Exhibit 10.12
Execution Version
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$70,000,000.00 SECOND LIEN CREDIT FACILITY
SECOND LIEN CREDIT AGREEMENT
DATED AS OF JULY 21, 2006
BY AND AMONG
CSAV, INC., A MASSACHUSETTS CORPORATION
AS THE BORROWER,
THE OTHER PERSONS PARTY HERETO THAT ARE
DESIGNATED AS CREDIT PARTIES
GENERAL ELECTRIC CAPITAL CORPORATION,
FOR ITSELF, AS A LENDER, AND AS THE AGENT FOR ALL LENDERS,
ALLIED CAPITAL CORPORATION,
FOR ITSELF, AS A LENDER, AND AS SECOND LIEN COLLATERAL AGENT FOR ALL LENDERS,
GE CAPITAL MARKETS, INC.,
AS SOLE LEAD ARRANGER AND AS BOOKRUNNER
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
AS LENDERS
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TABLE OF CONTENTS
ARTICLE I-THE CREDITS........................................................ 2
1.1. Amounts and Terms of Commitments.................................... 2
1.2. Notes............................................................... 2
1.3. Interest............................................................ 2
1.4. Loan Accounts....................................................... 3
1.5. Closing Date Borrowing.............................................. 4
1.6. Conversion and Continuation Elections............................... 4
1.7. Optional Prepayments................................................ 5
1.8. Mandatory Prepayments of Loan and Commitment Reductions............. 5
1.9. Reserved............................................................ 7
1.10. Payments by the Borrower............................................ 7
1.11. Payments by the Lenders to the Agent; Settlement.................... 8
1.12. Incremental Loan Facility........................................... 9
ARTICLE II - CONDITIONS PRECEDENT............................................ 10
2.1. Conditions of the Second Lien Term Loan............................. 10
ARTICLE III - REPRESENTATIONS AND WARRANTIES................................. 11
3.1. Corporate Existence and Power....................................... 11
3.2. Corporate Authorization; No Contravention........................... 11
3.3. Governmental Authorization.......................................... 12
3.4. Binding Effect...................................................... 13
3.5. Litigation.......................................................... 13
3.6. No Default.......................................................... 13
3.7. ERISA Compliance.................................................... 13
3.8. Use of Proceeds; Margin Regulations................................. 14
3.9. Title to Properties................................................. 14
3.10. Taxes............................................................... 14
3.11. Financial Condition................................................. 14
3.12. Environmental Matters............................................... 15
3.13. Regulated Entities.................................................. 16
3.14. Solvency............................................................ 16
3.15. Labor Relations..................................................... 16
3.16. Intellectual Property............................................... 17
3.17. Subsidiaries........................................................ 17
3.18. Brokers' Fees; Transaction Fees..................................... 17
3.19. Insurance........................................................... 17
3.20. Full Disclosure..................................................... 17
3.21. Foreign Assets Control Regulations and Anti-Money Laundering........ 18
3.22. Certain Other Representations and Warranties........................ 18
ARTICLE IV - AFFIRMATIVE COVENANTS........................................... 18
4.1. Financial Statements................................................ 18
4.2. Certificates; Other Information..................................... 19
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4.3. Notices............................................................. 20
4.4. Preservation of Corporate Existence, Etc............................ 22
4.5. Maintenance of Property............................................. 22
4.6. Insurance........................................................... 22
4.7. Payment of Obligations.............................................. 23
4.8. Compliance with Laws................................................ 24
4.9. Inspection of Property and Books and Records........................ 24
4.10. Use of Proceeds..................................................... 25
4.11. Cash Management Systems............................................. 25
4.12. Landlord Agreements................................................. 25
4.13. Further Assurances.................................................. 26
4.14. Interest Rate Protection............................................ 27
ARTICLE V - NEGATIVE COVENANTS............................................... 27
5.1 Limitation on Liens................................................. 27
5.2. Disposition of Assets............................................... 29
5.3. Consolidations and Mergers.......................................... 30
5.4. Loans and Investments............................................... 30
5.5. Limitation on Indebtedness.......................................... 31
5.6. Transactions with Affiliates........................................ 32
5.7. Management Fees and Compensation.................................... 32
5.8. Use of Proceeds..................................................... 33
5.9. Contingent Obligations.............................................. 33
5.10. Compliance with ERISA............................................... 34
5.11. Restricted Payments................................................. 34
5.12. Change in Business.................................................. 35
5.13. Change in Structure................................................. 35
5.14. Accounting Changes.................................................. 35
5.15. Amendments to Related Agreements and Subordinated Indebtedness...... 35
5.16. No Negative Pledges................................................. 36
5.17. OFAC................................................................ 36
5.18. Press Release and Related Matters................................... 36
5.19. Sale-Leasebacks..................................................... 37
5.20. Hazardous Materials................................................. 37
ARTICLE VI - FINANCIAL COVENANTS............................................. 37
6.1. Capital Expenditures................................................ 37
6.2. Leverage Ratio...................................................... 38
6.3. Fixed Charge Coverage Ratio......................................... 38
ARTICLE VII - EVENTS OF DEFAULT.............................................. 39
7.1. Event of Default.................................................... 39
7.2. Remedies............................................................ 42
7.3. Rights Not Exclusive................................................ 42
ARTICLE VIII - THE AGENT..................................................... 42
8.1. Appointment and Duties.............................................. 42
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8.2. Binding Effect...................................................... 44
8.3. Use of Discretion................................................... 44
8.4. Delegation of Rights and Duties..................................... 45
8.5. Reliance and Liability.............................................. 45
8.6. Agents Individually................................................. 46
8.7. Lender Credit Decision.............................................. 47
8.8. Expenses; Indemnities............................................... 47
8.9. Resignation of Agents............................................... 48
8.10. Release of Collateral or Guarantors................................. 48
8.11. Closing Date Intercreditor Agreement................................ 49
ARTICLE IX - MISCELLANEOUS................................................... 50
9.1. Amendments and Waivers.............................................. 50
9.2. Notices............................................................. 51
9.3. Electronic Transmissions............................................ 51
9.4. No Waiver; Cumulative Remedies...................................... 53
9.5. Costs and Expenses.................................................. 53
9.6. Indemnity........................................................... 54
9.7. Marshaling; Payments Set Aside...................................... 55
9.8. Successors and Assigns.............................................. 55
9.9. Assignments and Participations; Binding Effect...................... 55
9.10. Confidentiality..................................................... 58
9.11. Set-off; Sharing of Payments........................................ 58
9.12. Counterparts........................................................ 59
9.13. Severability; Facsimile Signature................................... 60
9.14. Captions............................................................ 60
9.15. Independence of Provisions.......................................... 60
9.16. Interpretation...................................................... 60
9.17. No Third Parties Benefited.......................................... 60
9.18. Governing Law and Jurisdiction...................................... 60
9.19. WAIVER OF JURY TRIAL................................................ 61
9.20. Entire Agreement; Release; Survival................................. 61
9.21. Patriot Act......................................................... 62
9.22. Replacement of Lender............................................... 62
9.23. Joint and Several................................................... 63
9.24. Lender-Creditor Relationship........................................ 63
ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY........................... 63
10.1. Taxes............................................................... 63
10.2. Illegality.......................................................... 65
10.3. Increased Costs and Reduction of Return............................. 66
10.4. Funding Losses...................................................... 67
10.5. Inability to Determine Rates........................................ 68
10.6. Reserves on LIBOR Rate Loans........................................ 68
10.7. Certificates of Lenders............................................. 68
10.8. Survival............................................................ 68
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ARTICLE XI - DEFINITIONS..................................................... 68
11.1. Defined Terms....................................................... 68
11.2. Other Interpretive Provisions....................................... 89
11.3. Accounting Terms and Principles..................................... 89
11.4. Payments............................................................ 90
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SCHEDULES
Schedule 1.1 Second Lien Term Loan Commitments
Schedule 3.2 Capitalization
Schedule 3.5 Litigation
Schedule 3.7 ERISA
Schedule 3.12 Environmental
Schedule 3.15 Labor Relations
Schedule 3.18 Brokers' and Transaction Fees
Schedule 5.1 Liens
Schedule 5.4 Investments
Schedule 5.5 Indebtedness
Schedule 5.9 Contingent Obligations
Schedule 11.1 Prior Indebtedness
EXHIBITS
Exhibit 1.6 Form of Notice of Conversion/Continuation
Exhibit 2.1 Closing Checklist
Exhibit 1.8(d) Excess Cash Flow Certificate
Exhibit 4.2(b) Compliance Certificate
Exhibit 11.1(a) Form of Assignment
Exhibit 11.l(b) Second Lien Term Note
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SECOND LIEN CREDIT AGREEMENT
This SECOND LIEN CREDIT AGREEMENT (including all exhibits and schedules
hereto, as the same may be amended, modified and/or restated from time to time,
this "Agreement") is entered into as of July 21, 2006, by and among CSAV, Inc.,
a Massachusetts corporation (the "Borrower"), the other Persons party hereto
that are designated as a "Credit Party", General Electric Capital Corporation, a
Delaware corporation (in its individual capacity, "GE Capital"), as Agent for
the several financial institutions from time to time party to this Agreement
(collectively, the "Lenders" and individually each a "Lender") and for itself as
a Lender, GE Capital Markets, Inc., as Sole Lead Arranger and as Bookainner,
Allied Capital Corporation as Second Lien Collateral Agent for the Lenders and
for itself as a Lender, and such Lenders.
WITNESSETH:
WHEREAS, the Borrower has requested, and the Lenders have agreed to make
available to the Borrower, a second lien term loan upon and subject to the terms
and conditions set forth in this Agreement to (a) refinance Prior Indebtedness,
(b) finance the Closing Date Dividend, (c) pay the Closing Date Management
Bonuses, (d) provide for working capital, capital expenditures and other general
corporate purposes of the Borrower and (e) fund certain fees and expenses
associated with the funding of the Second Lien Term Loan;
WHEREAS, the Borrower desires to secure all of its Obligations under the
Loan Documents by granting to Second Lien Collateral Agent, for the benefit of
Second Lien Collateral Agent and Lenders, a security interest in and lien upon
substantially all of its personal and real property (subject to the security
interest and lien granted to the First Lien Agent for the benefit of the First
Lien Creditors);
WHEREAS, CSAV Holding Corp., a Delaware corporation that owns all of the
Stock and Stock Equivalents of Borrower ("Holdings"), is willing to guaranty all
of the Obligations and to pledge to Second Lien Collateral Agent, for the
benefit of Second Lien Collateral Agent and Lenders, all of the Stock and Stock
Equivalents of Borrower and substantially all of its other personal and real
property to secure the Obligations (subject to the security interest and lien
granted to the First Lien Agent for the benefit of the First Lien Creditors);
WHEREAS, subject to the terms hereof, each of Borrower's Subsidiaries is
willing to guarantee all of the Obligations of Borrower and to grant to Second
Lien Collateral Agent, for the benefit of Second Lien Collateral Agent and
Lenders, a security interest in and lien upon substantially all of its personal
and real property (subject to the security interest and lien granted to the
First Lien Agent for the benefit of the First Lien Creditors);
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereto agree as follows:
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ARTICLE I - THE CREDITS
1.1. Amounts and Terms of Commitments. Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties of the
Credit Parties contained herein, each Lender with a Second Lien Term Loan
Commitment severally and not jointly agrees to lend to the Borrower on the
Closing Date, the amount set forth opposite such Lender's name in Schedule 1.1
under the heading "Second Lien Term Loan Commitment" (such amount being referred
to herein as such Lender's "Second Lien Term Loan Commitment"). Amounts borrowed
under this subsection 1.1 are referred to as the "Second Lien Term Loan" or the
"Loan." Amounts borrowed as a Second Lien Term Loan which are repaid or prepaid
may not be reborrowed.
1.2. Notes. The Second Lien Term Loan made by each Lender with a Second
Lien Term Loan Commitment shall be evidenced by this Agreement and, if requested
by such Lender, a Second Lien Term Note payable to the order of such Lender in
an amount equal to such Lender's Second Lien Term Loan Commitment.
1.3. Interest.
(a) Subject to subsections 1.3(c) and 1.3(d), the Second Lien Term Loan
shall bear interest on the outstanding principal amount thereof from the date
when made at a rate per annum equal to the LIBOR or the Base Rate, as the case
may be, plus the Applicable Margin. Each determination of an interest rate by
the Agent shall be conclusive and binding on the Borrower and the Lenders in the
absence of demonstrable error. Computations of interest determined by reference
to the Base Rate shall be made on the basis of 365 or 366 days, as the case may
be, and actual days elapsed. All computations of fees and interest determined by
reference to the LIBOR Rate payable under this Agreement shall be made on the
basis of a 360-day year and actual days elapsed. Interest and fees shall accrue
during each period during which interest or such fees are computed from the
first day thereof to the last day thereof.
(b) Interest on the Second Lien Term Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any payment or
prepayment of the Second Lien Term Loan in full.
(c) At the election of the Agent (at the direction of the Required Lenders)
or the Required Lenders while any Specified Event of Default exists (or
automatically while any Specified Event of Default under subsection 7.1(f) or
7.1(g) exists), the Borrower shall pay interest (after as well as before entry
of judgment thereon to the extent permitted by law) on the Second Lien Term Loan
from and after the date of occurrence of such Specified Event of Default, at a
rate per annum which is determined by adding two percent (2.0%) per annum to the
Applicable Margin then in effect for the Second Lien Term Loan (plus the LIBOR
or Base Rate, as the case may be) and, in the case of Obligations under the Loan
Documents not subject to an Applicable Margin, at a rate per annum equal to the
rate per annum applicable to the portion of the Second Lien Term Loan which are
Base Rate Loans (including the Applicable Margin with respect thereto)
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plus two percent (2.0%). All such interest shall be payable on demand of the
Agent or the Required Lenders.
(d) Anything herein to the contrary notwithstanding, the obligations of the
Borrower hereunder shall be subject to the limitation that payments of interest
shall not be required, for any period for which interest is computed hereunder,
to the extent (but only to the extent) that contracting for or receiving such
payment by the respective Lender would be contrary to the provisions of any law
applicable to such Lender limiting the highest rate of interest which may be
lawfully contracted for, charged or received by such Lender, and in such event
the Borrower shall pay such Lender interest at the highest rate permitted by
applicable law ("Maximum Lawful Rate"); provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest that would have been received had the
interest payable hereunder been (but for the operation of this paragraph) the
interest rate payable since the Closing Date as otherwise provided in this
Agreement.
1.4. Loan Accounts.
(a) The Agent, on behalf of the Lenders, shall record on its books and
records the amount of the Second Lien Term Loan made, the interest rate
applicable, all payments of principal and interest thereon and the principal
balance thereof from time to time outstanding. The Agent shall deliver to the
Borrower on a monthly basis a loan statement setting forth such record for the
immediately preceding month. Such record shall, absent manifest error, be
conclusive evidence of the amount of the Second Lien Term Loan made by the
Lenders to the Borrower and the interest and payments thereon. Any failure to so
record or any error in doing so, or any failure to deliver such loan statement
shall not, however, limit or otherwise affect the obligation of the Borrower
hereunder (and under any Note) to pay any amount owing with respect to the
Second Lien Term Loan or provide the basis for any claim against the Agent.
(b) The Agent, acting as agent of the Borrower solely for tax purposes and
solely with respect to the actions described in this subsection 1.4(b), shall
establish and maintain at its address referred to in Section 9.2 (or at such
other address as the Agent may notify the Borrower) (A) a record of ownership
(the "Register") in which the Agent agrees to register by book entry the
interests (including any rights to receive payment hereunder) of the Agent and
each Lender in the Second Lien Term Loan and any assignment of any such interest
or right and (B) accounts in the Register in accordance with its usual practice
in which it shall record (1) the names and addresses of the Lenders (and each
change thereto pursuant to Sections 9.9 and 9.22), (2) the Second Lien Term Loan
Commitment of each Lender, (3) the amount of the Second Lien Term Loan and, for
LIBOR Rate Loans, the Interest Period applicable thereto, (4) the amount of any
principal or interest due and payable or paid, and (5) any other payment
received by the Agent from the Borrower and its application to the Obligations.
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(c) Notwithstanding anything to the contrary contained in this Agreement,
the Second Lien Term Loan (including any Notes evidencing such Loan) are
registered obligations, the right, title and interest of the Lenders and their
assignees in and to such Loan shall be transferable only upon notation of such
transfer in the Register and no assignment thereof shall be effective until
recorded therein. This Section 1.4 and Section 9.9 shall be construed so that
the Second Lien Term Loan is at all times maintained in "registered form" within
the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code.
(d) The Credit Parties, the Agent and the Lenders shall treat each Person
whose name is recorded in the Register as a Lender for all purposes of this
Agreement. Information contained in the Register with respect to any Lender
shall be available for access by the Borrower, the Agent or such Lender at any
reasonable time and from time to time upon reasonable prior notice. No Lender
shall, in such capacity, have access to or be otherwise permitted to review any
information in the Register other than information with respect to such Lender
unless otherwise agreed by the Agent.
1.5. Closing Date Borrowing. The borrowing of the Second Lien Term Loan
shall be made upon the Borrower's irrevocable written notice delivered to the
Agent, which notice must be received by the Agent prior to 1:00 p.m. (New York
time) on the Closing Date.
1.6. Conversion and Continuation Elections.
(a) Borrower shall have the option to (i) convert at any time all or any
part of the Second Lien Term Loan from Base Rate Loans to LIBOR Rate Loans, (ii)
convert any LIBOR Rate Loan to a Base Rate Loan, subject to Section 10.4 if such
conversion is made prior to the expiration of the Interest Period applicable
thereto, or (iii) continue all or any portion of the Second Lien Term Loan as a
LIBOR Rate Loan upon the expiration of the applicable Interest Period. Any
portion of the Second Lien Term Loan having the same proposed Interest Period to
be made or continued as, or converted into, a LIBOR Rate Loan must be in a
minimum amount of $1,000,000 and integral multiples of $200,000 in excess of
such amount. Any such election must be made by 1:00 p.m. (New York time) on the
third Business Day prior to (1) the end of each Interest Period with respect to
any LIBOR Rate Loans to be continued as such, or (2) the date on which Borrower
wishes to convert any Base Rate Loan to a LIBOR Rate Loan for a Interest Period
designated by Borrower in such election. If no election is received with respect
to a LIBOR Rate Loan by 1:00 p.m. (New York time) on the third Business Day
prior to the end of the Interest Period with respect thereto, that LIBOR Rate
Loan shall be converted to a Base Rate Loan at the end of its Interest Period.
Borrower must make such election by notice to Agent in writing, by fax or
overnight courier (or by telephone, to be confirmed in writing on such day). In
the case of any conversion or continuation, such election must be made pursuant
to a written notice (a "Notice of Conversion/Continuation") in the form of
Exhibit 1.6. No portion of the Second Lien Term Loan shall be converted into or
continued as a LIBOR Rate Loan, if an Event of Default has occurred and is
continuing and Agent or Required Lenders have determined not to convert or
continue any portion of the Second Lien Term Loan as a LIBOR Rate
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Loan as a result thereof. No portion of the Second Lien Term Loan may be made as
or converted into a LIBOR Rate Loan until the earlier of (i) thirty (30) days
after the Closing Date or (ii) completion of primary syndication as determined
by Agent.
(b) Upon receipt of a Notice of Conversion/Continuation, the Agent will
promptly notify each Lender thereof. In addition, the Agent will, with
reasonable promptness, notify the Borrower and the Lenders of each determination
of LIBOR; provided that any failure to do so shall not relieve the Borrower of
any liability hereunder or provide the basis for any claim against the Agent.
All conversions and continuations shall be made pro rata according to the
respective outstanding principal amounts of the Second Lien Term Loan held by
each Lender with respect to which the notice was given.
(c) Notwithstanding any other provision contained in this Agreement, after
giving effect to any continuation or conversion of any portion of the Second
Lien Term Loan, there shall not be more than three (3) different Interest
Periods in effect.
1.7. Optional Prepayments.
(a) The Borrower may, following the repayment in full, in cash of the First
Lien Term Loan, upon at least two (2) Business Days' prior written notice to the
Agent, prepay the Second Lien Term Loan in whole or in part in an amount greater
than or equal to $100,000 without penalty or premium except as provided in
Section 10.4 provided, that both before and after giving effect to such
prepayment, the outstanding principal balance of the Revolving Loans and Swing
Loans is zero. Optional partial prepayments of the Second Lien Term Loan shall
be applied in the manner set forth in subsection 1.8(e). Optional partial
prepayments of the Second Lien Term Loan in amounts less than $100,000 shall not
be permitted.
(b) The notice of any prepayment shall not thereafter be revocable by the
Borrower and the Agent will promptly notify each Lender thereof and of such
Lender's Commitment Percentage of such prepayment. The payment amount specified
in such notice shall be due and payable on the date specified therein. Together
with each prepayment under this Section 1.7, the Borrower shall pay any amounts
required pursuant to Section 10.4.
1.8. Mandatory Prepayments of Loan and Commitment Reductions.
(a) Second Lien Term Loan Payments. The principal amount of the Second Lien
Term Loan shall be due and payable in full on June 30, 2013.
(b) Asset Dispositions. Subject to the provisions of subsection 1.8(f), if
the Borrower or any of its Subsidiaries shall at any time or from time to time:
(i) make or agree to make a Disposition; or
(ii) suffer an Event of Loss;
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and the aggregate amount of the Net Proceeds received by the Borrower and its
Subsidiaries in connection with such Disposition or Event of Loss and all other
Dispositions and Events of Loss occurring during the fiscal year exceeds
$3,000,000, then (A) the Borrower shall promptly notify the Agent of such
proposed Disposition or Event of Loss (including the amount of the estimated Net
Proceeds to be received by the Borrower and/or such Subsidiary in respect
thereof) and (B) promptly upon receipt by the Borrower and/or such Subsidiary of
the Net Proceeds of such Disposition or Event of Loss, the Borrower shall
deliver, or cause to be delivered, such excess Net Proceeds to the Agent for
distribution to the Lenders as a prepayment of the Second Lien Term Loan.
Notwithstanding the foregoing and provided no Default or Event of Default has
occurred and is continuing, such prepayment shall not be required to the extent
the Borrower or such Subsidiary reinvests the Net Proceeds of such Disposition
or Event of Loss in productive assets (other than Inventory) of a kind then used
or usable in the business of the Borrower or such Subsidiary, within one hundred
eighty (180) days after the date of such Disposition or Event of Loss or enters
into a binding commitment thereof within said one hundred eighty (180) day
period and subsequently makes such reinvestment.
(c) Issuance of Securities. Subject to the provisions of subsection 1.8(f),
immediately upon the receipt by any Credit Party or any Subsidiary of any Credit
Party of the Net Issuance Proceeds of the issuance of Stock or Stock Equivalents
(including any capital contribution) or debt securities (other than Net Issuance
Proceeds from the issuance of (i) debt securities in respect of Indebtedness
permitted hereunder (including, without limitation, the Incremental Loans) or
(ii) Excluded Equity Issuances); the Borrower shall deliver, or cause to be
delivered, to the Agent an amount equal to such Net Issuance Proceeds, for
application to the Second Lien Term Loan.
(d) Excess Cash Flow. Subject to the provisions of subsection 1.8(f),
within five (5) days after the annual financial statements are required to be
delivered pursuant to subsection 4.l(a) hereof, commencing with such annual
financial statements for the fiscal year ending December 31, 2007, the Borrower
shall deliver to the Agent a written calculation of Excess Cash Flow of the
Borrower for such fiscal year in the form of Exhibit 1.8(d) and certified as
correct on behalf of the Borrower by a Responsible Officer and concurrently
therewith shall deliver to the Agent, for distribution to the Lenders, an amount
equal to (i) (x) seventy-five percent (75%) of such Excess Cash Flow if the
Leverage Ratio (as calculated in the manner set forth on Exhibit 4.2(b)) as of
the last day of such fiscal year is 4.50:1.0 or greater or (y) fifty percent
(50) % of such Excess Cash Flow if the Leverage Ratio as of the last day of such
fiscal year is less than 4.50:1.0, minus (ii) voluntary prepayments of the
Second Lien Term Loan during such fiscal year, for application to the Second
Lien Term Loan. Excess Cash Flow shall be calculated in the manner set forth in
Exhibit 1.8(d).
(e) Application of Prepayments. Amounts prepaid hereunder shall be applied
first to any Base Rate Loans then outstanding and then to outstanding LIBOR Rate
Loans with the shortest Interest Periods remaining. Together with each
prepayment under this Section 1.8, the Borrower shall pay any amounts required
pursuant to Section 10.4 hereof.
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(f) First Lien Credit Agreement. Notwithstanding anything herein to the
contrary, no prepayment shall be required (or permitted) pursuant to subsections
1.8(b), 1.8(c) or 1.8(d) except to the extent the First Lien Term Loan has been
paid in full and, both before and after giving effect to such prepayment, the
outstanding principal balance of the Revolving Loans and Swing Loans are zero.
1.9. Reserved.
1.10. Payments by the Borrower.
(a) All payments (including prepayments) to be made by each Credit Party on
account of principal, interest, fees and other amounts required hereunder shall
be made without set-off, recoupment, counterclaim or deduction of any kind,
shall, except as otherwise expressly provided herein, be made to the Agent (for
the ratable account of the Persons entitled thereto) at the address for payment
specified in the signature page hereof in relation to the Agent (or such other
address as the Agent may from time to time specify in accordance with Section
9.2), and shall be made in Dollars and in immediately available funds, no later
than 2:00 p.m. (New York time) on the date due. Any payment which is received by
the Agent later than 2:00 p.m. (New York time) shall be deemed to have been
received on the immediately succeeding Business Day and any applicable interest
or fee shall continue to accrue. Borrower and each other Credit Party hereby
irrevocably waives the right to direct the application during the continuance of
an Event of Default of any and all payments in respect of any Obligation and any
proceeds of Collateral.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, if any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
(c) During the continuance of an Event of Default, the Agent may, and shall
upon the direction of Required Lenders apply any and all payments in respect of
any Obligation in accordance with clauses first through sixth below.
Notwithstanding any provision herein to the contrary, all amounts collected or
received by the Agent or the Second Lien Collateral Agent after any or all of
the Obligations have been accelerated (so long as such acceleration has not been
rescinded) and all proceeds received by the Agent or the Second Lien Collateral
Agent as a result of the exercise of its remedies under the Collateral Documents
after the occurrence and during the continuance of an Event of Default shall be
applied as follows:
first, to payment of costs and expenses, including Attorney Costs, of
the Agent and the Second Lien Collateral Agent payable or reimbursable by
the Credit Parties under the Loan Documents;
second, to payment of Attorney Costs of Lenders payable or
reimbursable by the Borrower under this Agreement;
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third, to payment of all accrued unpaid interest on the Obligations
and fees owed to the Agent and Lenders;
fourth, to payment of principal of the Obligations;
fifth, to payment of any other amounts owing constituting Obligations;
and
sixth, any remainder shall be for the account of and paid to whoever
may be lawfully entitled thereto.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to the application to the next
succeeding category and (ii) each of the Lenders or other Persons entitled to
payment shall receive an amount equal to its pro rata share of amounts available
to be applied pursuant to clauses third, fourth and fifth above.
1.11. Payments by the Lenders to the Agent; Settlement.
(a) Agent shall pay to each Lender such Lender's Commitment Percentage of
principal, interest and fees paid by Borrower for the benefit of such Lender on
that portion of the Second Lien Term Loan held by such Lender in accordance with
the remaining provisions of this subsection 1.11 (a). In the case of any payment
of principal, interest and fees received by Agent from Borrower in respect of
the Second Lien Term Loan prior to 1:00 p.m. (New York time) on any Business
Day, Agent shall pay to each applicable Lender such Lender's Commitment
Percentage of such payment on such Business Day, and, in the case of any payment
of principal, interest and fees received by Agent from Borrower in respect of
the Second Lien Term Loan later than 1:00 p.m. (New York time) on any Business
Day, Agent shall pay to each applicable Lender such Lender's Commitment
Percentage of such payment on the next Business Day.
