TERM LOAN AGREEMENT
EXHIBIT
10.6
THIS TERM
LOAN AGREEMENT (together with all amendments, modifications and supplements
hereto and restatements hereof, this “Agreement”) is made
and entered into as of August 10, 2007 by and among WALCO INTERNATIONAL, INC.
(“Borrower”), a
Delaware corporation, EACH OF THE CREDIT PARTIES WHICH IS NOW OR HEREAFTER A
GUARANTOR HEREUNDER, EACH OF THE FINANCIAL INSTITUTIONS WHICH IS A SIGNATORY
HERETO OR WHICH MAY FROM TIME TO TIME BECOME A PARTY HERETO (individually, a
“Lender” and
collectively, the “Lenders”) and XXXXX
FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders (in
such capacity, together with its successors and assigns, the “Agent”).
W I T N E S S E T
H:
THAT, in
consideration of the mutual covenants, agreements and undertakings herein
contained, the parties hereto agree as follows:
1. Definitions.
1.1. Certain Defined
Terms. Unless a particular word or phrase is otherwise defined
or the context otherwise requires, capitalized words and phrases used in the
Loan Documents have the meanings provided below.
Accounts shall have
the meaning set forth in Article 9 of the UCC and in the PPSA.
Adjusted LIBO Rate
shall mean, with respect to any LIBOR Borrowing for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the sum of (a) the product of (i) the LIBO Rate in effect for such
Interest Period and (ii) Statutory Reserves and (b) the Applicable
Margin.
Affiliate of any
Person shall mean any other Person which controls or is controlled by or under
common control with such Person. For purposes of this definition,
“control” (including “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person through the ownership of
securities or by contract; provided that no Lender shall be an Affiliate of the
Borrower. Without limiting the generality of the foregoing, control of the right
to vote of five percent (5%) or more of all voting securities of a Person or
beneficial ownership of five percent (5%) of the outstanding equity interests in
such Person shall be deemed to be control for purposes of compliance with the
provisions of Section 7.6
hereof; provided, however, that with
respect to any key management employees of the Borrower, control of the right to
vote of five percent (5%) or greater, but less than fifteen percent (15%), of
all voting securities of the Parent and/or the Borrower or beneficial ownership
of five percent (5%) or greater, but less than fifteen percent (15%), of the
outstanding equity interests in the Parent and/or the Borrower by such key
management employee shall not be deemed to be control for purposes of compliance
with the provisions of Section 7.6
hereof.
Agent shall have the
meaning specified in the preamble to this Agreement.
Alternate Base Rate
shall mean, for any day, a rate per annum (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to the sum of (a) the greater of (i) the Prime Rate
(computed on the basis of the actual number of days elapsed over a 360-day year)
in effect on such day, and (ii) the Federal Funds Effective Rate (computed on
the basis of the actual number of days elapsed over a 360-day year) in effect
for such day plus ½ of 1% and (b) the Applicable Margin. For purposes
of this Agreement, any change in the Alternate Base Rate due to a change in the
Prime Rate or Federal Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Effective Rate,
respectively. If for any reason the Agent shall have determined
(which determination shall be conclusive and binding, absent manifest error)
that it is unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Agent to obtain sufficient quotations
in accordance with the terms hereof, the Alternate Base Rate shall be determined
without regard to clause (a)(ii) until the circumstances giving rise to such
inability no longer exist.
Alternate Base Rate
Borrowing shall mean, as of any date, that portion of the principal
balance of the Term Loans bearing interest at the Alternate Base Rate as of such
date.
Annual Audited Financial
Statements shall mean (a) the annual financial statements of the Credit
Parties and their Subsidiaries, including all notes thereto, which statements
shall include, on a Consolidated basis, a balance sheet as of the end of such
fiscal year and a statement of operations, a retained earnings statement and a
statement of cash flows for such fiscal year, all setting forth in comparative
form the corresponding figures from the previous fiscal year and accompanied by
a report and opinion of independent certified public accountants with an
accounting firm of national standing and with a reputation satisfactory to the
Agent, which report shall not contain any material qualification (and be without
comment as to the accountants’ opinion whether the Borrower is a “going concern”
or can continue to be a “going concern”), except that such report may contain
qualification with respect to new accounting principles mandated by the
Financial Accounting Standards Board (or its successor organization), and shall
state that such financial statements, in the opinion of such accountants,
present fairly, in all material respects, the financial position of such Person
as of the date thereof and the results of its operations and cash flows for the
period covered thereby in conformity with GAAP and (b) to the extent required by
the Agent, annual consolidating financial statements of the Credit Parties and
their Subsidiaries containing a balance sheet as of the end of such fiscal year
and a statement of operations for such fiscal year prepared in reasonable
detail. Such statements shall be accompanied by a certificate of such
accountants that in making the appropriate audit and/or investigation in
connection with such report and opinion, such accountants did not become aware
of any Default or Event of Default with respect to any of the financial
covenants set forth in Sections 7.11 and
7.12 hereof, or
if in the opinion of such accountant any such Default or Event of Default
exists, a description of the nature and status thereof.
