amount of Excess Proceeds exceeds $20.0 million, the Borrower
shall make an offer (the “Asset
Sale Offer”)
to all
Lenders and all holders of other Indebtedness that is pari
passu
with the
Loans containing provisions similar to those set forth in Section 6.09
with
respect to offers to prepay or purchase with the proceeds of sales of assets
to
prepay the maximum principal amount of Loans, and such other pari
passu
Indebtedness that may be prepaid or purchased out of the Excess Proceeds. The
offer price in any Asset Sale Offer shall be equal to 100% of the principal
amount (in the case of the Loans), or accreted value or principal amount, as
applicable (in the case of any other Indebtedness), plus, without duplication,
accrued and unpaid interest, if any, to the date of prepayment or purchase,
as
applicable, and will be payable in cash (the “Excess
Proceeds Prepayment”).
All
prepayments of Loans under this Section 2.12
shall be
subject to Section
3.03.
(b)
If
any
Excess Proceeds remain after consummation of an Asset Sale Offer, the Borrower
may use such Excess Proceeds for any purpose not otherwise prohibited by this
Agreement. If the aggregate principal amount of all Loans and the accreted
value
or principal amount, as the case may be, of such other pari
passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds,
the
Loans and such other pari
passu Indebtedness
to be prepaid or purchased shall be prepaid or purchased, as applicable, on
a
pro rata basis based on the principal amount of the Loans and the accreted
value
or principal amount, as applicable, of such other pari
passu Indebtedness
tendered. Upon completion of each Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
(c)
To
the
extent that the aggregate principal amount of the Loans as to which an Asset
Sale Offer is accepted by Lenders is less than the Excess Proceeds, the Borrower
may use the remaining Excess Proceeds for general corporate purposes and such
amounts shall no longer be deemed Excess Proceeds. If the aggregate principal
amount of the Loans as to which an Asset Sale Offer is accepted by Lenders
exceeds the amount of Excess Proceeds available to prepay the Loans, the
Administrative Agent shall select the Loans to be prepaid on a pro rata
basis.
(d)
Immediately
following any Asset Sale Offer, the Borrower shall mail a notice to the
Administrative Agent and to each Lender stating:
(i)
that
the
Asset Sale Offer is being made pursuant to this Section 2.12
and that
all Loans of all Lenders properly accepting such Asset Sale Offer will be
prepaid;
(ii)
the
amount of the Excess Proceeds Prepayment and the purchase date (the
“Excess
Proceeds Prepayment Date”),
which
may not be earlier than 30 days nor later than 60 days from the date
such notice is mailed;
(iii)
that
any
Loans as to which such offer is not properly accepted by the Lender thereof
will
remain outstanding and will continue to accrue interest;
(iv)
that,
unless the Borrower defaults in the prepayment of any Loans as to which the
Asset Sale Offer shall have been accepted by Lenders, all Loans accepted for
prepayment pursuant to the Asset Sale Offer will cease to accrue interest on
and
after the Excess Proceeds Prepayment Date;
(v)
that
Lenders electing to have any Loans prepaid pursuant to an Asset Sale Offer
will
be required to notify the Administrative Agent prior to the close of business
on
the third Business Day preceding the Excess Proceeds Prepayment Date;
and
(vi)
that
Lenders will be entitled to withdraw their election to require the Borrower
to
prepay their Loans on the terms and conditions set forth in such
notice.
(e)
On
the
Excess Proceeds Prepayment Date, the Borrower shall, to the extent
lawful:
(i)
prepay
all Loans, or portions thereof, as to which the Asset Sale Offer was accepted
by
Lenders and not withdrawn; and
(ii)
deposit
with the Administrative Agent an amount sufficient to pay the Excess Proceeds
Prepayment in respect of all Loans or portions thereof, as to which the Asset
Sale Offer was accepted by Lenders and not withdrawn.
(f)
The
Borrower shall publicly announce the results of the Asset Sale Offer on or
as
soon as practicable after the Excess Proceeds Prepayment Date.
ARTICLE
III
Taxes
and Increased Costs Protection
3.01 Taxes
(a)
Except
as
provided in this Section 3.01
or as
otherwise expressly provided in this Agreement, any and all payments by the
Borrower to or for the account of the Administrative Agent or any Lender under
any Loan Document shall be made free and clear of and without reduction for
or
on account of any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and all
liabilities (including additions to tax, penalties and interest) with respect
thereto, excluding,
in the
case of the Administrative Agent and each Lender, taxes imposed on or measured
by its net income (including branch profits), and capital and franchise (and
similar) taxes imposed on it in lieu of net income taxes, by the jurisdiction
(or any political subdivision thereof) under the Laws of which the
Administrative Agent or such Lender, as the case may be, is organized or
maintains a lending office, and all liabilities (including additions to tax,
penalties and interest) with respect thereto (all such non-excluded taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and liabilities being hereinafter referred to as “Taxes”).
If
the Borrower shall be required by any Laws to deduct or withhold any Taxes
from
or in respect of any sum payable under any Loan Document to the Administrative
Agent or any Lender, (i) the sum payable shall be increased as necessary so
that after making all required deductions or withholdings (including amounts
applicable to additional sums payable under this Section 3.01),
each
of the Administrative Agent and such Lender receives an amount equal to the
sum
it would have received had no such deductions or withholdings been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower shall
pay the full amount deducted or withheld to the relevant taxation authority
or
other authority in accordance with applicable Laws, and (iv) within thirty
(30) days after the date of such payment, the Borrower shall furnish to the
Administrative Agent or Lender (as the case may be) the original or a certified
copy of a receipt evidencing payment thereof to the extent such a receipt is
issued therefor, or other written proof of payment thereof that is reasonably
satisfactory to the Administrative Agent.
(b)
In
addition, the Borrower agrees to pay any and all present or future stamp, court
or documentary taxes and any other excise, sales, goods and services or
intangible taxes or charges or similar levies which arise from any payment
made
under any Loan Document or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to the exercise by
the
Administrative Agent or a Lender of its rights under, any Loan
Document (hereinafter referred to as “Other
Taxes”).
(c)
The
Borrower agrees to indemnify the Administrative Agent and each Lender for
(i) the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section 3.01)
paid by
the Administrative Agent or such Lender, and (ii) any liability (including
additions to tax, penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority;
provided
the
Administrative Agent or Lender, as the case may be, provides the Borrower with
a
written statement thereof setting forth in reasonable detail the basis and
calculation of such amounts. Payment under this Section 3.01(c)
shall be
made within thirty (30) days after the date such Lender or the
Administrative Agent makes a written demand therefor.
(d)
The
Borrower shall not be required pursuant to this Section 3.01
to pay
any additional amount to, or to indemnify, any Lender or the Administrative
Agent, as the case may be, to the extent that such Lender or the Administrative
Agent becomes subject to Taxes subsequent to the Closing Date (or, if
later, the date such Lender or the Administrative Agent becomes a party to
this
Agreement) as a result of a change in the place of organization of such Lender
or Administrative Agent or a change in the lending office of such Lender, except
to the extent that any such change is requested or required by the Borrower
(and
provided
that
nothing in this clause (d) shall be construed as relieving the Borrower
from any obligation to make such payments or indemnification in accordance
with
Section 3.02
in the
event of a change that is a change in Law).
(e)
If
the
forms provided by a Lender or the Administrative Agent pursuant to Section 9.15(a)
at the
time such Lender or the Administrative Agent, as the case may be, first becomes
a party to this Agreement indicate a United States withholding tax rate in
excess of zero, United States withholding tax at such rate shall be considered
excluded from Taxes unless and until such Lender or the Administrative Agent,
as
the case may be, provides the appropriate forms certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such forms; provided,
however,
that,
if at the date of the Assignment and Assumption pursuant to which a Lender
becomes a party to this Agreement, the Lender assignor was entitled to payments
under clause (a) of this Section 3.01
in
respect of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to United
States withholding taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) United States withholding tax, if any, applicable
with respect to the Lender assignee on such date.
(f)
If
any
Lender or the Administrative Agent determines that it has received a refund
or
over-payment credit in respect of any Taxes or Other Taxes as to which
indemnification or additional amounts have been paid to it by the Borrower
pursuant to this Section 3.01,
it
shall promptly remit the amount of such refund or credit (including any
interest included in such refund or credit) to the Borrower (to the extent
that it reasonably determines that it can do so without prejudice to the
retention of the refund or credit), net of all out-of-pocket expenses of the
Lender or the Administrative Agent, as the case may be; provided,
however,
that
the Borrower, upon the request of the Lender or the Administrative Agent, as
the
case may be, agrees promptly to return such refund or credit to such party
in
the event such party is required to repay such refund or credit to the relevant
taxing authority. Such Lender or the Administrative Agent, as the case may
be,
shall, at the Borrower’s request, provide the Borrower with a copy of any notice
of assessment or other evidence of the requirement to repay such refund or
credit received from the relevant taxing authority (provided
that
such Lender or the Administrative Agent may delete any information therein
that
such Lender or the Administrative Agent deems confidential). Nothing herein
contained shall interfere with the right of a Lender or the Administrative
Agent
to arrange its tax affairs in whatever manner it thinks fit nor oblige any
Lender or the Administrative Agent to claim any tax refund or to disclose any
information relating to its tax affairs or any computations in respect thereof
or require any Lender or the Administrative Agent to do anything that would
prejudice its ability to benefit from any other refunds, credits, reliefs,
remissions or repayments to which it may be entitled.
(g)
Each
Lender agrees that, upon the occurrence of any event giving rise to the
operation of Section 3.01(a)
or (c)
with
respect to such Lender it will, if requested by the Borrower, use commercially
reasonable efforts (subject to such Lender’s overall internal policies of
general application and legal and regulatory restrictions) to avoid the
consequences of such event, including to designate another Lending Office for
any Loan affected by such event; provided
that
such efforts are made on terms that, in the reasonable judgment of such Lender,
do not cause such Lender and its Lending Office(s) to suffer any material
economic, legal or regulatory disadvantage; and provided,
further,
that
nothing in this Section 3.01(g)
shall
affect or postpone any of the Obligations of the Borrower or the rights of
such
Lender pursuant to Sections 3.01(a)
and (c).
3.02 Increased
Cost and Reduced Return; Capital Adequacy
(a)
If
any
Lender determines that as a result of the introduction of or any change in
or in
the interpretation of any Law, in each case after the date hereof, or such
Lender’s compliance therewith, there shall be any increase in the cost to such
Lender of agreeing to make or making, funding or maintaining Loans, or a
reduction in the amount received or receivable by such Lender in connection
with
the foregoing (excluding for purposes of this Section 3.02(a)
any such
increased costs or reduction in amount resulting from (i) Taxes or Other
Taxes (as to which Section 3.01
shall
govern), (ii) changes in the basis of taxation of net income or gross
income (including branch profits), capital and franchise (and similar) taxes
imposed in lieu of net income taxes, by the United States or any foreign
jurisdiction or any political subdivision of either thereof under the Laws
of
which such Lender is organized or maintains a lending office, and
(iii) reserve requirements contemplated by the definition of the term
“Adjusted LIBO Rate”), then from time to time upon demand of such Lender setting
forth in reasonable detail such increased costs (with a copy of such demand
to
the Administrative Agent given in accordance with Section 3.04),
the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction.
(b)
If
any
Lender determines that the introduction of any Law regarding capital adequacy,
reserve requirements or similar requirements or any change therein or in the
interpretation thereof, in each case after the date hereof, or compliance by
such Lender (or its Lending Office) therewith, has the effect of reducing
the rate of return on the capital of such Lender or any corporation controlling
such Lender as a consequence of such Lender’s obligations hereunder (taking
into consideration its policies with respect to capital adequacy and such
Lender’s desired return on capital), then from time to time upon demand of such
Lender setting forth in reasonable detail the charge and the calculation of
such
reduced rate of return (with a copy of such demand to the Administrative
Agent given in accordance with Section 3.04),
the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such reduction.
(c)
If
any
Lender requests compensation under this Section 3.02,
then
such Lender will, if requested by the Borrower, use commercially reasonable
efforts to designate another Lending Office for any Loan affected by such event;
provided
that
such efforts are made on terms that, in the reasonable judgment of such Lender,
do not cause such Lender and its Lending Office(s) to suffer any material
economic, legal or regulatory disadvantage, and provided
further
that
nothing in this Section 3.02(c)
shall
affect or postpone any of the Obligations of the Borrower or the rights of
such
Lender pursuant to Section 3.02(a)
or
(b).
3.03 Certain
Losses.
Upon demand of any Lender setting forth in reasonable detail the amount thereof
(with a copy to the Administrative Agent) from time to time, the Borrower shall
promptly compensate such Lender for and hold such Lender harmless from any
loss,
cost or expense incurred by it as a result of any failure of the Borrower to
make any payment or prepayment required to be made by it hereunder or following
revocation of the notice to make the same.
3.04 Matters
Applicable to All Requests for Compensation
(a)
A
certificate of the Administrative Agent or any Lender claiming compensation
under this Article III
and
setting forth the additional amount or amounts to be paid to it hereunder shall
be conclusive in the absence of manifest error. In determining such amount,
the
Administrative Agent or such Lender may use any reasonable averaging and
attribution methods.
(b)
With
respect to any Lender’s claim for compensation under Section 3.01
or
3.02
the
Borrower shall not be required to compensate such Lender for any amount incurred
more than one hundred eighty (180) days prior to the date that such Lender
notifies the Borrower of the event that gives rise to such claim; provided
that, if
the circumstances giving rise to such claim are retroactive, then such 180-day
period shall be extended to include the period of retroactive effect
thereof.
3.05 Replacement
of Lenders Under Certain Circumstances
(a)
If
at any
time the Borrower becomes obligated to pay additional amounts or indemnity
payments described in Section 3.01
or 3.02
as a
result of any condition described in such Sections, then the Borrower may,
on
ten (10) Business Days’ prior written notice to the Administrative Agent
and such Lender, either (i) replace such Lender by causing such Lender to
(and such Lender shall be obligated to) assign pursuant to Section 9.07(b)
all of
its rights and obligations under this Agreement to one or more Persons;
provided
that
neither the Administrative Agent nor any Lender shall have any obligation to
the
Borrower to find a replacement Lender or other such Person or (ii) repay
all obligations of the Borrower owing to such Lender relating to the Loans
and
participations held by such Lender as of such termination date.
(b)
Any
Lender being replaced pursuant to Section 3.05(a)
above
shall (i) execute and deliver an Assignment and Assumption with respect to
such Lender’s outstanding Loans, and (ii) deliver any promissory notes
evidencing such Loans to the Borrower or the Administrative Agent. Pursuant
to
such Assignment and Assumption, (i) the assignee Lender shall acquire all
of the assigning Lender’s outstanding Loans, (ii) all obligations of the
Borrower owing to the assigning Lender relating to the Loans so assigned shall
be paid in full by the assignee Lender to such assigning Lender concurrently
with such assignment and assumption and (iii) upon such payment and, if so
requested by the assignee Lender, delivery to the assignee Lender of a
promissory note or notes executed by the Borrower, the assignee Lender shall
become a Lender hereunder and the assigning Lender shall cease to constitute
a
Lender hereunder with respect to such assigned Loans, except with respect to
indemnification provisions under this Agreement, which shall survive as to
such
assigning Lender.
3.06 Survival.
All of
the Borrower’s obligations under this Article III shall survive termination
of this Agreement and repayment of all Loans and other Obligations
hereunder.
ARTICLE
IV
Conditions
Precedent To Effectiveness and to Making of the Initial
Loans
4.01 Conditions
to Effectiveness.
The
effectiveness of this Agreement, and the obligations of the Lenders to make
the
Initial Loans hereunder, are subject to the satisfaction of the following
conditions:
(a)
The
Administrative Agent shall have received from the Borrower, (i) either
(x) a counterpart of this Agreement signed on behalf of the Borrower or
(y) written evidence satisfactory to the Administrative Agent (which
may include fax transmission of a signed signature page of this Agreement)
that
the Borrower has signed a counterpart of this Agreement and (ii) a notice of
such Borrowing as required by Section
2.02;
(b)
The
representations and warranties of the Borrower contained in Article V
or any
other Loan Document shall be true and correct in all material respects on and
as
of the Closing Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall
be
true and correct in all material respects as of such earlier date;
(c)
At
the
time of and immediately after the Borrowing to be made on the Closing Date,
no
Default or Event of Default shall have occurred and be continuing;
(d)
The
Administrative Agent shall have received a certificate, dated the Closing Date
and signed by the chief financial officer, principal accounting officer,
treasurer or controller of the Borrower, confirming compliance with the
conditions precedent set forth in paragraphs (b) and (c) above.
(e)
The
Administrative Agent shall have received, on behalf of itself and the Lenders,
a
favorable written opinion of Ropes & Xxxx LLP, counsel for the Borrower, in
form and substance reasonably satisfactory to the Administrative Agent, (A)
dated the Closing Date, (B) addressed to the Administrative Agent and the
Lenders and (C) covering such other matters relating to the Loan Documents
and
the Bridge Loan Transactions as the Administrative Agent shall reasonably
request, and the Borrower hereby request such counsel to deliver such opinion.