(b) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement in the
belief or expectation that a related payment has been or will be received by
Agent from the Borrower and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender on demand without
setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received by Agent
under this Agreement must be returned to any Credit Party or paid to any other
Person pursuant to any insolvency law or otherwise, then, notwithstanding any
other term or condition of this Agreement or any other Loan Document, Agent will
not be required to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Agent on demand any portion of such amount that Agent
has distributed to such Lender,
8
together with interest at such rate, if any, as Agent is required to pay to any
Borrower or such other Person, without setoff, counterclaim or deduction of any
kind.
1.12. Incremental Loan Facility. Subject to the terms and conditions set
forth herein, so long as no Default or Event of Default shall have occurred and
then be continuing, this Agreement shall be in full force and effect, a Minority
Issuance shall not have theretofore occurred and the Permitted Sale shall not
have theretofore occurred (it being agreed that the Permitted Sale and Minority
Issuance may be consummated concurrently with the funding of the Incremental
Loans), the Borrower shall have the right, to be exercised not more than one (1)
time during the period commencing on the Closing Date and ending on the earlier
of the Permitted Sale Date and March 31, 2007, to incur additional Indebtedness
under this Agreement in the form of an additional second lien term loan (such
second lien term loan, the "Incremental Second Lien Term Loan") and/or, subject
to the satisfaction of the conditions set forth in subsection 5.5(f), an
additional term loan, an increase in the Revolving Loan Commitment (as defined
in the First Lien Credit Agreement) and/or the creation of a new revolving
credit facility, in each case, under the First Lien Credit Agreement (such term
and/or revolving loans, individually and together, the "Incremental Senior
Loan"; together with the Incremental Second Lien Term Loan, the "Incremental
Loans") in an aggregate amount for all Incremental Loans not to exceed
$60,000,000. The following additional terms and conditions shall apply to the
Incremental Second Lien Term Loan,: (a) the Incremental Second Lien Term Loan
shall (i) have a final maturity date no earlier than June 30, 2013, (ii) have an
interest rate to be determined at the time such Incremental Second Lien Term
Loan is made; provided that, if the interest rate for the Incremental Second
Lien Term Loan is higher than the then Applicable Margin with respect to the
Second Lien Term Loan then the Applicable Margin with respect to the Second Lien
Term Loan shall automatically increase (without any further action required to
be taken by any party) to an amount no lower than the interest rate then
applicable to the Incremental Second Lien Term Loan, (iii) have a weighted
average life to maturity no less than the weighted average life to maturity of
the Second Lien Term Loan and (iv) generally have terms that are no more
favorable than the terms of the Second Lien Term Loan, (b) the Incremental
Second Lien Term Loan shall constitute Loans and Obligations and will be secured
and guaranteed on a pari passu basis with all other Obligations, (c) the
Incremental Second Lien Term Loan shall be obtained from existing Lenders or
from other banks, financial institutions or investment funds, in each case in
accordance with the terms set forth below, (d) after giving effect to the
funding of the Incremental Loans (assuming full funding of any Incremental Loan
that is in the form of a revolving loan), (i) the Leverage Ratio shall not be
greater than 5.50:1.0 on a pro-forma basis and (ii) the Senior Leverage Ratio
shall not be greater than 3.75:1.0 on a pro-forma basis, (e) the proceeds
thereof shall be used to consummate a Liquidity Event, (f) the Borrower shall
execute, if requested by the applicable Lenders, such promissory notes as are
necessary to reflect the Incremental Second Lien Term Loan, (g) the Agent shall
have received from the Borrower updated financial projections (h) if a Change of
Control Event occurs concurrently therewith, the conditions set forth in the
definition of Permitted Sale shall have been satisfied and (i) all
representations and warranties of the Credit Parties contained herein shall be
true and correct in all material respects (without duplication
9
of any materiality qualified contained herein) as of the Incremental Loan
Closing Date, except to the extent that such representations or warranties
expressly relate to an earlier date (in which event such representations and
warranties shall be true and correct, in all material respects, as of such
earlier date). Participation in the Incremental Second Lien Term Loan shall be
offered first to each of the existing Lenders, but each such Lender shall have
no obligation whatsoever to provide all or any portion of the Incremental Second
Lien Term Loan. Each of the then existing Lenders shall have ten (10) Business
Days following receipt of a request for the Incremental Second Lien Term Loan
from the Borrower to notify the Borrower and Agent of such Lender's commitment
to make the Incremental Second Lien Term Loan. In the event that the Borrower
has not received commitments from the existing Lenders in an amount equal to the
requested Incremental Second Lien Term Loan within such ten (10) Business Day
period, then the Borrower may invite other banks, financial institutions and
investment funds reasonably acceptable to the Agent to be joined as parties to
this Agreement as Lenders hereunder with respect to the portion of such
Incremental Second Lien Term Loan not committed to within such ten (10) Business
Day period by existing Lenders, provided, that such other banks, financial
institutions and investment funds shall enter into such joinder agreements to
give effect thereto as the Agent and the Borrower reasonably may request.
Holdings, Borrower, each of Borrower's Subsidiaries and each Lender shall
execute and deliver such agreements, documents and instalments reasonably
requested by the Agent to effectuate the foregoing.
ARTICLE II - CONDITIONS PRECEDENT
2.1. Conditions of the Second Lien Term Loan. The obligation of each Lender
to make its portion of the Second Lien Term Loan is subject to satisfaction of
the following conditions:
(a) Loan Documents. The Agent shall have received on or before the Closing
Date all of the agreements, documents, instalments and other items set forth on
the Closing Checklist attached hereto as Exhibit 2.1, each in form and substance
reasonably satisfactory to the Agent;
(b) Representations and Warranties; Defaults; Both before and after giving
effect to the funding of the Second Lien Term Loan, (i) the representations and
warranties of the Credit Parties contained herein or in any other Loan Document
shall be true and correct in all material respects (without duplication of any
materiality qualifier contained therein) except to the extent that such
representation or warranty expressly relates to an earlier date (in which event
such representations and warranties shall be true and correct as of such earlier
date) and (ii) no Default or Event of Default shall have occurred and be
continuing.
(c) Related Transactions. The Related Transactions shall have closed in the
manner contemplated by the Related Agreements and shall otherwise be in form and
substance reasonably satisfactory to the Agent. Agent shall have received
evidence that First Lien Lenders shall have advanced to Borrower $145,000,000
pursuant to the First Lien Credit Agreement;
10
(d) EBITDA and Leverage. The Borrower shall have delivered evidence to the
satisfaction of the Agent demonstrating that: (i) EBITDA of the Borrower for the
twelve month period ended May 31, 2006 shall be not less than $38,000,000; (ii)
the ratio of (x) total Indebtedness of the Credit Parties as of the Closing Date
after giving effect to the consummation of the Related Transactions, payment of
all costs and expenses in connection therewith and the funding of the Second
Lien Term Loan, to (y) EBITDA of the Borrower for the twelve (12) month period
ending May 31, 2006 shall be not greater than 5.50:1.0; and (iii) the ratio of
(x) total Indebtedness of the Credit Parties less the Second Lien Term Loan, in
each instance, as of the Closing Date after giving effect to the consummation of
the Related Transactions, payment of all costs and expenses in connection
therewith and the funding of the Second Lien Term Loan, to (y) EBITDA of the
Borrower for the twelve (12) month period ending May 31, 2006 shall be not
greater than 3.75:1.0.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
The Credit Parties, jointly and severally, represent and warrant to the
Agent, the Second Lien Collateral Agent and each Lender that the following are,
and after giving effect to the Related Transactions will be, true, correct and
complete:
3.1. Corporate Existence and Power. Each Credit Party and each of their
respective Subsidiaries:
(a) is a corporation, limited liability company or limited partnership, as
applicable, duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, organization or formation, as
applicable;
(b) has the power and authority and all governmental licenses,
authorizations, Permits, consents and approvals to own its assets, carry on its
business and execute, deliver, and perform its obligations under, the Loan
Documents and the Related Agreements to which it is a party
(c) is duly qualified as a foreign corporation, limited liability company
or limited partnership, as applicable, and licensed and in good standing, under
the laws of each jurisdiction where its ownership, lease or operation of
Property or the conduct of its business requires such qualification or license;
and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clause (c) or clause (d), to the extent that
the failure to do so would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
3.2. Corporate Authorization; No Contravention.
(a) The execution, delivery and performance by each of the Credit Parties,
and by each of the Credit Parties and each of their respective Subsidiaries of
any other Loan Document and Related Agreement to which such Person is party and
the payment
11
of the Closing Date Dividend, have been duly authorized by all necessary action,
and do not and will not:
(i) contravene the terms of any of that Person's Organization
Documents;
(ii) conflict with or result in any material breach or contravention
of, or result of the creation of any Lien under, any document evidencing
any material Contractual Obligation to which such Person is a party or any
order, injunction, writ or decree of any Governmental Authority to which
such Person or its Property is subject; or
(iii) violate any material Requirement of Law in any material respect.
(b) Schedule 3.2 sets forth the authorized Stock and Stock Equivalents of
each of the Credit Parties and each of their respective Subsidiaries. All issued
and outstanding Stock and Stock Equivalents of each of the Credit Parties and
each of their respective Subsidiaries are duly authorized and validly issued,
fully paid, non-assessable, and free and clear of all Liens other than, with
respect to the Stock and Stock Equivalents of Borrower and Subsidiaries of the
Borrower, those in favor of the Second Lien Collateral Agent, for the benefit of
the Second Lien Collateral Agent and Lenders and First Lien Indebtedness Liens.
All such securities were issued in compliance with all applicable state and
federal laws concerning the issuance of securities. All of the issued and
outstanding Stock and Stock Equivalents of the Borrower is owned by Holdings. As
of the Closing Date, all of the issued and outstanding Stock and Stock
Equivalents of each of the Credit Parties (other than Borrower) is owned by the
Persons and in the amounts set forth on Schedule 3.2. Except as set forth on
Schedule 3.2, there are no pre-emptive or other outstanding rights, options,
warrants, conversion rights or other similar agreements or understandings for
the purchase or acquisition of any Stock and Stock Equivalents of any Credit
Party.
(c) The Closing Date Dividend has been made in accordance with applicable
Requirements of Law.
3.3. Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Credit Party
or any Subsidiary of any Credit Party of this Agreement, any other Loan Document
or Related Agreement except (a) for recordings and filings in connection with
the Liens granted to the Second Lien Collateral Agent under the Collateral
Documents and to the First Lien Agent under the First Lien Loan Documents, (b)
those obtained or made on or prior to the Closing Date and (c) in the case of
any Related Agreement, those which, if not obtained or made, would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
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3.4. Binding Effect. This Agreement and each other Loan Document and
Related Agreement to which any Credit Party or any Subsidiary of any Credit
Party is a party constitute the legal, valid and binding obligations of each
such Person which is a party thereto, enforceable against such Person in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.
3.5. Litigation. Except as specifically disclosed in Schedule 3.5, there
are no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of each Credit Party, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, against any Credit Party,
any Subsidiary of any Credit Party or any of their respective Properties which:
(a) purport to affect or pertain to this Agreement, any other Loan Document
or Related Agreement, or any of the transactions contemplated hereby or thereby;
or
(b) would reasonably be expected to result in, either individually or in
the aggregate, a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any nature
has been issued by any court or other Governmental Authority purporting to
enjoin or restrain the execution, delivery or performance of this Agreement, any
other Loan Document or any Related Agreement, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.
As of the Closing Date, no Credit Party or any Subsidiary of any Credit Party is
the subject of an audit by the IRS or other Governmental Authority or, to each
Credit Party's knowledge, any review or investigation by the IRS or other
Governmental Authority concerning the violation or possible violation of any
Requirement of Law.
3.6. No Default. No Default or Event of Default exists or would result from
the incurring of any Obligations by any Credit Party or the grant or perfection
of the Second Lien Collateral Agent's Liens on the Collateral or the
consummation of the Related Transactions. No Credit Party and no Subsidiary of
any Credit Party is in default under or with respect to any Contractual
Obligation in any respect which, individually or together with all such
defaults, would reasonably be expected to have a Material Adverse Effect.
3.7. ERISA Compliance. Schedule 3.7 sets forth, as of the Closing Date, a
complete and correct list of, and that separately identifies, (a) all Title IV
Plans, (b) all Multiemployer Plans and (c) all material Benefit Plans. Each
Benefit Plan, and each trust thereunder, intended to qualify for tax exempt
status under Section 401 or 501 of the Code or other Requirements of Law so
qualifies. Except for those that would not, in the aggregate, have a Material
Adverse Effect, (x) each Benefit Plan is in compliance with applicable
provisions of ERISA, the Code and other Requirements of Law, (y) there are no
existing or pending (or to the knowledge of any Credit Party, threatened) claims
(other than routine claims for benefits in the normal course),
13
sanctions, actions, lawsuits or other proceedings or investigation involving any
Benefit Plan to which any Credit Party incurs or otherwise has or could have an
obligation or any Liability and (z) no ERISA Event is reasonably expected to
occur. On the Closing Date, no ERISA Event has occurred in connection with which
obligations and liabilities (contingent or otherwise) remain outstanding. No
ERISA Affiliate would have any Withdrawal Liability as a result of a complete
withdrawal from any Multiemployer Plan on the date this representation is made.
3.8. Use of Proceeds; Margin Regulations. The proceeds of the Second Lien
Term Loan are intended to be and shall be used solely for the purposes set forth
in and permitted by Section 4.10, and are intended to be and shall be used in
compliance with Section 5.8. No Credit Party and no Subsidiary of any Credit
Party is engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
Proceeds of the Second Lien Term Loan shall not be used for the purpose of
purchasing or carrying Margin Stock.
3.9. Title to Properties. Each of the Credit Parties and each of their
respective Subsidiaries has good record and marketable title in fee simple to,
or valid leasehold interests in, all real Property, and good and valid title to
all owned personal property and valid leasehold interests in all leased personal
property, in each instance, necessary or used in the ordinary conduct of their
respective businesses. The Property of the Credit Parties and its Subsidiaries
is subject to no Liens, other than Permitted Liens.
3.10. Taxes. All federal, state, local and foreign income and franchise and
other material tax returns, reports and statements (collectively, the "Tax
Returns") required to be filed by any Tax Affiliate have been filed with the
appropriate Governmental Authorities in all jurisdictions in which such Tax
Returns are required to be filed, all such Tax Returns are true and correct in
all material respects, and all taxes, charges and other impositions reflected
therein or otherwise due and payable have been paid prior to the date on which
any Liability may be added thereto for non-payment thereof except for those
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves are maintained on the books of the appropriate Tax
Affiliate in accordance with GAAP. As of the Closing Date, no Tax Return is
under audit or examination by any Governmental Authority and no notice of such
an audit or examination or any assertion of any claim for Taxes has been given
or made by any Governmental Authority. Proper and accurate amounts have been
withheld by each Tax Affiliate from their respective employees for all periods
in full and complete compliance with the tax, social security and unemployment
withholding provisions of applicable Requirements of Law and such withholdings
have been timely paid to the respective Governmental Authorities. No Tax
Affiliate has participated in a "reportable transaction" within the meaning of
Treasury Regulation Section 1.601 l-4(b) or has been a member of an affiliated,
combined or unitary group other than the group of which a Tax Affiliate is the
common parent.
3.11. Financial Condition.
14
(a) Each of (i) the audited consolidated balance sheet of Holdings and its
Subsidiaries dated December 31, 2005 and the related audited consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal year ended on that date and (ii) the unaudited interim consolidated
balance sheet of the Borrower and its Subsidiaries dated May 31, 2006 and the
related unaudited consolidated statements of income, shareholders' equity and
cash flows for the five (5) months then ended:
(x) were prepared in accordance with GAAP consistently applied
throughout the respective periods covered thereby, except as otherwise
expressly noted therein, subject to, in the case of the unaudited interim
financial statements, normal year-end adjustments and the lack of footnote
disclosures; and
(y) present fairly in all material respects the consolidated financial
condition of the Borrower and its Subsidiaries as of the dates thereof and
results of operations for the periods covered thereby.
(b) Since December 31, 2005, there has been no Material Adverse Effect.
(c) The Credit Parties and their Subsidiaries have no Indebtedness other
than Indebtedness permitted pursuant to Section 5.5 and have no Contingent
Obligations other than Contingent Obligations permitted pursuant to Section 5.9.
(d) All financial performance projections delivered to the Agent represent
the Borrower's best good faith estimate of future financial performance and are
based on assumptions believed by the Borrower to be fair and reasonable in light
of current market conditions, it being acknowledged and agreed by the Agent and
Lenders that projections as to future events are not to be viewed as facts and
that the actual results during the period or periods covered by such projections
may differ from the projected results.
(e) Holdings has not engaged in any business activities other than (i)
ownership of the Stock and Stock Equivalents of Borrower, (ii) activities
incidental to maintenance of its corporate existence and (iii) performance of
its obligations under the Related Agreements to which it is a party.
3.12. Environmental Matters. Except as set forth on Schedule 3.12, (a) the
operations of each Credit Party and each Subsidiary of each Credit Party are and
have been in compliance with all applicable Environmental Laws, including
obtaining, maintaining and complying with all Permits required by any applicable
Environmental Law, other than non-compliances that, in the aggregate, would not
have a reasonable likelihood of resulting in Material Environmental Liabilities
to any Credit Party or any Subsidiary of any Credit Party, (b) no Credit Party
and no Subsidiary of any Credit Party is party to, and no Credit Party and no
Subsidiary of any Credit Party and no real property currently (or to the
knowledge of any Credit Party previously) owned, leased, subleased, operated or
otherwise occupied by or for any such Person is subject to or the subject of,
any Contractual Obligation or any pending (or, to the knowledge of any Credit
Party, threatened) order, action, investigation, suit, proceeding, audit, claim,
demand, dispute or notice of violation or of potential liability or similar
notice relating
15
in any manner to any Environmental Law other than those that, in the aggregate,
are not reasonably likely to result in Material Environmental Liabilities to any
Credit Party or any Subsidiary of any Credit Party, (c) no Lien in favor of any
Governmental Authority securing, in whole or in part, Environmental Liabilities
has attached to any property of any Credit Party or any Subsidiary of any Credit
Party and, to the knowledge of any Credit Party, no facts, circumstances or
conditions exist that could reasonably be expected to result in any such Lien
attaching to any such property, (d) no Credit Party and no Subsidiary of any
Credit Party has caused or suffered to occur a Release of Hazardous Materials
at, to or from any real property of any such Person and each such real property
is free of contamination by any Hazardous Materials except for such Release or
contamination that could not reasonably be expected to result, in the aggregate,
in Material Environmental Liabilities to any Credit Party or any Subsidiary of
any Credit Party, (e) no Credit Party and no Subsidiary of any Credit Party (i)
is or has been engaged in, or has permitted any current or former tenant to
engage in, operations or (ii) knows of any facts, circumstances or conditions,
including receipt of any information request or notice of potential
responsibility under the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Sections 9601 et seq.) or similar Environmental Laws,
that, in the aggregate, would have a reasonable likelihood of resulting in
Material Environmental Liabilities to any Credit Party or any Subsidiary of any
Credit Party and (f) each Credit Party has made available to Agent copies of all
existing environmental reports, reviews and audits and all documents pertaining
to actual or potential Environmental Liabilities, in each case to the extent
such reports, reviews, audits and documents are in their possession, custody or
control.
3.13. Regulated Entities. None of any Credit Party, any Person controlling
any Credit Party, or any Subsidiary of any Credit Party, is (a) an "investment
company" within the meaning of the Investment Company Act of 1940 or (b) subject
to regulation under the Federal Power Act, the Interstate Commerce Act, any
state public utilities code, or any other Federal or state statute, rule or
regulation limiting its ability to incur Indebtedness, pledge its assets or
perform its Obligations under the Loan Documents.
3.14. Solvency. Both before and after giving effect to (a) the funding of
the Second Lien Term Loan on or prior to the date this representation and
warranty is made or remade, (b) the disbursement of the proceeds of the Second
Lien Term Loan, (c) the consummation of the Related Transactions and (d) the
payment and accrual of all transaction costs in connection with the foregoing,
both the Credit Parties taken as a whole and Borrower individually are Solvent.
3.15. Labor Relations. There are no strikes, work stoppages, slowdowns or
lockouts existing, pending (or, to the knowledge of any Credit Party,
threatened) against or involving any Credit Party or any Subsidiary of any
Credit Party, except for those that would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect. Except as set forth on Schedule
3.15, as of the Closing Date, (a) there is no collective bargaining or similar
agreement with any union, labor organization, works council or similar
representative covering any employee of any Credit Party or any Subsidiary of
any Credit Party, (b) no petition for certification or election of any
16
such representative is existing or pending with respect to any employee of any
Credit Party or any Subsidiary of any Credit Party and (c) no such
representative has sought certification or recognition with respect to any
employee of any Credit Party or any Subsidiary of any Credit Party.
3.16. Intellectual Property. Each Credit Party and each Subsidiary of each
Credit Party owns, or is licensed to use, all Intellectual Property necessary to
conduct its business as currently conducted except for such Intellectual
Property the failure of which to own or license would not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect. To
the knowledge of each Credit Party, (a) the conduct and operations of the
businesses of each Credit Party and each Subsidiary of each Credit Party does
not infringe, misappropriate, dilute, violate or otherwise impair any
Intellectual Property owned by any other Person and (b) no other Person has
contested any right, title or interest of any Credit Party or any Subsidiary of
any Credit Party in, or relating to, any Intellectual Property, other than, in
each case, as cannot reasonably be expected to affect the Loan Documents and the
transactions contemplated therein and would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
3.17. Subsidiaries. As of the Closing Date, no Credit Party has any
Subsidiaries or equity investments in any other corporation or entity other than
those specifically disclosed in Schedule 3.2.
3.18. Brokers' Fees; Transaction Fees. Except as disclosed on Schedule 3.18
and except for fees payable to the Agent and Lenders, none of the Credit Parties
or any of their respective Subsidiaries has any obligation to any Person in
respect of any finder's, broker's or investment banker's fee in connection with
the transactions contemplated hereby.
3.19. Insurance. Each of the Credit Parties and each of their respective
Subsidiaries and their respective Properties are insured with financially sound
and reputable insurance companies which are not Affiliates of the Borrower, in
such amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar Properties
in localities where such Person operates. A true and complete listing of such
insurance, including issuers, coverages and deductibles, has been provided to
the Agent.
3.20. Full Disclosure. None of the representations or warranties made by
any Credit Party or any of their Subsidiaries in the Loan Documents as of the
date such representations and warranties are made or deemed made, and none of
the statements contained in each exhibit, report, statement or certificate
furnished by or on behalf of any Credit Party or any of their Subsidiaries in
connection with the Loan Documents (including the offering and disclosure
materials, if any, delivered by or on behalf of any Credit Party to the Lenders
prior to the Closing Date), contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading as of the time when made or delivered.
17
3.21. Foreign Assets Control Regulations and Anti-Money Laundering.
(a) OFAC. Neither any Credit Party nor any Subsidiary of any Credit Party
(i) is a person whose property or interest in property is blocked or subject to
blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any
dealings or transactions prohibited by Section 2 of such executive order, or is
otherwise associated with any such person in any manner violative of Section 2,
or (iii) is a person on the list of Specially Designated Nationals and Blocked
Persons or subject to the limitations or prohibitions under any other U.S.
Department of Treasury's Office of Foreign Assets Control regulation or
executive order.
(b) Patriot Act. Each of the Credit Parties and each of their respective
Subsidiaries are in compliance, in all material respects, with the Patriot Act.
No part of the proceeds of the Second Lien Term Loan will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.
3.22. Certain Other Representations and Warranties. As of the Closing Date
and any other date on which representations and warranties are otherwise remade
or deemed remade thereunder, each of the representations and warranties
contained in the First Lien Credit Agreement made by each Credit Party is true
and correct. Each of the Credit Parties agrees that, by this reference, such
representations and warranties contained in the First Lien Credit Agreement by a
Credit Party, without limiting any of the representations and warranties
otherwise contained herein or in any other Loan Document, hereby are
incorporated herein, mutatis mutandis, for the benefit of the Agent and each
Lender.
ARTICLE IV - AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any portion of the
Second Lien Term Loan or other Obligation (other than contingent indemnification
Obligations to the extent no claim giving rise thereto has been asserted) shall
remain unpaid or unsatisfied:
4.1. Financial Statements. Each Credit Party shall maintain, and shall
cause each of its Subsidiaries to maintain, a system of accounting established
and administered in accordance with sound business practices to permit the
preparation of financial statements in conformity with GAAP (provided that
monthly financial statements shall not be required to have footnote disclosures
and are subject to normal year-end adjustments). The Borrower shall deliver to
the Agent in electronic form and in detail reasonably satisfactory to the Agent:
18
(a) as soon as available, but not later than one hundred twenty (120) days
after the end of each fiscal year, a copy of the audited consolidated and
consolidating balance sheets of Holdings and each of its Subsidiaries as at the
end of such year and the related consolidated and consolidating statements of
income or operations, shareholders' equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, and accompanied by the unqualified opinion of any "Big Four" or
other nationally-recognized independent public accounting firm reasonably
acceptable to the Agent which report shall state that such consolidated
financial statements present fairly in all material respects the financial
position for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years; and
(b) as soon as available, but not later than thirty (30) days after the end
of each calendar month of each year, a copy of the unaudited consolidated and
consolidating balance sheets of the Borrower and each of its Subsidiaries, and
the related consolidated and consolidating statements of income, shareholders'
equity and cash flows as of the end of such month and for the portion of the
fiscal year then ended, all certified on behalf of the Borrower by an
appropriate Responsible Officer as being complete and correct and fairly
presenting, in all material respects, in accordance with GAAP, the financial
position and the results of operations of Borrower and its Subsidiaries, subject
to normal year-end adjustments and absence of footnote disclosures.
4.2. Certificates; Other Information. The Borrower shall furnish in
electronic form to the Agent:
(a) together with each delivery of financial statements pursuant to
subsections 4.1(a) and (b), (i) a management report, in reasonable detail,
signed by the chief financial officer of the Borrower, describing the operations
and financial condition of the Credit Parties and their Subsidiaries for the
month and the portion of the fiscal year then ended (or for the fiscal year then
ended in the case of annual financial statements), and (ii) a report setting
forth in comparative form the corresponding figures for the corresponding
periods of the previous fiscal year and the corresponding figures from the most
recent projections for the current fiscal year delivered pursuant to subsection
4.2(f) and discussing the reasons for any significant variations;
(b) concurrently with the delivery of the financial statements referred to
in subsections 4.1(a) and 4.1(b) above, a fully and properly completed
Compliance Certificate in the form of Exhibit 4.2(b), certified on behalf of the
Borrower by a Responsible Officer;
(c) promptly after the same are sent, copies of all financial statements
and reports which any Credit Party sends to its shareholders or other equity
holders, as applicable, generally and promptly after the same are filed, copies
of all financial statements and regular, periodic or special reports which such
Person may make to, or file with, the Securities and Exchange Commission or any
successor or similar Governmental Authority;
19
(d) as soon as available and in any event no later than the last day of
each fiscal year of the Borrower, projections of the Credit Parties (and their
Subsidiaries') consolidated and consolidating financial performance for the
forthcoming three fiscal years on a year by year basis, and for the forthcoming
fiscal year on a month by month basis;
(e) promptly upon receipt thereof, copies of any reports submitted by the
certified public accountants in connection with each annual, interim or special
audit or review of any type of the financial statements or internal control
systems of any Credit Party made by such accountants, including any comment
letters submitted by such accountants to management of any Credit Party in
connection with their services;
(f) from time to time, if the Agent determines that obtaining appraisals is
necessary in order for the Agent, Second Lien Collateral Agent or any Lender to
comply with applicable laws or regulations, and at any other time that Borrower
is required to do so under the First Lien Credit Agreement, the Agent may, or
may require the Borrower to, in either case at the Borrower's expense, obtain
appraisals in form and substance and from appraisers reasonably satisfactory to
the Agent stating the then current fair market value of all or any portion of
the real or personal property of any Credit Party or any Subsidiary of any
Credit Party; and
(g) promptly, such additional business, financial, corporate affairs,
perfection certificates and other information as the Agent may from time to time
reasonably request.