Applicable Lending
Office shall mean, with respect to each Lender, such Lender’s Domestic
Lending Office in the case of an Alternate Base Rate Borrowing and such Lender’s
LIBOR Lending Office in the case of a LIBOR Borrowing.
Applicable Margin
shall mean, a rate per annum of 2.00% for LIBOR Borrowings and a rate per annum
of 1.00% for Alternate Base Rate Borrowings;
Approved Fund shall
mean any Person (other than a natural person) that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit
in the ordinary course of its business and that is administered, advised or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers, advises or manages a
Lender.
Assignment and
Acceptance shall have the meaning specified in Section 10.12(c)
hereof.
Blocked Person shall
mean (i) a Person
that is listed in the annex to, or is otherwise subject to the provisions of,
the Executive Order No. 13224; (ii) a Person owned or controlled by, or acting
for or on behalf of, any Person that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order No. 13224; (iii) a
Person or entity with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law; (iv) a Person or entity
that commits, threatens or conspires to commit or supports “terrorism” as
defined in the Executive Order No. 13224; (v) a Person or entity that
is named as a “specially designated national” on the most current list published
by the U.S. Treasury Department Office of Foreign Asset Control at its official
website or any replacement website or other replacement official publication of
such list, or (vi) a Person or entity who is affiliated or associated with a
Person or entity listed above.
Borrower shall have
the meaning specified in the preamble of this Agreement.
Business Day shall
mean any day when commercial banking institutions in San Francisco, California,
are open for the transaction of banking business and the Lenders’ Applicable
Lending Offices are generally open for business; provided, however,
that with respect to LIBOR Borrowings, Business Day shall
also mean a day on which transactions in dollar deposits between lenders may be
carried on in the London eurodollar interbank market.
Business Entity shall
mean corporations, partnerships, limited liability companies, joint ventures,
joint stock associations, business trusts and other business
entities.
Canadian Subsidiary
shall mean any Subsidiary of that is organized and domiciled in the
Canada.
Capital Expenditures
shall mean, with respect to any Person for any period, all capital expenditures
of such Person, on a Consolidated basis, for such period (including without
limitation, the aggregate amount of Capital Lease Obligations incurred during
such period which are required to be capitalized and reported as a liability on
the consolidated balance sheet of such Person), determined in accordance with
GAAP, consistently applied. For the avoidance of doubt, the term
“Capital
Expenditures” shall not include those items described in Section
7.4(e)(7).
Capital Lease
Obligations shall mean the obligations of a Person to pay that portion of
rent or other amounts constituting payments of principal under a lease of (or
other agreement conveying the right to use) real and/or personal Property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board, as
amended), provided that for purposes of this Agreement, the amount of such
obligations shall be only the capitalized amount thereof, determined in
accordance with GAAP (including such Statement No. 13).
Cash Dividends shall
mean, with respect to any Person for any period, all fixed and calculable cash
dividend payments actually made with respect to any Equity Interests of such
Person for such period.
Cash Management
Obligations shall mean any and all obligations and liabilities of
Borrower or any of its Subsidiaries to the Revolving Credit Agent or any of the
Revolving Credit Lenders, whether direct, indirect, joint, several, or joint and
several, arising under or in any way relating to or incurred in connection with
(a) any deposit accounts maintained by Borrower or any of its Subsidiaries
with the Revolving Credit Agent or any of the Revolving Credit Lenders or any of
their respective Affiliates, (b) any cash management services or treasury
administration services provided by the Revolving Credit Agent or any of the
Revolving Credit Lenders or any of their respective Affiliates (c) any
documentation relating thereto, or (d) any services or transactions
relating thereto, including without limitation, daylight overdraft exposure and
credit card, debit card and other similar products.
Change of Control
shall mean the occurrence of any of the following at any time after the Closing
Date:
(a) at any
time prior the consummation of an initial public offering of any Equity
Interests in the Parent, Charlesbank and/or its respective Affiliates shall fail
to either (i) beneficially own in the aggregate, directly or indirectly, more
than 50% of the aggregate voting power of all issued and outstanding classes of
Equity Interests in the Parent having the right to elect Board of Directors of
the Parent, or (ii) have the right to cause enough of their nominees in the
aggregate to be elected or appointed, and remain serving at all times as, Board
of Directors of the Parent so as to constitute a majority of such Board of
Directors;
(b) at any
time after the consummation of an initial public offering of any Equity
Interests in the Parent, any Person and/or its respective Affiliates shall
either (i) beneficially own in the aggregate, directly or indirectly, 35% or
more of the aggregate voting power of all issued and outstanding classes of
Equity Interests in the Parent having the right to elect Board of Directors of
the Parent, or (ii) have the right to cause enough of their nominees in the
aggregate to be elected or appointed, and remain serving at all times as, Board
of Directors of the Parent so as to constitute a majority of such Board of
Directors;
(c) at any
time the Parent shall cease to own directly, free and clear of all Liens (other
than in favor of the Collateral Agent for the ratable benefit of the Lenders and
subordinate and inferior Liens permitted under Section 7.2), both
legal title to and beneficial ownership of 100% of all issued and outstanding
Equity Interests of the Borrower; provided, however, that a
transfer of the legal title to and beneficial ownership of Equity Interests of
the Borrower having no more than 10% of the aggregate voting power of all
classes of Equity Interests in the Borrower or 10% of the total economic equity
interests of the Borrower to management employees of the Borrower shall not
trigger a Change of Control; or
(d) at any
time (i) the Parent shall cease to have the right to elect, directly or
indirectly, by virtue of beneficial ownership of Equity Interests of the
Borrower, contract or otherwise, at least a majority in number of the members of
the Board of Directors of the Borrower or (ii) less than a majority in number of
the members of the Board of Directors of the Borrower shall have been elected or
appointed, directly or indirectly, by the Parent.