(f)
The
Administrative Agent shall have received (i) a copy of the certificates of
incorporation, including all amendments thereto, of the Borrower, Nortek
Holdings, Inc. and Nortek, certified as of a recent date by the Secretary of
State of Delaware, (ii) a certificate, dated the Closing Date and signed by
the Secretary or Assistant Secretary of the Borrower, Nortek Holdings, Inc.
and
Nortek, as applicable, certifying (A) that attached thereto is a true and
complete copy of the by-laws of the Borrower, Nortek Holdings, Inc. and Nortek,
respectively, each as in effect on the Closing Date and at all times since
a
date prior to the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions duly adopted by
the
Board of Directors of the Borrower, Nortek Holdings, Inc. and Nortek,
respectively, authorizing the execution, delivery and performance of this
Agreement, the borrowings hereunder and the Bridge Loan Transactions, and that
such resolutions have not been modified, rescinded or amended and are in full
force and effect, (C) that attached thereto is a certificate of good
standing of the Borrower, Nortek Holdings, Inc., and Nortek, respectively,
each
as of a recent date by the Secretary of the State of Delaware, and (D) as
to the incumbency and specimen signature of each officer executing this
Agreement or any other Loan Document or any other document delivered in
connection therewith; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above; and (iv) such
other documents as the Lenders or the Administrative Agent may reasonably
request.
(g)
The
Administrative Agent and the Lenders shall have received all fees and other
amounts due and payable on or prior to the Closing Date, including fees pursuant
to the Fee Letter and, to the extent invoiced, reimbursement or payment of
all
out of pocket expenses required to be reimbursed or paid by the Borrower
thereunder, hereunder or under any other Loan Document.
(h)
The
Administrative Agent shall have received (i) a solvency opinion in form and
substance and from an independent investment bank or valuation firm reasonably
acceptable to the Administrative Agent to the effect that, or (ii) a certificate
from the chief financial officer of the Borrower certifying, that the Borrower
and its subsidiaries, on a consolidated basis after giving effect to the Bridge
Loan Transactions and the other transactions contemplated hereby, are
Solvent.
(i)
The
Lenders shall have received to the extent requested, 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 USA PATRIOT Act.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES
The
Borrower represents and warrants to the Administrative Agent and the Lenders
that:
5.01 Disclosure.
None of
(a) the 2005 10-K, (b) any quarterly or current reports filed with the
Commission by the Borrower or any of its Subsidiaries with respect to any period
commencing, or event occurring, after December 31, 2005 and (c) the
report entitled “Nortek-Overview-April 2006” that was delivered by the Borrower
to the Initial Lenders prior to the Closing Date contains, in the case of items
(a) and (b), as of the date of filing of such reports with the Commission and,
subject to any information in a subsequent filing superceding information in
a
previous filing, as of the Closing Date, and, in the case of item (c), as of
the
date of such delivery and as of the Closing Date, any untrue statement of a
material fact or omitted or will omit to state a material fact necessary to
make
the statements therein, in the light of the circumstances under which they
were
made, not misleading.
5.02 Capitalization,
Organization, Powers and Authorization
(a)
Capitalization.
As of
April 1, 2006, the capitalization of the Borrower shall be as set forth on
Schedule
5.02(a-1).
All of
the subsidiaries of the Borrower are listed on Schedule
5.02(a-2);
all of
the outstanding shares of capital stock of the Borrower and its Subsidiaries
have been, and as of the Closing Date will be, duly authorized and validly
issued, are fully paid and nonassessable and were not issued in violation of
any
preemptive or similar rights; except for security interests granted pursuant
to
the Nortek Credit Agreement, all of the outstanding shares of capital stock
of
the Borrower and of each of its Subsidiaries are and will be as of the Closing
Date free and clear of all liens, encumbrances, equities and claims or
restrictions on transferability (other than those imposed by Federal securities
laws or the securities or “Blue Sky” laws of certain jurisdictions) or voting;
other than as set forth on Schedule 5.02(a-3),
there
are no (a) options, warrants or other rights to purchase,
(b) agreements or other obligations to issue or (c) other rights to
convert any obligation into, or exchange any securities for, shares of capital
stock of or ownership interests in the Borrower or any of its Subsidiaries
outstanding. Except for the Subsidiaries, as set forth on Schedule 5.02(a-4),
the
Borrower does not own, directly or indirectly, more than 5% of the outstanding
capital stock or other equity interests in any firm, partnership, joint venture
or other entity.
(b)
Existence,
Qualification and Power.
Each of
the Borrower and its Subsidiaries is duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of incorporation,
and each of the Borrower and its Subsidiaries has all requisite corporate,
limited liability company or partnership, as applicable, power and authority
to
own its properties and conduct its business as now conducted and as described
in
the 2005 10-K and the 2006 10-Q; each of the Borrower and its Subsidiaries
is
duly qualified to do business as a foreign corporation, limited liability
company or partnership, as applicable, in good standing, where applicable,
in
all other jurisdictions where the ownership or leasing of its properties or
the
conduct of its business requires such qualification, except where the failure
to
be so qualified would not, individually or in the aggregate, have a material
adverse effect on (a) the condition (financial or otherwise), business,
operations, assets or liabilities of the Borrower and its Subsidiaries, taken
as
a whole, (b) the ability of the Borrower or the Loan Parties (taken as a
whole) to perform their respective obligations under the Loan Documents or
(c) the rights and remedies of the Lenders under any Loan Document (any
such event, a “Material
Adverse Effect”).
(c)
Authorization;
No Contravention.
The
Borrower has all requisite corporate power and authority to execute, deliver
and
perform its obligations under this Agreement and to consummate the Bridge Loan
Transactions. This Agreement and the consummation by the Borrower of the Bridge
Loan Transactions have been duly and validly authorized by the Borrower. This
Agreement has been duly executed and delivered by the Borrower. This Agreement
constitutes a valid and legally binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, except that the enforcement
thereof may be subject to (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors’ rights generally, and (b) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought
(the
“Bankruptcy
Exceptions”).
5.03 Government
Authorization; Other Consents.
No
consent, approval, authorization or order of any court or governmental agency
or
body, or third party is required for execution, delivery or performance by,
or
enforcement against, the Borrower of this Agreement, except such as have been
obtained or will be obtained prior to the Closing Date. Neither the Borrower
nor
any of its Subsidiaries is or will be on the Closing Date (a) in violation
of their certificates of incorporation or by-laws (or similar organizational
document), (b) in breach or violation of any statute, judgment, decree,
order, rule or regulation applicable to any of them or any of their properties
or assets, except for any such breach or violation that would not, individually
or in the aggregate, have a Material Adverse Effect, or (c) in breach of or
default under (nor has any event occurred that, with notice or passage of time
or both, would constitute a default under) or in violation of any of the terms
or provisions of any indenture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement, permit, certificate, contract or other
agreement or instrument to which any of them is a party or to which any of
them
or their respective properties or assets is subject (collectively, “Contracts”),
except for any such breach, default, violation or event that would not,
individually or in the aggregate, have a Material Adverse Effect.
5.04 No
Conflicts. The execution, delivery and performance by the Borrower of this
Agreement and the consummation by the Borrower and any of its Subsidiaries,
as
applicable, of the Bridge Loan Transactions will not conflict with or constitute
or result in a breach of or a default under (or an event that with notice or
passage of time or both would constitute a default under) or violation of any
of
(a) the terms or provisions of any Contract, except for any such conflict,
breach, violation, default or event that would not, individually or in the
aggregate, have a Material Adverse Effect, (b) the certificate of
incorporation or by-laws (or similar organizational document) of the Borrower
or
any of the Subsidiaries or (c) any statute, judgment, decree, order, rule
or regulation applicable to the Borrower or any of its Subsidiaries or any
of
their respective properties or assets, except for any such conflict, breach
or
violation that would not, individually or in the aggregate, have a Material
Adverse Effect.
5.05 Financial
Statements. The historical consolidated financial statements (including the
notes thereto) of the Borrower (or its predecessors) and its subsidiaries
included in each of the 2005 10-K and the 2006 10-Q present fairly in all
material respects the consolidated financial position, results of operations,
cash flows and changes in stockholder’s investment of the Borrower at the
respective dates and for the respective periods indicated. All such financial
statements have been prepared in accordance with generally accepted accounting
principles in the United States applied on a consistent basis throughout the
periods presented (except as disclosed therein), except that the interim
financial statements do not include full footnote disclosure.
5.06 Independent
Registered Accounting Firm. Ernst & Young LLP, which has audited the
financial statements and supporting schedules included in the 2005 10-K, is
an
independent registered public accounting firm in accordance with the Standards
of the Public Company Accounting Oversight Board (United States).
5.07 Litigation.
There is not pending or, to the knowledge of the Borrower, threatened any
action, suit, proceeding, inquiry or investigation to which the Borrower or
any
of its Subsidiaries is a party, or to which the property or assets of the
Borrower or any of the Subsidiaries are subject, before or brought by any court,
arbitrator or governmental agency or body that could reasonably be expected
to
have a Material Adverse Effect or that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the performance by the Borrower of its
obligations under this Agreement or the consummation of the Bridge Loan
Transactions.
5.08 Intellectual
Property; Licenses, Etc. The Borrower and its Subsidiaries own or possess
adequate licenses or other rights to use all patents, trademarks, service marks,
trade names, copyrights, technology and know-how necessary to conduct the
business now or proposed to be conducted by the Borrower and its Subsidiaries
as
described in the 2005 10-K and the 2006 10-Q, except for those patents,
trademarks, service marks, trade names, copyrights, technology and know-how
the
failure to own or have the right to use which would not have a Material Adverse
Effect, and, except as disclosed in the 2005 10-K or the 2006 10-Q, neither
the
Borrower, nor any of its Subsidiaries has received any notice of infringement
of
or conflict with (or knows of such infringement of or conflict with) rights
of others with respect to any patents, trademarks, service marks, trade names,
copyrights, technology or know-how except for conflicts which could not
reasonably be expected to have a Material Adverse Effect; and to the best
knowledge of the Borrower, do not in the conduct of their business as now
conducted or proposed to be conducted, infringe or conflict with any such rights
of any third party, except as could not reasonably be expected to have a
Material Adverse Effect.
5.09 No
Material Adverse Effect
(a)
Since
April 1, 2006 (a) none of the Borrower or its Subsidiaries has
incurred any liabilities or obligations, direct or contingent, or entered into
or agreed to enter into any transactions or contracts (written or oral) not
in
the ordinary course of business, which liabilities, obligations, transactions
or
contracts would, individually or in the aggregate, be material to the general
affairs, management, business, condition (financial or otherwise),
prospects or results of operations of the Borrower and the Subsidiaries, taken
as a whole and (b) none of the Borrower or the Subsidiaries has purchased
any of its outstanding capital stock, nor declared, paid or otherwise made
any
dividend or distribution of any kind on its capital stock (other than with
respect to any of such Subsidiaries, the purchase of, or dividend or
distribution on, capital stock owned by the Borrower or any of the Subsidiaries
and other than on the Closing Date with respect to the Bridge Loan
Transactions).
(b)
Since
December 31, 2005, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to result in a material adverse change in the condition (financial or
otherwise), business, operations, assets or liabilities of the Borrower and
its
Subsidiaries, taken as a whole.
5.10 Taxes.
The
Borrower and its Subsidiaries have (A) filed all Federal, state and local
and foreign tax returns which are required to be filed through the date hereof,
and all such tax returns are true, complete and accurate in all material
respects, or (B) received valid extensions thereof and have paid all taxes
shown on such returns and all assessments received by them except where, in
the
case of state and local and foreign tax returns, the failure to file in
clause (A), or extend the due date of or pay the same in clause (B),
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect; the Borrower has no knowledge of any tax deficiency which has been
or
might be asserted against the Borrower or any of the Subsidiaries which could
reasonably be expected to have a Material Adverse Effect; and to the best
knowledge of the Borrower, all tax liabilities of the Borrower and the
Subsidiaries are adequately provided for on the consolidated books of the
Borrower.
5.11 Margin
Regulations. None of the Borrower, the Subsidiaries or any agent acting on
their
behalf is engaged or will engage, principally or as one of their important
activities, in the business of purchasing or carrying margin stock (within
the
meaning of Regulation U of the Board, in effect, or as the same may
hereafter be in effect, on the Closing Date), or extending credit for the
purpose of purchasing or carrying margin stock and no Loan will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock.
5.12 Ownership
of Properties. Each of the Borrower and its Subsidiaries has good and marketable
title to all real property and personal property and assets owned by them which
is material to the business of the Borrower and the Subsidiaries, in each case
subject to no lien, mortgage, pledge, charge or encumbrance of any kind except
(A) Permitted Liens or (B) those which are not material in amount and
do not adversely affect the use made and proposed to be made of such property
by
the Borrower and its Subsidiaries except for such uses the failure of which
to
be made would not have a Material Adverse Effect. Each of the Borrower and
its
Subsidiaries holds its leased properties under valid, subsisting and enforceable
leases, with such exceptions as are not, individually or in the aggregate,
material and do not, individually or in the aggregate, interfere with the use
made or proposed to be made of such properties by the Borrower or any of its
Subsidiaries (except for such uses the failure of which to be made would not
have a Material Adverse Effect). Except as disclosed in the 2005 10-K, the
Borrower and each of its Subsidiaries owns or leases all such properties as
are
necessary to its operations as now conducted or as proposed to be conducted
(except for such properties the failure of which to own or lease would not
have
a Material Adverse Effect).
5.13 No
Omissions. There are no legal or governmental proceedings involving or affecting
the Borrower or any Subsidiary or any of their respective properties or assets
that would be required to be described in the 2005 10-K or the 2006 10-Q that
are not so described, nor are there any material contracts or other documents
that would be required to be described in the 2005 10-K or the 2006 10-Q that
are not so described.
5.14 Environmental
Compliance
(a)
Except
as
would not, individually or in the aggregate, have a Material Adverse Effect,
(A) each of the Borrower and its Subsidiaries is in compliance with and not
subject to liability under applicable Environmental Laws (as defined below),
(B) each of the Borrower and the Subsidiaries has made all filings and
provided all notices required under any applicable Environmental Law, and has
and is in compliance with all Permits required under any applicable
Environmental Laws and each of them is in full force and effect, (C) there
is no civil, criminal or administrative action, suit, demand, claim, hearing,
notice of violation, investigation, proceeding, notice or demand letter or
request for information pending or, to the knowledge of the Borrower or any
of
the Subsidiaries, threatened against the Borrower or any of the Subsidiaries
under any Environmental Law, (D) no lien, charge, encumbrance or
restriction has been recorded under any Environmental Law with respect to any
assets, facility or property owned, operated, leased or controlled by the
Borrower or any of the Subsidiaries, (E) none of the Borrower or the
Subsidiaries has received notice that it has been identified as a potentially
responsible party under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (“CERCLA”),
or
any comparable state law and (F) no property or facility of the Borrower or
any of the Subsidiaries is (i) listed or proposed for listing on the
National Priorities List under CERCLA or (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by any
Governmental Authority.
(b)
For
purposes of this Agreement, “Environmental
Laws”
means
the common law and all applicable Federal, state and local laws or regulations,
codes, orders, decrees, judgments or injunctions issued, promulgated, approved
or entered thereunder, relating to pollution or protection of public or employee
health and safety or the environment, including, without limitation, laws
relating to (a) Releases or threatened Releases of Hazardous Materials into
the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), (b) the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport or handling of Hazardous Materials, and (c) underground and above
ground storage tanks and related piping, and Releases or threatened Releases
therefrom.
5.15 Labor
Matters.
Except
as described in the 2005 10-K or the 2006 10-Q, (A) no labor disturbance by
or dispute with the employees of the Borrower or any of its Subsidiaries exists
or, to the best knowledge of the Borrower, is threatened and (B) the
Borrower is not aware of any labor disturbance by the employees of any of the
Borrower’s or the Subsidiaries’ significant manufacturers, suppliers, customers
or contractors, that could reasonably be expected, in the case of both (A)
and (B), to have a Material Adverse Effect.
5.16 Insurance.
The Borrower and its Subsidiaries have insurance covering their respective
properties, operations, personnel and businesses, which insures against such
losses and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged and, in the opinion of the Borrower, are
adequate to protect their respective businesses.
5.17 ERISA.
Except as would not have a Material Adverse Effect, none of the Borrower or
its
Subsidiaries has any liability for any prohibited transaction or funding
deficiency or any complete or partial withdrawal liability with respect to
any
pension, profit sharing or other plan that is subject to the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”),
to
which the Borrower or any of its Subsidiaries makes or ever has made a
contribution and in which any employee of the Borrower or any Subsidiary is
or
has ever been a participant. With respect to such plans, the Borrower and each
Subsidiary is in compliance in all material respects with all applicable
provisions of ERISA.
5.18 Internal
Controls. The Borrower and each of its Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with the management’s general
or specific authorizations; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access
to assets is permitted only in accordance with management’s general or specific
authorization; and (D) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. To the best knowledge of the executive officers
of the Borrower, after reasonable investigation, the Borrower’s auditors and the
audit committee of the Board of Directors of the Borrower have been advised
of
all, and none of such executive officers is now aware of any:
(A) significant deficiencies in the design or operation of internal
controls which could materially adversely affect the Borrower’s ability to
record, process, summarize and report financial data; and (B) material
fraud that involves management or other employees who have a role in the
Borrower’s internal controls; and since the date of the most recent evaluation
of such disclosure controls and procedures, there have been no significant
changes in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
5.19 Investment
Company Act. Neither the Borrower nor any of its Subsidiaries is, and upon
consummation of the transactions contemplated hereby, none of such persons
will
be, subject to registration as an “investment company” or an entity “controlled
by” an “investment company” within the meaning of the Investment Company Act
of 1940, as amended, and the rules and regulations promulgated thereunder.