4.3. Notices. The Borrower shall notify promptly the Agent of each of the
following (and in no event later than three (3) Business Days after a
Responsible Officer becoming aware thereof):
(a) the occurrence or existence of any Default or Event of Default;
(b) any breach or non-performance of, or any default under, any Contractual
Obligation of any Credit Party or any Subsidiary of any Credit Party, or any
violation of, or non-compliance with, any Requirement of Law, which, in each
case, would reasonably be expected to result, either individually or in the
aggregate, in a Material Adverse Effect, including a description of such breach,
non-performance, default, violation or non-compliance and the steps, if any,
such Person has taken, is taking or proposes to take in respect thereof;
(c) any dispute, litigation, investigation, proceeding or suspension which
may exist at any time between any Credit Party or any Subsidiary of any Credit
Party and any Governmental Authority which would reasonably be expected to
result, either individually or in the aggregate, in a Material Adverse Effect;
(d) the commencement of, or any material development in, any litigation or
proceeding affecting any Credit Party or any Subsidiary of any Credit Party (i)
in which the amount of damages claimed is $1,000,000 (or its equivalent in
another currency or currencies) or more, (ii) in which injunctive or similar
relief is sought and which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect,
20
or (iii) in which the relief sought is an injunction or other stay of the
performance of this Agreement, any Loan Document or any Related Agreement;
(e) (i) the receipt by any Credit Party of any notice of violation of or
potential liability or similar notice under Environmental Law, (ii)(A)
unpermitted Releases, (B) the existence of any condition that could reasonably
be expected to result in violations of or liabilities under, any Environmental
Law or (C) the commencement of, or any material change to, any action,
investigation, suit, proceeding, audit, claim, demand, dispute alleging a
violation of or liability under any Environmental Law, that, for each of clauses
(A), (B) and (C) above (and, in the case of clause (C), if adversely
determined), in the aggregate for each such clause, could reasonably be expected
to result in Environmental Liabilities in excess of $1,000,000, (iii) the
receipt by any Credit Party of notification that any property of any Credit
Party is subject to any Lien in favor of any Governmental Authority securing, in
whole or in part, Environmental Liabilities and (iv) any proposed acquisition or
lease of real property, if such acquisition or lease would have a reasonable
likelihood of resulting in aggregate Environmental Liabilities in excess of
$1,000,000;
(f) (i) on or prior to any filing by any ERISA Affiliate of any notice of
intent to terminate any Title IV Plan, a copy of such notice and (ii) promptly,
and in any event within 10 days, after any officer of any ERISA Affiliate knows
or has reason to know that a request for a minimum funding waiver under Section
412 of the Code has been filed with respect to any Title IV Plan or
Multiemployer Plan, a notice (which may be made by telephone if promptly
confirmed in writing) describing such waiver request and any action that any
ERISA Affiliate proposes to take with respect thereto, together with a copy of
any notice filed with the PBGC or the IRS pertaining thereto;
(g) any Material Adverse Effect subsequent to the date of the most recent
audited financial statements delivered to the Agent and Lenders pursuant to this
Agreement;
(h) any material change in accounting policies or financial reporting
practices by any Credit Party or any Subsidiary of any Credit Party;
(i) any labor controversy resulting in or threatening to result in any
strike, work stoppage, boycott, shutdown or other labor disruption against or
involving any Credit Party or any Subsidiary of any Credit Party if the same
would reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect;
(j) the creation, establishment or acquisition of any Subsidiary or the
issuance by or to any Credit Party of any Stock or Stock Equivalent (other than
issuances by Holdings of Stock or Stock Equivalent not requiring a mandatory
prepayment hereunder); and
(k) (i) the creation, or filing with the IRS or any other Governmental
Authority, of any Contractual Obligation or other document extending, or having
the effect of extending, the period for assessment or collection of any taxes
with respect to any Tax Affiliate and (ii) the creation of any Contractual
Obligation of any Tax Affiliate,
21
or the receipt of any request directed to any Tax Affiliate, to make any
adjustment under Section 481(a) of the Code, by reason of a change in accounting
method or otherwise, which would have a Material Adverse Effect.
Each notice pursuant to this Section shall be in electronic form accompanied by
a statement by a Responsible Officer on behalf of the Borrower setting forth
details of the occurrence referred to therein, and stating what action the
Borrower or other Person proposes to take with respect thereto and at what time.
Each notice under subsection 4.3(a) shall describe with particularity any and
all clauses or provisions of this Agreement or other Loan Document that have
been breached or violated.
4.4. Preservation of Corporate Existence, Etc. Each Credit Party shall, and
shall cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its organizational
existence and good standing under the laws of its jurisdiction of incorporation,
organization or formation, as applicable, except, with respect to the Borrower's
Subsidiaries, in connection with transactions permitted by Section 5.3;
(b) preserve and maintain in full force and effect all rights, privileges,
qualifications, permits, licenses and franchises necessary in the normal conduct
of its business except in connection with transactions permitted by Section 5.3
and sales of assets permitted by Section 5.2 and except as would not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect;
(c) use its reasonable efforts, in the Ordinary Course of Business, to
preserve its business organization and preserve the goodwill and business of the
customers, suppliers and others having material business relations with it; and
(d) preserve or renew all of its registered trademarks, trade names and
service marks, the non-preservation of which would reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.
4.5. Maintenance of Property. Each Credit Party shall maintain, and shall
cause each of its Subsidiaries to maintain, and preserve all its Property which
is used or useful in its business in good working order and condition, ordinary
wear and tear excepted and shall make all necessary repairs thereto and renewals
and replacements thereof except where the failure to do so would not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect.
4.6. Insurance.
(a) Each Credit Party shall, and shall cause each of its Subsidiaries to,
(i) maintain or cause to be maintained in full force and effect all policies of
insurance of any kind with respect to the property and businesses of the Credit
Parties and such Subsidiaries (including policies of life, fire, theft, product
liability, public liability, property damage, other casualty, employee fidelity,
workers' compensation, business interruption and employee health and welfare
insurance) with financially sound and
22
reputable insurance companies or associations (in each case that are not
Affiliates of Borrower) of a nature and providing such coverage as is sufficient
and as is customarily carried by businesses of the size and character of the
business of the Credit Parties and (ii) cause all such insurance relating to any
property or business of any Credit Party to name the Second Lien Collateral
Agent as additional insured or loss payee, as appropriate. All policies of
insurance on real and personal property of the Credit Parties will contain an
endorsement, in form and substance reasonably acceptable to Agent, showing loss
payable to Second Lien Collateral Agent (Form 438 BFU or equivalent) and extra
expense and business interruption endorsements. Such endorsement, or an
independent instalment furnished to Second Lien Collateral Agent, will provide
that the insurance companies will give Second Lien Collateral Agent at least 30
days' prior written notice before any such policy or policies of insurance shall
be altered or canceled and that no act or default of Borrower or any other
Person shall affect the right of Second Lien Collateral Agent to recover under
such policy or policies of insurance in case of loss or damage. Subject to the
terms of the Closing Date Intercreditor Agreement, each Credit Party shall
direct all present and future insurers under its "All Risk" policies of
insurance to pay all proceeds payable thereunder directly to Agent. If any
insurance proceeds are paid by check, draft or other instalment payable to any
Credit Party and Agent jointly, Agent may endorse such Credit Party's name
thereon and do such other things as Agent may deem advisable to reduce the same
to cash. Agent reserves the right at any time, upon review of each Credit
Party's risk profile, to require additional forms and limits of insurance.
(b) Unless the Borrower provides the Agent with evidence of the insurance
coverage required by this Agreement, the Agent may purchase insurance at the
Credit Parties' expense to protect the Agent's and Lenders' interests in the
Credit Parties' and their Subsidiaries' properties. This insurance may, but need
not, protect the Credit Parties' and their Subsidiaries' interests. The coverage
that the Agent purchases may not pay any claim that any Credit Party or any
Subsidiary of any Credit Party makes or any claim that is made against such
Credit Party or any Subsidiary in connection with said Property. The Borrower
may later cancel any insurance purchased by the Agent, but only after providing
the Agent with evidence that there has been obtained insurance as required by
this Agreement. If the Agent purchases insurance, the Credit Parties will be
responsible for the costs of that insurance, including interest and any other
charges the Agent may impose in connection with the placement of insurance,
until the effective date of the cancellation or expiration of the insurance. The
costs of the insurance shall be added to the Obligations. The costs of the
insurance may be more than the cost of insurance the Borrower may be able to
obtain on its own.
4.7. Payment of Obligations. Such Credit Party shall, and shall cause each
of its Subsidiaries to, pay, discharge and perform as the same shall become due
and payable or required to be performed, all their respective obligations and
liabilities (other than in respect of First Lien Loan Obligations), including:
(a) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings diligently prosecuted which stay the
enforcement of any Lien
23
and for which adequate reserves in accordance with GAAP are being maintained by
such Person;
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
Property unless the same are being contested in good faith by appropriate
proceedings diligently prosecuted which stay the imposition or enforcement of
the Lien and for which adequate reserves in accordance with GAAP are being
maintained by such Person;
(c) all Indebtedness (other than First Lien Indebtedness), as and when due
and payable, but subject to any subordination provisions contained herein and/or
in any instalment or agreement evidencing such Indebtedness; and
(d) the performance of all obligations under any Contractual Obligation to
such Credit Party or any of its Subsidiaries is bound, or to which it or any of
its properties is subject, including the Related Agreements (other than the
First Lien Credit Documents), except where the failure to perform would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
4.8. Compliance with Laws.
(a) Each Credit Party shall, and shall cause each of its Subsidiaries to,
comply with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its business, except where the failure to comply would
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
(b) Without limiting the generality of the foregoing, each Credit Party
shall, and shall cause each of its Subsidiaries to, comply with, and maintain
its real property, whether owned, leased, subleased or otherwise operated or
occupied, in compliance with, all applicable Environmental Laws (including by
implementing any Remedial Action necessary to achieve such compliance or that is
required by orders and directives of any Governmental Authority) except for
failures to comply that would not, in the aggregate, have a Material Adverse
Effect. Without limiting the foregoing, if an Event of Default is continuing or
if Agent at any time has a reasonable basis to believe that there exist
violations of Environmental Laws by any Credit Party or any Subsidiary of any
Credit Party or that there exist any Environmental Liabilities, in each case,
that would have, in the aggregate, a Material Adverse Effect, then each Credit
Party shall, promptly upon receipt of request from Agent, cause the performance
of, and allow Agent and its Related Persons access to such real property for the
purpose of conducting, such environmental audits and assessments, including
subsurface sampling of soil and groundwater, and cause the preparation of such
reports, in each case as Agent may from time to time reasonably request. Such
audits, assessments and reports, to the extent not conducted by Agent or any of
its Related Persons, shall be conducted and prepared by reputable environmental
consulting firms reasonably acceptable to Agent and shall be in form and
substance reasonably acceptable to Agent.
4.9. Inspection of Property and Books and Records. Each Credit Party shall
maintain and shall cause each of its Subsidiaries to maintain proper books of
record
24
and account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of such Person. Each Credit Party shall, and
shall cause each of its Subsidiaries to, with respect to each owned, leased, or
controlled property, during normal business hours and upon reasonable advance
notice (unless an Event of Default shall have occurred and be continuing, in
which event no notice shall be required and Agent and Second Lien Collateral
Agent shall have access at any and all times during the continuance thereof):
(a) provide access to such property to Agent and Second Lien Collateral Agent
and any of their Related Persons, as frequently as Agent or Second Lien
Collateral Agent determines to be appropriate; (b) permit Agent and Second Lien
collateral Agent and any of their Related Persons to inspect, audit and make
extracts and copies (or take originals if reasonably necessary) from all of such
Credit Party's books and records; and (c) permit Agent and Second Lien
Collateral Agent to inspect, review, evaluate and make physical verifications
and appraisals of the inventory and other Collateral in any manner and through
any medium that Agent or Second Lien Collateral Agent considers advisable, in
each instance, at the Credit Parties' expense provided the Credit Parties shall
not be responsible for costs and expenses more than one time per year unless an
Event of Default has occurred and is continuing. Any Lender may accompany Agent
or Second Lien Collateral Agent in connection with any inspection at such
Lender's expense.
4.10. Use of Proceeds. The Borrower shall use the proceeds of the Second
Lien Term Loan solely as follows: (a) first, to the extent not paid in full with
proceeds of the loans under the First Lien Credit Agreement, to refinance on the
Closing Date, Prior Indebtedness, (b) to pay the Closing Date Dividend, (c) to
pay the Closing Date Management Bonuses, (d) to pay costs and expenses of the
Related Transactions and costs and expenses required to be paid pursuant to
Section 2.1, and (e) for working capital and other general corporate purposes
not in contravention of any Requirement of Law and not in violation of this
Agreement; provided, that the Incremental Second Lien Term Loan shall be used
solely for the purpose of consummating a Liquidity Event in accordance with
section 1.12 hereof.
4.11. Cash Management Systems. Each Credit Party shall, and shall cause
each Domestic Subsidiary of each Credit Party to, enter into, and cause each
depository, securities intermediary or commodities intermediary to enter into,
Control Agreements with respect to each deposit, securities, commodity or
similar account maintained by such Person (other than any payroll account so
long as such payroll account is a zero balance account and withholding tax and
fiduciary accounts) as of or after the Closing Date.
4.12. Landlord Agreements. Each Credit Party shall, and shall cause each of
its Domestic Subsidiaries to, use commercially reasonable efforts to obtain a
landlord agreement or bailee or mortgagee waivers, as applicable, from the
lessor of each leased property, bailee in possession of any Collateral or
mortgage of any owned property with respect to each location where any
Collateral is stored or located, which agreement shall be reasonably
satisfactory in form and substance to Agent.
25
4.13. Further Assurances.
(a) Each Credit Party shall ensure that all written information, exhibits
and reports furnished to the Agent, Second Lien Collateral Agent or the Lenders
do not and will not contain any untrue statement of a material fact and do not
and will not omit to state any material fact or any fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which made, and will promptly disclose to the Agent, Second Lien Collateral
Agent and the Lenders and correct any defect or error that may be discovered
therein or in any Loan Document or in the execution, acknowledgement or
recordation thereof.
(b) Promptly upon request by the Agent or the Second Lien Collateral Agent,
the Credit Parties shall (and, subject to the limitations hereinafter set forth,
shall cause each of their Subsidiaries to) take such additional actions as the
Agent or Second Lien Collateral Agent may reasonably require from time to time
in order (i) to carry out more effectively the purposes of this Agreement or any
other Loan Document, (ii) to subject to the Liens created by any of the
Collateral Documents any of the Properties, rights or interests covered by any
of the Collateral Documents, (iii) to perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Agent, the Second Lien
Collateral Agent and Lenders the rights granted or now or hereafter intended to
be granted to the Agent, Second Lien Collateral Agent and the Lenders under any
Loan Document or under any other document executed in connection therewith.
Without limiting the generality of the foregoing and except as otherwise
approved in writing by Required Lenders, the Credit Parties shall cause each of
their Domestic Subsidiaries to guaranty the Obligations and to cause each such
Subsidiary to grant to the Second Lien Collateral Agent, for the benefit of the
Second Lien Collateral Agent and Lenders, a security interest in, subject to the
limitations hereinafter set forth, all of such Subsidiary's Property to secure
such guaranty. Furthermore and except as otherwise approved in writing by
Required Lenders, each Credit Party shall, and shall cause each of its Domestic
Subsidiaries to, (x) pledge all of the Stock and Stock Equivalents of each of
its Domestic Subsidiaries and sixty-five percent (65%) of the outstanding voting
Stock and Stock Equivalents and one hundred percent (100%) of the outstanding
non-voting Stock and Stock Equivalents of each of its Material Foreign
Subsidiaries (other than Chief Hong Kong) and (y) upon the occurrence and during
the continuance of an Event of Default, use its commercially reasonable efforts
to pledge sixty five percent (65%) of the outstanding voting Stock and Stock
Equivalents and one hundred percent (100%) of the outstanding non-voting Stock
and Stock Equivalents of Chief Hong Kong, in each instance, to the Second Lien
Collateral Agent, for the benefit of the Second Lien Collateral Agent and
Lenders, to secure the Obligations. In connection with each pledge of Stock and
Stock Equivalents, the Credit Parties shall deliver, or cause to be delivered,
to the Second Lien Collateral Agent, irrevocable proxies and stock powers and/or
assignments, as applicable, duly executed in blank. In the event any Credit
Party or any Domestic Subsidiary acquires any real Property, at the request of
Agent and simultaneously with such acquisition, such Person shall execute and/or
deliver, or cause to be executed and/or delivered, to the Second Lien Collateral
Agent, (x) a fully executed Mortgage, in form and substance reasonably
26
satisfactory to the Agent together with an A.L.T.A. lender's title insurance
policy issued by a title insurer reasonably satisfactory to the Agent, in form
and substance and in an amount reasonably satisfactory to the Agent insuring
that the Mortgage is a valid and enforceable first priority Lien on the
respective property, free and clear of all defects, encumbrances and Liens, (y)
then current A.L.T.A. surveys, certified to the Second Lien Collateral Agent and
the Lenders by a licensed surveyor sufficient to allow the issuer of the
lender's title insurance policy to issue such policy without a survey exception
and (z) an environmental site assessment prepared by a qualified firm reasonably
acceptable to the Agent, in form and substance satisfactory to the Agent.
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, in no event shall any Credit Party be required to xxxxx x Xxxx on any
Property in respect of which the First Lien Agent shall not have been granted a
Lien for the benefit of the First Lien Creditors.
4.14. Interest Rate Protection. Within ninety (90) days of the Closing
Date, the Borrower shall enter into, and thereafter maintain, Rate Contracts
providing protection against fluctuations in interest rates with one or more
financial institutions with respect to at least fifty percent (50%) of the
amount of the sum of the Aggregate Second Lien Term Loan Commitment and
"Aggregate Term Loan Commitment" (as defined in the First Lien Credit Agreement)
on the date hereof, which agreements shall provide for not less than a three (3)
year term and containing such other terms as are customary and are satisfactory
to the First Lien Agent.
ARTICLE V - NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any portion of the
Second Lien Term Loan or other Obligation (other than contingent indemnification
Obligations to the extent no claim giving rise thereto has been asserted) shall
remain unpaid or unsatisfied:
5.1. Limitation on Liens. No Credit Party shall, and no Credit Party shall
suffer or permit any of its Subsidiaries to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its Property, whether now owned or hereafter acquired, other than the
following ("Permitted Liens"):
(a) any Lien existing on the Property of a Credit Party or a Subsidiary of
a Credit Party on the Closing Date and set forth in Schedule 5.1 securing
Indebtedness outstanding on such date and permitted by subsection 5.5(c),
including replacement Liens on the Property currently subject to such Liens
securing Indebtedness permitted by Section 5.5(c);
(b) any Lien created under any Loan Document;
27
(c) Liens for taxes, fees, assessments or other governmental charges (i)
which are not delinquent or remain payable without penalty, or (ii) the
non-payment of which is permitted by Section 4.7;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the Ordinary Course of Business
which are not delinquent for more than ninety (90) days or remain payable
without penalty or which are being contested in good faith and by appropriate
proceedings diligently prosecuted, which proceedings have the effect of
preventing the forfeiture or sale of the Property subject thereto and for which
adequate reserves in accordance with GAAP are being maintained;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the Ordinary Course of Business in connection with workers'
compensation, unemployment insurance and other social security legislation or to
secure the performance of tenders, statutory obligations, surety, stay, customs
and appeals bonds, bids, leases, governmental contract, trade contracts,
performance and return of money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money) or to secure liability to
insurance carriers;
(f) Liens consisting of judgment or judicial attachment liens, provided
that the enforcement of such Liens is effectively stayed and all such Liens
secure claims in the aggregate at any time outstanding for the Credit Parties
and their Subsidiaries not exceeding $3,600,000;
(g) easements, rights-of-way, zoning and other restrictions, minor defects
or other irregularities in title, and other similar encumbrances incurred in the
Ordinary Course of Business which, either individually or in the aggregate, are
not substantial in amount, and which do not in any case materially detract from
the value of the Property subject thereto or interfere in any material respect
with the ordinary conduct of the businesses of any Credit Party or any
Subsidiary of any Credit Party;
(h) Liens on any Property acquired or held by any Credit Party or any
Subsidiary of any Credit Party securing Indebtedness incurred or assumed for the
purpose of financing (or refinancing) all or any part of the cost of acquiring
such Property and permitted under subsection 5.5(d); provided that (i) any such
Lien attaches to such Property concurrently with or within ninety (90) days
after the acquisition thereof, (ii) such Lien attaches solely to the Property so
acquired in such transaction, and (iii) the principal amount of the debt secured
thereby does not exceed 100% of the cost of such Property;
(i) Liens securing Capital Lease Obligations permitted under subsection
5.5(d);
(j) any interest or title of a lessor or sublessor under any lease
permitted by this Agreement;
28
(k) Liens arising from precautionary uniform commercial code financing
statements filed under any lease permitted by this Agreement;
(l) licenses, sublicenses, leases or subleases granted to third parties in
the Ordinary Course of Business not interfering with the business of the Credit
Parties or any of their Subsidiaries;
(m) Liens in favor of collecting banks arising under Section 4-210 of the
UCC;
(n) Liens (including the right of set-off) in favor of a bank or other
depository institution arising as a matter of law encumbering deposits;
(o) Liens arising out of consignment or similar arrangements for the sale
of goods entered into by the Borrower or any of its Subsidiaries in the Ordinary
Course of Business;
(p) Liens in favor of customs and revenue authorities arising as a matter
of law which secure payment of customs duties in connection with the importation
of goods in the Ordinary Course of Business;
(q) First Lien Indebtedness Liens to the extent securing permitted First
Lien Loan Obligations;
(r) Liens existing on Property of a Person immediately prior to its being
consolidated with or merged into a Credit Party or its becoming a Subsidiary, or
any Lien existing on any Property acquired by a Credit Party at the time such
Property is so acquired (whether or not the Indebtedness secured thereby shall
have been assumed), provided that (i) no such Lien shall have been created or
assumed in contemplation of such consolidation or merger or such Person's
becoming a Subsidiary or such acquisition of Property, and (ii) each such Lien
shall extend solely to the item or items of Property so acquired and, if
required by the terms of the instalment originally creating such Lien, other
Property which is an improvement to or is acquired for specific use in
connection with such acquired Property; and
(s) Liens not otherwise permitted by this Section 5.1, securing
Indebtedness (other than Indebtedness for borrowed money) otherwise permitted
under Section 5.5 in an aggregate amount not to exceed $600,000.
5.2. Disposition of Assets. No Credit Party shall, and no Credit Party
shall suffer or permit any of its Subsidiaries to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one or a
series of transactions) any Property (including accounts and notes receivable,
with or without recourse) or enter into any agreement to do any of the
foregoing, except:
(a) dispositions of inventory, or used, worn-out or surplus equipment, all
in the Ordinary Course of Business;
29
(b) dispositions not otherwise permitted hereunder which are made for fair
market value and the mandatory prepayment in the amount of the Net Proceeds of
such disposition is made if and to the extent required by Section 1.8; provided,
that (i) at the time of any disposition, no Event of Default shall exist or
shall result from such disposition, (ii) not less than eighty-five percent (85%)
of the aggregate sales price from such disposition shall be paid in cash and
(iii) the aggregate fair market value of all assets so sold by the Credit
Parties and their Subsidiaries, together, shall not exceed in any fiscal year
$3,600,000;
(c) dispositions of Cash Equivalents;
(d) licenses, sublicenses, leases or subleases granted to third parties in
the Ordinary Course of Business not interfering with the business of the Credit
Parties or any of their Subsidiaries; and
(e) Permitted Collateral Sales (as defined in the Closing Date
Intercreditor Agreement) and/or assets sold in connection with a Release Event
(as defined in the Closing Date Intercreditor Agreement).
5.3. Consolidations and Mergers. No Credit Party shall, and no Credit Party
shall suffer or permit any of its Subsidiaries to, merge, consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except upon not less than five (5) Business Days prior written notice to the
Agent, (a) any Subsidiary of the Borrower may merge with, or dissolve or
liquidate into, the Borrower or a Wholly-Owned Subsidiary of the Borrower which
is a Domestic Subsidiary, provided that the Borrower or such Wholly-Owned
Subsidiary which is a Domestic Subsidiary shall be the continuing or surviving
entity and (b) subject to compliance with subsection 4.13(b) hereof, if and to
the extent applicable, any Foreign Subsidiary may merge with or dissolve or
liquidate into another Foreign Subsidiary.
5.4. Loans and Investments. No Credit Party shall and no Credit Party shall
suffer or permit any of its Subsidiaries to (i) purchase or acquire, or make any
commitment to purchase or acquire any Stock or Stock Equivalents, or any
obligations or other securities of, or any interest in, any Person, including
the establishment or creation of a Subsidiary, or (ii) make or commit to make
any Acquisitions, or any other acquisition of all or substantially all of the
assets of another Person, or of any business or division of any Person,
including without limitation, by way of merger, consolidation or other
combination or (iii) make or commit to make any advance, loan, extension of
credit or capital contribution to or any other investment in, any Person
including any Affiliate of the Borrower or any Subsidiary of the Borrower (the
items described in clauses (i), (ii) and (iii) are referred to as
"Investments"), except for:
(a) Investments in cash and Cash Equivalents;
30
(b) extensions of credit by (i) any Credit Party (other than Holdings) to
any other Credit Party (other than Holdings), (ii) the Borrower or any Domestic
Subsidiary of the Borrower to Foreign Subsidiaries of the Borrower not to exceed
$3,600,000 in the aggregate at any time outstanding for all such extensions of
credit provided, if the extensions of credit described in foregoing clauses (i)
and (ii) are evidenced by notes, such notes shall be pledged to the Second Lien
Collateral Agent, for the benefit of the Second Lien Collateral Agent and
Lenders, and have such terms as the Agent may reasonably require and (iii) a
Foreign Subsidiary of the Borrower to another Foreign Subsidiary of the
Borrower;
(c) loans and advances to employees in the Ordinary Course of Business not
to exceed $600,000 in the aggregate at any time outstanding;
(d) Investments received as the non-cash portion of consideration received
in connection with transactions permitted pursuant to Section 5.2(b);
(e) Investments acquired in connection with the settlement of delinquent
accounts in the Ordinary Course of Business or in connection with the bankruptcy
or reorganization of suppliers or customers;
(f) Investments consisting of non-cash loans made by Holdings to officers,
directors and employees which are used by such Persons to purchase
simultaneously Stock or Stock Equivalents of Holdings;
(g) Investments existing on the Closing Date and set forth on Schedule 5.4;
(h) other Investments not to exceed $1,200,000 in the aggregate at any time
outstanding; and
(i) Permitted Acquisitions.
5.5. Limitation on Indebtedness. No Credit Party shall, and no Credit Party
shall suffer or permit any of its Subsidiaries to, create, incur, assume, permit
to exist, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations described in clause
(i) of the definition thereof and permitted pursuant to Section 5.9;
(c) Indebtedness existing on the Closing Date and set forth in Schedule 5.5
including extensions and refinancings thereof which do not increase the
principal amount of such Indebtedness as of the date of such extension or
refinancing;
(d) Indebtedness not to exceed $6,000,000 in the aggregate at any time
outstanding, consisting of Capital Lease Obligations or secured by Liens
permitted by subsection 5.1(h);
31
(e) unsecured intercompany Indebtedness permitted pursuant to subsection
5.4(b);
(f) First Lien Indebtedness to the extent permitted under the Closing Date
Intercreditor Agreement; provided that, the Incremental Senior Loan shall not be
permitted hereunder unless the conditions set forth in subsection 1.12(d)] shall
have been satisfied on the Incremental Loan Closing Date; and
(g) other unsecured Indebtedness not exceeding in the aggregate at any time
outstanding $3,600,000.
5.6. Transactions with Affiliates. No Credit Party shall, and no Credit
Party shall suffer or permit any of its Subsidiaries to, enter into any
transaction with any Affiliate of the Borrower or of any such Subsidiary,
except:
(a) as expressly permitted by this Agreement; or
(b) in the Ordinary Course of Business and pursuant to the reasonable
requirements of the business of such Credit Party or such Subsidiary provided
that, in the case of this clause (b), upon fair and reasonable terms no less
favorable to such Credit Party or such Subsidiary than would be obtained in a
comparable arm's length transaction with a Person not an Affiliate of the
Borrower or such Subsidiary and which are disclosed in writing to the Agent.
5.7. Management Fees and Compensation. No Credit Party shall, and no Credit
Party shall permit any of its Subsidiaries to, pay any management, consulting or
similar fees to any Affiliate of any Credit Party or to any officer, director or
employee of any Credit Party or any Affiliate of any Credit Party except:
(a) payment of reasonable compensation to officers and employees for actual
services rendered to the Credit Parties and their Subsidiaries in the Ordinary
Course of Business;
(b) payment of directors' fees and reimbursement of actual out-of-pocket
expenses incurred in connection with attending board of director meetings not to
exceed in the aggregate, with respect to all such items, $300,000 in any fiscal
year of the Borrower;
(c) payment of a management fee to Sponsor or, after the consummation of
the Permitted Sale, to New Sponsor (or an Affiliate thereof), in each case, not
to exceed $360,000 per annum; provided, however, that the fees described in this
clause (c) shall not be paid during any period while an Event of Default has
occurred and is continuing or would arise as a result of such payment; provided,
further any fees not paid due to the existence of an Event of Default shall be
deferred and may be paid when no Event of Default exists;
(d) reimbursement of reasonable out-of-pocket costs and expenses to Sponsor
in an amount not to exceed $120,000 per annum or, after the consummation of the
32
Permitted Sale, if any, to New Sponsor (or an Affiliate thereof) pursuant to the
terms of the New Sponsor Management Agreement; and
(e) on the Closing Date, payment of the Closing Date Management Bonuses.
5.8. Use of Proceeds. No Credit Party shall, and no Credit Party shall
suffer or permit any of its Subsidiaries to, use any portion of the Loan
proceeds, directly or indirectly, to purchase or carry Margin Stock or repay or
otherwise refinance Indebtedness of any Credit Party or others incurred to
purchase or carry Margin Stock, or otherwise in any manner which is in
contravention of any Requirement of Law or in violation of this Agreement.
5.9. Contingent Obligations. No Credit Party shall, and no Credit Party
shall suffer or permit any of its Subsidiaries to, create, incur, assume or
suffer to exist any Contingent Obligations except in respect of the Obligations
and except:
(a) endorsements for collection or deposit in the Ordinary Course of
Business;
(b) Rate Contracts entered into in the Ordinary Course of Business for bona
fide hedging purposes and not for speculation with the Agent's prior written
consent or pursuant to Section 4.14 of the First Lien Credit Agreement;
(c) Contingent Obligations of the Credit Parties and their Subsidiaries
existing as of the Closing Date and listed in Schedule 5.9, including extension
and renewals thereof which do not increase the amount of such Contingent
Obligations as of the date of such extension or renewal;
(d) Contingent Obligations incurred in the Ordinary Course of Business with
respect to surety and appeal bonds, performance bonds and other similar
obligations;
(e) Contingent Obligations arising under indemnity agreements to title
insurers to cause such title insurers to issue to the Second Lien Collateral
Agent title insurance policies;
(f) Contingent Obligations arising with respect to customary
indemnification obligations in favor of (i) sellers in connection with
Acquisitions permitted hereunder and (ii) purchasers in connection with
dispositions permitted under subsection 5.2(b);
(g) Contingent Obligations arising under Letters of Credit (as defined in
the First Lien Credit Agreement);
(h) Contingent Obligations arising under guarantees made in the Ordinary
Course of Business of obligations of any Credit Party (other than Holdings),
which obligations are otherwise permitted hereunder; provided that if such
obligation is subordinated to the Obligations, such guarantee shall be
subordinated to the same extent;
(i) Contingent Obligations consisting of guarantees by Holdings or any
Subsidiary of Borrower of the First Lien Loan Obligations; and
33
(j) other Contingent Obligations not exceeding $1,200,000 in the aggregate
at any time outstanding.
5.10. Compliance with ERISA. No ERISA Affiliate shall cause or suffer to
exist (a) any event that could result in the imposition of a Lien on any asset
of a Credit Party or a Subsidiary of a Credit Party with respect to any Title IV
Plan or Multiemployer Plan or (b) any other ERISA Event, that would, in the
aggregate, have a Material Adverse Effect. No Credit Party shall cause or suffer
to exist any event that could result in the imposition of a Lien with respect to
any Benefit Plan.
5.11. Restricted Payments. No Credit Party shall, and no Credit Party shall
suffer or permit any of its Subsidiaries to, (i) declare or make any dividend
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account of any Stock or Stock Equivalent, (ii) purchase, redeem
or otherwise acquire for value any Stock or Stock Equivalent now or hereafter
outstanding or (iii) make any payment or prepayment of principal of, premium, if
any, interest, fees, redemption, exchange, purchase, retirement, defeasance,
sinking fund or similar payment with respect to, Subordinated Indebtedness (the
items described in clauses (i), (ii) and (iii) above are referred to as
"Restricted Payments"); except that any Wholly-Owned Subsidiary of the Borrower
may declare and pay dividends to the Borrower or any Wholly-Owned Subsidiary of
the Borrower, and except that:
(a) Holdings may declare and make dividend payments or other distributions
payable solely in its Stock or Stock Equivalent; and
(b) the Borrower may make distributions to Holdings which are immediately
used by Holdings to redeem from officers, directors and employees Stock and
Stock Equivalents provided all of the following conditions are satisfied:
(i) no Default or Event of Default has occurred and is continuing or
would arise as a result of such Restricted Payment;
(ii) after giving effect to such Restricted Payment, the Credit
Parties are in compliance on a pro forma basis with the covenants set forth
in Article VI, recomputed for the most recent quarter for which financial
statements have been delivered; and
(iii) the aggregate Restricted Payments permitted (x) in any fiscal
year of the Borrower shall not exceed $1,200,000 and (y) during the term of
this Agreement shall not exceed $3,600,000;
(c) in the event the Borrower files a consolidated income tax return with
Holdings, Borrower may make distributions to Holdings to permit Holdings to pay
federal and state income taxes then due and owing, franchise taxes and other
similar licensing expenses incurred in the Ordinary Course of Business provided,
that the amount of such distribution shall not be greater, nor the receipt by
the Borrower of tax benefits less, than they would have been had the Borrower
not filed a consolidated return with Holdings;
34
(d) Borrower may make distributions to Holdings which are immediately used
by Holdings to pay administrative and corporate overhead expenses of Holdings in
an amount not to exceed $360,000 per year.
(e) Holdings may declare and make dividends or distributions payable in
cash to its shareholders at any time on or prior to March 31, 2007; provided
that such dividends or distributions are funded solely from the proceeds of
equity issuances described in clause (e) of the definition of Excluded Equity
Issuance;
(f) on the Closing Date, Borrower may pay the Closing Date Management
Bonuses;
(g) on the Closing Date, Borrower and Holdings may make the Closing Date
Dividend;
(h) on the Incremental Loan Closing Date, Borrower may make distributions
to Holdings using proceeds of the Incremental Loans to the extent necessary to
consummate a Liquidity Event; and
(i) Holdings may redeem Stock and Stock Equivalents of Holdings using
proceeds of the Incremental Loans and/or proceeds from Excluded Equity Issuances
of the type described in clauses (e) and/or (f) thereof to consummate a
Liquidity Event.
5.12. Change in Business. No Credit Party shall, and no Credit Party shall
permit any of its Subsidiaries to, engage in any material line of business
substantially different from those lines of business carried on by it on the
date hereof. Holdings shall not engage in any business activities other than (i)
ownership of the Stock and Stock Equivalents of Borrower, (ii) activities
incidental to maintenance of its corporate existence and (iii) performance of
its obligations under the Related Agreements to which it is a party.
5.13. Change in Structure. Except as expressly permitted under this
Agreement, no Credit Party shall, and no Credit Party shall permit any of its
Subsidiaries to, make any material changes in its equity capital structure
(including in the terms of its outstanding Stock or Stock Equivalents), or amend
any of its Organization Documents in any material respect or in any respect
adverse to the Agent, the Second Lien Collateral Agent or Lenders.
5.14. Accounting Changes. No Credit Party shall, and no Credit Party shall
suffer or permit any of its Subsidiaries to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year or method for determining fiscal quarters of any Credit
Party or of any consolidated Subsidiary of any Credit Party.
5.15. Amendments to Related Agreements and Subordinated Indebtedness.
35
(a) No Credit Party shall and no Credit Party shall permit any of its
Subsidiaries, to (i) amend, supplement, waive or otherwise modify any provision
of, any Related Agreement (other than the First Lien Loan Documents) in a manner
adverse to the Agent, the Second Lien Collateral Agent or Lenders or which would
reasonably be expected to have a Material Adverse Effect, or (ii) take any
action under any Related Agreement (other than the First Lien Loan Documents)
that would reasonably be expected to have a Material Adverse Effect.
(b) The Borrower shall not, and shall not permit any of its Subsidiaries
directly or indirectly to, change or amend the terms of the First Lien
Indebtedness evidenced by the First Lien Loan Documents to the extent such
change or amendment is not permitted under, or otherwise is prohibited by, the
terms of the Closing Date Intercreditor Agreement.
5.16. No Negative Pledges. No Credit Party shall, and no Credit Party shall
permit any of its Subsidiaries to, directly or indirectly, to create or
otherwise cause or suffer to exist or become effective any consensual
restriction or encumbrance of any kind on the ability of any such Subsidiary to
pay dividends or make any other distribution on any of such Subsidiary's Stock
or Stock Equivalents or to pay fees, including management fees, or make other
payments and distributions to the Borrower or any of its Subsidiaries. No Credit
Party shall, and no Credit Party shall permit any of its Subsidiaries to,
directly or indirectly, enter into, assume or become subject to any Contractual
Obligation prohibiting or otherwise restricting the existence of any Lien upon
any of its assets in favor of the Second Lien Collateral Agent, whether now
owned or hereafter acquired except in connection with any document or instrument
governing Liens permitted pursuant to subsections 5.l(h) and (i) provided that
any such restriction contained therein relates only to the asset or assets
subject to such Permitted Liens.
5.17. OFAC. No Credit Party shall, and no Credit Party shall permit any of
its Subsidiaries to (i) become a person whose property or interests in property
are blocked or subject to blocking pursuant to Section 1 of Executive Order
13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit or Support Terrorism (66 Fed. Reg.
49079(2001), (ii) engage in any dealings or transactions prohibited by Section 2
of such executive order, or be otherwise associated with any such person in any
manner violative of Section 2, or (iii) otherwise become a person on the list of
Specially Designated Nationals and Blocked Persons or subject to the limitations
or prohibitions under any other OFAC regulation or executive order.
5.18. Press Release and Related Matters. No Credit Party shall, and no
Credit Party shall permit any of its Affiliates to, issue any press release or
other public disclosure (other than any document filed with any Governmental
Authority relating to a public offering of securities of any Credit Party) using
the name, logo or otherwise referring to GE Capital or of any of its Affiliates,
the Loan Documents or any transaction contemplated therein to which the Agent is
party without the prior consent
36
of GE Capital except to the extent required to do so under applicable
Requirements of Law and then, only after consulting with GE Capital prior
thereto.
5.19. Sale-Leasebacks. No Credit Party shall, and no Credit Party shall
permit any of its Subsidiaries to, engage in a sale leaseback, synthetic lease
or similar transaction involving any of its assets.
5.20. Hazardous Materials. No Credit Party shall, and no Credit Party shall
permit any of its Subsidiaries to, cause or suffer to exist any Release of any
Hazardous Material at, to or from any real property owned, leased, subleased or
otherwise operated or occupied by any Credit Party or any Subsidiary of any
Credit Party that would violate any Environmental Law, form the basis for any
Environmental Liabilities or otherwise adversely affect the value or
marketability of any real property (whether or not owned by any Credit Party or
any Subsidiary of any Credit Party), other than such violations, Environmental
Liabilities and effects that would not, in the aggregate, have a Material
Adverse Effect.
ARTICLE VI - FINANCIAL COVENANTS
Each Credit Party covenants and agrees that, so long as any portion of the
Second Lien Term Loan or other Obligation (other than contingent indemnification
Obligations to the extent no claim giving rise thereto has been asserted) shall
remain unpaid or unsatisfied:
6.1. Capital Expenditures. The Borrower and its Subsidiaries shall not make
or commit to make Capital Expenditures for any fiscal year (or shorter period)
set forth below in excess of the amount set forth in the table below (the
"Capital Expenditure Limitation") with respect to such fiscal year (or shorter
period):
Fiscal Period Capital Expenditure Limitation
------------- ------------------------------
Closing Date through December 31, 2006 $4,950,000
Fiscal year ending December 31, 2007 $4,950,000
Fiscal year ending December 31, 2008 $4,950,000
Fiscal year ending December 31, 2009
and each fiscal year thereafter $6,050,000
; provided, however, in the event the Borrower and its Subsidiaries do not
expend the entire Capital Expenditure Limitation in any fiscal year, the
Borrower and its Subsidiaries may carry forward to the immediately succeeding
fiscal year fifty percent (50%) of the unutilized portion. All Capital
Expenditures shall first be applied to reduce the applicable Capital Expenditure
Limitation and then to reduce the carry forward from the previous fiscal year,
if any.
37
"Capital Expenditures" shall be calculated in the manner set forth in Exhibit
4.2(b).
6.2. Leverage Ratio. The Credit Parties shall not permit the Leverage Ratio
for the twelve (12) month period ending on any date set forth below to be
greater than the maximum ratio set forth in the table below opposite such date:
Date Maximum Leverage Ratio
---- ----------------------
September 30, 2006 6.60 to 1.00
December 31, 2006 6.60 to 1.00
March 31, 2007 6.60 to 1.00
June 30, 2007 6.60 to 1.00
September 30, 2007 6.40 to 1.00
December 31, 2007 6.10 to 1.00
March 31, 2008 5.80 to 1.00
June 30, 2008 5.50 to 1.00
September 30, 2008 5.30 to 1.00
December 31, 2008 5.00 to 1.00
March 31, 2009 4.70 to 1.00
June 30, 2009 4.40 to 1.00
September 30, 2009 4.20 to 1.00
December 31, 2009 3.90 to 1.00
March 31, 2010 3.60 to 1.00
June 30, 2010 and
the last day of
each fiscal quarter
thereafter 3.30 to 1.00
"Leverage Ratio" shall be calculated in the manner set forth in Exhibit 4.2(b).
6.3. Fixed Charge Coverage Ratio. The Credit Parties shall not permit the
Fixed Charge Coverage Ratio for the twelve (12) month period (or such shorter
period commencing on July 1, 2006) ending on any date set forth below to be less
than the minimum ratio set forth in the table below opposite such date:
Date Minimum Fixed Charge Ratio
---- --------------------------
September 30, 2006 1.00 to 1.00
December 31, 2006 1.00 to 1.00
March 31, 2007 1.00 to 1.00
June 30, 2007 1.00 to 1.00
September 30, 2007 1.05 to 1.00
38
December 31, 2007 1.05 to 1.00
March 31, 2008 1.05 to 1.00
June 30, 2008 1.05 to 1.00
September 30, 2008
and the last day of
each fiscal quarter
thereafter 1.10 to 1.00
"Fixed Charge Coverage Ratio" shall be calculated in the manner set forth in
Exhibit 4.2(b).
ARTICLE VII - EVENTS OF DEFAULT
7.1. Event of Default. Any of the following shall constitute an "Event of
Default":
(a) Non-Payment. Any Credit Party fails (i) to pay when and as required to
be paid herein, any amount of principal of the Second Lien Term Loan, including
after maturity of the Second Lien Term Loan or (ii) to pay within three (3)
Business Days after the same shall become due, interest on the Second Lien Term
Loan, any fee or any other amount payable hereunder or pursuant to any other
Loan Document; or
(b) Representation or Warranty. Any representation, warranty or
certification by or on behalf of any Credit Party made or deemed made herein, in
any other Loan Document, or which is contained in any certificate, document or
financial or other statement by any such Person, or their respective Responsible
Officers, furnished at any time under this Agreement, or in or under any other
Loan Document, shall prove to have been incorrect in any material respect on or
as of the date made or deemed made; or
(c) Specific Defaults. Any Credit Party fails to perform or observe any
term, covenant or agreement contained in any of Sections 4.1, 4.2(b), 4.3(a),
4.6(a)(i), 4.9, Article V or Article VI hereof or the Fee Letter; or
(d) Other Defaults. Any Credit Party fails to perform or observe any other
term, covenant or agreement contained in this Agreement or any other Loan
Document, and such default shall continue unremedied for a period of thirty (30)
days after the earlier to occur of (i) the date upon which a Responsible Officer
of any Credit Party becomes aware of such default and (ii) the date upon which
written notice thereof is given to the Borrower by the Agent or Required
Lenders; or
(e) Cross-Default, (i) Any Credit Party (x) fails to make any payment in
respect of any Indebtedness (other than the Obligations and the First Lien
Indebtedness) or Contingent Obligation (other than in respect of, or
constituting, First Lien Loan Obligations) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more than
$3,600,000 when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure
39
continues after the applicable grace or notice period, if any, specified in the
document relating thereto on the date of such failure; or (y) fails to perform
or observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness (other than First Lien Indebtedness) or Contingent Obligation
(other than in respect of, or constituting, First Lien Loan Obligations), if the
effect of such failure, event or condition is to cause, or to permit the holder
or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity (without regard to any
subordination terms with respect thereto), or such Contingent Obligation to
become payable or cash collateral in respect thereof to be demanded or (ii) any
Credit Party fails to perform or observe any condition or covenant, or any other
event shall occur or condition exist, under any agreement or instrument relating
to any First Lien Indebtedness, if the effect of such failure, event or
condition is to cause or result in such First Lien Indebtedness under the First
Lien Credit Agreement to be declared to be due and payable prior to its stated
maturity; or
(f) Insolvency; Voluntary Proceedings. The Borrower, individually, ceases
or fails, or the Credit Parties and their Subsidiaries on a consolidated basis,
cease or fail, to be Solvent, or any Credit Party: (i) generally fails to pay,
or admits in writing its inability to pay, its debts as they become due, subject
to applicable grace periods, if any, whether at stated maturity or otherwise;
(ii) voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against any Credit Party, or any writ, judgment, warrant of
attachment, execution or similar process, is issued or levied against a
substantial part of any such Person's Properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or fully bonded
within sixty (60) days after commencement, filing or levy; (ii) any Credit Party
admits the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law) is
ordered in any Insolvency Proceeding; or (iii) any Credit Party acquiesces in
the appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its Property or business; or
(h) Monetary Judgments. One or more judgments, non-interlocutory orders,
decrees or arbitration awards shall be entered against any one or more of the
Credit Parties involving in the aggregate a liability (to the extent not covered
by independent third-party insurance) as to any single or related series of
transactions, incidents or conditions, of $3,600,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of thirty
(30) days after the entry thereof; or
(i) Non-Monetary Judgments. One or more non-monetary judgments, orders or
decrees shall be rendered against any one or more of the Credit Parties which
has or
40
would reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect, and there shall be any period of ten (10) consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(j) Collateral. Any material provision of any Loan Document shall for any
reason cease to be valid and binding on or enforceable against any Credit Party
party thereto or any Credit Party shall so state in writing or bring an action
to limit its obligations or liabilities thereunder; or any Collateral Document
shall for any reason (other than pursuant to the terms thereof) cease to create
a valid security interest in the Collateral purported to be covered thereby or
such security interest shall for any reason (other than the failure of the
Second Lien Collateral Agent to take any action within its control) cease to be
a perfected and first priority security interest subject only to Permitted
Liens; or
(k) Ownership.
(i) (x) Prior to the earlier to occur of the consummation of the
Permitted Sale and the funding of the Incremental Loans, Sponsor at any
time fails to own beneficially, directly or indirectly, at least a majority
of the issued and outstanding voting Stock of Holdings free and clear of
all Liens, rights options, warrants or other similar agreements or
understandings, or, in any event, ceases to have the right to appoint and
cause to be elected members of the board of directors, or similar governing
body, of Holdings possessing votes constituting a majority of the votes of
all members of the board of directors or other similar governing body of
Holdings, (y) after the funding of the Incremental Loans in connection with
a Liquidity Event not constituting a Permitted Sale, if such funding occurs
in accordance with Section 1.12 and subsection 5.5(f) hereof, Sponsor
ceases to have the right to appoint and cause to be elected members of the
board of directors, or similar governing body, of Holdings possessing votes
constituting a majority of the votes of all members of the board of
directors or other similar governing body of Holdings, whether through
ownership of voting Stock or otherwise and (z) after the consummation of
the Permitted Sale, if the Permitted Sale occurs in accordance with the
terms of this Agreement, New Sponsor at any time fails to own beneficially,
directly or indirectly, a majority of the issued and outstanding voting
Stock of Holdings free and clear of all Liens, rights options, warrants or
other similar agreements or understandings, or in any event, ceases to have
the right to appoint and cause to be elected members of the board of
directors, or similar governing body, of Holdings possessing votes
constituting a majority of the votes of all members of the board of
directors or other similar governing body of Holdings; or
(ii) at any time, Holdings ceases to own one hundred percent (100%) of
the issued and outstanding Stock and Stock Equivalents of the Borrower,
free and clear of all Liens, rights, options, warrants or other similar
agreements or understandings, other than Liens in favor of the Second Lien
Collateral Agent, for
41
the benefit of the Second Lien Collateral Agent and Lenders and First Lien
Indebtedness Liens to the extent permitted under subsection 5.l(q) hereof.
(l) Invalidity of Subordination Provisions. The subordination provisions of
the Closing Date Intercreditor Agreement or any agreement or instrument
governing any Subordinated Indebtedness shall for any reason be revoked or
invalidated, or otherwise cease to be in full force and effect, or any Person
shall contest in any manner the validity or enforceability thereof or deny that
it has any further liability or obligation thereunder, or the Obligations, for
any reason shall not have the priority contemplated by this Agreement or such
subordination provisions.
7.2. Remedies. Upon the occurrence and during the continuance of any Event
of Default, the Agent may, and shall at the request of the Required Lenders:
(a) Reserved;
(b) declare all or any portion of the unpaid principal amount of the Second
Lien Term Loan, all interest accrued and unpaid thereon, and all other amounts
owing or payable hereunder or under any other Loan Document to be immediately
due and payable; without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by each Credit Party; and/or
(c) exercise, or direct the Second Lien Collateral Agent to exercise, on
behalf of itself and the Lenders all rights and remedies available to it, the
Second Lien Colalteral Agent and the Lenders under the Loan Documents or
applicable law;
provided, however, that upon the occurrence of any event specified in
subsections 7.1(f) or 7.1(g) above (in the case of clause (i) of subsection
7.1(g) upon the expiration of the sixty (60) day period mentioned therein), the
unpaid principal amount of the Second Lien Term Loan and all interest and other
amounts as aforesaid shall automatically become due and payable without further
act of the Agent or any Lender.
7.3. Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE VIII - THE AGENT
8.1. Appointment and Duties.
(a) Appointment of Agent. Each Lender hereby appoints GE Capital (together
with any successor Agent pursuant to Section 8.9) as the Agent hereunder and
authorizes the Agent to (i) execute and deliver the Loan Documents and accept
delivery thereof on its behalf from any Credit Party, (ii) take such action on
its behalf and to exercise all rights, powers and remedies and perform the
duties as are expressly delegated to the Agent under such Loan Documents and
(iii) exercise such powers as are reasonably incidental thereto.
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(b) Appointment of Second Lien Collateral Agent. Each Lender hereby
appoints Allied Capital Corporation (together with any successor Second Lien
Collateral Agent pursuant to Section 8.9) as the Second Lien Collateral Agent
hereunder and authorizes the Second Lien Collateral Agent to (i) execute and
deliver the Loan Documents and accept delivery thereof on its behalf from any
Credit Party, (ii) take such action on its behalf and to exercise all rights,
powers and remedies and perform the duties as are expressly delegated to the
Second Lien Collateral Agent under such Loan Documents and (iii) exercise such
powers as are reasonably incidental thereto. Without limiting the generality of
the foregoing, each Lender acknowledged that it has received a copy of the
Closing Date Intercreditor Agreement, consents to Second Lien Collateral Agent's
and Agent's execution of the Closing Date Intercreditor Agreement on behalf of
such Lender and agrees to be bound by the terms and provisions of the Closing
Date Intercreditor Agreement.
(c) Duties as Agent. Without limiting the generality of clause (a) above,
the Agent shall have the sole and exclusive right and authority (to the
exclusion of the Lenders), and is hereby authorized, to (i) act as the
disbursing and collecting agent for the Lenders with respect to all payments and
collections arising in connection with the Loan Documents (including in any
proceeding described in subsection 7.1(g) or any other bankruptcy, insolvency or
similar proceeding), and each Person making any payment in connection with any
Loan Document to any Lender is hereby authorized to make such payment to the
Agent, (ii) file and prove claims and file other documents necessary or
desirable to allow the claims of the Lenders with respect to any Obligation in
any proceeding described in subsection 7.1(g) or any other bankruptcy,
insolvency or similar proceeding (but not to vote, consent or otherwise act on
behalf of such Person) and (iii) execute any amendment, consent or waiver under
the Loan Documents on behalf of any Lender that has consented in writing to such
amendment, consent or waiver.
(d) Duties as Second Lien Collateral Agent. Without limiting the generality
of clause (b) above, Second Lien Collateral Agent shall have the sole and
exclusive right and authority (to the exclusion of the Lenders) and is hereby
authorized, to (i) act as collateral agent for each Lender for purposes of the
perfection of all Liens created by such agreements and all other purposes stated
therein, (ii) manage, supervise and otherwise deal with the Collateral, to the
extent permitted to do so pursuant to the terms of the Closing Date
Intercreditor Agreement, (iii) take such other action as is necessary or
desirable to maintain the perfection and priority of the Liens created or
purported to be created by the Loan Documents and (iv) except as may be
otherwise specified in any Loan Document, exercise all remedies given to the
Second Lien Collateral Agent and the Lenders with respect to the Collateral,
whether under the Loan Documents, applicable Requirements of Law or otherwise;
provided, however, that the Second Lien Collateral Agent hereby appoints,
authorizes and directs each Lender to act as collateral sub-agent for the Second
Lien Collateral Agent and the Lenders for purposes of the perfection of all
Liens with respect to the Collateral, including any deposit account maintained
by a Credit Party with, and cash and Cash Equivalents held by, such Lender and
may further authorize and direct the Lenders to take further actions as
collateral sub-agents for purposes of enforcing such Liens or otherwise to
transfer the Collateral subject thereto to
43
the Second Lien Collateral Agent, and each Lender hereby agrees to take such
further actions to the extent, and only to the extent, so authorized and
directed.