Each such person will conduct its business and financial affairs in such a
manner as to ensure that it will not become an “investment company” or an entity
“controlled” by an “investment company”.
5.20 FCPA.
None of the Borrower or any of its Subsidiaries nor, to the knowledge of the
Borrower, any director, officer, agent, employee or other person associated
with
or acting on behalf of the Borrower or any of its Subsidiaries has used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, made any unlawful payment
to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds, made any bribe, rebate,
payoff, influence payment, kickback, or other unlawful payment or violated
any
provision of the Foreign Corrupt Practices Act of 1977.
5.21 Xxxxxxxx-Xxxxx.
There is and has been no failure on the part of Nortek and the Borrower and
any
of their respective directors or officers, in their capacities as such, to
comply in all material respects with any provision of the Xxxxxxxx-Xxxxx Act
of 2002 and the rules and regulations promulgated in connection therewith
that are now in effect and that apply to Nortek or the Borrower, as
applicable.
ARTICLE
VI
COVENANTS
6.01 Corporate
Existence.
Except
as otherwise permitted by Section 6.16, the Borrower shall do or cause to
be done all things necessary to preserve and keep in full force and effect
its
corporate existence in accordance with its organizational documents and the
rights (charter and statutory) and material franchises of the
Borrower.
6.02 Payment
of Taxes and Other Claims. The Borrower shall, and shall cause each of its
Restricted Subsidiaries to, pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes,
assessments and governmental charges levied or imposed upon it or any of its
Restricted Subsidiaries or upon the income, profits or property of it or any
of
its Restricted Subsidiaries and (b) all lawful claims for labor, materials
and supplies which, in each case, if unpaid, might by law become a material
liability or Lien upon the property of it or any of its Restricted Subsidiaries;
provided, however, that the Borrower shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate actions.
6.03 Maintenance
of Properties and Insurance
(a)
The
Borrower shall cause all material properties owned by or leased by it or any
of
its Restricted Subsidiaries used or useful to the conduct of its business or
the
business of any of its Restricted Subsidiaries to be maintained and kept in
normal condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all repairs, renewals, replacements, and
betterments thereof, all as in its judgment may be necessary, so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided,
however,
that
nothing in this Section 6.03
shall
prevent the Borrower or any of its Restricted Subsidiaries from discontinuing
the use, operation or maintenance of any of such properties, or disposing of
any
of them, if such discontinuance or disposal is, in the judgment of the
management of the Borrower or any such Restricted Subsidiary desirable in the
conduct of the business of the Borrower or any such Restricted Subsidiary;
provided
further
that
nothing in this Section 6.03
shall
prevent the Borrower or any of its Restricted Subsidiaries from discontinuing
or
disposing of any properties to the extent otherwise permitted by this
Agreement.
(b)
The
Borrower shall maintain, and shall cause its Restricted Subsidiaries to
maintain, insurance with responsible carriers against such risks and in such
amounts, and with such deductibles, retentions, self-insured amounts and
co-insurance provisions, as are customarily carried by similar businesses of
similar size, including property and casualty loss, workers’ compensation and
interruption of business insurance.
6.04 Compliance
Certificate; Notice of Default
(a)
The
Borrower shall deliver to the Administrative Agent, within 120 days after
the close of each fiscal year commencing with the fiscal year ending
December 31, 2006, an Officers’ Certificate stating that a review of the
activities of the Borrower and its Subsidiaries has been made under the
supervision of the signing Officers with a view to determining whether the
Borrower has kept, observed, performed and fulfilled its obligations under
this
Agreement and further stating, as to each such Officer signing such certificate,
that to the best of such Officer’s knowledge, the Borrower during such preceding
fiscal year has kept, observed, performed and fulfilled each and every such
covenant and no Default occurred during such year and at the date of such
certificate there is no Default that has occurred and is continuing or, if
such
signers do know of such Default, the certificate shall describe its status
with
particularity. The Officers’ Certificate shall also notify the Administrative
Agent should the Borrower elect to change the manner in which it fixes its
fiscal year end.
(b)
The
Borrower shall deliver to the Administrative Agent as soon as possible, and
in
any event within fifteen days after the Borrower becomes aware of the
occurrence of any Default or Event of Default, an Officers’ Certificate
specifying the Default or Event of Default and describing its status with
particularity and the action proposed to be taken thereto.
(c)
The
Borrower’s fiscal years currently end on December 31. The Borrower will
provide written notice to the Administrative Agent of any change in its fiscal
year.
6.05 Waiver
of Stay
or
Extension Laws. The Borrower covenants (to the extent permitted by applicable
law) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law
or other law that would prohibit or forgive the Borrower from paying all or
any
portion of the principal of, premium, if any, and/or interest on the Loans
as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or
which may affect the covenants or the performance of this Agreement, and (to
the
extent permitted by applicable law) the Borrower hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Administrative
Agent, but will suffer and permit the execution of every such power as though
no
such law had been enacted.
6.06 Incurrence
of Indebtedness and Issuance of Preferred Stock.
(a)
The
Borrower shall not, and shall not permit any of its Restricted Subsidiaries
to,
directly or indirectly, create, incur, issue, assume, Guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to
(collectively, “Incur”)
any
Indebtedness (including Acquired Debt), and the Borrower will not issue any
Disqualified Stock and the Borrower will not permit any of its Restricted
Subsidiaries to issue any Disqualified Stock or preferred stock; provided,
however,
that
(x) the Borrower may incur Indebtedness (including Acquired Debt) or issue
Disqualified Stock and any of its Restricted Subsidiaries (other than Nortek
and
its Restricted Subsidiaries) may incur Indebtedness (including Acquired Debt)
or
issue Disqualified Stock or preferred stock, if the Fixed Charge Coverage Ratio
of the Borrower for its most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date
on
which such additional Indebtedness is incurred or such Disqualified Stock or
preferred stock is issued would have been at least 2.00 to 1.00, determined
on a
pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred or Disqualified
Stock or preferred stock had been issued, as the case may be, at the beginning
of such four-quarter period, and (y) Nortek and its Restricted Subsidiaries
may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock
or
preferred stock, if the Fixed Charge Coverage Ratio of Nortek for its most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or preferred stock is issued
would have been at least 2.00 to 1.00, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or Disqualified Stock or preferred
stock had been issued, as the case may be, at the beginning of such four-quarter
period.
(b)
Section 6.06(a)
shall
not prohibit the incurrence of any of the following items of Indebtedness
(collectively, “Permitted
Debt”):
(1)
(a) the
incurrence by the Borrower or any Restricted Subsidiary of Indebtedness under
Credit Facilities in an aggregate principal amount at any one time outstanding
(with letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Borrower and the Restricted Subsidiaries
thereunder) not to exceed $1.0 billion and (b) the incurrence by the
Borrower or any Restricted Subsidiary of additional Indebtedness under Credit
Facilities in an aggregate principal amount at any one time outstanding (with
letters of credit being deemed to have a principal amount equal to the maximum
potential liability of the Borrower and the Restricted Subsidiaries thereunder)
not to exceed the amount, if any, by which (x) the amount of the Borrowing
Base as of the date of such incurrence exceeds (y) the aggregate amount of
Indebtedness permitted to be incurred pursuant to the immediately preceding
clause (a) as of the date of such incurrence, less, in the case of
clause (a), the aggregate amount of all Net Proceeds of Asset Sales,
applied by the Borrower or any Restricted Subsidiary to repay any Indebtedness
under Credit Facilities (and, in the case of any revolving credit Indebtedness
under a Credit Facility, to effect a corresponding commitment reduction
thereunder) pursuant to Section 6.09(b)(1)
and, in
the case of each of clauses (a) and (b), less amounts outstanding
under any Qualified Receivables Transactions;
(2)
the
incurrence by the Borrower or any Restricted Subsidiary of the Existing
Indebtedness;
(3)
the
incurrence by the Borrower of Indebtedness represented by the Initial Loans,
Extended Loans or Exchange Notes to be made or issued, as applicable, pursuant
to the Loan Documents, any Loan Guarantees in respect thereof and the Exchange
Note Indenture;
(4)
the
incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing all or any
part
of the purchase price, or cost of construction or improvement, of property
(real
or personal), plant or equipment used in the business of the Borrower or any
of
its Restricted Subsidiaries (whether through the direct acquisition of such
assets or the acquisition of Equity Interests of any Person owning such assets)
in an aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (4), not to exceed, at any time outstanding, the
greater of (x) $30.0 million or (y) 3% of Consolidated Tangible
Assets of the Borrower;
(5)
the
incurrence by the Borrower or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are
used
to refund, refinance or replace Indebtedness (other than intercompany
Indebtedness) that is permitted by this Agreement to be incurred under
Section 6.06(a)
or
clauses (2), (3), (4), (5), (15) or (16) of this Section 6.06(b);
(6)
the
incurrence by the Borrower or any of its Restricted Subsidiaries of intercompany
Indebtedness between or among the Borrower and any of its Restricted
Subsidiaries; provided,
however,
that
(i) any subsequent issuance or transfer of Equity Interests that results in
any such Indebtedness being held by a Person other than the Borrower or a
Restricted Subsidiary thereof and (ii) any sale or other transfer of any
such Indebtedness to a Person that is not either the Borrower or a Restricted
Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence
of such Indebtedness by the Borrower or such Restricted Subsidiary, as the
case
may be, that was not permitted by this clause (6);
(7)
the
incurrence by the Borrower or any of its Restricted Subsidiaries of Hedging
Obligations that are incurred in the ordinary course of business for the purpose
of fixing, hedging or swapping interest rate, commodity price or foreign
currency exchange rate risk (or to reverse or amend any such agreements
previously made for such purposes), and not for speculative purposes, and that
do not increase the Indebtedness of the obligor outstanding at any time other
than as a result of fluctuations in interest rates, commodity prices or foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder;
(8)
the
Guarantee by the Borrower or any Restricted Subsidiary of Indebtedness of the
Borrower or a Restricted Subsidiary of the Borrower that was permitted to be
incurred by another provision of this Section 6.06;
provided
that, in
the case of a Guarantee of Indebtedness of the Borrower by any Restricted
Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with
Section 6.12;
(9)
the
accrual of interest, the accretion or amortization of original issue discount,
the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on Disqualified
Stock or preferred stock in the form of additional shares of the same class
of
Disqualified Stock or preferred stock will not be deemed to be an incurrence
of
Indebtedness or an issuance of Disqualified Stock or preferred stock for
purposes of this Section 6.06;
provided,
in each
such case, that the amount thereof is included in Fixed Charges of the Borrower
as accrued (other than as expressly permitted to be excluded for any purpose
by
the terms of this Agreement);
(10)
the
incurrence by the Borrower’s Unrestricted Subsidiaries of Non-Recourse Debt;
provided,
however,
that if
any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted
Subsidiary, such event shall be deemed to constitute an incurrence of
Indebtedness by a Restricted Subsidiary of the Borrower that was not permitted
by this clause (10);
(11)
the
incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness
constituting reimbursement obligations with respect to letters of credit issued
in the ordinary course of business, including, without limitation, letters
of
credit in respect of workers’ compensation claims or self-insurance, or other
Indebtedness with respect to reimbursement type obligations regarding workers’
compensation claims or self-insurance; provided,
however,
that,
upon the drawing of such letters of credit or the incurrence of such
Indebtedness, such obligations are reimbursed within 30 days following such
drawing or incurrence;
(12)
the
incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness
arising from agreements of the Borrower or such Restricted Subsidiary providing
for indemnification, adjustment of purchase price or similar obligations, in
each case, incurred or assumed in connection with the disposition of any
business, assets or Capital Stock of the Borrower or a Restricted Subsidiary,
other than Guarantees of Indebtedness incurred by any Person acquiring all
or
any portion of such business, assets or a Subsidiary for the purpose of
financing such acquisition; provided
that:
(a) such
Indebtedness is not reflected on the balance sheet of the Borrower or any
Restricted Subsidiary (contingent obligations referred to in a footnote or
footnotes to financial statements and not otherwise reflected on the balance
sheet will not be deemed to be reflected on that balance sheet for purposes
of
this clause (a));
and
(b) the
maximum assumable liability in respect of that Indebtedness shall at no time
exceed the gross proceeds including noncash proceeds (the fair market value
of
those noncash proceeds being measured at the time received and without giving
effect to any subsequent changes in value) actually received by the Borrower
and/or that Restricted Subsidiary in connection with that
disposition;
(13)
the
issuance of Disqualified Stock or preferred stock by any of the Borrower’s
Restricted Subsidiaries issued to the Borrower or another Restricted Subsidiary;
provided
that
(i) any subsequent issuance or transfer of any Equity Securities that
results in such Disqualified Stock or preferred stock being held by a Person
other than the Borrower or a Restricted Subsidiary thereof and (ii) any
sale or other transfer of any such shares of Disqualified Stock or preferred
stock to a Person that is not either the Borrower or a Restricted Subsidiary
thereof shall be deemed, in each case, to constitute an issuance of such shares
of Disqualified Stock or preferred stock that was not permitted by this
clause (13);
(14)
the
incurrence by the Borrower or any of its Restricted Subsidiaries of obligations
in respect of performance and surety bonds and completion Guarantees provided
by
the Borrower or such Restricted Subsidiary in the ordinary course of
business;
(15)
the
incurrence by the Borrower or any Restricted Subsidiary of Indebtedness in
an
aggregate principal amount (or accreted value, as applicable) at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness incurred pursuant to this
clause (15), not to exceed $75.0 million;
(16)
the
incurrence by the Foreign Restricted Subsidiaries of the Borrower of
Indebtedness in an aggregate principal amount at any one time outstanding (with
letters of credit being deemed to have a principal amount equal to the maximum
potential liability of the Foreign Restricted Subsidiaries thereunder),
including all Permitted Refinancing Indebtedness incurred to refund, refinance
or replace any Indebtedness incurred pursuant to this clause (16), not to
exceed $50.0 million;
(17)
the
incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse
to the Borrower or any other Restricted Subsidiary of the Borrower (other than
Standard Securitization Undertakings) incurred in connection with a Qualified
Receivables Transaction; provided,
that,
the aggregate amount of Indebtedness under this clause (17), when
aggregated with all Indebtedness outstanding under clause (1), shall not
exceed the maximum amount permitted under clause (1);
(18)
contingent
liabilities arising out of endorsements of checks and other negotiable
instruments for deposit or collection in the ordinary course of
business;
(19)
the
incurrence by the Borrower or any Restricted Subsidiary of Indebtedness to
effect the repurchase, redemption or other acquisition or retirement for value
of any Equity Interests of the Borrower or any Parent, in each case held by
any
former or current employees, officers, directors or consultants of the Borrower
or any of its Restricted Subsidiaries or their respective estates, spouses,
former spouses or family members under any management equity plan or stock
option or other management or employee benefit plan upon the death, disability
or termination of employment of such Persons in an aggregate amount at any
one
time outstanding not to exceed the maximum amount of such acquisitions pursuant
to Section 6.07(b)(5);
and
(20)
the
incurrence of Indebtedness of the Borrower or any Restricted Subsidiary
supported by a letter of credit issued pursuant to the Nortek Credit Agreement
in a principal amount not in excess of the stated amount of such letter of
credit.
For
purposes of determining compliance with this Section 6.06,
in the
event that any proposed Indebtedness meets the criteria of more than one of
the
categories of Permitted Debt described in clauses (1) through (20)
above, or is entitled to be incurred pursuant to Section 6.06(a),
the
Borrower will be permitted to classify such item of Indebtedness on the date
of
its incurrence, and from time to time may reclassify, in any manner that
complies with this Section 6.06
at such
time. Indebtedness under the Nortek Credit Agreement on the Closing Date shall
be deemed to have been outstanding on such date pursuant to Section 6.06(b)(1).