(e) Limited Duties. Under the Loan Documents, the Agent and the Second Lien
Collateral Agent (i) are acting solely on behalf of the Lenders, with duties
that are entirely administrative in nature, notwithstanding the use of the
defined term "Agent" and "Second Lien Collateral Agent" the terms "agent",
"Agent", "collateral agent" and "Second Lien Collateral Agent" and similar terms
in any Loan Document to refer to the Agent and/or the Second Lien Collateral
Agent, which terms are used for title purposes only, (ii) are not assuming any
obligation under any Loan Document other than as expressly set forth therein or
any role as agent, fiduciary or trustee of or for any Lender or any other Person
and (iii) shall have no implied functions, responsibilities, duties, obligations
or other liabilities under any Loan Document, and each Lender hereby waives and
agrees not to assert any claim against the Agent or the Second Lien Collateral
Agent based on the roles, duties and legal relationships expressly disclaimed in
clauses (i) through (iii) above.
8.2. Binding Effect. Each Lender agrees that (i) any action taken by the
Agent or the Required Lenders (or, if expressly required hereby, a greater
proportion of the Lenders) in accordance with the provisions of the Loan
Documents, (ii) any action taken by the Agent in reliance upon the instructions
of Required Lenders (or, where so required, such greater proportion) and (iii)
the exercise by the Agent or the Required Lenders (or, where so required, such
greater proportion) of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders.
8.3. Use of Discretion
(a) No Action without Instructions. Neither the Agent nor the Second Lien
Collateral Agent shall be required to exercise any discretion or take, or to
omit to take, any action, including with respect to enforcement or collection,
except any action it is required to take or omit to take (i) under any Loan
Document or (ii) pursuant to instructions from the Required Lenders (or, where
expressly required by the terms of this Agreement, a greater proportion of the
Lenders).
(b) Right Not to Follow Certain Instructions. Notwithstanding clause (a)
above, neither the Agent nor the Second Lien Collateral Agent shall be required
to take, or to omit to take, any action (i) unless, upon demand, the Agent or
the Second Lien Collateral Agent receives an indemnification satisfactory to it
from the Lenders (or, to the extent applicable and acceptable to the Agent or
the Second Lien Collateral Agent, respectively, any other Person) against all
Liabilities that, by reason of such action or omission, may be imposed on,
incurred by or asserted against the Agent, the Second Lien Collateral Agent or
any Related Person thereof or (ii) that is, in the opinion of the Agent, the
Second Lien Collateral Agent or either of their counsel, contrary to any Loan
Document or applicable Requirement of Law.
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8.4. Delegation of Rights and Duties. The Agent and the Second Lien
Collateral Agent may, upon any term or condition it specifies, delegate or
exercise any of its rights, powers and remedies under, and delegate or perform
any of its duties or any other action with respect to, any Loan Document by or
through any trustee, co-agent, employee, attorney-in-fact and any other Person
(including any Lender). Any such Person shall benefit from this Article VIII to
the extent provided by the Agent or the Second Lien Collateral Agemtn.
8.5. Reliance and Liability.
(a) Each of the Agent and the Second Lien Collateral Agent may, without
incurring any liability hereunder, (i) treat the payee of any Note as its holder
until such Note has been assigned in accordance with Section 9.9, (ii) rely on
the Register to the extent set forth in Section 1.4, (iii) consult with any of
its Related Persons and, whether or not selected by it, any other advisors,
accountants and other experts (including advisors to, and accountants and
experts engaged by, any Credit Party) and (iv) rely and act upon any document
and information (including those transmitted by Electronic Transmission) and any
telephone message or conversation, in each case believed by it to be genuine and
transmitted, signed or otherwise authenticated by the appropriate parties.
(b) None of Agent, Second Lien Collateral Agent and their Related Persons
shall be liable for any action taken or omitted to be taken by any of them under
or in connection with any Loan Document, and each Lender, Holdings, the Borrower
and each other Credit Party hereby waive and shall not assert (and each of
Holdings and the Borrower shall cause each other Credit Party to waive and agree
not to assert) any right, claim or cause of action based thereon, except to the
extent of liabilities resulting primarily from the gross negligence or willful
misconduct of the Agent, the Second Lien Collateral Agent or, as the case may
be, such Related Person (each as determined in a final, non-appealable judgment
by a court of competent jurisdiction) in connection with the duties expressly
set forth herein. Without limiting the foregoing, the Agent and the Second Lien
Collateral Agent:
(i) shall not be responsible or otherwise incur liability for any
action or omission taken in reliance upon the instructions of the Required
Lenders or for the actions or omissions of any of its Related Persons
selected with reasonable care (other than employees, officers and directors
of the Agent, when acting on behalf of the Agent or employees, officers and
directors of the Second Lien Collateral Agent, when acting on behalf of the
Second Lien Collateral Agent);
(ii) shall not be responsible to any Lender or other Person for the
due execution, legality, validity, enforceability, effectiveness,
genuineness, sufficiency or value of, or the attachment, perfection or
priority of any Lien created or purported to be created under or in
connection with, any Loan Document;
(iii) makes no warranty or representation, and shall not be
responsible, to any Lender or other Person for any statement, document,
information,
45
representation or warranty made or furnished by or on behalf of any Credit
Party or any Related Person of any Credit Party in connection with any Loan
Document or any transaction contemplated therein or any other document or
information with respect to any Credit Party, whether or not transmitted or
(except for documents expressly required under any Loan Document to be
transmitted to the Lenders) omitted to be transmitted by the Agent or the
Second Lien Collateral Agent, including as to completeness, accuracy, scope
or adequacy thereof, or for the scope, nature or results of any due
diligence performed by the Agent or the Second Lien Collateral Agent in
connection with the Loan Documents; and
(iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any provision of any Loan Document, whether
any condition set forth in any Loan Document is satisfied or waived, as to
the financial condition of any Credit Party or as to the existence or
continuation or possible occurrence or continuation of any Default or Event
of Default and shall not be deemed to have notice or knowledge of such
occurrence or continuation unless it has received a notice from the
Borrower or any Lender describing such Default or Event of Default clearly
labeled "notice of default" (in which case the Agent shall promptly give
notice of such receipt to all Lenders);
and, for each of the items set forth in clauses (i) through (iv) above, each
Lender, Holdings and the Borrower hereby waives and agrees not to assert (and
each of Holdings and the Borrower shall cause each other Credit Party to waive
and agree not to assert) any right, claim or cause of action it might have
against the Agent or the Second Lien Collateral Agent based thereon.
8.6. Agents Individually.
(a) The Agent and its Affiliates may make loans and other extensions of
credit to, acquire Stock and Stock Equivalents of, engage in any kind of
business with, any Credit Party or Affiliate thereof as though it were not
acting as Agent and may receive separate fees and other payments therefor. To
the extent the Agent or any of its Affiliates makes any Loan or otherwise
becomes a Lender hereunder, it shall have and may exercise the same rights and
powers hereunder and shall be subject to the same obligations and liabilities as
any other Lender and the terms "Lender" and "Required Lender" and any similar
terms shall, except where otherwise expressly provided in any Loan Document,
include, without limitation, the Agent or such Affiliate, as the case may be, in
its individual capacity as Lender or as one of the Required Lenders.
(b) The Second Lien Collateral Agent and its Affiliates may make loans and
other extensions of credit to, acquire Stock and Stock Equivalents of, engage in
any kind of business with, any Credit Party or Affiliate thereof as though it
were not acting as Second Lien Collateral Agent and may receive separate fees
and other payments therefor. To the extent the Second Lien Collateral Agent or
any of its Affiliates makes any Loan or otherwise becomes a Lender hereunder, it
shall have and may exercise the same rights and powers hereunder and shall be
subject to the same obligations and liabilities as any other Lender and the
terms "Lender" and "Required Lender" and any similar terms shall,
46
except where otherwise expressly provided in any Loan Document, include, without
limitation, the Second Lien Collateral Agent or such Affiliate, as the case may
be, in its individual capacity as Lender or as one of the Required Lenders.
8.7. Lender Credit Decision. Each Lender acknowledges that it shall,
independently and without reliance upon the Agent, the Second Lien Agent, any
Lender or any of their Related Persons or upon any document (including any
offering and disclosure materials in connection with the syndication of the
Second Lien Term Loan) solely or in part because such document was transmitted
by the Agent or any of its Related Persons, conduct its own independent
investigation of the financial condition and affairs of each Credit Party and
make and continue to make its own credit decisions in connection with entering
into, and taking or not taking any action under, any Loan Document or with
respect to any transaction contemplated in any Loan Document, in each case based
on such documents and information as it shall deem appropriate. Except for
documents expressly required by any Loan Document to be transmitted by the Agent
to the Lenders, neither the Agent nor the Second Lien Collateral Agent shall
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 any Credit Party or any Affiliate of
any Credit Party that may come in to the possession of the Agent or any of its
Related Persons.
8.8. Expenses; Indemnities.
(a) Each Lender agrees to reimburse the Agent, the Second Lien Collateral
Agent and each of their Related Persons (to the extent not reimbursed by any
Credit Party) promptly upon demand, severably and ratably, of any costs and
expenses (including fees, charges and disbursements of financial, legal and
other advisors and Other Taxes paid in the name of, or on behalf of, any Credit
Party) that may be incurred by the Agent, Second Lien Collateral Agent or any of
their Related Persons in connection with the preparation, syndication,
execution, delivery, administration, modification, consent, waiver or
enforcement (whether through negotiations, through any work-out, bankruptcy,
restructuring or other legal or other proceeding or otherwise) of, or legal
advice in respect of its rights or responsibilities under, any Loan Document.
(b) Each Lender further agrees to indemnify the Agent, the Second Lien
Collateral Agent and each of their Related Persons (to the extent not reimbursed
by any Credit Party), severably and ratably, from and against Liabilities
(including taxes, interests and penalties imposed for not properly withholding
or backup withholding on payments made to on or for the account of any Lender)
that may be imposed on, incurred by or asserted against the Agent, Second Lien
Collateral Agent or any of their Related Persons in any matter relating to or
arising out of, in connection with or as a result of any Loan Document, any
Related Document or any other act, event or transaction related, contemplated in
or attendant to any such document, or, in each case, any action taken or omitted
to be taken by the Agent, Second Lien Collateral Agent or any of their Related
Persons under or with respect to any of the foregoing; provided, however, that
no Lender shall be liable to the Agent, Second Lien Collateral Agent or any of
their Related Persons
47
to the extent such liability has resulted primarily from the gross negligence or
willful misconduct of the Agent, the Second Lien Collateral Agent or, as the
case may be, such Related Person, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order.
8.9. Resignation of Agents.
(a) The Agent and the Second Lien Collateral Agent may resign at any time
by delivering notice of such resignation to the Lenders and the Borrower,
effective on the date set forth in such notice or, if no such date is set forth
therein, upon the date such notice shall be effective. If the Agent or the
Second Lien Collateral Agent, as applicable, delivers any such notice, the
Required Lenders shall have the right to appoint a successor Agent or Second
Lien Collateral Agent, as applicable. If, within 30 days after the retiring
Agent or Second Lien Collateral Agent having given notice of resignation, no
successor Agent or Second Lien Collateral Agent has been appointed by the
Required Lenders that has accepted such appointment, then the retiring Agent or
Second Lien Collateral Agent may, on behalf of the Lenders, appoint a successor
Agent or Second Lien Collateral Agent from among the Lenders. Each appointment
under this clause (a) shall be subject to the prior consent of the Borrower,
which may not be unreasonably withheld but shall not be required during the
continuance of a Default.
(b) Effective immediately upon its resignation, (i) the retiring Agent or
Second Lien Collateral Agent shall be discharged from its duties and obligations
under the Loan Documents, (ii) the Lenders shall assume and perform all of the
duties of the Agent or Second Lien Collateral Agent until a successor Agent or
Second Lien Collateral Agent shall have accepted a valid appointment hereunder,
(iii) the retiring Agent or Second Lien Collateral Agent and its respective
Related Persons shall no longer have the benefit of any provision of any Loan
Document other than with respect to any actions taken or omitted to be taken
while such retiring Agent or Second Lien Collateral Agent was, or because such
Agent or Second Lien Collateral Agent had been, validly acting as Agent or
Second Lien Collateral Agent under the Loan Documents and (iv) subject to its
rights under Section 8.3, the retiring Agent or Second Lien Collateral Agent
shall take such action as may be reasonably necessary to assign to the successor
Agent or Second Lien Collateral Agent its rights as Agent or Second Lien
Collateral Agent under the Loan Documents. Effective immediately upon its
acceptance of a valid appointment as Agent or Second Lien Collateral Agent, a
successor Agent or Second Lien Collateral Agent shall succeed to, and become
vested with, all the rights, powers, privileges and duties of the retiring Agent
under the Loan Documents.
8.10. Release of Collateral or Guarantors. Each Lender hereby consents to
the release and hereby directs the Agent and the Second Lien Collateral Agent to
release (or, in the case of clause (b)(ii) below, release or subordinate) the
following:
(a) any Subsidiary of the Borrower from its guaranty of any Obligation if
all of the Stock and Stock Equivalents of such Subsidiary owned by any Credit
Party are sold or transferred in a transaction permitted under the Loan
Documents (including pursuant to a waiver or consent), to the extent that, after
giving effect to such transaction,
48
such Subsidiary would not be required to guaranty any Obligations pursuant to
Section 4.13; and
(b) any Lien held by the Second Lien Collateral Agent for the benefit of
the Secured Parties against (i) any Collateral that is sold, transferred,
conveyed or otherwise disposed of by a Credit Party in a transaction permitted
by the Loan Documents (including pursuant to a valid waiver or consent), to the
extent all Liens required to be granted in such Collateral pursuant to
Section 4.13 after giving effect to such transaction have been granted, (ii) any
property subject to a Lien permitted hereunder in reliance upon subsection
5.1(h) or (i), (iii) all of the Collateral and all Credit Parties, upon (A)
payment and satisfaction in full of the Second Lien Term Loan and all other
Obligations under the Loan Documents that the Agent has been notified in writing
are then due and payable, (B) deposit of cash collateral with respect to all
contingent Obligations in amounts and on terms and conditions and with parties
satisfactory to the Agent and each Indemnitee that is owed such Obligations and
(C) to the extent requested by the Agent, receipt by Agent and the Lenders of
liability releases from the Credit Parties each in form and substance acceptable
to the Agent and (iv) any Collateral encumbered by a Lien held by Second Lien
Collateral Agent that is required to be released pursuant to the terms of the
Closing Date Intercreditor Agreement.
Each Lender hereby directs the Agent and the Second Lien Collateral Agent, and
the Agent and the Second Lien Collateral Agent hereby agree, upon receipt of
reasonable advance notice from the Borrower, to execute and deliver or file such
documents and to perform other actions reasonably necessary to release the
guaranties and Liens when and as directed in this Section 8.10.
8.11. Closing Date Intercreditor Agreement. Each of the Agent and the
Second Lien Collateral Agent shall promptly provide to each of the Lenders a
copy of each notice it receives from any party to the Closing Date Intercreditor
Agreement, which notice was delivered to the Agent or the Second Lien Collateral
Agent pursuant to the terms thereof.
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ARTICLE IX - MISCELLANEOUS
9.1. Amendments and Waivers.
(a) No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent with respect to any departure by any Credit Party
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders, the Borrower and acknowledged by the Agent, and then such
waiver shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Lenders directly affected
thereby, the Borrower and acknowledged by the Agent, do any of the following:
(i) increase or extend the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to subsection 7.2(a));
(ii) postpone or delay any date fixed for, or waive, any scheduled
installment of principal or any payment of interest, fees or other amounts
due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(iii) reduce the principal of, or the rate of interest specified
herein or the amount of interest payable in cash specified herein on the
Second Lien Term Loan, or of any fees or other amounts payable hereunder or
under any other Loan Document;
(iv) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Second Lien Term Loan which shall be
required for the Lenders or any of them to take any action hereunder;
(v) amend this Section 9.1 or the definition of Required Lenders or
any provision providing for consent or other action by all Lenders; or
(vi) discharge any Credit Party from its respective payment
Obligations under the Loan Documents, or release all or substantially all
of the Collateral, except as otherwise may be provided in this Agreement or
the other Loan Documents;
it being agreed that all Lenders shall be deemed to be directly affected by an
amendment or waiver of the type described in the preceding clauses (iv), (v) and
(vi).
(b) No amendment, waiver or consent shall, unless in writing and signed by
the Agent and the Second Lien Collateral Agent, in addition to the Required
Lenders, all the Lenders affected thereby or all the Lenders, as the case may
be, affect the rights or duties of the Agent or the Second Lien Collateral Agent
under this Agreement or any other Loan Document.
(c) Notwithstanding the foregoing provisions of this Section 9.1, in the
event the Incremental Second Lien Term Loan is made in accordance with the
provisions of
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Section 1.12, Agent and such Lenders and other Persons making such Incremental
Second Lien Term Loan shall be permitted, on behalf of all Lenders (and are
hereby authorized by all such Lenders), to enter into amendments to this
Agreement and all other Loan Documents to provide for the making of such
Incremental Second Lien Term Loan on the terms set forth in Section 1.12. In no
event shall the provisions of this subsection 9.1(c) obligate the Agent or any
Lender to make the Incremental Second Lien Term Loan.
9.2. Notices.
(a) Addresses. All notices, demands, requests, directions and other
communications required or expressly authorized to be made by this Agreement
shall, whether or not specified to be in writing but unless otherwise expressly
specified to be given by any other means, be given in writing and (i) addressed
to the address set forth on the applicable signature page hereto, (ii) posted to
Intralinks(R) (to the extent such system is available and set up by or at the
direction of the Agent prior to posting) in an appropriate location by uploading
such notice, demand, request, direction or other communication to www,
intralinks .com, faxing it to 000-000-0000 with an appropriate bar-code fax
coversheet or using such other means of posting to Intralinks(R) as may be
available and reasonably acceptable to the Agent prior to such posting, (iii)
posted to any other E-System set up by or at the direction of Agent or (iv)
addressed to such other address as shall be notified in writing (A) in the case
of the Borrower, the Second Lien Collateral Agent and the Agent, to the other
parties hereto and (B) in the case of all other parties, to the Borrower, the
Second Lien Collateral Agent and the Agent. Transmission by electronic mail
(including E-Fax, even if transmitted to the fax numbers set forth above) shall
not be sufficient or effective to transmit any such notice under this clause
(a).
(b) Effectiveness. All communications described in clause (a) above and all
other notices, demands, requests and other communications made in connection
with this Agreement shall be effective and be deemed to have been received (i)
if delivered by hand, upon personal delivery, (ii) if delivered by overnight
courier service, one (1) Business Day after delivery to such courier service,
(iii) if delivered by mail, when deposited in the mails, (iv) if delivered by
facsimile (other than to post to an E-System pursuant to clause (a)(ii) or
(a)(iii) above), upon sender's receipt of confirmation of proper transmission,
and (v) if delivered by posting to any E-System, on the later of the date of
such posting and the date access to such posting is given to the recipient
thereof in accordance with the standard procedures applicable to such E-System;
provided, however, that no communications to Agent pursuant to Article I shall
be effective until received by Agent.
(c) Each Lender shall notify the Agent in writing of any changes in the
address to which notices to such Lender should be directed, of addresses of its
Lending Office, of payment instructions in respect of all payments to be made to
it hereunder and of such other administrative information as the Agent shall
reasonably request.
9.3. Electronic Transmissions.
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(a) Authorization. Subject to the provisions of Section 9.2(a), each of
Agent, Second Lien Collateral Agent, Lenders, each Credit Party and each of
their Related Persons, is authorized (but not required) to transmit, post or
otherwise make or communicate, in its sole discretion, Electronic Transmissions
in connection with any Loan Document and the transactions contemplated therein.
Each party hereto acknowledges and agrees that the use of Electronic
Transmissions is not necessarily secure and that there are risks associated with
such use, including risks of interception, disclosure and abuse and each
indicates it assumes and accepts such risks by hereby authorizing the
transmission of Electronic Transmissions.
(b) Signatures. Subject to the provisions of Section 9.2(a), (i)(A) no
posting to any E-System shall be denied legal effect merely because it is made
electronically, (B) each E-Signature on any such posting shall be deemed
sufficient to satisfy any requirement for a "signature" and (C) each such
posting shall be deemed sufficient to satisfy any requirement for a "writing",
in each case including pursuant to any Loan Document, any applicable provision
of any UCC, the federal Uniform Electronic Transactions Act, the Electronic
Signatures in Global and National Commerce Act and any substantive or procedural
Requirement of Law governing such subject matter, (ii) each such posting that is
not readily capable of bearing either a signature or a reproduction of a
signature may be signed, and shall be deemed signed, by attaching to, or
logically associating with such posting, an E-Signature, upon which Agent,
Second Lien Collateral Agent, each Lender and each Credit Party may rely and
assume the authenticity thereof, (iii) each such posting containing a signature,
a reproduction of a signature or an E-Signature shall, for all intents and
purposes, have the same effect and weight as a signed paper original and (iv)
each party hereto or beneficiary hereto agrees not to contest the validity or
enforceability of any posting on any E-System or E- Signature on any such
posting under the provisions of any applicable Requirement of Law requiring
certain documents to be in writing or signed; provided, however, that nothing
herein shall limit such party's or beneficiary's right to contest whether any
posting to any E-System or E-Signature has been altered after transmission.
(c) Separate Agreements. All uses of an E-System shall be governed by and
subject to, in addition to Section 9.2 and this Section 9.3, separate terms and
conditions posted or referenced in such E-System and related Contractual
Obligations executed by Agent and Credit Parties in connection with the use of
such E-System.
(d) LIMITATION OF LIABILITY. ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS
SHALL BE PROVIDED "AS IS" AND "AS AVAILABLE". NONE OF AGENT, SECOND LIEN
COLLATERAL AGENT, ANY LENDER OR ANY OF THEIR RELATED PERSONS WARRANTS THE
ACCURACY, ADEQUACY OR COMPLETENESS OF ANY E-SYSTEMS OR ELECTRONIC TRANSMISSION
AND DISCLAIMS ALL LIABILITY FOR ERRORS OR OMISSIONS THEREIN. NO WARRANTY OF ANY
KIND IS MADE BY AGENT, SECOND LIEN COLLATERAL AGENT, ANY LENDER OR ANY OF THEIR
RELATED PERSONS IN CONNECTION WITH ANY E-SYSTEMS OR ELECTRONIC COMMUNICATION,
INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-
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INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE
DEFECTS. Each of Borrower, each other Credit Party executing this Agreement and
each Lender agrees that Agent has no responsibility for maintaining or providing
any equipment, software, services or any testing required in connection with any
Electronic Transmission or otherwise required for any E-System.
9.4. No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Agent, Second Lien Collateral Agent or any
Lender, any right, remedy, power or privilege hereunder, 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. No course of
dealing between any Credit Party, any Affiliate of any Credit Party, the Agent,
Second Lien Collateral Agent or any Lender shall be effective to amend, modify
or discharge any provision of this Agreement or any of the other Loan Documents.
9.5. Costs and Expenses. Any action taken by any Credit Party under or with
respect to any Loan Document, even if required under any Loan Document or at the
request of Agent, Second Lien Collateral Agent or Required Lenders, shall be at
the expense of such Credit Party, and none of Agent, Second Lien Collateral
Agent or any Lender shall be required under any Loan Document to reimburse any
Credit Party or any Subsidiary of any Credit Party therefor except as expressly
provided therein. In addition, the Borrower agrees to pay or reimburse upon
demand (a) the Agent and the Second Lien Collateral Agent for all reasonable
out-of-pocket costs and expenses incurred by it or any of its Related Persons,
in connection with the investigation, development, preparation, negotiation,
syndication, execution, interpretation or administration of, any modification of
any term of or termination of, any Loan Document, any commitment or proposal
letter therefor, any other document prepared in connection therewith or the
consummation and administration of any transaction contemplated therein, in each
case including Attorney Costs to the Agent, (b) the Agent and the Second Lien
Collateral Agent for all reasonable costs and expenses incurred by it or any of
its Related Persons in connection with internal audit reviews, field
examinations and Collateral examinations (which shall be reimbursed, in addition
to the out-of-pocket costs and expenses of such examiners, at the per diem rate
per individual charged by the Agent for its examiners), (c) the Agent, the
Second Lien Collateral Agent and their Related Persons for all costs and
expenses incurred in connection with (i) any refinancing or restructuring of the
credit arrangements provided hereunder in the nature of a "work-out", (ii) the
enforcement or preservation of any right or remedy under any Loan Document, any
Obligation, with respect to the Collateral or any other related right or remedy
or (iii) the commencement, defense, conduct of, intervention in, or the taking
of any other action with respect to, any proceeding (including any bankruptcy or
insolvency proceeding) related to any Credit Party, any Subsidiary of any Credit
Party, Loan Document, Obligation or Related Transaction (or the response to and
preparation for any subpoena or request for document production relating
thereto), including Attorney Costs and (d) fees and disbursements of Attorney
Costs of one law firm on behalf of all Lenders (other than
53
Agent and Second Lien Collateral Agent) incurred in connection with any of the
matters referred to in clause (c) above.
9.6. Indemnity.
(a) Each Credit Party agrees to indemnify, hold harmless and defend Agent,
Second Lien Collateral Agent and each Lender and each of their respective
Related Persons (each such Person being an "Indemnitee") from and against all
Liabilities (including brokerage commissions, fees and other compensation) that
may be imposed on, incurred by or asserted against any such Indemnitee in any
matter relating to or arising out of, in connection with or as a result of (i)
any Loan Document, any Related Agreement, any Obligation (or the repayment
thereof), the use or intended use of the proceeds of the Second Lien Term Loan
or any securities filing of, or with respect to, any Credit Party, (ii) any
commitment letter, proposal letter or term sheet with any Person or any
Contractual Obligation, arrangement or understanding with any broker, finder or
consultant, in each case entered into by or on behalf of any Credit Party or any
Affiliate of any of them in connection with any of the foregoing and any
Contractual Obligation entered into in connection with any E-Systems or other
Electronic Transmissions, (iii) any actual or prospective investigation,
litigation or other proceeding, whether or not brought by any such Indemnitee or
any of its Related Persons, any holders of securities or creditors (and
including attorneys' fees in any case), whether or not any such Indemnitee,
Related Person, holder or creditor is a party thereto, and whether or not based
on any securities or commercial law or regulation or any other Requirement of
Law or theory thereof, including common law, equity, contract, tort or otherwise
or (iv) any other act, event or transaction related, contemplated in or
attendant to any of the foregoing (collectively, the "Indemnified Matters");
provided, however, that no Credit Party shall have any liability under this
Section 9.6 to any Indemnitee with respect to any Indemnified Matter, and no
Indemnitee shall have any liability with respect to any Indemnified Matter other
than (to the extent otherwise liable), to the extent such liability has resulted
primarily from the gross negligence or willful misconduct of such Indemnitee, as
determined by a court of competent jurisdiction in a final non-appealable
judgment or order. Furthermore, each of Borrower and each other Credit Party
executing this Agreement waives and agrees not to assert against any Indemnitee,
and shall cause each other Credit Party to waive and not assert against any
Indemnitee, any right of contribution with respect to any Liabilities that may
be imposed on, incurred by or asserted against any Related Person.
(b) Without limiting the foregoing, "Indemnified Matters" includes all
Environmental Liabilities, including those arising from, or otherwise involving,
any property of any Credit Party or any Related Person of any Credit Party or
any actual, alleged or prospective damage to property or natural resources or
harm or injury alleged to have resulted from any Release of Hazardous Materials
on, upon or into such property or natural resource or any property on or
contiguous to any real property of any Credit Party or any Related Person or any
Credit Party, whether or not, with respect to any such Environmental
Liabilities, any Indemnitee is a mortgagee pursuant to any leasehold mortgage, a
mortgagee in possession, the successor-in-interest to any Credit Party or any
Related Person of any Credit Party or the owner, lessee or operator of any
property of any
54
Related Person through any foreclosure action, in each case except to the extent
such Environmental Liabilities (i) are incurred solely following foreclosure by
Agent or following Agent or any Lender having become the successor-in-interest
to any Credit Party or any Related Person of any Credit Party and (ii) are
attributable solely to acts of such Indemnitee.
9.7. Marshaling; Payments Set Aside. None of the Agent, the Second Lien
Collateral Agent or any Lender shall be under any obligation to marshal any
property in favor of any Credit Party or any other Person or against or in
payment of any Obligation. To the extent that the Agent, Second Lien Collateral
Agent or any Lender receives a payment from Borrower, from any other Credit
Party, from the proceeds of the Collateral, from the exercise of its rights of
setoff, any enforcement action or otherwise, and such payment is subsequently,
in whole or in part, invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party, then
to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and all Liens, rights and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not
occurred.
9.8. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that any assignment by any Lender shall be
subject to the provisions of Section 9.9 hereof, and provided further that the
Borrower may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Agent and each Lender.
9.9. Assignments and Participations; Binding Effect.
(a) This Agreement shall become effective when it shall have been executed
by Holdings, the Borrower, the other Credit Parties signatory hereto, Second
Lien Collateral Agent and the Agent and when the Agent shall have been notified
by each Lender that such Lender has executed it. Thereafter, it shall be binding
upon and inure to the benefit of, but only to the benefit of, Holdings, the
Borrower, the other Credit Parties hereto (in each case except for Article
VIII), the Agent, Second Lien Collateral Agent, each Lender and, in each case,
their respective successors and permitted assigns. Except as expressly provided
in any Loan Document (including in Section 8.9), none of Holdings, the Borrower,
any other Credit Party, Second Lien Collateral Agent or the Agent shall have the
right to assign any rights or obligations hereunder or any interest herein.
(b) Each Lender may sell, transfer, negotiate or assign (a "Sale") all or a
portion of its rights and obligations hereunder (including all or a portion of
its Second Lien Term Loan Commitment and its rights and obligations with respect
to the Second Lien Term Loan) to (i) any existing Lender, (ii) any Affiliate or
Approved Fund of any existing Lender or (iii) any other Person acceptable (which
acceptance shall not be unreasonably withheld or delayed) to the Agent and, as
long as no Event of Default is continuing the Borrower; provided, however, that
(x) such Sales must be ratable among the obligations owing to and owed by such
Lender with respect to the Second Lien Term
55
Loan and (y) the aggregate outstanding principal amount (determined as of the
effective date of the applicable Assignment) of the portion of the Second Lien
Term Loan subject to any such Sale shall be in a minimum amount of $1,000,000,
unless such Sale is made to an existing Lender or an Affiliate or Approved Fund
of any existing Lender, is of the assignor's (together with its Affiliates and
Approved Funds) entire interest in such Facility or is made with the prior
consent of the Borrower and the Agent; provided that, the consent of Borrower
shall not be required at any time that an Event of Default has occurred and is
continuing.
(c) The parties to each Sale made in reliance on clause (b) above (other
than those described in clause (e) or (f) below) shall execute and deliver to
the Agent (which shall keep a copy thereof) an Assignment, together with any
existing Note subject to such Sale (or any affidavit of loss therefor acceptable
to the Agent), any tax forms required to be delivered pursuant to Section 10.1
and payment by the assignee of an assignment fee in the amount of $3,500;
provided that, no assignment fee shall be payable in connection with an
assignment to an Affiliate or an Approved Fund. Upon receipt of all the
foregoing, and conditioned upon such receipt and upon the Agent consenting to
such Assignment (if required), from and after the effective date specified in
such Assignment, the Agent shall record or cause to be recorded in the Register
the information contained in such Assignment.
(d) Effective upon the entry of such record in the Register, (i) such
assignee shall become a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to such assignee
pursuant to such Assignment, shall have the rights and obligations of a Lender,
(ii) any applicable Note shall be transferred to such assignee through such
entry and (iii) the assignor thereunder shall, to the extent that rights and
obligations under this Agreement have been assigned by it pursuant to such
Assignment, relinquish its rights (except for those surviving the termination of
the Commitments and the payment in full of the Obligations) and be released from
its obligations under the Loan Documents, other than those relating to events or
circumstances occurring prior to such assignment (and, in the case of an
Assignment covering all or the remaining portion of an assigning Lender's rights
and obligations under the Loan Documents, such Lender shall cease to be a party
hereto).
(e) In addition to the other rights provided in this Section 9.9, each
Lender may grant a security interest in, or otherwise assign as collateral, any
of its rights under this Agreement, whether now owned or hereafter acquired
(including rights to payments of principal or interest on the Second Lien Term
Loan), to (A) any federal reserve bank (pursuant to Regulation A of the Federal
Reserve Board), without notice to the Agent or (B) any holder of, or trustee for
the benefit of the holders of, such Lender's Indebtedness or equity securities,
without notice to the Agent; provided, however, that no such holder or trustee,
whether because of such grant or assignment or any foreclosure thereon (unless
such foreclosure is made through an assignment in accordance with clause (b)
above), shall be entitled to any rights of such Lender hereunder and no such
Lender shall be relieved of any of its obligations hereunder.
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(f) In addition to the other rights provided in this Section 9.9, each
Lender may, (x) with notice to the Agent, grant to an SPV the option to make all
or any part of the Second Lien Term Loan that such Lender would otherwise be
required to make hereunder (and the exercise of such option by such SPV and the
making of the Second Lien Term Loan pursuant thereto shall satisfy the
obligation of such Lender to make the Second Lien Term Loan hereunder) and such
SPV may assign to such Lender the right to receive payment with respect to any
Obligation and (y) without notice to or consent from the Agent or the Borrower,
sell participations to one or more Persons in or to all or a portion of its
rights and obligations under the Loan Documents (including all its rights and
obligations with respect to the Second Lien Term Loan); provided, however, that,
whether as a result of any term of any Loan Document or of such grant or
participation, (i) no such SPV or participant shall have a commitment, or be
deemed to have made an offer to commit, to make any portion of the Second Lien
Term Loan hereunder, and, except as provided in the applicable option agreement,
none shall be liable for any obligation of such Lender hereunder, (ii) such
Lender's rights and obligations, and the rights and obligations of the Credit
Parties and the Secured Parties towards such Lender, under any Loan Document
shall remain unchanged and each other party hereto shall continue to deal solely
with such Lender, which shall remain the holder of the Obligations in the
Register, except that (A) each such participant and SPV shall be entitled to the
benefit of Article X, but, with respect to Section 10.1, only to the extent such
participant or SPV delivers the tax forms such Lender is required to collect
pursuant to subsection 10.1(f) and then only to the extent of any amount to
which such Lender would be entitled in the absence of any such grant or
participation and (B) each such SPV may receive other payments that would
otherwise be made to such Lender with respect to the portion of the Second Lien
Term Loan funded by such SPV to the extent provided in the applicable option
agreement and set forth in a notice provided to the Agent by such SPV and such
Lender, provided, however, that in no case (including pursuant to clause (A) or
(B) above) shall an SPV or participant have the right to enforce any of the
terms of any Loan Document, and (iii) the consent of such SPV or participant
shall not be required (either directly, as a restraint on such Lender's ability
to consent hereunder or otherwise) for any amendments, waivers or consents with
respect to any Loan Document or to exercise or refrain from exercising any
powers or rights such Lender may have under or in respect of the Loan Documents
(including the right to enforce or direct enforcement of the Obligations),
except for those described in clauses (ii) and (iii) of subsection 9.1(a) with
respect to amounts, or dates fixed for payment of amounts, to which such
participant or SPV would otherwise be entitled and, in the case of participants,
except for those described in clause (vi) of subsection 9.1(a). No party hereto
shall institute (and each of Borrower and Holdings shall cause each other Credit
Party not to institute) against any SPV grantee of an option pursuant to this
clause (f) any bankruptcy, reorganization, insolvency, liquidation or similar
proceeding, prior to the date that is one year and one day after the payment in
full of all outstanding commercial paper of such SPV; provided, however, that
each Lender having designated an SPV as such agrees to indemnify each Indemnitee
against any Liability that may be incurred by, or asserted against, such
Indemnitee as a result of failing to institute such proceeding (including a
failure to get reimbursed by such SPV for any such Liability). The agreement in
the preceding
57
sentence shall survive the termination of the Commitments and the payment in
full of the Obligations.
9.10. Confidentiality. Each Lender, the Second Lien Collateral Agent and
the Agent agrees to use all reasonable efforts to maintain, in accordance with
its customary practices, the confidentiality of information obtained by it
pursuant to any Loan Document and designated in writing by any Credit Party as
confidential for a period of two (2) years following the date on which this
Agreement terminates in accordance with the terms hereof, except that such
information may be disclosed (i) with the Borrower's consent, (ii) to Related
Persons of such Lender, the Second Lien Collateral Agent or the Agent, as the
case may be, that are advised of the confidential nature of such information and
are instructed to keep such information confidential, (iii) to the extent such
information presently is or hereafter becomes available to such Lender, the
Second Lien Collateral Agent or the Agent, as the case may be, on a
non-confidential basis from a source other than any Credit Party, (iv) to the
extent disclosure is required by applicable Requirements of Law or other legal
process or requested or demanded by any Governmental Authority, (v) to the
extent necessary or customary for inclusion in league table measurements or in
any tombstone or other advertising materials (and the Loan Parties consent to
the publication of such tombstone or other advertising materials by the Agent,
the Second Lien Collateral Agent, any Lender or any of their Related Persons),
(vi) (A) to the National Association of Insurance Commissioners or any similar
organization, any examiner or any nationally recognized rating agency or (B)
otherwise to the extent consisting of general portfolio information that does
not identify borrowers, (vii) to current or prospective assignees, SPVs
(including the investors therein) or participants, direct or contractual
counterparties to any Rate Contracts permitted hereunder and to their respective
Related Persons, in each case to the extent such assignees, investors,
participants, counterparties or Related Persons agree to be bound by provisions
substantially similar to the provisions of this Section 9.10, (viii) in
connection with the exercise of any remedy under any Loan Document, (ix) to an
investor or prospective investor in a Securitization that agrees that its access
to information regarding the Credit Parties, the Second Lien Term Loan and Loan
Documents is solely for purposes of evaluating an investment in a Securitization
and who agrees to treat such information as confidential and (x) to a trustee,
collateral manager, serviceer, backup servicer, noteholder or secured party in a
Securitization in connection with the administration, servicing and reporting on
the assets serving as collateral for a Securitization. In the event of any
conflict between the terms of this Section 9.10 and those of any other
Contractual Obligation entered into with any Credit Party (whether or not a Loan
Document), the terms of this Section 9.10 shall govern.
Each Credit Party consents to the publication by Agent, Second Lien Collateral
Agent or any Lender of advertising material relating to the financing
transactions contemplated by this Agreement using Borrower's or any other Credit
Party's name, product photographs, logo or trademark. Agent, Second Lien
Collateral Agent or such Lender shall provide a draft of any advertising
material to Borrower for review and comment prior to the publication thereof.
9.11. Set-off; Sharing of Payments.
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(a) Right of Setoff. Each of the Agent, each Lender and each Affiliate
(including each branch office thereof) of any of them is hereby authorized,
without notice or demand (each of which is hereby waived by each Credit Party),
at any time and from time to time during the continuance of any Event of Default
and to the fullest extent permitted by applicable Requirements of Law, to set
off and apply any and all deposits (whether general or special, time or demand,
provisional or final) at any time held and other Indebtedness, claims or other
obligations at any time owing by the Agent, such Lender or any of their
respective Affiliates to or for the credit or the account of the Borrower or any
other Credit Party against any Obligation of any Credit Party now or hereafter
existing, whether or not any demand was made under any Loan Document with
respect to such Obligation and even though such Obligation may be unmatured.
Each of the Agent and each Lender agrees promptly to notify the Borrower and the
Agent after any such setoff and application made by such Lender or its
Affiliates; provided, however, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights under this
Section 9.11 are in addition to any other rights and remedies (including other
rights of setoff) that the Agent the Lenders and their Affiliates may have.
(b) Sharing of Payments, Etc. If any Lender, directly or through an
Affiliate or branch office thereof, obtains any payment of any Obligation of any
Credit Party (whether voluntary, involuntary or through the exercise of any
right of setoff or the receipt of any Collateral or "proceeds" (as defined under
the applicable UCC) of Collateral) other than pursuant to Article X and such
payment exceeds the amount such Lender would have been entitled to receive if
all payments had gone to, and been distributed by, the Agent in accordance with
the provisions of the Loan Documents, such Lender shall purchase for cash from
other Lenders such participations in their Obligations as necessary for such
Lender to share such excess payment with such Lenders to ensure such payment is
applied as though it had been received by the Agent and applied in accordance
with this Agreement (or, if such application would then be at the discretion of
the Borrower, applied to repay the Obligations in accordance herewith);
provided, however, that (a) if such payment is rescinded or otherwise recovered
from such Lender in whole or in part, such purchase shall be rescinded and the
purchase price therefor shall be returned to such Lender without interest and
(b) such Lender shall, to the fullest extent permitted by applicable
Requirements of Law, be able to exercise all its rights of payment (including
the right of setoff) with respect to such participation as fully as if such
Lender were the direct creditor of the applicable Credit Party in the amount of
such participation.
9.12. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart. Delivery of an executed signature page of this Agreement by
facsimile transmission or Electronic Transmission shall be as effective as
delivery of a manually executed counterpart hereof.
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9.13. Severability; Facsimile Signature. The illegality or unenforceability
of any provision of this Agreement or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or enforceability
of the remaining provisions of this Agreement or any instrument or agreement
required hereunder. Any Loan Document, or other agreement, document or
instrument, delivered by facsimile transmission shall have the same force and
effect as if the original thereof had been delivered.
9.14. Captions. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
9.15. Independence of Provisions. The parties hereto acknowledge that this
Agreement and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.
9.16. Interpretation. This Agreement is the result of negotiations among
and has been reviewed by counsel to the Agent, each Lender and other parties
hereto, and is the product of all parties hereto. Accordingly, this Agreement
and the other Loan Documents shall not be construed against the Lenders or the
Agent merely because of the Agent's or Lenders' involvement in the preparation
of such documents and agreements.
9.17. No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and legal benefit of the Borrower, the Lenders, the
Second Lien Collateral Agent and the Agent, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary of,
or have any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents. None of the Agent, the Second Lien
Collateral Agent or any Lender shall have any obligation to any Person not a
party to this Agreement or the other Loan Documents.
9.18. Governing Law and Jurisdiction.
(a) Governing Law. The laws of the New York shall govern all matters
arising out of, in connection with or relating to this Agreement, including,
without limitation, its validity, interpretation, construction, performance and
enforcement.
(b) Submission to Jurisdiction. Any legal action or proceeding with respect
to any Loan Document may be brought in the courts of the State of New York
located in the City of New York, Borough of Manhattan, or of the United States
of America sitting for the Southern District of New York and, by execution and
delivery of this Agreement, each of Borrower and each other Credit Party
executing this Agreement hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The parties hereto (and, to the extent set forth in any other Loan
Document, each other Credit Party) hereby irrevocably waive any objection,
including
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any objection to the laying of venue or based on the grounds of forum non
conveniens, that any of them may now or hereafter have to the bringing of any
such action or proceeding in such jurisdictions.
(c) Service of Process. Each Credit Party hereby irrevocably waives
personal service of any and all legal process, summons, notices and other
documents and other service of process of any kind and consents to such service
in any suit, action or proceeding brought in the United States of America with
respect to or otherwise arising out of or in connection with any Loan Document
by any means permitted by applicable Requirements of Law, including by the
mailing thereof (by registered or certified mail, postage prepaid) to the
address of Borrower specified herein (and shall be effective when such mailing
shall be effective, as provided therein). Each Credit Party agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(d) Non-Exclusive Jurisdiction. Nothing contained in this Section 9.18
shall affect the right of Agent, Second Lien Collateral Agent or any Lender to
serve process in any other manner permitted by applicable Requirements of Law or
commence legal proceedings or otherwise proceed against any Credit Party in any
other jurisdiction.
9.19. WAIVER OF JURY TRIAL. THE PARTIES HERETO, TO THE EXTENT PERMITTED BY
LAW, WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING ARISING
OUT OF, IN CONNECTION WITH OR RELATING TO, THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS AND ANY OTHER TRANSACTION CONTEMPLATED HEREBY AND THEREBY. THIS WAIVER
APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE.
9.20. Entire Agreement; Release; Survival.
(a) THE LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT OF THE PARTIES AND
SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER
THEREOF AND ANY PRIOR LETTER OF INTEREST, COMMITMENT LETTER, FEE LETTER,
CONFIDENTIALITY AND SIMILAR AGREEMENTS INVOLVING ANY CREDIT PARTY AND ANY LENDER
OR ANY OF THEIR RESPECTIVE AFFILIATES RELATING TO A FINANCING OF SUBSTANTIALLY
SIMILAR FORM, PURPOSE OR EFFECT. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS
OF THIS AGREEMENT AND ANY OTHER LOAN DOCUMENT, THE TERMS OF THIS AGREEMENT SHALL
GOVERN (UNLESS SUCH TERMS OF SUCH OTHER LOAN DOCUMENTS ARE NECESSARY TO COMPLY
WITH APPLICABLE REQUIREMENTS OF LAW, IN WHICH CASE SUCH TERMS SHALL GOVERN TO
THE EXTENT NECESSARY TO COMPLY THEREWITH).
(b) Execution of this Agreement by the Credit Parties constitutes a full,
complete and irrevocable release of any and all claims which each Credit Party
may have at law or in equity in respect of all prior discussions and
understandings, oral or written,
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relating to the subject matter of this Agreement and the other Loan Documents.
In no event shall any Indemnitee be liable on any theory of liability for any
special, indirect, consequential or punitive damages (including any loss of
profits, business or anticipated savings). Each of Borrower and each other
Credit Party signatory hereto hereby waives, releases and agrees (and shall
cause each other Credit Party to waive, release and agree) not to xxx upon any
such claim for any special, indirect, consequential or punitive damages, whether
or not accrued and whether or not known or suspected to exist in its favor.
9.21. Patriot Act. Each Lender that is subject to the Patriot Act hereby
notifies the Borrower that pursuant to the requirements of the Patriot Act, it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender to identify the Borrower in
accordance with the Patriot Act.
9.22. Replacement of Lender. Within forty-five days after: (i) receipt by
the Borrower of written notice and demand from any Lender (an "Affected Lender")
for payment of additional costs as provided in Sections 10.1, 10.3 and/or 10.6;
or (ii) any failure by any Lender to consent to a requested amendment, waiver or
modification to any Loan Document in which Required Lenders have already
consented to such amendment, waiver or modification but the consent of each
Lender (or each Lender directly affected thereby, as applicable) is required
with respect thereto, the Borrower may, at its option, notify the Agent and such
Affected Lender (or such defaulting or non-consenting Lender, as the case may
be) of the Borrower's intention to obtain, at the Borrower's expense, a
replacement Lender ("Replacement Lender") for such Affected Lender (or such
defaulting or non-consenting Lender, as the case may be), which Replacement
Lender shall be reasonably satisfactory to the Agent. In the event the Borrower
obtains a Replacement Lender within forty-five (45) days following notice of its
intention to do so, the Affected Lender (or defaulting or non-consenting Lender,
as the case may be) shall sell and assign its portion of the Second Lien Term
Loan to such Replacement Lender, at par, provided that the Borrower has
reimbursed such Affected Lender for its increased costs for which it is entitled
to reimbursement under this Agreement through the date of such sale and
assignment. In the event that a replaced Lender does not execute an Assignment
and Acceptance pursuant to Section 9.8 within five (5) Business Days after
receipt by such replaced Lender of notice of replacement pursuant to this
Section 9.22 and presentation to such replaced Lender of an Assignment and
Acceptance evidencing an assignment pursuant to this Section 9.22, the Borrower
shall be entitled (but not obligated) to execute such an Assignment and
Acceptance on behalf of such replaced Lender, and any such Assignment and
Acceptance so executed by the Borrower, the Replacement Lender and the Agent,
shall be effective for purposes of this Section 9.22 and Section 9.8. Upon any
such assignment and payment and compliance with the other provisions of Section
9.8, such replaced Lender shall no longer constitute a "Lender" for purposes
hereof; provided, any rights of such replaced Lender to indemnification
hereunder shall survive as to such replaced Lender.
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9.23. Joint and Several. The obligations of the Credit Parties hereunder
and under the other Loan Documents are joint and several.
9.24. Lender-Creditor Relationship. The relationship between Agent, Second
Lien Collateral Agent and each Lender, on the one hand, and the Credit Parties,
on the other hand, is solely that of lender and creditor. None of Agent, Second
Lien Collateral Agent or any Lender has any fiduciary relationship or duty to
any Credit Party arising out of or in connection with, and there is no agency,
tenancy or joint venture relationship between Agent, Second Lien Collateral
Lenders and the Credit Parties by virtue of, any Loan Document or any
transaction contemplated therein.
ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY
10.1. Taxes.
(a) Except as otherwise provided in this Section 10.1, each payment by any
Credit Party under any Loan Document shall be made free and clear of all present
or future taxes, levies, imposts, deductions, charges or withholdings and all
liabilities with respect thereto (and without deduction for any of them)
(collectively, but excluding the taxes set forth in clauses (i) and (ii) below,
the "Taxes") other than for (i) taxes measured by net income (including branch
profits taxes) and franchise taxes imposed in lieu of net income taxes, in each
case imposed on Agent, Second Lien Collateral Agent or any Lender as a result of
a present or former connection between such Person and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than such connection arising solely from
Agent, Second Lien Collateral Agent or any Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, any Loan
Document) or (ii) taxes that are directly attributable to the failure (other
than as a result of a change in any Requirement of Law) by Agent or any Lender
to deliver the documentation required to be delivered pursuant to clause (f)
below.
(b) If any Taxes shall be required by law to be deducted from or in respect
of any amount payable under any Loan Document to Agent, Second Lien Collateral
Agent or any Lender (i) such amount shall be increased as necessary to ensure
that, after all required deductions for Taxes are made (including deductions
applicable to any increases to any amount under this Section 10.1), Agent,
Second Lien Collateral Agent or such Lender receives the amount it would have
received had no such deductions been made, (ii) the relevant Credit Party shall
make such deductions, (iii) the relevant Credit Party shall timely pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable Requirements of Law and (iv) within 30 days after
such payment is made, the relevant Credit Party shall deliver to the Agent an
original or certified copy of a receipt evidencing such payment; provided,
however, that no such increase shall be made with respect to, and no Credit
Party shall be required to indemnify Agent, Second Lien Collateral Agent or any
Lender pursuant to clause (d) below for, withholding taxes to the extent that
the obligation to withhold amounts existed on the date that such Person became a
Lender under this Agreement in the capacity under
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which such Person makes a claim under this clause (b), except in each case to
the extent such Person is a direct or indirect assignee (other than pursuant to
Section 9.22) of any Lender that was entitled, at the time the assignment to
such Person became effective, to receive additional amounts under this clause
(b).
(c) In addition, the Borrower agrees to pay, and authorizes the Agent to
pay in its name, any stamp, documentary, excise or property tax, charges or
similar levies imposed by any applicable Requirement of Law or Governmental
Authority and all Liabilities with respect thereto (including by reason of any
delay in payment thereof), in each case arising from the execution, delivery or
registration of, or otherwise with respect to, any Loan Document or any
transaction contemplated therein (collectively, "Other Taxes"). Within 30 days
after the date of any payment of Taxes or Other Taxes by any Credit Party, the
Borrower shall furnish to the Agent, at its address referred to in Section 9.2,
the original or a certified copy of a receipt evidencing payment thereof.
(d) The Borrower shall reimburse and indemnify, within 30 days after
receipt of demand therefor (with copy to the Agent), Agent, Second Lien
Collateral Agent and each Lender for all Taxes and Other Taxes (including any
Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 10.1) paid by such Agent, Second Lien Collateral Agent or such Lender
and any Liabilities arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. A certificate of
the Agent, Second Lien Collateral Agent or such Lender (or of the Agent on
behalf of such Lender) claiming any compensation under this clause (d), setting
forth the amounts to be paid thereunder and delivered to the Borrower with copy
to the Agent, shall be conclusive, binding and final for all purposes, absent
manifest error. In determining such amount, the Agent, Second Lien Collateral
Agent and such Secured Party may use any reasonable averaging and attribution
methods.
(e) Any Lender claiming any additional amounts payable pursuant to this
Section 10.1 shall use its reasonable efforts (consistent with its internal
policies and Requirements of Law) to change the jurisdiction of its lending
office if such a change would reduce any such additional amounts (or any similar
amount that may thereafter accrue) and would not, in the sole determination of
such Lender, be otherwise disadvantageous to such Lender.
(f) (i) Each Non-U.S. Lender Party that, at any of the following times, is
entitled to an exemption from United States withholding tax or, after a change
in any Requirement of Law, is subject to such withholding tax at a reduced rate
under an applicable tax treaty, shall (w) on or prior to the date such Non-U.S.
Lender Party becomes a "Non-U.S. Lender Party" hereunder, (x) on or prior to the
date on which any such form or certification expires or becomes obsolete, (y)
after the occurrence of any event requiring a change in the most recent form or
certification previously delivered by it pursuant to this clause (i) and (z)
from time to time if requested by the Borrower or the Agent (or, in the case of
a participant or SPV, the relevant Lender), provide the Agent and the Borrower
(or, in the case of a participant or SPV, the relevant Lender) with two
completed originals of each of the following, as applicable: (A) Forms W-8ECI
(claiming exemption from U.S. withholding tax because the income is effectively
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connected with a U.S. trade or business), W-8BEN (claiming exemption from, or a
reduction of, U.S. withholding tax under an income tax treaty) and/or W-8IMY or
any successor forms, (B) in the case of a Non-U.S. Lender Party claiming
exemption under Sections 871(h) or 881(c) of the Code, Form W-8BEN (claiming
exemption from U.S. withholding tax under the portfolio interest exemption) or
any successor form and a certificate in form and substance acceptable to the
Agent that such Non-U.S. Lender Party is not (1) a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, (2) a "10 percent shareholder" of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code or (3) a "controlled
foreign corporation" described in Section 881(c)(3)(C) of the Code or (C) any
other applicable document prescribed by the IRS certifying as to the entitlement
of such Non-U.S. Lender Party to such exemption from United States withholding
tax or reduced rate with respect to all payments to be made to such Non-U.S.
Lender Party under the Loan Documents. Unless the Borrower and the Agent have
received forms or other documents satisfactory to them indicating that payments
under any Loan Document to or for a Non-U.S. Lender Party are not subject to
United States withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Credit Parties and the Agent shall withhold amounts
required to be withheld by applicable Requirements of Law from such payments at
the applicable statutory rate.
(ii) Each U.S. Lender Party shall (A) on or prior to the date such
U.S. Lender Party becomes a "U.S. Lender Party" hereunder, (B) on or prior to
the date on which any such form or certification expires or becomes obsolete,
(C) after the occurrence of any event requiring a change in the most recent form
or certification previously delivered by it pursuant to this clause (f) and (D)
from time to time if requested by the Borrower or the Agent (or, in the case of
a participant or SPV, the relevant Lender), provide the Agent and the Borrower
(or, in the case of a participant or SPV, the relevant Lender) with two
completed originals of Form W-9 (certifying that such U.S. Lender Party is
entitled to an exemption from U.S. backup withholding tax) or any successor
form.
(iii) Each Lender having sold a participation in any of its
Obligations or identified an SPV as such to the Agent shall collect from such
participant or SPV the documents described in this clause (f) and provide them
to the Agent.
10.2. Illegality. If after the date hereof any Lender shall determine that
the introduction of any Requirement of Law, or any change in any Requirement of
Law or in the interpretation or administration thereof, has made it unlawful, or
that any central bank or other Governmental Authority has asserted that it is
unlawful, for any Lender or its Lending Office to make LIBOR Rate Loans, then,
on notice thereof by such Lender to the Borrower through the Agent, the
obligation of that Lender to make LIBOR Rate Loans shall be suspended until such
Lender shall have notified the Agent and the Borrower that the circumstances
giving rise to such determination no longer exists.