6.07 Limitation
on Restricted Payments
(a)
The
Borrower shall not, and shall not permit any of its Restricted Subsidiaries
to,
directly or indirectly:
(I)
declare
or pay any dividend or make any other payment or distribution on account of
the
Borrower’s or any of its Restricted Subsidiaries’ Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Borrower or any of its Restricted Subsidiaries or any payment
under the Holdings Deferred Compensation Plan to the extent such payment is
funded with a dividend or distribution that would have constituted a “Restricted
Payment” under the terms of the Senior Subordinated Notes Indenture, as such
indenture may be amended, supplemented or otherwise modified from time to time
in accordance with the terms thereof), other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Borrower
or
to the Borrower or a Restricted Subsidiary of the Borrower;
(II)
purchase,
redeem or otherwise acquire or retire for value (including, without limitation,
in connection with any merger or consolidation involving the Borrower) any
Equity Interests of the Borrower or any Parent;
(III)
make
any
payment of principal or premium on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value, any Indebtedness that is
subordinated to the Loans or any Loan Guarantee prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment (other than (A) from
the Borrower or a Restricted Subsidiary or (B) the purchase, repurchase,
redemption, defeasance or other acquisition or retirement of such subordinated
Indebtedness purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year of
the
date of such purchase, repurchase, redemption, defeasance or other acquisition
or retirement); or
(IV)
make
any
Restricted Investment (all such payments and other actions set forth in
clause (I) through (IV) above being collectively referred to as
“Restricted
Payments”),
unless, at the time of and after giving effect to such Restricted
Payment:
(1)
no
Default or Event of Default shall have occurred and be continuing or would
occur
as a consequence thereof; and
(2)
the
Borrower or such Restricted Subsidiary, as the case may be, would, at the time
of such Restricted Payment and after giving pro forma effect thereto as if
such
Restricted Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to Section 6.06(a);
provided
that for
purposes of this clause (2) only, any of the Borrower’s non-cash interest
expense and amortization of original issue discount shall be excluded from
the
determination of the Fixed Charge Coverage Ratio of the Borrower to the extent
not already excluded therefrom; and
(3)
such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Borrower and its Restricted Subsidiaries after
August 27, 2004 (excluding Restricted Payments permitted by
clauses (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (13), (14),
(15) and (16) of Section 6.07(b)),
is
less than the sum, without duplication, of:
(a) 50%
of
the Consolidated Net Income (excluding, for purposes of calculating Consolidated
Net Income of the Borrower for this clause (3)(a) only, (A) any of the
Borrower’s non-cash interest expense and amortization of original issue discount
to the extent not already excluded from the definition of Consolidated Net
Income and (B) any other expenses actually incurred by the Borrower,
including amortization of expenses associated with the offering of the NTK
Senior Discount Notes) for the period (taken as one accounting period) beginning
on August 27, 2004 and ending on the date of the Borrower’s most recently
ended fiscal quarter for which internal financial statements are available
at
the time of such Restricted Payment (provided,
that,
if the amount of Consolidated Net Income as so calculated divided by the number
of full fiscal quarters in such period exceeds $5.25 million, then such
amount shall equal (i) 50% of the product of $5.25 million multiplied
by the number of full fiscal quarters in such period plus (ii) 75% of the
amount in excess of the product of $5.25 million multiplied by the number
of full fiscal quarters in such period) (or, if such Consolidated Net Income
for
such period is a deficit, less 100% of such deficit); plus
(b) 100%
of
the aggregate net proceeds (including the fair market value of property)
received by the Borrower subsequent to August 27, 2004 as a contribution to
its
common equity capital or from the issue or sale of Equity Interests of the
Borrower (other than Excluded Contributions or net proceeds from the issue
and
sale of Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt securities
of the Borrower that have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or Disqualified Stock or debt
securities) sold to a Restricted Subsidiary of the Borrower); plus
(c) in
an
amount equal to the net reduction in Investments by the Borrower and its
Restricted Subsidiaries, subsequent to August 27, 2004, resulting from payments
of interests on Indebtedness, dividends, repayments of loans or advances or
other transfers of assets, in each case to the Borrower or any such Restricted
Subsidiary from any such Investment, or from the net cash proceeds from the
sale
of any such Investment, or from a designation of an Unrestricted Subsidiary
to a
Restricted Subsidiary, but only if and to the extent such amounts are not
included in the calculation of Consolidated Net Income (as calculated as set
forth above) and not to exceed in the case of any Investment the amount of
the
Investment previously made by the Borrower or any Restricted Subsidiary in
such
Person or Unrestricted Subsidiary; provided
that 50%
(or, if subclause (a)(ii) of this clause (3) is applicable to the
period in which such amounts are received, 75%) of amounts in excess of the
amount of the Investment previously made may be added to the amounts otherwise
available under this clause (c) to make Restricted Investments pursuant to
this clause (3).
(b)
Section 6.07(a)
shall
not prohibit:
(1)
the
payment of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied with
the provisions of this Agreement;
(2)
the
redemption, repurchase, retirement, defeasance or other acquisition of any
subordinated Indebtedness of the Borrower or any Restricted Subsidiary or of
any
Equity Interests of the Borrower or any Parent in exchange for, or out of the
net cash proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary of the Borrower) of, Equity Interests of the Borrower
other than Disqualified Stock (and any distribution, loan or advance of such
net
cash proceeds to the Borrower or any Parent for such purpose) or out of
contributions to the equity capital of the Borrower (other than Disqualified
Stock); provided
that the
amount of any such net proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded from
Section 6.07(a)(3)(b);
(3)
the
repayment, defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Borrower or any Restricted Subsidiary with
the
net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness;
(4)
the
payment of any dividend by a Restricted Subsidiary of the Borrower to the
holders of any series or class of its common Equity Interests on a pro rata
basis;
(5)
the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Borrower and any distribution, loan or advance to any
Parent for the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of any Parent, in each case held by any former
or
current employees, officers, directors or consultants of the Borrower or any
of
its Restricted Subsidiaries or their respective estates, spouses, former spouses
or family members under any management equity plan or stock option or other
management or employee benefit plan upon the death, disability or termination
of
employment of such Persons, in an amount not to exceed $7.5 million in any
calendar year; provided
that
such amount in any calendar year may be increased by an amount not to exceed
(i) the net cash proceeds from the sale of Equity Interests (other than
Disqualified Stock) of the Borrower (or any Parent to the extent such net cash
proceeds are contributed to the common equity of the Borrower) to employees,
officers, directors or consultants of the Borrower and its Restricted
Subsidiaries that occurs after August 27, 2004 (to the extent the cash
proceeds from the sale of such Equity Interests have not otherwise been applied
to the payment of Restricted Payments pursuant to clause (2) above or
previously applied to the payment of Restricted Payments pursuant to this
clause (5)) plus (ii) the cash proceeds of key man life insurance
policies received by the Borrower and its Restricted Subsidiaries after
August 27, 2004 less any amounts previously applied to the payment of
Restricted Payments pursuant to this clause (5); provided
further
that
cancellation of Indebtedness owing to the Borrower from employees, officers,
directors and consultants of the Borrower or any of its Restricted Subsidiaries
in connection with a repurchase of Equity Interests of the Borrower from such
Persons will not be deemed to constitute a Restricted Payment for purposes
of
this Section 6.07
or any
other provisions of this Agreement to the extent that the proceeds received
from
the sale of such Equity Interests were excluded from Section 6.07(a)(3)(b);
provided
further
that the
net cash proceeds from such sales of Equity Interests described in
subclause (i) of this clause (5) shall be excluded from Section 6.07(a)(3)(b)
to the
extent such proceeds have been or are applied to the payment of Restricted
Payments pursuant to this clause (5);
(6)
the
payment of dividends or other distributions or the making of loans or advances
to any Parent in amounts required for any Parent to pay franchise taxes and
other fees required to maintain its existence and provide for all other
operating costs of any Parent to the extent attributable to the ownership or
operation of the Borrower and its Restricted Subsidiaries, including, without
limitation, in respect of director fees and expenses, administrative, legal
and
accounting services provided by third parties and other costs and expenses
including all costs and expenses with respect to filings with the Commission
plus any indemnification claims made by directors or officers of the Borrower,
any Parent or any Restricted Subsidiary attributable to the ownership or
operation of the Borrower and its Restricted Subsidiaries;
(7)
the
payment of dividends or other distributions by the Borrower to any Parent in
amounts required to pay the tax obligations of any Parent attributable to the
Borrower and its Subsidiaries determined as if the Borrower and its Subsidiaries
had filed a separate consolidated, combined or unitary return for the relevant
taxing jurisdiction; provided
that any
refunds received by any Parent attributable to the Borrower or any of its
Subsidiaries shall promptly be returned by any Parent to the Borrower through
a
contribution to the common equity of, or the purchase of common stock (other
than Disqualified Stock) of the Borrower from, the Borrower; and provided
further
that the
amount of any such contribution or purchase shall be excluded from Section 6.07(a)(3)(b);
(8)
repurchases
of Capital Stock deemed to occur upon the cashless exercise of stock options
and
warrants;
(9)
after
February 15, 2006, Restricted Payments not otherwise permitted pursuant to
this Section
6.07
in an
aggregate amount not to exceed $50.0 million;
(10)
the
declaration and payment of dividends and distributions to holders of any class
or series of Disqualified Stock of the Borrower or any of its Restricted
Subsidiaries issued or incurred in accordance with Section 6.06;
(11)
Investments
that are made with Excluded Contributions;
(12)
following
the first Public Equity Offering of the Borrower or any Parent after the Closing
Date, the payment of dividends on the Borrower’s common stock (and, in the case
of a Public Equity Offering of any Parent, solely for the purpose of paying
dividends on any Parent’s common stock) in an amount not to exceed 6% per annum
of the gross proceeds of such Public Equity Offering received by or contributed
to the common equity capital of, the Borrower (other than any such gross
proceeds constituting Excluded Contributions);
(13)
upon
the
occurrence of a Change of Control or Asset Sale and within 60 days after
completion of the Change of Control Offer pursuant to Section 2.11
or Asset
Sale Offer pursuant to Section 2.12
(including the repayment of all Loans of Lenders that have elected to have
such
Loans repaid pursuant thereto), any purchase or redemption of Indebtedness
of
the Borrower subordinated to the Loans that is required to be repurchased or
redeemed pursuant to the terms thereof as a result of such Change of Control
or
Asset Sale, at a purchase price not greater than 101% of the aggregate principal
amount or accreted value, as applicable, thereof (plus accrued and unpaid
interest);
(14)
the
payment of dividends or other distributions by the Borrower to any Parent in
amounts required for any Parent to pay any expenses incurred in connection
with
unconsummated offerings of debt securities or Equity Interests of any
Parent;
(15)
the
payment of dividends or other distributions by the Borrower to any Parent in
an
amount equal to any reduction in taxes realized by the Borrower and its
Restricted Subsidiaries in the form of refunds or deductions realized in
connection with or otherwise resulting from the Original Transactions;
and
(16)
Restricted
Payments made with the net proceeds received by the Borrower from the sale
of
the NTK Senior Discount Notes on February 15, 2005;
provided,
however,
that in
the case of clauses (2), (3), (5), (9), (10), (12), (13), (14)
and (15) of this Section 6.07(b),
no
Default or Event of Default has occurred and is continuing;
(c)
The
amount of all Restricted Payments (other than cash) shall be the fair market
value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued to or by the Borrower or such Subsidiary,
as the case may be, pursuant to the Restricted Payment. The fair market value
of
any assets or securities that are required to be valued by this Section 6.07
shall,
if the fair market value thereof exceeds $10.0 million, be determined by
the Board of Directors of the Borrower whose resolution with respect thereto
shall be delivered to the Administrative Agent. The determination of the Board
of Directors of the Borrower must be based upon an opinion or appraisal issued
by an accounting, appraisal or investment banking firm of national standing
(an
“Independent
Financial Advisor”)
if the
fair market value exceeds $25.0 million. If any fairness opinion or
appraisal is required by this Agreement in connection with any Restricted
Payments, the Borrower shall deliver to the Administrative Agent an Officers’
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 6.07
were
computed, together with a copy of such fairness opinion or
appraisal.
6.08 Limitation
on Liens.
The
Borrower shall not create, incur, assume or otherwise cause or suffer to exist
or become effective any Lien of any kind securing Indebtedness of the Borrower
(other than Permitted Liens) upon any property or assets of the Borrower or
any
of its Restricted Subsidiaries, now owned or hereafter acquired, unless all
Loans made pursuant to this Agreement are secured on an equal and ratable basis
with the obligations so secured (or, in the case of subordinated Indebtedness,
prior or senior thereto, with the same relative priority as the Loans shall
have
with respect to such subordinated Indebtedness) until such time as such
obligations are no longer secured by a Lien.
6.09 Asset
Sales
(a)
The
Borrower shall not, and shall not permit any of its Restricted Subsidiaries
to,
consummate an Asset Sale unless:
(1)
the
Borrower (or such Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed
of;
(2)
in
the
case of Asset Sales involving consideration in excess of $10.0 million,
such fair market value is determined by the Borrower’s Board of Directors and
evidenced by a resolution of such Board of Directors set forth in an Officers’
Certificate delivered to the Administrative Agent; and
(3)
at
least
75% of the consideration therefor received by the Borrower or such Restricted
Subsidiary is in the form of cash, Cash Equivalents or Replacement Assets or
a
combination thereof. For purposes of this Section 6.09(a)(3),
each of
the following shall be deemed to be cash:
(A)
any
liabilities (as shown on the Borrower’s or such Restricted Subsidiary’s most
recent balance sheet) of the Borrower or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated
to
the Loans) that are assumed by the transferee of any such assets and, in the
case of liabilities other than Non-Recourse Debt, where the Borrower and all
Restricted Subsidiaries are released from any further liability in connection
therewith;
(B)
any
securities, notes or other obligations received by the Borrower or any such
Restricted Subsidiary from such transferee that are converted by the Borrower
or
such Restricted Subsidiary into cash within 180 days thereafter (to the
extent of the cash received in that conversion); and
(C)
any
Designated Noncash Consideration received by the Borrower or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate fair market
value
(as determined in good faith by the Board of Directors of the Borrower), taken
together with all other Designated Noncash Consideration received pursuant
to
this clause (C) that is at that time outstanding, not to exceed the greater
of (x) $50.0 million or (y) 5.0% of Consolidated Tangible Assets
at the time of the receipt of such Designated Noncash Consideration (with the
fair market value of each item of Designated Noncash Consideration being
measured at the time received without giving effect to subsequent changes in
value).
For
purposes of this Section 6.09(a)(3)
above,
any liabilities of the Borrower or any Restricted Subsidiary that are not
assumed by the transferee of such assets in respect of which the Borrower and
all Restricted Subsidiaries are not released from any future liabilities in
connection therewith shall not be considered consideration.
(b)
Within
365 days after the receipt of any Net Proceeds from an Asset Sale, the
Borrower may apply such Net Proceeds at its option:
(1)
to
repay
Indebtedness under the Nortek Credit Agreement, secured Indebtedness of the
Borrower or Indebtedness of any Restricted Subsidiary (other than Indebtedness
which is by its terms subordinated to any Loan Guarantee) and, if the
Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce
commitments with respect thereto; provided
that if
an offer to purchase, redeem or otherwise repay any Indebtedness of any
Restricted Subsidiary is made in accordance with the terms of such Indebtedness,
the obligation to reduce Indebtedness of such Restricted Subsidiary will be
deemed to be satisfied to the extent of the amount of the offer, whether or
not
accepted by the holders thereof, and the amount of Net Proceeds will be reduced
to the extent of the amount of the offer;
(2)
to
acquire all or substantially all of the assets of, or a majority of the Voting
Stock of, another Person engaged in a Permitted Business;
(3)
to
acquire other assets, including investments in property, or to make capital
expenditures, that, in either case, are used or useful in a Permitted Business;
or
(4)
any
combination of the foregoing;
provided
that the
Borrower shall be deemed to have applied Net Proceeds in accordance with this
paragraph within such 365-day period if, within such 365-day period, it has
entered into a binding commitment or agreement to invest such Net Proceeds
and
continues to use all reasonable efforts to so apply such Net Proceeds as soon
as
practicable thereafter but in any event within 180 days after the end of
such 365-day period; provided
further
that
upon the earlier of (x) any abandonment or termination of such commitment or
agreement or (y) the end of such 180-day period, the Net Proceeds not applied
will constitute Excess Proceeds.
Pending
the final application of any such Net Proceeds, the Borrower may temporarily
reduce revolving credit borrowings or otherwise invest such Net Proceeds in
any
manner that is not prohibited by this Agreement.
6.10 Limitation
on Transactions with Affiliates.
The
Borrower shall not, and shall not permit any of its Restricted Subsidiaries
to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of
its
properties or assets to, or purchase any property or assets from, or enter
into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or Guarantee with, or for the benefit of, any Affiliate involving
aggregate consideration in excess of $5.0 million on or after the Closing
Date (each, an “Affiliate
Transaction”),
unless:
(1)
such
Affiliate Transaction is on terms that are no less favorable to the Borrower
or
the relevant Restricted Subsidiary than those that would have been obtained
in a
comparable transaction by the Borrower or such Restricted Subsidiary with an
unrelated Person; and
(2)
the
Borrower delivers to the Administrative Agent:
(a) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10.0 million, a resolution
of the Board of Directors of the Borrower set forth in an Officers’ Certificate
certifying that such Affiliate Transaction complies with this Section 6.10
and that
such Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors of the Borrower; and
(b) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $25.0 million, an opinion as
to the fairness to the Borrower or such Restricted Subsidiary of such Affiliate
Transaction from a financial point of view issued by an Independent Financial
Advisor.