(a) Subject to clause (c) below, if any Lender shall determine that it is
unlawful to maintain any LIBOR Rate Loan, the Borrower shall prepay in full all
LIBOR Rate Loans of such Lender then outstanding, together with interest accrued
thereon,
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either on the last day of the Interest Period thereof if such Lender may
lawfully continue to maintain such LIBOR Rate Loans to such day, or immediately,
if such Lender may not lawfully continue to maintain such LIBOR Rate Loans,
together with any amounts required to be paid in connection therewith pursuant
to Section 10.4.
(b) If the obligation of any Lender to make or maintain LIBOR Rate Loans
has been terminated, the Borrower may elect, by giving notice to such Lender
through the Agent that all Loans which would otherwise be made by any such
Lender as LIBOR Rate Loans shall be instead Base Rate Loans.
(c) Before giving any notice to the Agent pursuant to this Section 10.2,
the affected Lender shall designate a different Lending Office with respect to
its LIBOR Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Lender, be
illegal or otherwise disadvantageous to the Lender.
10.3. Increased Costs and Reduction of Return.
(a) If any Lender shall determine that, due to either (i) the introduction
of, or any change in, or in the interpretation of, any law or regulation or (ii)
the compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in the case of
either clause (i) or (ii) subsequent to the date hereof, there shall be any
increase in the cost to such Lender of agreeing to make or making, funding or
maintaining any LIBOR Rate Loans, then the Borrower shall be liable for, and
shall from time to time, within thirty (30) days of demand therefor by such
Lender (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender, additional amounts as are sufficient to compensate such
Lender for such increased costs; provided, that the Borrower shall not be
required to compensate any Lender pursuant to this Section for any increased
costs incurred more than 180 days prior to the date that such Lender notifies
the Borrower, in writing of the increased costs and of such Lender's intention
to claim compensation thereof; provided, further, that if the circumstance
giving rise to such increased costs is retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect
thereof.
(b) If any Lender shall have determined that:
(i) the introduction of any Capital Adequacy Regulation;
(ii) any change in any Capital Adequacy Regulation;
(iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof; or
(iv) compliance by such Lender (or its Lending Office) or any entity
controlling the Lender, with any Capital Adequacy Regulation;
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affects the amount of capital required or expected to be maintained by such
Lender or any entity controlling such Lender and (taking into consideration such
Lender's or such entities' policies with respect to capital adequacy and such
Lender's desired return on capital) determines that the amount of such capital
is increased as a consequence of its Commitment(s), loans, credits or
obligations under this Agreement, then, within thirty (30) days of demand of
such Lender (with a copy to the Agent), the Borrower shall pay to such Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender (or the entity controlling the Lender) for such increase;
provided, that the Borrower shall not be required to compensate any Lender
pursuant to this Section for any amounts incurred more than 180 days prior to
the date that such Lender notifies the Borrower, in writing of the amounts and
of such Lender's intention to claim compensation thereof; provided, further,
that if the event giving rise to such increase is retroactive, then the 180-day
period referred to above shall be extended to include the period of retroactive
effect thereof.
10.4. Funding Losses. The Borrower agrees to reimburse each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of:
(a) the failure of the Borrower to make any payment or mandatory prepayment
of principal of any LIBOR Rate Loan (including payments made after any
acceleration thereof);
(b) the failure of the Borrower to continue or convert any portion of the
Second Lien Term Loan after the Borrower has given (or is deemed to have given)
a Notice of Continuation/Conversion;
(c) the failure of the Borrower to make any prepayment after the Borrower
has given a notice in accordance with Section 1.7;
(d) the prepayment (including pursuant to Section 1.8) of a LIBOR Rate Loan
on a day which is not the last day of the Interest Period with respect thereto;
or
(e) the conversion pursuant to Section 1.6 of any LIBOR Rate Loan to a Base
Rate Loan on a day that is not the last day of the applicable Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans hereunder or from fees
payable to terminate the deposits from which such funds were obtained. Solely
for purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 10.4 and under subsection 10.3(a): each LIBOR Rate Loan made by a
Lender (and each related reserve, special deposit or similar requirement) shall
be conclusively deemed to have been funded at the LIBOR used in determining the
interest rate for such LIBOR Rate Loan by a matching deposit or other borrowing
in the interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such LIBOR Rate Loan is in fact so funded.
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10.5. Inability to Determine Rates. If the Agent shall have determined in
good faith that for any reason adequate and reasonable means do not exist for
ascertaining the LIBOR for any requested Interest Period with respect to a
proposed LIBOR Rate Loan or that the LIBOR applicable pursuant to subsection
1.3(a) for any requested Interest Period with respect to a proposed LIBOR Rate
Loan does not adequately and fairly reflect the cost to the Lenders of funding
such Loan, the Agent will forthwith give notice of such determination to the
Borrower and each Lender. Thereafter, the obligation of the Lenders to make or
maintain LIBOR Rate Loans hereunder shall be suspended until the Agent revokes
such notice in writing. Upon receipt of such notice, the Borrower may revoke any
Notice of Continuation/ Conversion then submitted by it. If the Borrower does
not revoke such notice, the Lenders shall convert or continue the portion of the
Second Lien Term Loan, as proposed by the Borrower, in the amount specified in
the applicable notice submitted by the Borrower, but such Loans shall be,
converted or continued as Base Rate Loans.
10.6. Reserves on LIBOR Rate Loans. The Borrower shall pay to each Lender,
as long as such Lender shall be required under regulations of the Federal
Reserve Board to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional costs on the unpaid principal amount of
each LIBOR Rate Loan equal to actual costs of such reserves allocated to such
Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive absent demonstrable error), payable on each
date on which interest is payable on such Loan provided the Borrower shall have
received at least fifteen (15) days' prior written notice (with a copy to the
Agent) of such additional interest from the Lender. If a Lender fails to give
notice fifteen (15) days prior to the relevant Interest Payment Date, such
additional interest shall be payable fifteen (15) days from receipt of such
notice.
10.7. Certificates of Lenders. Any Lender claiming reimbursement or
compensation pursuant to this Article X shall deliver to the Borrower (with a
copy to the Agent) a certificate setting forth in reasonable detail the amount
payable to such Lender hereunder and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
10.8. Survival. The agreements and obligations of the Borrower in this
Article X shall survive the payment of all other Obligations.
ARTICLE XI - DEFINITIONS
11.1. Defined Terms. The following terms are defined in the Sections or
subsections referenced opposite such terms:
"Affected Lender" 9.22
"Assignee" 9.8(a)
"Assignment and Acceptance" 9.8(a)(ii)
"Borrower" Preamble
"Capital Expenditure Limitation" 6.1
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"Confidential Information" 9.9
"EBITDA" Exhibit 4.2(b)
"Event of Default" 7.1
"Excess Cash Flow" Exhibit 1.8(d)
"Fee Letter" 1.9(a)
"Fixed Charge Coverage Ratio" Exhibit 4.2(b)
"Holdings" Recitals
"Incremental Second Lien Term Loan" 1.12
"Incremental Senior Loan" 1.12
"Incremental Loans" 1.12
"Indemnified Person" 9.5
"Indemnified Liabilities" 9.5
"Investments" 5.4
"Lender" Preamble
"Leverage Ratio" Exhibit 4.2(b)
"Maximum Lawful Rate" 1.3(d)
"Originating Lender" 9.8(d)
"Other Taxes" 10.1(b)
"Participant" 9.8(d)
"Permitted Liens" 5.1
"Register" 1.4(b)
"Restricted Payments" 5.11
"Replacement Lender" 9.22
"Sale" 9.9(b)
"Second Lien Term Loan" 1.1 (a)
"Second Lien Term Loan Commitment" 1.1 (a)
"Senior Leverage Ratio" Exhibit 4.2(b)
"Taxes" 10.1(a)
In addition to the terms defined elsewhere in this Agreement, the following
terms have the following meanings:
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of fifty percent (50%) of
the Stock and Stock Equivalents of any Person or otherwise causing any Person to
become a Subsidiary of the Borrower, or (c) a merger or consolidation or any
other combination with another Person.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of five percent
(5%) or more of the Stock (either directly or through ownership of Stock
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Equivalents) of a Person shall for the purposes of this Agreement, be deemed to
control the other Person. Notwithstanding the foregoing, none of the Agent, the
Second Lien Collateral Agent or any Lender shall be deemed an "Affiliate" of any
Credit Party or of any Subsidiary of any Credit Party.
"Agent" means GE Capital in its capacity as administrative agent for the
Lenders hereunder, and any successor administrative agent.
"Agent-Related Persons" means GE Capital and any successor agent arising
under Section 8.9, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Aggregate Second Lien Term Loan Commitment" means the combined Second Lien
Term Loan Commitments of the Lenders, which shall initially be in the amount of
$70,000,000, as such amount may be reduced from time to time pursuant to this
Agreement.
"Applicable Margin" means with respect to Base Rate Loans, five and one
quarter percent (5.25%) per annum, and with respect to LIBOR Rate Loans, six and
one half percent (6.50%) per annum
"Approved Fund" means, with respect to any Lender, any Person (other than a
natural Person) that (a) (i) is or will be engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business or (ii) temporarily warehouses
loans for any Lender or any Person described in clause (i) above and (b) is
advised or managed by (i) such Lender, (ii) any Affiliate of such Lender or
(iii) any Person (other than an individual) or any Affiliate of any Person
(other than an individual) that administers or manages such Lender.
"Assignment" means an assignment agreement entered into by a Lender, as
assignor, and any prospective assignee thereof and accepted by the Agent, in
substantially the form of Exhibit 11.1(a).
"Attorney Costs" means and includes all reasonable fees and disbursements
of any law firm or other external counsel.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. Section 101, et seq.), as amended and in effect from time to time and the
regulations issued from time to time thereunder.
"Base Rate" means, at any time, a rate per annum equal to the higher of (a)
the rate last quoted by The Wall Street Journal as the "base rate on corporate
loans posted by at least 75% of the nation's largest banks" in the United States
or, if The Wall Street Journal ceases to quote such rate, the highest per annum
interest rate published by the Federal Reserve Board in Federal Reserve
Statistical Release H. 15 (519) (Selected Interest Rates) as the "bank prime
loan" rate or, if such rate is no longer quoted therein, any similar rate quoted
therein (as determined by Agent) or any similar release by the Federal Reserve
Board (as determined by Agent) and (b) the sum of 0.5% per annum and
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the Federal Funds Rate. Any change in the Base Rate due to a change in any of
the foregoing shall be effective on the effective date of such change in the
"Prime Rate" or the Federal Funds Rate.
"Base Rate Loan" means a portion of the Second Lien Term Loan that bears
interest based on the Base Rate.
"Benefit Plan" means any employee benefit plan as defined in Section 3(3)
of ERISA (whether governed by the laws of the United States or otherwise) to
which any Credit Party incurs or otherwise has any obligation or liability,
contingent or otherwise.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in Chicago, Illinois or New York, New York are authorized
or required by law to close and, if the applicable Business Day relates to any
LIBOR Rate Loan, a day on which dealings are carried on in the London interbank
market.
"Capital Adequacy Regulation" means any guideline, request or directive of
any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any Lender or of any corporation controlling a Lender.
"Capital Lease" means any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease.
"Capital Lease Obligations" means all monetary obligations of any Credit
Party or any Subsidiary of any Credit Party under any Capital Leases.
"Cash Equivalents" means: (a) securities issued or fully guaranteed or
insured by the United States Government or any agency thereof having maturities
of not more than six (6) months from the date of acquisition; (b) certificates
of deposit, time deposits, repurchase agreements, reverse repurchase agreements,
or bankers' acceptances, having in each case a tenor of not more than six (6)
months, issued by any Lender, or by any U.S. commercial bank or any branch or
agency of a non-U.S. bank licensed to conduct business in the U.S. having
combined capital and surplus of not less than $250,000,000; (c) commercial paper
of an issuer rated at least A-l by Standard & Poor's Corporation or P-l by
Xxxxx'x Investors Service Inc. and in either case having a tenor of not more
than three (3) months and (d) money market funds provided that substantially all
of the assets of such fund are comprised of securities of the type described in
clauses (a) through (c).
"Change of Control Event" is defined in the definition of "Permitted Sale."
"Chief Hong Kong" means CSAV Asia Pacific Ltd., a corporation organized
under the laws of Hong Kong, China.
"Closing Date" means the date on which all conditions precedent set forth
in Section 2.1 are satisfied or waived by the Agent and all Lenders.
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"Closing Date Dividend" means the dividend by Borrower to Holdings on the
Closing Date in an aggregate amount equal to $130,306,164.00, which shall be
used immediately by Holdings in like amount to pay a dividend to its
shareholders.
"Closing Date Management Bonuses" means a payment on the Closing Date to
senior management of Borrower in an aggregate amount equal to $2,848,836.00.
"Closing Date Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of even date herewith by and among the Agent, the Second Lien
Collateral Agent, the Credit Parties and First Lien Agent, as the same may be
amended, restated and/or modified from time to time in accordance with the terms
thereof.
"Code" means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.
"Collateral" means all Property and interests in Property and proceeds
thereof now owned or hereafter acquired by any Credit Party, any of their
respective Subsidiaries and any other Person who has granted a Lien to the
Second Lien Collateral Agent, in or upon which a Lien now or hereafter exists in
favor of any Lender or the Second Lien Collateral Agent for the benefit of
Second Lien Collateral Agent and Lenders, whether under this Agreement or under
any other documents executed by any such Persons and delivered to the Agent.
"Collateral Documents" means, collectively, the Guaranty and Security
Agreement, the Mortgages, each Control Agreement and all other security
agreements, pledge agreements, patent and trademark security agreements, lease
assignments, guarantees and other similar agreements, and all amendments,
restatements, modifications or supplements thereof or thereto, by or between any
one or more of any Credit Party, any of their respective Subsidiaries or any
other Person pledging or granting a lien on Collateral or guaranteeing the
payment and performance of the Obligations, and any Lender or the Second Lien
Collateral Agent for the benefit of the Second Lien Collateral Agent and the
Lenders now or hereafter delivered to the Lenders or the Second Lien Collateral
Agent pursuant to or in connection with the transactions contemplated hereby,
and all financing statements (or comparable documents now or hereafter filed in
accordance with the UCC or comparable law) against any such Person as debtor in
favor of any Lender or the Second Lien Collateral Agent for the benefit of the
Second Lien Collateral Agent and the Lenders, as secured party, as any of the
foregoing may be amended, restated and/or modified from time to time .
"Commitment" means, for each Lender, its Second Lien Term Loan Commitment.
"Commitment Percentage" means, as to any Lender, the percentage equivalent
of such Lender's Second Lien Term Loan Commitment divided by the Aggregate
Second Lien Term Loan Commitment.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person: (i) with respect to any
Indebtedness, lease,
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dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto; (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings; (iii) under any Rate Contracts;
(iv) to make take-or-pay or similar payments if required regardless of
nonperformance by any other party or parties to an agreement; or (v) for the
obligations of another Person through any agreement to purchase, repurchase or
otherwise acquire such obligation or any Property constituting security
therefor, to provide funds for the payment or discharge of such obligation or to
maintain the solvency, financial condition or any balance sheet item or level of
income of another Person. The amount of any Contingent Obligation shall be equal
to the amount of the obligation so guaranteed or otherwise supported or, if not
a fixed and determined amount, the maximum amount so guaranteed or supported.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its Property is bound.
"Control Agreement" means a four party deposit account, securities account
or commodities account control agreements by and among the applicable Credit
Party, Second Lien Collateral Agent, Agent and the depository, securities
intermediary or commodities intermediary, and each in form and substance
reasonably satisfactory in all respects to Second Lien Collateral Agent and in
any event providing to Second Lien Collateral Agent "control" of such deposit
account, securities or commodities account within the meaning of Articles 8 and
9 of the UCC.
"Controlled Investment Affiliate" means, with respect to the Sponsor, any
other Person that (i) is organized by the Sponsor or an Affiliate of the Sponsor
for the purpose of making equity or debt investments in one or more companies
and (ii) is controlled by, or is under common control with, the Sponsor. For
purposes of this definition "control" means the power to direct or cause the
direction of management and policies of a Person, whether by contract or
otherwise.
"Conversion Date" means any date on which the Borrower converts a Base Rate
Loan to a LIBOR Rate Loan or a LIBOR Rate Loan to a Base Rate Loan.
"Copyrights" means all rights, title and interests (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to
copyrights and all mask work, database and design rights, whether or not
registered or published, all registrations and recordations thereof and all
applications in connection therewith.
"Credit Parties" means Holdings, the Borrower and each other Person (i)
which executes this Agreement as a "Credit Party," (ii) which executes a
guaranty of the Obligations, (iii) which grants a Lien on all or substantially
all of its assets to secure
73
payment of the Obligations and (iv) all of the Stock of which is pledged to
Second Lien Collateral Agent for the benefit of itself and Lenders.
"Default" means any event or circumstance which, with the giving of notice,
the lapse of time, or both, would (if not cured or otherwise remedied during
such time) constitute an Event of Default.
"Disposition" means (a) the sale, lease, conveyance or other disposition of
Property, other than sales or other dispositions expressly permitted under
subsection 5.2(a), 5.2(c) and 5.2(d), and (b) the sale or transfer by the
Borrower or any Subsidiary of the Borrower of any Stock or Stock Equivalent
issued by any Subsidiary of the Borrower and held by such transferor Person.
"Dollars", "dollars" and "$" each mean lawful money of the United States of
America.
"Domestic Subsidiary" means, with respect to any Person, a Subsidiary of
such Person, which Subsidiary is incorporated or otherwise organized under the
laws of a state of the United States of America.
"Electronic Transmission" means each document, instruction, authorization,
file, information and any other communication transmitted, posted or otherwise
made or communicated by e-mail or E-Fax, or otherwise to or from an E-System or
other equivalent service.
"Environmental Laws" means all present and future Requirements of Law and
Permits imposing liability or standards of conduct for or relating to the
regulation and protection of human health, safety, the environment and natural
resources, and including public notification requirements and environmental
transfer of ownership, notification or approval statutes.
"Environmental Liabilities" means all Liabilities (including costs of
Remedial Actions, natural resource damages and costs and expenses of
investigation and feasibility studies) that may be imposed on, incurred by or
asserted against any Credit Party or any Subsidiary of any Credit Party as a
result of, or related to, any claim, suit, action, investigation, proceeding or
demand by any Person, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute or common law or
otherwise, arising under any Environmental Law or in connection with any
environmental, health or safety condition or with any Release and resulting from
the ownership, lease, sublease or other operation or occupation of property by
any Credit Party or any Subsidiary of any Credit Party, whether on, prior or
after the date hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means, collectively, any Credit Party and any Person
under common control or treated as a single employer with, any Credit Party,
within the meaning of Section 414(b), (c), (m) or (o) of the Code.
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"ERISA Event" means any of the following: (a) a reportable event described
in Section 4043(b) of ERISA (or, unless the 30-day notice requirement has been
duly waived under the applicable regulations, Section 4043(c) of ERISA) with
respect to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a
Title IV Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any ERISA Affiliate from any Multiemployer
Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of
reorganization, insolvency or termination (or treatment of a plan amendment as
termination) under Section 4041A of ERISA; (e) the filing of a notice of intent
to terminate a Title IV Plan (or treatment of a plan amendment as termination)
under Section 4041 of ERISA; (f) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to make any
required contribution to any Title IV Plan or Multiemployer Plan when due; (h)
the imposition of a lien under Section 412 of the Code or Section 302 or 4068 of
ERISA on any property (or rights to property, whether real or personal) of any
ERISA Affiliate; (i) the failure of a Benefit Plan or any trust thereunder
intended to qualify for tax exempt status under Section 401 or 501 of the Code
or other Requirements of Law to qualify thereunder; and (j) any other event or
condition that might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or for the imposition of any
liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC
premiums due but not delinquent.
"Event of Loss" means, with respect to any Property, any of the following:
(a) any loss, destruction or damage of such Property; (b) any pending or
threatened institution of any proceedings for the condemnation or seizure of
such Property or for the exercise of any right of eminent domain; or (c) any
actual condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, of such Property, or confiscation of such Property or the
requisition of the use of such Property.
"Excluded Equity Issuance" means Net Issuance Proceeds resulting from the
issuance of (a) Stock or Stock Equivalents by Holdings to management or
employees of a Credit Party under any employee stock option or stock purchase
plan or other employee benefits plan in existence from time to time, (b) Stock
or Stock Equivalents by a Wholly-Owned Subsidiary of the Borrower to the
Borrower or another Wholly-Owned subsidiary of the Borrower constituting an
Investment permitted hereunder, (c) Stock or Stock Equivalents by a Wholly-Owned
Subsidiary of Holdings to Holdings or another Wholly-Owned subsidiary of
Holdings constituting an Investment permitted hereunder, (d) so long as no Event
of Default has occurred and is continuing or would result therefrom, Stock or
Stock Equivalents by Holdings to Sponsor or any other equityholder of Holdings
or, if the Permitted Sale has been consummated, by Holdings to New Sponsor or
other equityholders of Holdings from and after the Permitted Sale Date, (e) so
long as no Event of Default has occurred and is continuing or would result
therefrom and provided the funding of the Incremental Loans shall not have
theretofore occurred (it being agreed that such funding may occur concurrently
with the issuance of Stock or Stock Equivalents of Holdings contemplated in this
clause (e)), Stock or Stock Equivalents by Holdings to a third party
institutional investor holding, directly or indirectly, less than fifty percent
75
(50%) of each of the issued and outstanding voting Stock of Holdings and the
issued and outstanding Stock or Stock Equivalents of Holdings, in each instance,
both before and after giving effect to such issuance; provided that, the
proceeds thereof are used solely for the purposes of (x) contemporaneously
making a dividend to the shareholders of Holdings in an amount not to exceed the
amount invested by such third party investor; provided, further, such issuance
and dividend are made on or prior to March 31, 2007 and/or (y) contributed to
Borrower for investment in productive assets of a kind then used or usable in
the business of the Borrower or any Subsidiary or for working capital and;
provided further that, after giving effect to such issuance, Sponsor has the
right to appoint and cause to be elected a majority of the members of the board
of directors, or similar governing body, of Holdings, whether through ownership
of voting Stock or otherwise (a "Minority Issuance"), (f) Stock or Stock
Equivalents by Holdings in connection with a Permitted Sale and (g) Stock or
Stock Equivalents by a Foreign Subsidiary of such Foreign Subsidiary to qualify
directors where required pursuant to a Requirement of Law or to satisfy other
requirements of applicable law, in each instance, with respect to the ownership
of Stock of Foreign Subsidiaries.
"E-Fax" means any system used to receive or transmit faxes electronically.
"E-Signature" means the process of attaching to or logically associating
with an Electronic Transmission an electronic symbol, encryption, digital
signature or process (including the name or an abbreviation of the name of the
party transmitting the Electronic Transmission) with the intent to sign,
authenticate or accept such Electronic Transmission.
"E-System" means any electronic system, including Intralinks(R) and any
other Internet or extranet-based site, whether such electronic system is owned,
operated or hosted by Agent, any of its Related Persons or any other Person,
providing for access to data protected by passcodes or other security system.
"Federal Funds Rate" means, for any day, the rate per annum (rounded upward
to the nearest l/100th of 1%) equal to the weighted average of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day, provided
that if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to the Agent on
such day on such transactions as determined by the Agent in a commercially
reasonable manner.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.
"First Lien Agent" means "First Lien Agent" as such term is defined in the
Closing Date Intercreditor Agreement.
"First Lien Credit Agreement" means the "First Lien Credit Agreement" as
such term is defined in the Closing Date Intercreditor Agreement.
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"First Lien Creditors" means "First Lien Creditors" as such term is defined
in the Closing Date Intercreditor Agreement.
"First Lien Indebtedness" means the Revolving Loans, the Swing Loans, the
First Lien Term Loan, in each case, together with capitalized interest, if any,
and fees, costs and other amounts, in each case, incurred pursuant to the terms
of the First Lien Loan Documents.
"First Lien Indebtedness Liens" means Liens in favor of the First Lien
Agent for the benefit of the First Lien Creditors on the assets and Stock of the
Credit Parties (other than the Stock of Holdings) and their Subsidiaries.
"First Lien Lenders" means each "First Lien Lender" as such term is defined
in the Closing Date Intercreditor Agreement.
"First Lien Loan Documents" means the "First Lien Loan Documents" as such
term is defined in the Closing Date Intercreditor Agreement.
"First Lien Loan Obligations" means "First Lien Loan Obligations" as such
term is defined in the Closing Date Intercreditor Agreement.
"First Lien Term Loan" means the term loan in the aggregate principal
amount of $145,000,000.00 made to the Borrower on the date hereof by the First
Lien Lenders pursuant to the First Lien Credit Agreement, including, in any
event, any Incremental Senior Loan which is in the form of a term loan, and, in
each instance, any amendment, restatement and/or refinancing thereof permitted
by the Closing Date Intercreditor Agreement.
"First Tier Foreign Subsidiary" means a Foreign Subsidiary more than fifty
percent (50%) of the voting Stock (directly or through ownership of Stock
Equivalents) of which are held directly by the Borrower or indirectly by
Borrower through one or more Domestic Subsidiaries.
"Foreign Subsidiary" means, with respect to any Person, a Subsidiary of
such Person, which Subsidiary is not a Domestic Subsidiary.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other
77
entity owned or controlled, through stock or capital ownership or otherwise, by
any of the foregoing.
"Guaranty and Security Agreement" means that certain Guaranty and Security
Agreement, dated as of even date herewith, in form and substance reasonably
acceptable to the Agent, Second Lien Collateral Agent and Borrower, made by the
Credit Parties in favor of the Second Lien Collateral Agent, for the benefit of
the Second Lien Collateral Agent and Lenders, as the same may be amended,
restated and/or modified from time to time.
"Hazardous Materials" means any substance, material or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including petroleum or any fraction thereof,
asbestos, polychlorinated biphenyls and radioactive substances.
"Incremental Loan Closing Date" means the date on which the Incremental
Loans have been made in accordance with the terms and conditions set forth in
Section 1.12.
"Indebtedness" of any Person means, without duplication: (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of Property or services (other than trade
payables entered into in the Ordinary Course of Business); (c) the face amount
of all letters of credit issued for the account of such Person and without
duplication, all drafts drawn thereunder and all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar
instruments issued by such Person; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of Property, assets or businesses;
(e) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect
to Property acquired by the Person (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such Property); (f) all Capital Lease Obligations; (g)
the principal balance outstanding under any synthetic lease, off-balance sheet
loan or similar off balance sheet financing product; (h) all obligations,
whether or not contingent, to purchase, redeem, retire, defease or otherwise
acquire for value any of its own Stock or Stock Equivalents (or any Stock or
Stock Equivalent of a direct or indirect parent entity thereof) prior to the
date that is 180 days after the final scheduled installment payment date for the
Second Lien Term Loan, valued at, in the case of redeemable preferred Stock, the
greater of the voluntary liquidation preference and the involuntary liquidation
preference of such Stock plus accrued and unpaid dividends; (i) all indebtedness
referred to in clauses (a) through (h) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien upon or in Property (including accounts and contracts
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such indebtedness; and (j) all Contingent Obligations
described in clause (i) of the definition thereof in respect of indebtedness or
obligations of others of the kinds referred to in clauses (a) through (i) above.
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"Insolvency Proceeding" means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; in each case in (a) and (b) above, undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.
"Intellectual Property" means all rights, title and interests in or
relating to intellectual property and industrial property arising under any
Requirement of Law and all IP Ancillary Rights relating thereto, including all
Copyrights, Patents, Trademarks, Internet domain names, Trade Secrets and IP
Licenses.
"Interest Payment Date" means, (a) with respect to any LIBOR Rate Loan
(other than a LIBOR Rate Loan having an Interest Period of six (6) months) the
last day of each Interest Period applicable to such Loan, (b) with respect to
any LIBOR Rate Loan having an Interest Period of six (6) months, the last day of
each three (3) month interval and, without duplication, the last day of such
Interest Period, and (c) with respect to Base Rate Loans the first day of each
calendar quarter.
"Interest Period" means, with respect to any LIBOR Rate Loan, the period
commencing on the Business Day such Loan is disbursed or continued or on the
Conversion Date on which a Base Rate Loan is converted to the LIBOR Rate Loan
and ending on the date one, two, three or six months thereafter, as selected by
the Borrower in its Notice of Conversion/Continuation; provided that:
(a) if any Interest Period pertaining to a LIBOR Rate Loan would otherwise
end on a day which is not a Business Day, that Interest Period shall be extended
to the next succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period;
(c) no Interest Period applicable to the Second Lien Term Loan shall extend
beyond the last scheduled payment date therefor; and
(d) no Interest Period applicable to the Second Lien Term Loan or portion
thereof shall extend beyond any date upon which is due any scheduled principal
payment in respect of the Second Lien Term Loan unless the aggregate principal
amount of the Second Lien Term Loan represented by Base Rate Loans or by LIBOR
Rate Loans having Interest Periods that will expire on or before such date is
equal to or in excess of the amount of such principal payment.
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"Inventory" means all of the "inventory" (as such term is defined in the
UCC) of the Borrower and its Subsidiaries, including, but not limited to, all
merchandise, raw materials, parts, supplies, work-in-process and finished goods
intended for sale, together with all the containers, packing, packaging,
shipping and similar materials related thereto, and including such inventory as
is temporarily out of the Borrower's or such Subsidiary's custody or possession,
including inventory on the premises of others and items in transit.
"IP Ancillary Rights" means, with respect to any other Intellectual
Property, as applicable, all foreign counterparts to, and all divisionals,
reversions, continuations, continuations-in-part, reissues, reexaminations,
renewals and extensions of, such Intellectual Property and all income,
royalties, proceeds and Liabilities at any time due or payable or asserted under
or with respect to any of the foregoing or otherwise with respect to such
Intellectual Property, including all rights to xxx or recover at law or in
equity for any past, present or future infringement, misappropriation, dilution,
violation or other impairment thereof, and, in each case, all rights to obtain
any other IP Ancillary Right.
"IP License" means all Contractual Obligations (and all related IP
Ancillary Rights), whether written or oral, granting any right, title and
interest in or relating to any Intellectual Property.
"Lending Office" means, with respect to any Lender, the office or offices
of such Lender specified as its "Lending Office" beneath its name on the
applicable signature page hereto, or such other office or offices of such Lender
as it may from time to time notify the Borrower and the Agent.
"Liabilities" means all claims, actions, suits, judgments, damages, losses,
liability, obligations, responsibilities, fines, penalties, sanctions, costs
(including Attorney Costs), fees, taxes, commissions, charges, disbursements and
expenses, in each case of any kind or nature (including interest accrued thereon
or as a result thereto and fees, charges and disbursements of financial, legal
and other advisors and consultants), whether joint or several, whether or not
indirect, contingent, consequential, actual, punitive, treble or otherwise.
"LIBOR" means, for each Interest Period, the offered rate per annum for
deposits of Dollars for the applicable Interest Period that appears on Telerate
Page 3750 as of 11:00 A.M. (London, England time) two (2) Business Days prior to
the first day in such Interest Period. If no such offered rate exists, such rate
will be the rate of interest per annum, as determined by the Agent (rounded
upwards, if necessary, to the nearest 1/100 of 1%) at which deposits of Dollars
in immediately available funds are offered at 11:00 A.M. (London, England time)
two (2) Business Days prior to the first day in such Interest Period by major
financial institutions reasonably satisfactory to the Agent in the London
interbank market for such Interest Period for the applicable principal amount on
such date of determination.
"LIBOR Rate Loan" means a portion of the Second Lien Term Loan that bears
interest based on LIBOR.
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"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
otherwise) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same economic effect as any of the foregoing, or the
filing of any financing statement naming the owner of the asset to which such
lien relates as debtor, under the UCC or any comparable law) and any contingent
or other agreement to provide any of the foregoing, but not including the
interest of a lessor under a lease which is not a Capital Lease.
"Liquidity Event" shall mean the acquisition by Liquidity Investor on the
Incremental Loan Closing Date of Stock and Stock Equivalents of Holdings
constituting at least twenty percent (20%) of the issued and outstanding Stock
and Stock Equivalents of Holdings after giving effect thereto (which Liquidity
Event may constitute a Permitted Sale if the conditions set forth in the
definition thereof have been satisfied).
"Liquidity Investor" means a third party institutional investor, if any,
acquiring Stock and Stock Equivalents of Holdings constituting at least twenty
percent (20%) of the issued and outstanding Stock and Stock Equivalents of
Holdings on the Incremental Loan Closing Date in a Liquidity Event, which
Liquidity Investor may be a New Sponsor if such Liquidity Event qualifies as a
Permitted Sale.
"Loan" means an extension of credit by a Lender to the Borrower pursuant to
Article I hereof, and may be a Base Rate Loan or a LIBOR Rate Loan.
"Loan Documents" means this Agreement, the Notes, if any, the Fee Letter,
the Collateral Documents, the Closing Date Intercreditor Agreement and all
documents delivered to the Agent and/or any Lender in connection with any of the
foregoing.
"Margin Stock" means "margin stock" as such term is defined in Regulation
T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means: (a) a material adverse change in, or a
material adverse effect upon, the operations, business, Properties, condition
(financial or otherwise) of the Credit Parties and the Subsidiaries taken as a
whole; (b) a material impairment of the ability of any Credit Party to perform
in any material respect its obligations under any Loan Document; or (c) a
material adverse effect upon (i) the legality, validity, binding effect or
enforceability of any material provision of any Loan Document, or (ii) the
perfection or priority of any Lien on any material portion of the Collateral
granted to the Lenders or to the Second Lien Collateral Agent for the benefit of
the Lenders under any of the Collateral Documents.
"Material Environmental Liabilities" means Environmental Liabilities
exceeding $2,000,000 in the aggregate.
"Material Foreign Subsidiary" means a First Tier Foreign Subsidiary (i)
with revenues in excess of the United States Dollar equivalent of $2,000,000 in
the aggregate
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in any twelve (12) month period or (ii) assets with a fair market value in
excess of the United States Dollar equivalent of $600,000 at any time.
"Minority Issuance" is defined in clause (e) of the definition of "Excluded
Equity Issuances."
"Mortgage" means any deed of trust, leasehold deed of trust, mortgage,
leasehold mortgage, deed to secure debt, leasehold deed to secure debt or other
document creating a Lien on real Property or any interest in real Property.
"Multiemployer Plan" means any multiemployer plan, as defined in Section
4001(a)(3) of ERISA, as to which any ERISA Affiliate incurs or otherwise has any
obligation or liability, contingent or otherwise.
"Net Issuance Proceeds" means, in respect of any issuance of debt or
equity, cash proceeds (including cash proceeds as and when received in respect
of non-cash proceeds received or receivable in connection with such issuance),
net of underwriting discounts and reasonable out-of-pocket costs and expenses
paid or incurred in connection therewith in favor of any Person not an Affiliate
of the Borrower.
"Net Proceeds" means proceeds in cash, checks or other cash equivalent
financial instalments (including Cash Equivalents) as and when received by the
Person making a Disposition and insurance proceeds received on account of an
Event of Loss, net of: (a) in the event of a Disposition (i) the direct costs
relating to such Disposition excluding amounts payable to the Borrower or any
Affiliate of the Borrower, (ii) sale, use or other transaction taxes paid or
payable as a result thereof and (iii) amounts required to be applied to repay
principal, interest and prepayment premiums and penalties on Indebtedness
secured by a Lien on the asset which is the subject of such Disposition and (b)
in the event of an Event of Loss, (i) all money actually applied to repair or
reconstruct the damaged Property or Property affected by the condemnation or
taking, (ii) all of the costs and expenses reasonably incurred in connection
with the collection of such proceeds, award or other payments and (iii) any
amounts retained by or paid to parties having superior rights to such proceeds,
awards or other payments.
"New Sponsor" is defined in the definition of "Permitted Sale"
"New Sponsor Management Agreement" means the management agreement dated on
or around the Permitted Sale Date between Borrower and New Sponsor (or an
Affiliate thereof).
"Non-U.S. Lender Party" means each of the Agent, each Lender, each SPV and
each participant, in each case that is not a United States person under and as
defined in Section 7701(a)(30) of the Code.
"Note" means any Second Lien Term Note and "Notes" means all such Notes.
"Obligations" means the Second Lien Term Loan, and other Indebtedness,
advances, debts, liabilities, obligations, covenants and duties owing by any
Credit Party
82
to any Lender, the Agent, or any other Person required to be indemnified, that
arises under any Loan Document, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty, indemnification or
in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired.
"Ordinary Course of Business" means, in respect of any transaction
involving any Credit Party or any Subsidiary of any Credit Party, the ordinary
course of such Person's business, as conducted by any such Person in accordance
with past practice and undertaken by such Person in good faith and not for
purposes of evading any covenant or restriction in any Loan Document.
"Organization Documents" means, (a) for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, (b) for any partnership, the partnership
agreement and, if applicable, certificate of limited partnership, (c) for any
limited liability company, the operating agreement and articles or certificate
of formation or (d) any other document setting forth the manner of election or
duties of the officers, directors, managers or other similar persons, or the
designation, amount or relative rights, limitations and preference of the Stock
of a Person.
"Patents" means all rights, title and interests (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to letters
patent and applications therefor.
"Patriot Act" means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L.
107-56, as amended.
"PBGC" means the United States Pension Benefit Guaranty Corporation any
successor thereto.
"Permits" means, with respect to any Person, any permit, approval,
authorization, license, registration, certificate, concession, grant, franchise,
variance or permission from, and any other Contractual Obligations with, any
Governmental Authority, in each case whether or not having the force of law and
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"Permitted Acquisition" means any Acquisition by (i) the Borrower or any
Wholly-Owned Subsidiary of the Borrower which is a Domestic Subsidiary of
substantially all of the assets of a Target, which assets are located in the
United States or (ii) the Borrower or any Wholly-Owned Subsidiary of the
Borrower which is a Domestic Subsidiary of 100% of the Stock and Stock
Equivalents of a Target incorporated under the laws of any State in the United
States or the District of Columbia to the extent that each of the following
conditions shall have been satisfied:
83
(a) the Borrower shall have furnished to the Agent and Lenders such
information and documentation as Agent shall request, including, without
imitation, a certificate of a Responsible Officer of the Borrower demonstrating
on a pro forma basis compliance with the covenants set forth in Article VI
hereof after giving effect to the consummation of such Acquisition;
(b) the Borrower and its Subsidiaries (including any new Subsidiary) shall
execute and deliver the agreements, instalments and other documents required by
Section 4.13;
(c) such Acquisition shall not be hostile and shall have been approved by
the board of directors (or other similar body) and/or the stockholders or other
equityholders of the Target;
(d) no Default or Event of Default shall then exist or would exist after
giving effect thereto;;
(e) the total consideration paid or payable (including without limitation,
any deferred payment) for all Acquisitions consummated (i) during any year shall
not exceed $10,000,000 in the aggregate for all such Acquisitions and (ii)
during the term of this Agreement shall not exceed $50,000,000 in the aggregate
for all such Acquisitions; and
(f) the Target has EBITDA, subject to proforma adjustments (including
anticipated cost savings) acceptable to the Agent and the Second Lien Collateral
Agent, for the most recent four quarters prior to the acquisition date for which
financial statements are available, greater than zero.
"Permitted Sale" means the acquisition (whether by purchase,
recapitalization or merger in which Holdings is the surviving entity) by a
Person of more than fifty percent (50%) of the issued and outstanding voting
Stock of Holdings, or as a result of which such Person shall have the right to
appoint a majority of the board of directors or other similar governing body of
Holdings (a "Change of Control Event") that meets the following criteria: (i)
the Change of Control Event occurs on or before Xxxxx 00, 0000, (xx) the funding
of the Incremental Loans pursuant to Section 1.12 and hereof and a Minority
Issuance shall not have occurred prior thereto (it being agreed that the funding
of the Incremental Loans and Minority Issuance may occur concurrently
therewith), (iii) no Default or Event of Default exists on the date of such
Change of Control Event, (iv) Borrower shall be in pro forma compliance with all
financial covenants set forth in Article VI hereof after giving effect to such
Change of Control Event, (v) the buyer must be an unaffiliated third-party
private equity sponsor (the "New Sponsor"), (vi) subject to the last sentence of
this definition, New Sponsor must be consented to by (x) Lenders and First Lien
Lenders then holding more than sixty six and two thirds percent (66-2/3%) of the
sum of the Aggregate Revolving Loan Commitment (as defined in the First Lien
Credit Agreement) then in effect plus the aggregate unpaid principal balance of
the First Lien Term Loan then outstanding plus the aggregate unpaid principal
balance of the Second Lien Term Loan then outstanding, or (y) if the Aggregate
Revolving Loan Commitments (as defined in the First Lien Credit Agreement) have
terminated, Lenders
84
and First Lien Lenders then having more than sixty six and two thirds percent
(66-2/3%) of the sum of the aggregate unpaid principal amount of Loans (as
defined in the First Lien Credit Agreement) (other than Swing Loans (as defined
in the First Lien Credit Agreement)) then outstanding, outstanding Letter of
Credit Obligations (as defined in the First Lien Credit Agreement), amounts of
participations in Swing Loans (as defined in the First Lien Credit Agreement),
the principal amount of unparticipated portions of Swing Loans (as defined in
the First Lien Credit Agreement) and aggregate unpaid principal amount of the
Second Lien Term Loan (such consent not to be unreasonably withheld, provided
that any objection may only be made on a reasonable basis based upon adverse
experiences with or negative market reputation of such New Sponsor), (vii) prior
to such Change of Control Event, Agent shall have received satisfactory know
your customer information and background checks with respect to such New
Sponsor, (viii) the Change of Control Event shall not involve the merger of
Borrower with or into any other company with material operations, or the
integration of Borrower's operations with or into any other company with
material operations, (ix) any changes to the senior management of Borrower shall
be reasonably satisfactory to Agent and (x) the terms of the New Sponsor
Management Agreement, if any, shall be reasonably satisfactory to Agent. Not
less than thirty (30) days prior to entering into any Permitted Sale, Borrower
will provide Agent with a list of all potential buyers. Lenders shall have ten
(10) Business Days after the date on which Agent receives such list to object to
a potential buyer (it being agreed that if any Lender fails to object to such
buyer during such ten (10) Business Day period, such Lender shall be deemed to
have consented to such buyer) for purposes of clause (vi) above.
"Permitted Sale Date" means the date on which the Permitted Sale is
consummated.
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.
"Pledged Collateral" has the meaning specified in the Guaranty and Security
Agreement and shall include any other Collateral required to be delivered to
Second Lien Collateral Agent pursuant to the terms of any Collateral Document.
"Prior Indebtedness" means the Indebtedness and obligations specified on
Schedule 11.1 hereto.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
"Rate Contracts" means swap agreements (as such term is defined in Section
101 of the Bankruptcy Code) and any other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates.
"Related Agreements" means the First Lien Loan Documents.
85
"Related Persons" means, with respect to any Person, each Affiliate of such
Person and each director, officer, employee, agent, trustee, representative,
attorney, accountant and each insurance, environmental, legal, financial and
other advisor (including those retained in connection with the satisfaction or
attempted satisfaction of any condition set forth in Article II) and other
consultants and agents of or to such Person or any of its Affiliates.
"Related Transactions" means the transactions contemplated by the Related
Agreements and includes, without limitation, the funding of the Revolving Loans
and the First Lien Term Loan.
"Releases" means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material into
or through the environment.
"Remedial Action" means all actions required to (a) clean up, remove, treat
or in any other way address any Hazardous Material in the indoor or outdoor
environment, (b) prevent or minimize any Release so that a Hazardous Material
does not migrate or endanger or threaten to endanger public health or welfare or
the indoor or outdoor environment or (c) perform pre remedial studies and
investigations and post-remedial monitoring and care with respect to any
Hazardous Material.
"Required Lenders" means at any time Lenders then holding more than fifty
percent (50%) of the sum of the unpaid principal balance of the Second Lien Term
Loan then outstanding but in no event less than two Lenders that are not
Affiliates.
"Requirement of Law" means, as to any Person, any law (statutory or
common), ordinance, treaty, rule, regulation, order, policy, other legal
requirement or determination of an arbitrator or of a Governmental Authority, in
each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Responsible Officer" means the chief executive officer or the president of
the Borrower, or any other officer having substantially the same authority and
responsibility; or, with respect to compliance with financial covenants or
delivery of financial information, the chief financial officer or the treasurer
of the Borrower, or any other officer having substantially the same authority
and responsibility.
"Revolving Loan" and "Revolving Loans" have the meanings ascribed to such
terms in the First Lien Credit Agreement and including, in any event, any
Incremental Senior Loan which is in the form of a revolving loan, and, in each
instance, any amendment, restatement and/or refinancing thereof as permitted by
the Closing Date Intercreditor Agreement.
"Second Lien Collateral Agent" means Allied Capital Corporation, a Maryland
corporation in its capacity as collateral agent for the Lenders, and any
successor collateral agent.
86
"Second Lien Term Note" means a promissory note of the Borrower payable to
the order of a Lender, in substantially the form of Exhibit 11.l(b) hereto,
evidencing the Indebtedness of the Borrower to such Lender resulting from the
Second Lien Term Loan made to the Borrower by such Lender.
"Securitization" means a public or private offering by a Lender or any of
its direct or indirect Affiliates or their respective successors and assigns of
securities which represent an interest in, or which are collateralized, in whole
or in part by, the Second Lien Term Loan and Loan Documents.
"Specified Event of Default" means an Event of Default under subsections
7.1(a) 7.1(c), 7.1(e), 7.1(f), 7.1(g), 7.1(j) or 7.1(k), or the failure of any
Credit Party to comply with the provisions of Section 4.4 or Section 4.5 hereof.
"Solvent" means, with respect to any Person as of any date of
determination, that, as of such date, (a) the value of the assets of such Person
(both at fair value and present fair saleable value) is greater than the total
amount of liabilities (including contingent and unliquidated liabilities) of
such Person, (b) such Person is able to pay all liabilities of such Person as
such liabilities mature and (c) such Person does not have unreasonably small
capital. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities shall be computed at the amount that, in 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.
"Sponsor" means Xxxxxxxx, Xxxxxxxxx & Xxxx Capital Partners, L.P., a
Delaware limited partnership and its Controlled Investment Affiliates.
"SPV" means any special purpose funding vehicle identified as such in a
writing by any Lender to the Agent.
"Stock" means all shares of capital stock (whether denominated as common
stock or preferred stock), equity interests, beneficial, partnership or
membership interests, joint venture interests, participations or other ownership
or profit interests in or equivalents (regardless of how designated) of or in a
Person (other than an individual), whether voting or non-voting.
"Stock Equivalents" means all securities convertible into or exchangeable
for Stock or any other Stock Equivalent and all warrants, options or other
rights to purchase, subscribe for or otherwise acquire any Stock or any other
Stock Equivalent, whether or not presently convertible, exchangeable or
exercisable.
"Subordinated Indebtedness" means the Indebtedness of any Credit Party or
any Subsidiary of any Credit Party which is subordinated in right of payment to
the Obligations including, without limitation, Indebtedness incurred in
connection with Acquisitions permitted hereunder.
"Subsidiary" of a Person means any corporation, association, limited
liability company, partnership, joint venture or other business entity of which
more than fifty
87
percent (50%) of the voting Stock (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof.
"Swing Loan" or "Swing Loans" have the meanings ascribed to such terms in
the First Lien Credit Agreement, and any amendment, restatement and/or
refinancing thereof as permitted by the Closing Date Intercreditor Agreement
"Target" means any other Person or business unit or asset group of any
other Person acquired or proposed to be acquired in an Acquisition.
"Tax Affiliate" means, (a) Borrower and its Subsidiaries and (b) any
Affiliate of Borrower with which Borrower files or is eligible to file
consolidated, combined or unitary tax returns.
"Title IV Plan" means a pension plan subject to Title IV of ERISA, other
than a Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has
any obligation or liability, contingent or otherwise.
"Trade Secrets" means all right, title and interest (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to trade
secrets.
"Trademark" means all rights, title and interests (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and other source
or business identifiers and, in each case, all goodwill associated therewith,
all registrations and recordations thereof and all applications in connection
therewith.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York.
"United States" and "U.S." each means the United States of America.
"U.S. Lender Party" means each of the Agent, each Lender, each SPV and each
participant, in each case that is a United States person under and as defined in
Section 7701(a)(30) of the Code.
"Wholly-Owned Subsidiary" means any Subsidiary in which (other than
directors' qualifying shares required by law) one hundred percent (100%) of the
Stock and Stock Equivalents, at the time as of which any determination is being
made, is owned, beneficially and of record, by any Credit Party, or by one or
more of the other Wholly-Owned Subsidiaries, or both.
"Withdrawal Liabilities" means, at any time, any liability incurred
(whether or not assessed) by any ERISA Affiliate and not yet satisfied or paid
in full at such time with respect to any Multiemployer Plan pursuant to Section
4201 of ERISA.
88
11.2. Other Interpretive Provisions.
(a) Defined Terms. Unless otherwise specified herein or therein, all terms
defined in this Agreement or in any other Loan Document shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto. The meanings of defined terms shall be equally applicable to
the singular and plural forms of the defined terms. Terms (including
uncapitalized terms) not otherwise defined herein and that are defined in the
UCC shall have the meanings therein described.
(b) The Agreement. The words "hereof, "herein", "hereunder" and words of
similar import when used in this Agreement or any other Loan Document shall
refer to this Agreement or such other Loan Document as a whole and not to any
particular provision of this Agreement or such other Loan Document; and
subsection, section, schedule and exhibit references are to this Agreement or
such other Loan Documents unless otherwise specified.
(c) Certain Common Terms. The term "documents" includes any and all
instalments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced. The term "including" is not limiting and means
"including without limitation."
(d) Performance; Time. Whenever any performance obligation hereunder or
under any other Loan Document (other than a payment obligation) shall be stated
to be due or required to be satisfied on a day other than a Business Day, such
performance shall be made or satisfied on the next succeeding Business Day. 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."
If any provision of this Agreement or any other Loan Document refers to any
action taken or to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be interpreted to encompass any and all means,
direct or indirect, of taking, or not taking, such action.
(e) Contracts. Unless otherwise expressly provided herein or in any other
Loan Document, references to agreements and other contractual instalments,
including this Agreement and the other Loan Documents, shall be deemed to
include all subsequent amendments, thereto, restatements and substitutions
thereof and other modifications and supplements thereto which are in effect from
time to time, but only to the extent such amendments and other modifications are
not prohibited by the terms of any Loan Document.
(f) Laws. References to any statute or regulation are to be construed as
including all statutory and regulatory provisions related thereto or
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
11.3. Accounting Terms and Principles. All accounting determinations
required to be made pursuant hereto shall, unless expressly otherwise provided
herein, be made in accordance with GAAP. No change in the accounting principles
used in
89
the preparation of any financial statement hereafter adopted by Holdings or
Borrower shall be given effect for purposes of measuring compliance with any
provision of Article V or VI unless the Borrower, the Agent and the Required
Lenders agree to modify such provisions to reflect such changes in GAAP and,
unless such provisions are modified, all financial statements, Compliance
Certificates and similar documents provided hereunder shall be provided together
with a reconciliation between the calculations and amounts set forth therein
before and after giving effect to such change in GAAP.
11.4. Payments. The Agent may set up standards and procedures to determine
or redetermine the equivalent in Dollars of any amount expressed in any currency
other than Dollars and otherwise may, but shall not be obligated to, rely on any
determination made by any Credit Party. Any such determination or
redetermination by the Agent shall be conclusive and binding for all purposes,
absent manifest error. No determination or redetermination by Agent, any Lender
or any Credit Party and no other currency conversion shall change or release any
obligation of any Credit Party or of any Lender (other than the Agent and its
Related Persons) under any Loan Document, each of which agrees to pay separately
for any shortfall remaining after any conversion and payment of the amount as
converted. The Agent may round up or down, and may set up appropriate mechanisms
to round up or down, any amount hereunder to nearest higher or lower amounts and
may determine reasonable de minimis payment thresholds.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
90
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.
BORROWER:
CSAV, INC., a Massachusetts corporation
By: /s/ XXXXX XXXXXXX
------------------------------------
Name: XXXXX XXXXXXX
Title: CFO
FEIN:
Address for notices:
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Attn: XXXX XXXXXXX
Facsimile: (000) 0000000
Address for Wire Transfers:
Xxxxx FARGO BANK
ABA#
Account#
Second Lien Credit Agreement
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.
CREDIT PARTIES:
CSAV HOLDING CORP., a Delaware
corporation
By: /s/ XXXXX X. MONEY
------------------------------------
Name: XXXXX X. MONEY
Title: TREASURER & SECRETARY
FEIN:
----------------------------------
Address for notices:
c/x Xxxxxxxx Xxxxxxxxx & Xxxx LLC
Xxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attn:
----------------------------------
Facsimile:
-----------------------------
DECADE INDUSTRIES, INC., a
Minnesota corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
FEIN:
----------------------------------
Address for notices:
0000 Xxxxxxx 00 Xxxx
Xx. Xxxx, XX 00000
Attn:
----------------------------------
Facsimile:
-----------------------------
Second Lien Credit Agreement
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.
CREDIT PARTIES:
CSAV HOLDING CORP., a Delaware
corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
FEIN:
----------------------------------
Address for notices:
c/x Xxxxxxxx Xxxxxxxxx & Xxxx LLC
Xxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attn:
----------------------------------
Facsimile:
-----------------------------
DECADE INDUSTRIES, INC., a
Minnesota corporation
By: /s/ XXXXX XXXXXXX
------------------------------------
Name: XXXXX XXXXXXX
Title: CFO
FEIN:
Address for notices:
0000 Xxxxxxx 00 Xxxx
Xx. Xxxx, XX 00000
Attn: XXXX XXXXXXX
----------------------------------
Facsimile: (000) 000 0000
Second Lien Credit Agreement
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.
ALLIED CAPITAL CORPORATION, a
Maryland corporation, as Second Lien
Collateral Agent and as a Lender
By: /s/ Xxxxx Xxxx
------------------------------------
Name: Xxxxx Xxxx
Title: Principal
Address for Notices:
Allied Capital Corporation
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Xxxx
Facsimile: (000) 000-0000
Second Lien Credit Agreement
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.
GENERAL ELECTRIC CAPITAL CORPORATION, as
Agent and as a Lender
By: /s/ Xxxxx Xxxxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Its Duly Authorized Signatory
Address for Notices:
General Electric Capital Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Chief-Account Officer
Facsimile: (000) 000-0000
With a copy to:
General Electric Capital Corporation
201 Xxxxxxx 7
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxx 00000
Attn: General Counsel-Global Sponsor
Finance
Facsimile: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Corporate Counsel-Global Sponsor
Finance
Facsimile: (000) 000-0000
Address for payments:
ABA No.
Account Number
Deutsche Bank Trust Company Americas
New York, New York
Account Name:
Reference:
Second Lien Credit Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as a Lender
By: /s/ ILLEGIBLE
------------------------------------
Title: ILLEGIBLE
Address for notices:
00 Xxxxx Xxxxxxx Xx.
X 9305 - 051
Xxxxxxxxxxx, XX 00000
Lending office:
00 Xxxxx Xxxxxxx Xx.
X 9305 - 051
Xxxxxxxxxxx, XX 00000
Second Lien Credit Agreement
Schedule 1.1 (a)
Second Lien Term Loan Commitments
General Electric Capital Corporation $22,500,000.00
Allied Capital Corporation $37,500,000.00
Xxxxx Fargo Bank, National Association $10,000,000.00