The
following items shall not be deemed to be Affiliate Transactions and, therefore,
will not be subject to the provisions of the prior paragraph:
(1) any
consulting or employment agreement or arrangement entered into by the Borrower
or any of its Restricted Subsidiaries approved by a majority of the
disinterested members of the Board of Directors of the Borrower (or the Board
of
Directors of Nortek in the case of Nortek and its Restricted
Subsidiaries);
(2) transactions
between or among the Borrower and/or its Restricted Subsidiaries;
(3) payment
of reasonable directors’ fees to directors of the Borrower, any Parent or any
Restricted Subsidiary and the provision of customary indemnities to directors,
officers, employees or consultants of the Borrower, and any Parent or any
Restricted Subsidiary;
(4) issuances
and sales of Equity Interests (other than Disqualified Stock) to Affiliates
of
the Borrower;
(5) any
tax
sharing agreement or arrangement and payments pursuant thereto among the
Borrower and its Subsidiaries and any other Person with which the Borrower
or
its Subsidiaries is required or permitted to file a consolidated, combined
or
unitary tax return or with which the Borrower or any of its Restricted
Subsidiaries is or could be part of a consolidated, combined or unitary group
for tax purposes in amounts not otherwise prohibited by this
Agreement;
(6) Restricted
Payments that are permitted by Section 6.07
or any
Permitted Investments;
(7) the
payment (directly or through any Parent) of annual management, consulting,
monitoring and advising fees and related expenses to the Equity Sponsor and
its
respective Affiliates pursuant to the Sponsor Management Agreement, as the
same
may be amended, modified or replaced from time to time, so long as any such
amendment, modification or replacement is not materially less favorable to
the
Borrower and its Restricted Subsidiaries than such agreement as in effect on
the
Closing Date;
(8) payments
by the Borrower or any of its Restricted Subsidiaries to the Equity Sponsor
and
its Affiliates for any financial advisory, financing, underwriting or placement
services or in respect of other investment banking activities, including,
without limitation, in connection with acquisitions or divestitures, which
payments are approved by the majority of the Board of Directors of the Borrower
(or the Board of Directors of Nortek in the case of Nortek and its Restricted
Subsidiaries) in good faith; provided
that the
maximum aggregate amount of any such fees in any 12-month period shall not
exceed 1.25% of the aggregate transaction value (including enterprise value
in
connection with acquisitions or divestitures) (or portion thereof) in respect
of
which such services are rendered (excluding, in any case, commitment or similar
fees for providing financing);
(9) loans
to
employees that are approved in good faith by a majority of the Board of
Directors of the Borrower (or the Board of Directors of Nortek in the case
of
Nortek and its Restricted Subsidiaries) in an amount not to exceed
$5.0 million outstanding at any time and advances and expense
reimbursements to employees in the ordinary course of business;
(10) agreements
(and payments relating thereto) existing on the Closing Date, as the same may
be
amended, modified or replaced from time to time, so long as any amendment,
modification or replacement is not materially less favorable to the Borrower
and
its Restricted Subsidiaries than such agreements as in effect on the Closing
Date;
(11) transactions
with a joint venture engaged in a Permitted Business; provided
that all
the outstanding ownership interests of such joint venture are owned only by
the
Borrower, its Restricted Subsidiaries and Persons who are not Affiliates of
the
Borrower;
(12) transactions
between a Receivables Subsidiary and any Person in which the Receivables
Subsidiary has an Investment;
(13) transactions
with customers, clients, suppliers or purchasers or sellers of goods, in each
case in the ordinary course of business; and
(14) transactions
which have been approved by a majority of the disinterested members of the
Board
of Directors of the Borrower (or the Board of Directors of Nortek in the case
of
Nortek and its Restricted Subsidiaries) and with respect to which an Independent
Financial Advisor has delivered an opinion as to the fairness to the Borrower
or
such Restricted Subsidiary of such transaction from a financial point of
view.
6.11 Dividend
and Other Payment Restrictions Affecting Restricted
Subsidiaries
(a)
The
Borrower shall not, and shall not permit any of its Restricted Subsidiaries
to,
directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(1)
pay
dividends or make any other distributions on its Capital Stock to the Borrower
or any of its Restricted Subsidiaries or pay any indebtedness owed to the
Borrower or any of its Restricted Subsidiaries;
(2)
make
loans or advances to the Borrower or any of its Restricted Subsidiaries;
or
(3)
transfer
any of its properties or assets to the Borrower or any of its Restricted
Subsidiaries.
(b)
However,
the preceding restrictions will not apply to encumbrances or restrictions
existing under or by reason of:
(1)
Existing
Indebtedness and the Nortek Credit Agreement;
(2)
this
Agreement, the Loans and the Loan Guarantees, if any, or by other Indebtedness
of the Borrower or a Guarantor, if any, which is pari
passu
in right
of payment with the Loans or the Loan Guarantees, as applicable, incurred
pursuant to Section 6.06;
provided
that the
encumbrances and restrictions are no more restrictive, taken as a whole, than
those contained in this Agreement;
(3)
applicable
law or regulation;
(4)
any
agreements or instruments governing Indebtedness or Capital Stock of a Person
acquired by the Borrower or any of its Restricted Subsidiaries as in effect
at
the time of such acquisition (except to the extent such Indebtedness or Capital
Stock was incurred or issued, as the case may be, 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 the terms of this
Agreement to be incurred;
(5)
Indebtedness
incurred by Restricted Subsidiaries in compliance with Section 6.06;
provided
either
(i) the provisions relating to such encumbrance or restriction contained in
such
Indebtedness, taken as a whole, are not less favorable to the Borrower in any
material respect as determined by the Board of Directors of the Borrower in
its
good faith judgment than the provisions contained in the Nortek Credit Agreement
and the Senior Subordinated Notes Indenture in each case, as in effect on the
Closing Date, or (ii) any encumbrance or restriction contained in such
Indebtedness does not prohibit (except upon a default or event of default
thereunder) the payment of dividends in an amount sufficient, as determined
by
the Board of Directors of the Borrower in its good faith judgment, to make
payments of cash interest on Loans after the fifth anniversary of the Closing
Date;
(6)
customary
non-assignment provisions in leases, licenses and other agreements entered
into
in the ordinary course of business;
(7)
purchase
money obligations for property acquired in the ordinary course of business
that
impose restrictions on the property so acquired of the nature described in
Section 6.11(a)(3);
(8)
an
agreement entered into for the sale or disposition of Capital Stock or assets
of
a Restricted Subsidiary or an agreement entered into for the sale of specified
assets or the granting of an option to purchase specified assets (in either
case, so long as such encumbrance or restriction, by its terms, terminates
on
the earlier of the termination of such agreement or the consummation of such
agreement and so long as such restriction applies only to the Capital Stock
or
assets to be sold);
(9)
Permitted
Refinancing Indebtedness; provided
that the
encumbrances and restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness being
refinanced;
(10)
Permitted
Liens securing Indebtedness of the Borrower or Liens securing Indebtedness
of
any Restricted Subsidiary, in each case, that limit the right of the debtor
to
dispose of the assets subject to such Lien;
(11)
customary
limitations on the disposition or distribution of assets or property in joint
venture agreements and other similar agreements entered into in the ordinary
course of business;
(12)
any
Purchase Money Note, or other Indebtedness or contractual requirements of a
Receivables Subsidiary in connection with a Qualified Securitization
Transaction; provided
that
such restrictions only apply to such Receivables Subsidiary;
(13)
cash
or
other deposits or net worth imposed by customers or agreements entered into
in
the ordinary course of business;
(14)
customary
provisions in joint venture agreements;
(15)
Indebtedness
of a Foreign Restricted Subsidiary permitted to be incurred under this
Agreement; and
(16)
any
encumbrances or restrictions imposed by any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of the agreements, contracts, instruments or obligations referred
to in clauses (1) through (15) above; provided
that
such amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment of
the
Borrower’s Board of Directors, not materially more restrictive, taken as a
whole, with respect to such dividend and other payment restrictions than the
dividend or other payment restrictions contained in the contracts, agreements,
instruments or obligations referred to in clauses (1) through (15) above
prior to such amendment, modification, restatement, renewal, increase,
supplement, refunding, replacement or refinancing; provided
further,
however,
that
with respect to contracts, agreements, instruments or obligations existing
on
the Closing Date, any such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings contain, in
the
good faith judgment of the Borrower’s Board of Directors, dividend and other
payment restrictions that are not materially more restrictive, taken as a whole,
than such restrictions contained in such contracts, instruments or obligations
as in effect on the Closing Date.
6.12 Future
Guarantors.
(a)
The
Borrower shall cause each Domestic Subsidiary that Guarantees any Indebtedness
of the Borrower to, at the same time such Restricted Subsidiary Guarantees
such
Indebtedness, execute and deliver to the Administrative Agent a Loan Guarantee
pursuant to which such Restricted Subsidiary shall unconditionally (subject
to
limitations determined by the Board of Directors of the Borrower to be customary
in order to prevent such Guarantee from constituting a fraudulent conveyance)
Guarantee payment of the Loans on a joint and several senior unsecured basis
(and if such other Indebtedness of the Borrower is subordinated Indebtedness,
the Guarantee by such Restricted Subsidiary of such Indebtedness shall be
subordinated to the same extent to such Restricted Subsidiary’s Loan
Guarantee).
(b)
The
Loan
Guarantee of a Guarantor will be automatically released:
(1)
in
connection with any sale or other disposition of all or substantially all of
the
assets of that Guarantor (including by way of merger or consolidation) to a
Person that is not (either before or after giving effect to such transaction)
a
Restricted Subsidiary of the Borrower, if the sale or other disposition of
all
or substantially all of the assets of that Guarantor complies with Section 6.09
and
Section
2.12;
(2)
in
connection with any sale of all of the Capital Stock of a Guarantor to a Person
that is not (either before or after giving effect to such transaction) a
Restricted Subsidiary of the Borrower, if the sale of all such Capital Stock
of
that Guarantor complies with Section 6.09
and
Section
2.12;
(3)
if
the
Borrower properly designates any Restricted Subsidiary that is a Guarantor
as an
Unrestricted Subsidiary;
(4)
in
connection with any sale of Capital Stock of a Guarantor to a Person that
results in the Guarantor no longer being a Subsidiary of the Borrower, if the
sale of such Capital Stock of that Guarantor complies with Section 6.09
and
Section
2.12;
(5)
upon
the
release or discharge of the Guarantee by such Restricted Subsidiary of
Indebtedness of the Borrower or the repayment of the Indebtedness or
Disqualified Stock, in each case, which resulted in the obligation to Guarantee
the Loans; or
(6)
upon
the
applicable Subsidiary ceasing to be a Subsidiary as a result of any foreclosure
of any pledge or security interest securing such other Indebtedness or other
exercise of remedies in respect thereof.
6.13 Reports.
(a)
Whether
or not required by the Commission, so long as any Loans are outstanding the
Borrower shall furnish to the Administrative Agent, on behalf of the Lenders,
within the time periods specified in the Commission’s rules and
regulations:
(1)
all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Borrower
were required to file such Forms, including a “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and, with respect to
the annual information only, a report on the annual financial statements by
the
Borrower’s certified independent accountants; and
(2)
all
current reports that would be required to be filed with the Commission on Form
8-K if the Borrower were required to file such reports;
provided
that if
the Borrower files such reports electronically with the Commission’s Electronic
Data Gathering Analysis and Retrieval System (or any successor system) within
such time periods, the Borrower shall not be required under this Agreement
to
furnish such reports as specified above.
(b)
In
addition, if at any time any Parent becomes a Guarantor (there being no
obligation of any Parent to do so) and holds no material assets other than
cash,
Cash Equivalents and the Capital Stock of the Borrower or any Parent (and
performs the related incidental activities associated with such ownership),
the
reports, information and other documents required to be filed and furnished
to
Lenders of the Loans pursuant to this Section 6.13
may, at
the option of the Borrower, be filed by and be those of any Parent rather than
the Borrower.
(c)
The
Administrative Agent shall not be under a duty to review or evaluate any report
or information delivered to the Administrative Agent pursuant to the provisions
of this Section 6.13
for the
purposes of making such reports available to it and to the Lenders who may
request such information. Delivery of such reports, information and documents
to
the Administrative Agent as may be required under this Section 6.13
is for
informational purposes only and the Administrative Agent’s receipt of such shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Borrower’s
compliance with any of its covenants hereunder (as to which the Administrative
Agent is entitled to rely exclusively on an Officers’ Certificate).
6.14 Designation
of Restricted and Unrestricted Subsidiaries.
The
Board of Directors of the Borrower may designate any Restricted Subsidiary
to be
an Unrestricted Subsidiary if that designation would not cause a Default;
provided that in no event shall there be any Unrestricted Subsidiaries on or
immediately following the Closing Date. If a Restricted Subsidiary is designated
as an Unrestricted Subsidiary, the aggregate fair market value of all
outstanding Investments owned by the Borrower and its Restricted Subsidiaries
in
the Subsidiary so designated (after giving effect to any sale of Equity
Interests of such Subsidiary in connection with such designation) will be deemed
to be an Investment made as of the time of such designation and will either
reduce the amount available for Restricted Payments under Section 6.07(a)
or reduce the amount available for future Investments under one or more
clauses of the definition of “Permitted Investments.” That designation
shall only be permitted if such Investment would be permitted at that time
and
if such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors of the Borrower may at any time designate
any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Borrower of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (1) such
Indebtedness is permitted under Section 6.06, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period; and (2) no Default or Event of Default would be in
existence following such designation.
6.15 Business
Activities. The Borrower shall not, and shall not permit any Restricted
Subsidiary to, engage in any business other than Permitted Businesses, except
as
would not be material to the Borrower and its Subsidiaries, taken as a
whole.
6.16 Merger,
Consolidation, or Sale of Assets
(a)
The
Borrower shall not, directly or indirectly, consolidate or merge with or into
another Person (whether or not the Borrower is the surviving corporation),
and
the Borrower will not sell, assign, transfer, convey or otherwise dispose of
all
or substantially all of the properties or assets of the Borrower and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person (including by way of consolidation or merger),
unless:
(1)
either:
(A) the Borrower is the surviving corporation or (B) the Person formed
by or surviving any such consolidation or merger (if other than the Borrower)
or
to which such sale, assignment, transfer, conveyance or other disposition shall
have been made is a corporation, partnership or limited liability company
organized or existing under the laws of the United States, any state thereof
or
the District of Columbia; provided
that, in
the case such Person is a limited liability company or a partnership, a
co-obligor of the Loans is a corporation;
(2)
the
Person formed by or surviving any such consolidation or merger (if other than
the Borrower) or the Person to which such sale, assignment, transfer, conveyance
or other disposition shall have been made assumes all the obligations of the
Borrower, as the case may be, under the Loans and this Agreement pursuant to
agreements reasonably satisfactory to the Administrative Agent;
(3)
immediately
after such transaction and any related financing transactions, no Default or
Event of Default exists; and
(4)
the
Borrower or the Person formed by or surviving any such consolidation or merger
(if other than the Borrower), or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made, on the date of such
transaction after giving pro forma effect thereto and any related financing
transactions as if the same had occurred at the beginning of the applicable
four-quarter period either (A) would be permitted to incur at least $1.00
of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set
forth in clause (x) of Section 6.06(a),
or
(B) would have a Fixed Charge Coverage Ratio on such basis higher than the
Fixed Charge Coverage Ratio of the Borrower immediately prior to such
transactions.
(b)
Notwithstanding
clauses (3) and (4) of Section 6.16(a),
the
Borrower may merge or consolidate with a Restricted Subsidiary incorporated
solely for the purposes of organizing the Borrower in another
jurisdiction.
(c)
The
Borrower shall not, directly or indirectly, lease all or substantially all
of
its properties or assets, in one or more related transactions, to any other
Person.
(d)
This
Section 6.16
shall
not apply to a sale, assignment, transfer, conveyance or other disposition
of
assets (including by way of consolidation or merger) between or among the
Borrower and any of its Restricted Subsidiaries.
(e)
In
connection with any such consolidation, merger, sale, assignment, transfer,
conveyance or other disposition, the Borrower shall deliver, or cause to be
delivered, to the Administrative Agent, in form and substance reasonably
satisfactory to the Administrative Agent, an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, conveyance or other disposition comply with this Agreement
and that all conditions precedent therein provided for relating to such
transactions have been complied with.
(f)
Upon
any
such consolidation, merger, sale, assignment, transfer, conveyance or other
disposition, the successor Person formed by such consolidation or into which
the
Borrower is merged or the successor Person to which such transfer is made shall
succeed to, and be substituted for, and may exercise every right and power
of,
the Borrower under this Agreement with the same effect as if such successor
Person had been named as the Borrower in this Agreement, and when a successor
Person assumes all the obligations of its predecessor under this Agreement,
the
predecessor shall be released from those obligations; provided,
however,
that in
the case of a transfer by lease, the predecessor shall not be released from
the
payment of principal of, premium, if any, and interest on the
Loans.
6.17 Exchange
Notes.
(a)
In
the
event that any Loans remain outstanding on the 270th day after the Closing
Date,
(i) the Borrower and the Administrative Agent shall agree to the form of
the Exchange Note Indenture (and all exhibits and appendices thereto) (such
agreement to be evidenced in a writing satisfactory to the Borrower and the
Administrative Agent), it being understood that the covenants and events of
default contained in such Exchange Note Indenture, to the extent analogous,
shall be substantially similar to the covenants and events of default contained
in Article VI and Article VII herein, respectively, with such changes
as are appropriate, and (1) the Change of Control Prepayment for any Fixed
Rate Exchange Notes (as defined below) shall be for a purchase price in cash
equal to 101% of the principal amount thereof plus accrued but unpaid interest
to the date of repurchase, (2) a Lender shall have the right to fix the
interest rate on an Exchange Note at the interest rate then in effect on such
Exchange Note (each such note, a “Fixed
Rate Exchange Note”);
provided that prior to the Mandatory Prepayment Termination Date (but not on,
or
after, such date), such right may only be exercised upon the sale of an Exchange
Note to a third party purchaser, (3) each Fixed Rate Exchange Note shall be
non-callable prior to September 1, 2009 (subject to equity clawback and
make-whole provisions on terms substantially similar to those contained in
the
NTK Senior Discount Notes Indenture) and shall be callable thereafter at par
plus accrued interest plus a premium equal to 50% of the interest rate thereon
in effect on the date of issuance of such Fixed Rate Exchange Note, which
premium shall decline ratably on each yearly anniversary of the date of such
sale to zero two years prior to the Final Maturity Date, (4) the amendment
provisions in the Exchange Note Indenture shall be substantially similar to
the
amendment provisions contained in the NTK Senior Discount Notes Indenture,
(5)
interest on the Exchange Notes shall be computed on the basis of a 360-day
year
comprised of twelve 30-day months and (6) the Exchange Note Indenture shall
contain provisions similar to Section 2.06(b) with respect to all Exchange
Notes
and Section 2.04(a) and (b) with respect to Increasing Rate Exchange Notes
and
(ii) on the date of the first issuance of Exchange Notes, the Borrower shall
place the full amount of the Exchange Notes (other than the Exchange Notes
actually issued on such date) that may be issued pursuant to the terms hereof
in
escrow, on terms reasonably satisfactory to the Administrative Agent, and with
a
fiduciary reasonably satisfactory to the Administrative Agent, to be held,
undated, in escrow pending issuance pursuant to the terms hereof. The Exchange
Note Indenture shall be in such form that it can be qualified under the U.S.
Trust Indenture Act of 1939, as amended.
(b)
The
Borrower shall, no later than ten Business Days prior to the Initial Maturity
Date, (i) cause the Exchange Notes to become eligible for deposit at The
Depository Trust Company (including by the filing of an appropriately executed
letter of representations), (ii) obtain “CUSIP” and “ISIN” numbers for the
Exchange Notes and (iii) cause the Exchange Notes to be eligible for trading
in
the Private Offerings, Resales and Trading through Automatic Linkages
(“Portal”)
market.
(c)
On
or
prior to the fifth Business Day following the receipt of an Exchange Request
from a Lender in accordance with Section
2.03(b)
(and
subject to the proviso set forth therein) that requests the exchange of any
Loan
(or portion thereof to the extent permitted by such Section) of such Lender
for
Exchange Notes, the Borrower shall use all commercially reasonable efforts
to
cause the Trustee to deliver, in accordance with the instructions set forth
in
such Exchange Request and with the terms of the Exchange Note Indenture, a
fully
executed and authenticated Exchange Note or Exchange Notes, bearing interest
and
with a maturity date as set forth for such Exchange Notes in the Exchange Note
Indenture, in exchange for such Loan, dated the date of the issuance of such
Exchange Note. Such Exchange Note shall either (i) be recorded in book-entry
form as a beneficial interest in one or more global notes deposited with the
Trustee as custodian for the Depositary Trust Company and credited to the
account of the exchanging Lender directly or indirectly through its participant
in the Depository Trust Company system, in each case in the same principal
amount as such Loan (or portion thereof) being exchanged or (ii) if the
foregoing is not reasonably practicable, be issued as a definitive registered
note payable to the order of the holder or beneficial owner, as the case may
be,
in the same principal amount as such Loan (or portion thereof) being
exchanged.
ARTICLE
VII
DEFAULT
AND REMEDIES
7.01 Events
of Default.
Each of
the following constitutes an “Event of Default”:
(1) the
Borrower defaults for 30 days in the payment when due of interest on the
Loans;
(2) the
Borrower defaults in payment when due of the principal of, or premium if any,
on
any Loans when and as the same shall become due and payable, whether at the
due
date thereof or at the date fixed for prepayment thereof or by acceleration
thereof or otherwise;
(3) failure
by the Borrower or any of its Restricted Subsidiaries to comply with
Sections 2.11,
2.12,
6.09
and
6.16;
(4) failure
by the Borrower or any of its Restricted Subsidiaries for 45 days after
notice by the Administrative Agent or Lenders holding at least 25% in principal
amount of the then outstanding Loans to comply with any of the other agreements
in this Agreement;
(5) default
by the Borrower or any Restricted Subsidiary under any mortgage, indenture
or
instrument under which there may be issued or by which there may be secured
or
evidenced any Indebtedness for money borrowed by the Borrower or any of its
Restricted Subsidiaries (or the payment of which is Guaranteed by the Borrower
or any of its Restricted Subsidiaries) whether such Indebtedness or Guarantee
now exists, or is created after the Closing Date, if that default:
(a) is
caused
by a failure to make any payment when due at the final maturity (after any
applicable grace period) of such Indebtedness (a “Payment
Default”);
or
(b) results
in the acceleration of such Indebtedness prior to its express
maturity;
and,
in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been
a
Payment Default or the maturity of which has been so accelerated, aggregates
$25.0 million or more;
(6) failure
by the Borrower or any of its Restricted Subsidiaries to pay final judgments
aggregating in excess of $25.0 million (net of any amount covered by
insurance), which judgments are not paid, discharged or stayed for a period
of
60 days after such judgments have become final and non-appealable and, in
the event such judgment is covered by insurance, an enforcement proceeding
has
been commenced by any creditor upon such judgment or decree that is not promptly
stayed;
(7) the
Borrower or any of its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary,
pursuant to or within the meaning of Bankruptcy Law:
(i)
commences
a voluntary case; or
(ii)
consents
to entry of an order for relief against it in an involuntary case;
or
(iii)
consents
to the appointment of a custodian of it or for all or substantially all of
its
property; or
(iv)
makes
a
general assignment for the benefit of its creditors; or
(v)
generally
is not paying its debts as they become due; or
(8) a
court
of competent jurisdiction enters an order or decree under any Bankruptcy Law
that:
(i)
is
for
relief against the Borrower or any of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries that, taken as a whole, would constitute
a Significant Subsidiary in an involuntary case;
(ii)
appoints
a custodian of the Borrower or any of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries that, taken as a whole, would constitute
a Significant Subsidiary or for all or substantially all of the property of
the
Borrower or any of its Subsidiaries that is a Significant Subsidiary or any
group of Subsidiaries that, take as a whole, would constitute a Significant
Subsidiary; or
(iii)
orders
the liquidation of the Borrower or any of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries that, taken as a whole, would constitute
a Significant Subsidiary;
and
the
order or decree remains unstayed and in effect for 60
consecutive days.
In
the
event of a declaration of acceleration of the Loans because an Event of Default
has occurred and is continuing as a result of the acceleration of any
Indebtedness described in clause (5) of the preceding paragraph, the
declaration of acceleration of the Loans shall be automatically annulled if
the
holders of any Indebtedness described in clause (5) of the preceding
paragraph have rescinded the declaration of acceleration in respect of such
Indebtedness within 30 days of the date of such declaration and if (i) the
annulment of the acceleration of Loans would not conflict with any judgment
or
decree of a court of competent jurisdiction and (ii) all existing Events of
Default, except nonpayment of Loans or interest on the Loans that became due
solely because of the acceleration of the Loans have been cured or
waived.
7.02 Acceleration.
In the
case of any Event of Default specified in Section 7.01(7) or (8) that
occurs and is continuing, then all unpaid principal of, premium, if any, and
accrued and unpaid interest, if any, on all of the outstanding Loans shall
ipso
facto become due and payable immediately without further action or notice on
the
part of the Administrative Agent or any Lender.
If
any
Event of Default (other than an Event of Default specified in Section 7.01(7)
or
(8))
occurs
and is continuing, the Administrative Agent or Lenders holding at least 25%
in
principal amount of the then outstanding Loans may declare all unpaid principal
of, premium, if any, and accrued interest on the Loans to be due and payable
immediately by notice in writing to the Borrower specifying the respective
Event
of Default.
7.03 Other
Remedies.
(a)
If
a
Default occurs and is continuing, the Administrative Agent may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any, or interest on the Loans or to enforce the
performance of any provision of this Agreement.
(b)
The
Administrative Agent may maintain a proceeding even if it does not possess
any
of the Loans. A delay or omission by the Loans or any Lender in exercising
any
right or remedy accruing upon a Default shall not impair the right or remedy
or
constitute a waiver of or acquiescence in the Default. No remedy is exclusive
of
any other remedy. All available remedies are cumulative to the extent permitted
by law.
7.04 Waiver
of Defaults.
Provided the Loans are not then due and payable by reason of a declaration
of
acceleration, the Required Lenders may on behalf of all the Lenders waive any
Default with respect to such Loans and its consequences by providing written
notice thereof to the Borrower and the Administrative Agent, except a Default
(1) in the payment of principal of, premium, if any, or interest on any Loan
or
(2) in respect of a covenant or provision hereof which under this Agreement
cannot be modified or amended without the consent of each Lender. In the case
of
any such waiver, the Borrower, the Administrative Agent and the Lenders will
be
restored to their former positions and rights under this Agreement,
respectively; provided that no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.
7.05 Control
by Majority. The Required Lenders may direct the time, method and place of
conducting any proceeding for any remedy available to the Administrative Agent
or exercising any trust or power conferred on it. Subject to Section 8.01,
however, the Administrative Agent may refuse to follow any direction that
conflicts with any law or this Agreement, that the Administrative Agent
determines may be unduly prejudicial to the rights of another Lender, or that
may involve the Administrative Agent in personal liability; provided that the
Administrative Agent may take any other action deemed proper by the
Administrative Agent which is not inconsistent with such direction.
In
the
event the Administrative Agent takes any action or follows any direction
pursuant to this Agreement, the Administrative Agent shall be entitled to
indemnification against any loss or expense caused by taking such action or
following such direction.
7.06 Limitation
on Suits.
A
Lender may not pursue any remedy with respect to this Agreement
unless:
(1) the
Lender gives to the Administrative Agent written notice of a continuing Event
of
Default;
(2) the
Lender or Lenders holding at least 25% in principal amount of the outstanding
Loans make a written request to the Administrative Agent to pursue the
remedy;
(3) such
Lender or Lenders offer and provide to the Administrative Agent reasonable
indemnity or security against any loss, liability or expense satisfactory to
the
Administrative Agent;
(4) the
Administrative Agent does not comply with the request within 30 days after
receipt of the request and the offer of indemnity and security; and
(5) during
such 30-day period the Required Lenders do not give the Administrative Agent
a
direction which, in the opinion of the Administrative Agent, is inconsistent
with the request.
A
Lender
may not use this Agreement to prejudice the rights of another Lender or to
obtain a preference or priority over such other Lender.
7.07 Rights
of Lenders To Receive Payment.
Notwithstanding any other provision of this Agreement, the right of any Lender
to receive payment of the principal of, premium, if any, and interest on a
Loan,
on or after the respective due dates expressed in this Agreement, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of the
Lender.
7.08 Collection
Suit by Administrative Agent. If a Default specified in clause (1) or (2)
of Section 7.01 occurs and is continuing, the Administrative Agent may
recover judgment in its own name and as trustee of an express trust against
the
Borrower or any other obligor on the Loans for the whole amount of the principal
of, premium, if any, and accrued interest on the Loans and fees remaining
unpaid, together with interest on overdue principal and premium, if any, and,
to
the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the Loans
and such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Administrative Agent, its agents and counsel.
7.09 Priorities.
If the Administrative Agent collects any money or property pursuant to this
Article VII, it shall pay out the money or property in the following
order:
FIRST:
to
the Administrative Agent for amounts due under Sections 2.06
and
8.07;
SECOND:
to Lenders for interest accrued on the Loans to the date of such distribution,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Loans for interest;
THIRD:
to
Lenders for the principal amount and premium, if any, due and unpaid on the
Loans without preference or priority of any kind, according to the amounts
due
and payable on the Loans for principal and premium, if any; and
FOURTH:
to the Borrower.
The
Administrative Agent, upon prior notice to the Borrower, may fix a Record Date
and payment date for any payment to Lenders pursuant to this Section 7.09.
7.10 Undertaking
for Costs.
In any
suit for the enforcement of any right or remedy under this Agreement or in
any
suit against the Administrative Agent for any action taken or omitted by it
as
the Administrative Agent, a court in its discretion may require the filing
by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made
by
the party litigant. This Section 7.10 does not apply to a suit by the
Administrative Agent, a suit by a Lender pursuant to Section 7.07, or a
suit by a Lender or Lenders of more than 10% in principal amount of the
outstanding Loans.
ARTICLE
VIII
ADMINISTRATIVE
AGENT
8.01 Appointment
and Authorization of Administrative Agent.
Each
Lender hereby irrevocably appoints, designates and authorizes the Administrative
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere herein or
in
any other Loan Document, (i) the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent, (ii) the Administrative Agent shall not have any duty
to
take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such greater or lesser number of Lenders as may be expressly
required hereby in any instance), (iii) except as expressly set forth in the
Loan Documents, the Administrative Agent shall not have any duty to disclose
or
shall be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by
the
bank serving as the Administrative Agent or any of its Affiliates in any
capacity and (iv) the Administrative Agent shall not be liable to any Lender
for
any action taken or not taken by it with the consent or at the request of the
Required Lenders (or such greater or lesser number of Lenders as may be
expressly required hereby in any instance) or in the absence of its own gross
negligence or willful misconduct. Without limiting the generality of the
foregoing sentence, the use of the term “agent” herein and in the other Loan
Documents with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. Instead, such term is used merely as a matter
of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
8.02 Delegation
of Duties. The Administrative Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that they select in the absence of gross
negligence or willful misconduct.
8.03 Liability
of Administrative Agent. No Agent-Related Person shall (a) be liable for any
action taken or omitted to be taken by any of them under or in connection with
this Agreement or any other Loan Document or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct in connection
with its duties expressly set forth herein), or (b) be responsible in any manner
to any Lender or participant for any recital, statement, representation or
warranty made by any Loan Party or any officer thereof, contained herein or
in
any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative
Agent
under or in connection with, this Agreement or any other Loan Document, or
the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Loan Party
or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
or participant to ascertain or to inquire as to the observance or performance
of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any
Loan
Party or any Affiliate thereof.
8.04 Reliance
by Administrative Agent
(a)
The
Administrative Agent shall be entitled to rely, and shall be fully protected
in
relying, upon any writing, communication, signature, resolution, representation,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex
or
telephone message, electronic mail message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements
of
legal counsel (including counsel to any Loan Party), independent accountants
and
other experts selected by the Administrative Agent. Except for its express
obligations to the Loan Parties under the Loan Documents, the Administrative
Agent shall be fully justified in failing or refusing to take any action under
any Loan Document unless it shall first receive such advice or concurrence
of
the Required Lenders as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
Required Lenders (or such greater or lesser number of Lenders as may be
expressly required hereby in any instance) and such request and any action
taken
or failure to act pursuant thereto shall be binding upon all the
Lenders.
(b)
For
purposes of determining compliance with the conditions specified in Article
IV,
each
Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
8.05 Notice
of Default.
The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent
for
the account of the Lenders, unless the Administrative Agent shall have received
written notice from a Lender or the Borrower referring to this Agreement,
describing such Default and stating that such notice is a “notice of default.”
The Administrative Agent will notify the Lenders of its receipt of any such
notice. The Administrative Agent shall take such action with respect to any
Event of Default as may be directed by the Required Lenders in accordance with
Article VII; provided, however, that unless and until the Administrative Agent
has received any such direction, the Administrative Agent may (but shall not
be
obligated to) take such action, or refrain from taking such action, with respect
to such Event of Default as it shall deem advisable or in the best interest
of
the Lenders.
8.06 Credit
Decision; Disclosure of Information by the Administrative Agent. Each Lender
acknowledges that no Agent-Related Person or any other Lender has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment
or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
or any other Lender to any Lender as to any matter, including whether
Agent-Related Persons or other Lenders have disclosed material information
in
their possession. Each Lender represents to the Administrative Agent that it
has, independently and without reliance upon any Agent-Related Person or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries, and all applicable bank
or other regulatory Laws relating to the transactions contemplated hereby,
and
made its own decision to enter into this Agreement and to extend credit to
the
Borrower hereunder. Each Lender also represents that it will, independently
and
without reliance upon any Agent-Related Person or any other Lender and based
on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking
or
not taking action under this Agreement and the other Loan Documents and to
make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by
the Administrative Agent herein, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Borrower or any other Loan Party
or any of their respective Affiliates which may come into the possession of
any
Agent-Related Person.
8.07 Indemnification
of the Administrative Agent. Whether or not the transactions contemplated hereby
are consummated, the Lenders shall indemnify upon demand each Agent-Related
Person (to the extent not reimbursed by or on behalf of the Borrower and without
limiting the obligation of the Borrower to do so), pro rata, and hold harmless
each Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by
a
court of competent jurisdiction to have resulted from such Agent-Related
Person’s own gross negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall
be
deemed to constitute gross negligence or willful misconduct for purposes of
this
Section 8.07. In the case of any investigation, litigation or proceeding giving
rise to any Indemnified Liabilities, this Section 8.07 applies whether any
such
investigation, litigation or proceeding is brought by any Lender or any other
Person. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for their ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower.
The
undertaking in this Section 8.07 shall survive the payment of all other
Obligations and the resignation of the Administrative Agent.
8.08 Administrative
Agent in its Individual Capacity. Xxxxxxx Xxxxx Credit Partners L.P. and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire Equity Interests in and generally engage in any kind
of
banking, trust, financial advisory, underwriting or other business with each
of
the Loan Parties and their respective Affiliates as though Xxxxxxx Sachs Credit
Partners L.P. were not the Administrative Agent hereunder and without notice
to
or consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Xxxxxxx Xxxxx Credit Partners L.P. or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loans,
Xxxxxxx Sachs Credit Partners L.P. and its Affiliates shall have the same rights
and powers under this Agreement as any other Lender and may exercise such rights
and powers as though it were not the Administrative Agent, and the terms
“Lender” and “Lenders” include Xxxxxxx Xxxxx Credit Partners L.P. in its
individual capacity.
8.09 Successor
Administrative Agent. The Administrative Agent may resign as an Administrative
Agent upon thirty (30) days’ notice to the Lenders. If the Administrative Agent
resigns under this Agreement, the Required Lenders shall appoint from among
the
Lenders a successor agent for such Lenders, which successor agent shall be
consented to by the Borrower at all times other than during the existence of
an
Event of Default under Section 7.01(1), (2), (7) or (8) (which consent of
the Borrower shall not be unreasonably withheld or delayed). If no successor
agent is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor agent from among the Lenders.
Upon the acceptance of its appointment as successor agent hereunder, the Person
acting as such successor agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term “Administrative Agent,”
shall mean such successor administrative agent and/or supplemental
administrative agent, as the case may be, and the retiring Administrative
Agent’s appointment, powers and duties as the Administrative Agent shall be
terminated. After the retiring Administrative Agent’s resignation hereunder as
the Administrative Agent, the provisions of this Article VIII and Sections
9.04
and 9.05 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Administrative Agent under this Agreement. If
no
successor agent has accepted appointment as the Administrative Agent by the
date
which is thirty (30) days following the retiring Administrative Agent’s notice
of resignation, such retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of
the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above. Upon the
acceptance of any appointment as the Administrative Agent hereunder by a
successor every successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges, and duties
of
such retiring Administrative Agent, and such retiring Administrative Agent
shall
be discharged from its duties and obligations under the Loan Documents. After
an
Administrative Agent’s resignation hereunder as the Administrative Agent, the
provisions of this Article VIII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as
Administrative Agent.
8.10 Administrative
Agent May File Proofs of Claim. In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise
and
irrespective of whether the Administrative Agent shall have made any demand
on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a)
to
file
and prove a claim for the whole amount of the principal and interest owing
and
unpaid in respect of the Loans and all other Obligations, that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent
under
Sections
2.06
and
9.04)
allowed
in such judicial proceeding; and
(b)
to
collect and receive any monies or other property payable or deliverable on
any
such claims and to distribute the same;
and
any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event
that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due
to
the Administrative Agent under Sections
2.06
and
9.04.
Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan
of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or to authorize the Administrative Agent to vote
in
respect of the claim of any Lender in any such proceeding.
8.11 Other
Agents; Arrangers
and Bookrunners. None of the Lenders or other Persons identified on the facing
page of this Agreement as a “syndication agent”, “documentation agent”,
“co-documentation agent”, “joint lead arranger” or “joint bookrunner” shall have
any obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of the Lenders or other Persons so identified shall have or be deemed
to
have any fiduciary relationship with any Lender. Each Lender acknowledges that
it has not relied, and will not rely, on any of the Lenders or other Persons
so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE
IX
MISCELLANEOUS
9.01 Amendments,
Etc.
No
amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Borrower or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrower or the applicable Loan Party, as the case may be,
and
each such waiver or consent shall be effective only in the specific instance
and
for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall:
(a)
extend
or
increase the Commitment of any Lender without the written consent of such
Lender;
(b)
extend
the date specified as the Initial Maturity Date or the Final Maturity Date
or
otherwise extend the maturity of the Loans (it being understood that the
automatic maturity date extension to the Final Maturity Date as provided in
Section 2.03
shall
not
be considered an extension of the maturity of the Loans for purposes of this
clause (b)),
or
postpone any date scheduled for any payment of principal, interest or fees
under
Section
2.05
or
2.06
without
the written consent of each Lender directly affected thereby;
(c)
reduce
or
forgive the principal of, or the rate of interest specified herein on, any
Loan
or (subject to clause (i)
of the
third proviso to this Section 9.01)
any
fees or other amounts payable hereunder or under any other Loan Document without
the written consent of each Lender directly affected thereby; provided,
however,
that
only the consent of the Required Lenders shall be necessary to amend the
definition of “Default Rate” or to waive any obligation of the Borrower to pay
interest at the Default Rate;
(d)
impose
any additional restrictions on the ability of the Lenders to exchange Extended
Loans for Exchange Notes or modify the principal amount of Exchange Notes into
which the principal amount of Extended Loans is exchangeable from 100.0% without
the written consent of each Lender;
(e)
change
Section 2.04(b)
or
2.04(c),
any
provision of this Section 9.01
or the
definition of “Required Lenders” without the written consent of each Lender or
change any other provision of any Loan Document specifying the number or
percentage of Lenders required to waive, amend or modify any rights thereunder
or make any determination or grant any consent thereunder, without the written
consent of such specified number or percentage of the Lenders;
(f)
change
the priorities provisions of Section 7.09,
the pro
rata treatment provisions of Section 2.11,
or the
sharing of payment provisions of Section 2.10
without
the consent of each Lender adversely affected thereby;
and
provided,
further,
that
(i) no amendment, waiver or consent shall, unless in writing and signed by
the Administrative Agent in addition to the Lenders required above, affect
the
rights or duties of, or any fees or other amounts payable to, the Administrative
Agent under this Agreement or any other Loan Document; (ii) Section 9.07(g)
may not
be amended, waived or otherwise modified without the consent of each Granting
Lender all or any part of whose Loans are being funded by an SPC at the time
of
such amendment, waiver or other modification; (iii) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto; and (iv) the definition of “Super Majority Lenders”
may not be amended without the written consent of the Super Majority
Lenders.
Notwithstanding
anything to the contrary contained in Section 9.01,
in the
event that the Borrower requests that this Agreement be modified or amended
in a
manner that would require the unanimous consent of all of the Lenders and such
modification or amendment is agreed to by the Super Majority Lenders (as
hereinafter defined), then with the consent of the Borrower and the Super
Majority Lenders, the Borrower and the Super Majority Lenders shall be permitted
to amend the Agreement without the consent of the Lender or Lenders that did
not
agree to the modification or amendment requested by the Borrower (such Lender
or
Lenders, collectively the “Minority
Lenders”)
to
provide for (x) the making of such additional Loans by one or more other
financial institutions (each of which shall consent to the requested
modification or amendment) or Super Majority Lender or Lenders, as the case
may
be, as may be necessary to repay in full, at par, the outstanding Loans of
and
interest and fees payable to the Minority Lenders immediately before giving
effect to such amendment and (y) such other modifications to this Agreement
as may be appropriate to effect the foregoing clause (x).
As used
herein, the term “Super
Majority Lenders”
shall
mean, as of any date of determination, Lenders having more than 66 2/3% of
the
sum of the Outstanding Amount.
9.02 Notices
and Other Communications; Facsimile Copies
(a)
General.
Unless
otherwise expressly provided herein, all notices and other communications
provided for hereunder or any other Loan Document shall be in writing (including
by facsimile transmission). All such written notices shall be mailed, faxed
or
delivered to the applicable address, facsimile number or (subject to
Section
9.02(c))
electronic mail address, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:
(i)
if
to the
Borrower or the Administrative Agent, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on
Schedule
9.02
or to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the other parties;
and
(ii)
if
to any
other Lender, to the address, facsimile number, electronic mail address or
telephone number specified in its Administrative Questionnaire or to such other
address, facsimile number, electronic mail address or telephone number as shall
be designated by such party in a notice to the Borrower and the Administrative
Agent.
All
such
notices and other communications shall be deemed to be given or made upon the
earlier to occur of (i) actual receipt by the relevant party hereto and (ii)
(A)
if delivered by hand or by courier, when signed for by or on behalf of the
relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when
sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of Section
9.02(c)),
when
delivered; provided,
however,
that
notices and other communications to the Administrative Agent pursuant to
Article
II
shall
not be effective until actually received by such Person; provided,
further,
that
failure to deliver courtesy copies of notices and other communications shall
in
no event affect the validity or effectiveness of such notices and other
communications. In no event shall a voicemail message be effective as a notice,
communication or confirmation hereunder.
(b)
Effectiveness
of Facsimile Documents and Signatures.
Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness
of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on
all
Loan Parties, the Agents and the Lenders. The Administrative Agent may also
require that any such documents and signatures be confirmed by a manually-signed
original thereof; provided,
however,
that
the failure to request or deliver the same shall not limit the effectiveness
of
any facsimile document or signature.
(c)
Limited
Use of Electronic Mail.
Electronic mail and Internet and intranet websites may be used only to
distribute routine communications, and to distribute Loan Documents for
execution by the parties thereto, and may not be used for any other
purpose.
(d)
Reliance
by Administrative Agent and Lenders.
The
Administrative Agent and the Lenders shall be entitled to rely and act upon
any
notice (including a telephonic Borrowing Request) purportedly given by or on
behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by
the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
each Agent-Related Person and each Lender from all losses, costs, expenses
and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower in the absence of gross
negligence or willful misconduct. All telephonic notices to the Administrative
Agent may be recorded by the Administrative Agent, and each of the parties
hereto hereby consents to such recording.
9.03 No
Waiver; Cumulative Remedies.
No
failure by any Lender or the Administrative Agent to exercise, and no delay
by
any such Person in exercising, any right, remedy, power or privilege hereunder
or under any other Loan Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided, and provided under each other Loan Document, are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by Law.
9.04 Attorney
Costs, Expenses and Taxes. The Borrower agrees (a) to pay or reimburse the
Agents for all reasonable costs and expenses incurred in connection with the
preparation, negotiation, syndication and execution of the commitments to
provide the Loans hereunder, this Agreement and the other Loan Documents, and
any actual or proposed amendment, waiver, consent or other modification of
the
provisions hereof and thereof (whether or not the transactions contemplated
thereby are consummated), and the consummation and administration of the
transactions contemplated hereby and thereby, including all Attorney Costs
of
Cravath, Swaine & Xxxxx LLP and local counsel (if any), and (b) to
pay or reimburse the Administrative Agent and each Lender for all reasonable
costs and expenses incurred in connection with the enforcement of any rights
or
remedies under this Agreement or the other Loan Documents (including all such
costs and expenses incurred during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs of counsel
to the Administrative Agent. The foregoing costs and expenses shall include
all
out-of-pocket expenses incurred by any Agent. All amounts due under this
Section 9.04 shall be paid within twenty (20) Business Days after invoiced
or demand therefor. The agreements in this Section 9.04 shall survive the
termination of this Agreement and the repayment of all other Obligations. If
the
Borrower fails to pay when due any costs, expenses or other amounts payable
by
it hereunder or under any Loan Document, such amount may be paid on behalf
of
the Borrower by the Administrative Agent or any Lender, in its sole
discretion.
9.05 Indemnification
by the Borrower. Whether or not the transactions contemplated hereby are
consummated, the Borrower shall indemnify and hold harmless each Agent-Related
Person, each Lender and their respective Affiliates, directors, officers,
employees, counsel, agents and, in the case of any funds, trustees and advisors
and attorneys-in-fact (collectively the “Indemnitees”)
from
and against any and all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, judgments, suits, costs, expenses and disbursements
(including Attorney Costs (which shall be limited to one (1) counsel to the
Administrative Agent and the Lenders (plus any local counsel), unless
(x) the interests of the Administrative Agent and the Lenders are
sufficiently divergent, in which case one (1) additional counsel may be
appointed, and (y) if the interests of any Lender or group of Lenders
(other than all of the Lenders) are distinctly or disproportionately affected,
one (1) additional counsel for such Lender or group of Lenders)) of any kind
or
nature whatsoever which may at any time be imposed on, incurred by or asserted
against any such Indemnitee in any way relating to or arising out of or in
connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) any Loan or the
use or proposed use of the proceeds therefrom, or (c) any actual or alleged
presence, Release or threatened Release of Hazardous Materials at, under, on
or
from any property currently or formerly owned or operated by the Borrower or
any
Subsidiary, or any Environmental Liability related in any way to the Borrower
or
any Subsidiary, or (d) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based
on
contract, tort or any other theory (including any investigation of, preparation
for, or defense of any pending or threatened claim, investigation, litigation
or
proceeding) and regardless of whether any Indemnitee is a party thereto (all
the
foregoing, collectively, the “Indemnified
Liabilities”),
in
all cases, whether or not caused by or arising, in whole or in part, out of
the
negligence of the Indemnitee; provided that such indemnity shall not, as to
any
Indemnitee, be available to the extent that such liabilities, obligations,
losses, damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses or disbursements are determined by a court of competent jurisdiction
by
final and nonappealable judgment to have resulted from the gross negligence
or
willful misconduct of such Indemnitee or breach of the Loan Documents by such
Indemnitee. No Indemnitee shall be liable for any damages arising from the
use
by others of any information or other materials obtained through IntraLinks
or
other similar information transmission systems in connection with this
Agreement, nor shall any Indemnitee or any Loan Party have any liability for
any
special, punitive, indirect or consequential damages relating to this Agreement
or any other Loan Document or arising out of its activities in connection
herewith or therewith (whether before or after the Closing Date). In the case
of
an investigation, litigation or other proceeding to which the indemnity in
this
Section 9.05 applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnitee or any other Person,
whether or not any Indemnitee is otherwise a party thereto and whether or not
any of the transactions contemplated hereunder or under any of the other Loan
Documents is consummated. All amounts due under this Section 9.05 shall be
payable within twenty (20) Business Days after demand therefor; provided that
any Indemnitee shall promptly refund amounts paid to such Indemnitee pursuant
to
this Section 9.05 to the extent that a court of competent jurisdiction
determines in a final, nonappealable judgment that such Indemnitee was not
entitled to indemnification with respect to such payment pursuant to the express
terms of this Section 9.05. The agreements in this Section 9.05 shall
survive the resignation of the Administrative Agent, the replacement of any
Lender and, the repayment, satisfaction or discharge of all other
Obligations.
9.06 Payments
Set Aside. To the extent that any payment by or on behalf of any Borrower is
made to the Administrative Agent or any Lender, or the Administrative Agent
or
any Lender exercises its right of setoff, and such payment or the proceeds
of
such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full
force
and effect as if such payment had not been made or such setoff had not occurred,
and (b) each Lender severally agrees to pay to the Administrative Agent
upon demand its applicable share of any amount so recovered from or repaid
by
the Administrative Agent, plus interest thereon from the date of such demand
to
the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.
9.07 Successors
and Assigns
(a)
The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the parties hereto and their respective successors and assigns permitted hereby,
except that the Borrower may not assign or otherwise transfer any of its rights
or obligations hereunder (except as expressly permitted by Section 6.16)
without
the prior written consent of each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder, except (i) in
accordance with the provisions of Section 9.07(b),
(ii) by way of participation in accordance with the provisions of
Section 9.07(d),
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 9.07(f)
or
(h)
or
(iv) to an SPC in accordance with the provisions of Section
9.07(g)
(and any
other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed
to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided
in
Section 9.07(d)
and, to
the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this
Agreement.
(b)
Any
Lender may at any time assign to one or more Persons all or a portion of its
rights and obligations under this Agreement (including all or a portion of
the
Loans at the time owing to it); provided
that
(i) the outstanding principal balance of the Loan of the assigning Lender
subject to each such assignment, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of
the Trade Date, shall not be less than $1,000,000, except in the case of an
assignment of the entire amount of the Loans at the time owing to the assigning
Lender or in the case of an assignment to a Lender or an Affiliate of a Lender
or an Approved Fund with respect to a Lender, unless the Administrative Agent
and, so long as no Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); (ii) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption; (iii) the assigning
Lender shall deliver any promissory notes, if any, evidencing such Loans to
the
Borrower or the Administrative Agent; (iv) any such assignment (other than
an assignment to an Affiliate of a Lender or an Approved Fund with respect
to a
Lender) (A) that occurs at any time prior to the date that is three months
after the Closing Date or (B) that occurs at any time prior to the Initial
Maturity Date and that involves the assignment by an Initial Lender that would
result in such Initial Lender holding less than 51% of the aggregate principal
amount of the Loans of such Initial Lender as of the Closing Date, must be
consented to by the Borrower; and (v) the assigning Lender shall remain
obligated to refund the Rollover Fee to the extent, and in the circumstances,
required in accordance with the provisions of Section
2.06(f);
provided,
further,
that in
the case of an assignment to an Affiliate of the assigning Lender, such
assignment shall be effective as between such Lender and its Affiliate
immediately without compliance with the conditions for assignment under this
Section 9.07(b)
or
Section 9.07(d),
but
shall not be effective with respect to the Borrower, Administrative Agent or
any
other Lender, and the Borrower, Administrative Agent or other Lender shall
be
entitled to deal solely with (and continue to treat as the Lender hereunder
for
all purposes) such assigning Lender under any such assignment, in each case,
until the conditions for assignment under this Section 9.07(b)
and
Section 9.07(c)
have
been complied with. Subject to acceptance and recording thereof by the
Administrative Agent pursuant to Section
9.07(c),
from
and after the effective date specified in each Assignment and Assumption, the
assignee thereunder shall be a party to this Agreement and, to the extent of
the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment
and
Assumption, be released from its obligations under this Agreement (and, in
the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be
a
party hereto but shall continue to be entitled to the benefits of Sections 3.01,
3.02,
3.03,
9.04
and
9.05
with
respect to facts and circumstances occurring prior to the effective date of
such
assignment). Upon request, and the surrender by the assigning Lender of any
promissory note evidencing the Loan of such Lender, the Borrower (at its
expense) shall execute and deliver a promissory note to the assignee Lender.
Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this clause (b)
shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 9.07(d).
(c)
The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at its Administrative Agent’s Office a copy of each
Assignment and Assumption relating to the Loans delivered to it and a register
for the recordation of the names and addresses of the applicable Lenders, and
principal amounts (and related interest amounts) of the applicable Loans, owing
to, each Lender pursuant to the terms hereof from time to time (each, a
“Register”).
The
entries in the applicable Register shall be conclusive, absent manifest error,
and the Borrower and the Lenders shall treat each Person whose name is recorded
in such Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Registers shall be available for inspection by the Borrower and any Lender,
at
any reasonable time and from time to time upon reasonable prior
notice.
(d)
Any
Lender may at any time, subject to clause (a),
without
the consent of, or notice to, the Borrower (except as otherwise provided below
in this Section 9.07(d))
or the
Administrative Agent, sell participations to any Person (other than a natural
person) (each, a “Participant”)
in all
or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of the Loans owing to it); provided
that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and (iv) any such sale of a participation
(other than any sale of a participation pursuant to Section
2.10)
that
(A) occurs at any time prior to the date that is three months after the
Closing Date and (B) involves the sale by an Initial Lender of
participations (together with all other such participations sold by such Initial
Lender during the period specified in clause (A))
in
Loans representing more than 33.0% of the aggregate principal amount of the
Loans of such Initial Lender as of the Closing Date, must be consented to by
the
Borrower. Any agreement or instrument pursuant to which a Lender sells such
a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver
of
any provision of this Agreement; provided
that
such agreement or instrument may provide that such Lender will not, without
the
consent of the Participant, agree to any amendment, waiver or other modification
described in the first proviso to Section 9.01
that
directly affects such Participant. Subject to Section 9.07(e),
the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01,
3.02
and
3.03
to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 9.07(b)
but
shall not be entitled to recover greater amounts under such Sections than the
selling Lender would have been entitled to recover. To the extent permitted
by
law, each Participant also shall be entitled to the benefits of Section 9.09
as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.10
as
though it were a Lender.
(e)
A
Participant shall not be entitled to receive any greater payment under
Section 3.01,
3.02
or
3.03
than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation
to
such Participant is made with the Borrower’s prior written consent. A
Participant shall not be entitled to the benefits of Section 3.01
unless
the Borrower is notified of the participation sold to such Participant and
such
Participant agrees, for the benefit of the applicable Borrower, to comply with
Section 9.15
as
though it were a Lender.
(f)
Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under the promissory
note
evidencing the Loan of such Lender, if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided
that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(g)
Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting
Lender”)
may
grant to a special purpose funding vehicle identified as such in writing from
time to time by the Granting Lender to the Administrative Agent and the Borrower
(an “SPC”)
the
option to provide all or any part of the Loan that such Granting Lender would
otherwise be obligated to make pursuant to this Agreement; provided
that
(i) nothing herein shall constitute a commitment by any SPC to fund any
Loan, and (ii) if an SPC elects not to exercise such option or otherwise
fails to make all or any part of the Loan, the Granting Lender shall be
obligated to make the Loan pursuant to the terms hereof. Each party hereto
hereby agrees that (i) neither the grant to any SPC nor the exercise by any
SPC of such option shall increase the costs or expenses or otherwise increase
or
change the obligations of the Borrower under this Agreement (including their
obligations under Section 3.01
or
3.02),
(ii) no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement for which a Lender would be liable, and (iii) the
Granting Lender shall for all purposes, including the approval of any amendment,
waiver or other modification of any provision of any Loan Document, remain
the
lender of record hereunder. The making of a Loan by an SPC hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without
prior consent of the Borrower and the Administrative Agent, assign all or any
portion of its right to receive payment with respect to the Loan to the Granting
Lender and (ii) disclose on a confidential basis any non-public information
relating to its funding of the Loan to any rating agency, commercial paper
dealer or provider of any surety or Guarantee or credit or liquidity enhancement
to such SPC.
(h)
Notwithstanding
anything to the contrary contained herein, any Lender that is a Fund may create
a security interest in all or any portion of the Loans owing to it and the
promissory note evidencing the same, if any, held by it to the trustee for
holders of obligations owed, or securities issued, by such Fund as security
for
such obligations or securities; provided
that
unless and until such trustee actually becomes a Lender in compliance with
the
other provisions of this Section 9.07,
(i) no such pledge shall release the pledging Lender from any of its
obligations under the Loan Documents and (ii) such trustee shall not be
entitled to exercise any of the rights of a Lender under the Loan Documents
even
though such trustee may have acquired ownership rights with respect to the
pledged interest through foreclosure or otherwise.
9.08 Confidentiality.
Each of
the Agents and the Lenders agrees to maintain the confidentiality of the
Information, except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (b) to
the extent requested by any regulatory authority; (c) to the extent
required by applicable Laws or regulations or by any subpoena or similar legal
process; (d) to any other party to this Agreement; (e) subject to an
agreement containing provisions substantially the same as those of this
Section 9.08 (or as may otherwise be reasonably acceptable to the
Borrower), to any assignee of or Participant in, or any prospective assignee
of
or Participant in, any of its rights or obligations under this Agreement;
(f) with the consent of the Borrower; (g) to the extent such
Information becomes publicly available other than as a result of a breach of
this Section 9.08; (h) to any state, provincial, Federal or foreign
authority or examiner (including the National Association of Insurance
Commissioners or any other similar organization) regulating any Lender or its
Affiliates; (i) to any rating agency when required by it (it being
understood that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Information relating to the
Borrower received by it from such Lender) or (j) in connection with the
exercise of any remedy hereunder or any suit, action or proceeding relating
to
this Agreement or any other Loan Document or the enforcement of rights hereunder
or thereunder. In addition, the Agents and the Lenders may disclose the
existence of this Agreement and information about this Agreement to market
data
collectors, similar service providers to the lending industry, and service
providers to the Agents and the Lenders in connection with the administration
and management of this Agreement, the other Loan Documents, the Commitments,
and
the Loans. For the purposes of this Section 9.08, “Information”
means
all information received from any Loan Party relating to any Loan Party or
its
business, other than any such information that is publicly available to any
Agent or any Lender prior to disclosure by any Loan Party other than as a result
of a breach of this Section 9.08; provided that, in the case of information
received from a Loan Party after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this
Section 9.08 shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
9.09 Setoff.
In addition to any rights and remedies of the Lenders provided by Law, upon
the
occurrence and during the continuance of any Event of Default, each Lender
is
authorized at any time and from time to time, without prior notice to the
Borrower or any other Loan Party, any such notice being waived by the Borrower
(on its own behalf and on behalf of each Loan Party) to the fullest extent
permitted by Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
Indebtedness at any time owing by, such Lender to or for the credit or the
account of the respective Loan Parties against any and all Obligations owing
to
such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in
a
currency different from that of the applicable deposit or Indebtedness. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent
after
any such setoff and application made by such Lender; provided, however, that
the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of the Administrative Agent and each Lender under this
Section 9.09 are in addition to other rights and remedies (including,
without limitation, other rights of setoff) that the Administrative Agent and
such Lender may have.
9.10 Interest
Rate Limitation
(a)
Notwithstanding
anything to the contrary contained in any Loan Document, the interest paid
or
agreed to be paid under the Loan Documents shall not exceed the maximum rate
of
non-usurious interest permitted by applicable Law (the “Maximum
Rate”).
If
the Administrative Agent or any Lender shall receive interest in an amount
that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower.
In determining whether the interest contracted for, charged, or received by
the
Administrative Agent or a Lender exceeds the Maximum Rate, such Person may,
to
the extent permitted by applicable Law, (a) characterize any payment that
is not principal as an expense, fee, or premium rather than interest,
(b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the Obligations
hereunder.
9.11 Counterparts.
This
Agreement and each other Loan Document may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery by fax of an
executed counterpart of a signature page to this Agreement and each other Loan
Document shall be effective as delivery of an original executed counterpart
of
this Agreement and such other Loan Document. The Administrative Agent may also
require that any such documents and signatures delivered by fax be confirmed
by
a manually-signed original thereof; provided that the failure to request or
deliver the same shall not limit the effectiveness of any document or signature
delivered by fax.
9.12 Integration.
This Agreement, together with the other Loan Documents and the Fee Letter,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions
of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights
or
remedies in favor of the Administrative Agent or the Lenders in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document
was drafted with the joint participation of the respective parties thereto
and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
9.13 Survival
of Representations and Warranties. All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery hereof and thereof. Such representations and warranties
have been or will be relied upon by each Agent and each Lender, regardless
of
any investigation made by any Agent or any Lender or on their behalf and
notwithstanding that any Agent or any Lender may have had notice or knowledge
of
any Default at the time of any making of any credit extension, and shall
continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied.
9.14 Severability.
If any provision of this Agreement or the other Loan Documents is held to be
illegal, invalid or unenforceable, the legality, validity and enforceability
of
the remaining provisions of this Agreement and the other Loan Documents shall
not be affected or impaired thereby. The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
9.15 Tax
Forms
(a)
(i)
Each
Lender and Agent that is not a “U.S. person” within the meaning of
Section 7701(a)(30) of the Code (each, a “Foreign
Lender”)
shall
deliver to the Borrower and the Administrative Agent, prior to receipt of any
payment subject to withholding under the Code (or upon accepting an assignment
of an interest herein), two duly signed, properly completed copies of either
IRS
Form W-8BEN or any successor thereto (relating to such Foreign Lender and
entitling it to an exemption from, or reduction of, United States withholding
tax on all payments to be made to such Foreign Lender by the Borrower pursuant
to this Agreement or any other Loan Document) or IRS Form W-8ECI or any
successor thereto (relating to all payments to be made to such Foreign Lender
by
the Borrower or any other Loan Party pursuant to this Agreement or any other
Loan Document) or such other evidence reasonably satisfactory to the Borrower
and the Administrative Agent that such Foreign Lender is entitled to an
exemption from, or reduction of, United States withholding tax, including any
exemption pursuant to Section 881(c) of the Code, and in the case of a
Foreign Lender claiming such an exemption under Section 881(c) of the Code,
a certificate that establishes in writing to the Borrower and the Administrative
Agent that such Foreign Lender is not (x) a “bank” as described in
Section 881(c)(3)(A) of the Code, (y) a 10-percent shareholder within
the meaning of Section 871(h)(3)(B) of the Code, or (z) a controlled
foreign corporation related to the Borrower within the meaning of
Section 864(d) of the Code. Thereafter and from time to time, each such
Foreign Lender shall (A) promptly submit to the Borrower and the
Administrative Agent such additional duly completed and signed copies of one
or
more of such forms or certificates (or such successor forms or certificates
as
shall be adopted from time to time by the relevant U.S. taxing authorities)
as
may then be available under then current U.S. laws and regulations to avoid,
or
such evidence as is reasonably satisfactory to the Borrower and the
Administrative Agent of any available exemption from, or reduction of, United
States withholding taxes in respect of all payments to be made to such Foreign
Lender by the Borrower pursuant to this Agreement, or any other Loan Document,
in each case, (1) on or before the date that any such form, certificate or
other evidence expires or becomes obsolete, (2) after the occurrence of any
event requiring a change in the most recent form, certificate or evidence
previously delivered by it to the Borrower and the Administrative Agent and
(3) from time to time thereafter if reasonably requested by the Borrower or
the Administrative Agent, and (B) promptly notify the Borrower and the
Administrative Agent of any change in circumstances which would modify or render
invalid any claimed exemption or reduction.
(ii)
Each
Foreign Lender, to the extent it does not act or ceases to act for its own
account with respect to any portion of any sums paid or payable to such Foreign
Lender under any of the Loan Documents (for example, in the case of a typical
participation by such Foreign Lender), shall deliver to the Borrower and the
Administrative Agent on the date when such Foreign Lender ceases to act for
its
own account with respect to any portion of any such sums paid or payable, and
at
such other times as may be necessary in the determination of the Borrower or
the
Administrative Agent (in either case, in the reasonable exercise of its
discretion), (A) two duly signed completed copies of the forms or
statements required to be provided by such Foreign Lender as set forth above,
to
establish the portion of any such sums paid or payable with respect to which
such Foreign Lender acts for its own account that is not subject to United
States withholding tax, and (B) two duly signed completed copies of IRS
Form W-8IMY (or any successor thereto), together with any information such
Foreign Lender chooses to transmit with such form, and any other certificate
or
statement of exemption required under the Code, to establish that such Foreign
Lender is not acting for its own account with respect to a portion of any such
sums payable to such Foreign Lender.
(iii)
The
Borrower shall not be required to pay any additional amount or any indemnity
payment under Section 3.01
to
(A) any Foreign Lender with respect to any Taxes required to be deducted or
withheld on the basis of the information, certificates or statements of
exemption such Lender transmits with an IRS Form W-8IMY pursuant to this
Section 9.15(a),
(B) any Foreign Lender by reason of such Foreign Lender failing to satisfy
the foregoing provisions of this Section 9.15(a),
or
(C) any Lender by reason of such Lender failing to satisfy the provisions
of Section 9.15(b);
provided
that if
such Lender shall have satisfied the requirement of this Section 9.15(a)
or
Section 9.15(b),
as
applicable, on the date such Lender became a Lender or ceased to act for its
own
account with respect to any payment under any of the Loan Documents, nothing
in
this Section 9.15(a)
or
Section 9.15(b)
shall
relieve the Borrower of its obligation to pay any amounts pursuant to
Section 3.01
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 or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced
rate.
(iv)
The
Administrative Agent may deduct and withhold any taxes required by any Laws
to
be deducted and withheld from any payment under any of the Loan Documents and
shall promptly provide notice to the Borrower if it does so. If the
Administrative Agent deducts or withholds any such taxes, the obligations of
the
Borrower to gross-up or indemnify, or the rights of the Borrower to not gross-up
or indemnify, for such taxes or related amounts shall be as otherwise stated
in
this Agreement.
(b)
Each
Lender and Agent that is a “U.S. person” within the meaning of
Section 7701(a)(30) of the Code (each, only for the purposes of this
Section 9.15,
a
“U.S.
Lender”)
shall
deliver to the Administrative Agent and the Borrower two duly signed, properly
completed copies of IRS Form W-9 on or prior to the Closing Date (or on or
prior
to the date it becomes a party to this Agreement), certifying that such Lender
is entitled to an exemption from United States backup withholding tax, or any
successor form. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any payment to such Lender an amount
equivalent to the applicable backup withholding tax imposed by the
Code.
9.16 Governing
Law
(a)
THIS
AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b)
ANY
LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX SITTING IN NEW YORK CITY
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE ADMINISTRATIVE
AGENT
AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE AGENT
AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS,
WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN
SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED
THERETO.
9.17 Waiver
of Right to Trial by Jury.
EACH
PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT
OR
IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION 9.17 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
9.18 Binding
Effect. This Agreement shall become effective when it shall have been executed
by the parties hereto and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent and each Lender and their
respective successors and assigns, except that the Borrower shall not have
the
right to assign their rights hereunder or any interest herein without the prior
written consent of the Lenders.
9.19 USA
PATRIOT Act Notice.
Each
Lender and the Administrative Agent (for itself and not on behalf of any Lender)
hereby notifies the Borrower that pursuant to the requirements of the USA
PATRIOT Act, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of
the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the USA
PATRIOT Act.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed as of the date
first above written.
|
|
|
|
by
|
|
|
/s/
Xxxxxx X. Xxxxxx
|
|
|
Name: Xxxxxx
X. Xxxxxx
|
|
|
Title: Vice
President and Treasurer
|
|
|
XXXXXXX
XXXXX CREDIT PARTNERS L.P.,
individually and as Administrative Agent,
|
|
|
by
|
|
|
/s/
Xxxxxxx X. Xxxxxx
|
|
|
Name: Xxxxxxx
X. Xxxxxx
|
|
|
Title: Managing
Director
|
|
|
CREDIT
SUISSE, CAYMAN ISLANDS BRANCH, as Initial Lender,
|
|
|
by
|
|
|
/s/
Xxxxx Xxxx
|
|
|
Name: Xxxxx
Xxxx
|
|
|
Title: Vice
President
|
|
|
by
|
|
|
/s/
Xxxxxxx Xxxxxxxxxxx
|
|
|
Name: Xxxxxxx
Xxxxxxxxxxx
|
|
|
Title: Associate
|
|
|
BANC
OF
AMERICA BRIDGE LLC, as Initial Lender,
|
|
|
by
|
|
|
/s/
Xxxxx X. Xxxxxxxx
|
|
|
Name: Xxxxx
X. Xxxxxxxx
|
|
|
Title: Managing
Director
|
|
|
UBS
LOAN FINANCE LLC, as Initial Lender,
|
|
|
by
|
|
|
/s/
Xxxxxxx X. Xxxxxx
|
|
|
Name: Xxxxxxx
X. Xxxxxx
|
|
|
Title: Director
|
|
|
by
|
|
|
/s/
Xxxx X. Xxxx
|
|
|
Name: Xxxx
X. Xxxx
|
|
|
Title: Associate
Director
|
|