As used
above, “beneficially own” shall have the same meaning as defined in
Rules 13d-3 and 13d-5 of the Securities and Exchange Act of 1934, as
amended, or any successor provision thereto.
Charlesbank shall
mean Charlesbank Equity Fund VI, Limited Partnership, a Massachusetts limited
partnership.
Closing Date shall
mean the date on which each requirement of Section 4 is satisfied or waived
by the Agent.
Code shall mean the
Internal Revenue Code of 1986, as amended, as now or hereafter in effect,
together with all regulations, rulings and interpretations thereof or thereunder
by the Internal Revenue Service.
Collateral shall mean
all collateral and security as described in the Security Documents.
Collateral Agent
shall mean JPMorgan Chase Bank, N.A., in its capacity as the collateral agent of
the holders of the Revolving Credit Agreement Debt and the Obligations with
respect to the Collateral in accordance with and pursuant to the terms of the
First Lien Intercreditor Agreement, and any successor collateral agent under the
terms of the First Lien Intercreditor Agreement.
Consequential Loss
shall mean, with respect to (a) the payment of principal of or interest on a
LIBOR Borrowing on a day other than the last day of the applicable Interest
Period, (b) the failure to borrow or convert a LIBOR Borrowing on the date
specified by the Borrower for any reason, or (c) any cessation of the Adjusted
LIBO Rate to apply to the Term Loans or any part thereof pursuant to Section 2.7 hereof,
in each case whether voluntary or involuntary, any loss, expense, penalty,
premium or liability incurred by any of the Lenders or the Agent as a result
thereof, including without limitation, any interest paid by any of the Lenders
to lenders of funds borrowed by it to make or carry the Term Loans and any other
costs and expenses sustained or incurred in liquidating or employing deposits
from third parties acquired to effect or maintain the Term Loans.
Consolidated shall
mean, for any Person, as applied to any financial or accounting term, such term
determined on a consolidated basis in accordance with GAAP (except as otherwise
required herein) for such Person and all Subsidiaries thereof.
Contingent Obligation
shall mean, as to any Person, any obligation of such Person guaranteeing the
payment or performance of any Indebtedness, leases, dividends or other
obligations (collectively “primary obligations”) of any other Person (the
“primary obligor”), whether directly or indirectly, including without
limitation, any obligation of the Person for whom Contingent Obligations is
being determined, (a) to purchase any such primary obligation or other property
constituting direct or indirect security therefor, (b) assume or contingently
agree to become or be secondarily liable in respect of any such primary
obligation, (c) to advance or supply funds (i) for the purchase or payment of
any such primary obligation or (ii) to maintain working capital or equity
capital for the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (d) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, or (e) otherwise to assure or hold harmless the owner of such
primary obligation against loss in respect thereof; provided, however, that the
term “Contingent Obligation” shall not include endorsements of checks or other
negotiable instruments in the ordinary course of business.
Contribution
Agreement shall mean any Contribution Agreement executed by and among the
Borrower and its Subsidiaries and as the same may be further amended, modified,
supplemented, restated and joined in pursuant to a Joinder Agreement, from time
to time.
Credit Parties shall
mean the Borrower and the Guarantors, and Credit Party shall
mean any one of such Persons.
Debt Service Expense
shall mean, with respect to the Credit Parties for any period, the aggregate of
regularly scheduled principal payments of all Funded Debt (including, without
limitation, regularly scheduled principal payments of the Term Loans and any
mandatory principal payments of the Term Loans pursuant to Section 2.3(a), but
excluding any principal payments of the Revolving Loans (as defined in the
Revolving Credit Agreement) to the extent there is not an equivalent permanent
reduction in the Total Revolving Credit Commitment (as defined in the Revolving
Credit Agreement)), made or to be made by such Person during such period, on a
Consolidated basis, in accordance with GAAP, consistently
applied. Notwithstanding the foregoing, for purposes of calculating
the Debt Service Expense for any period ending prior to September 26, 2007, the
component of the Debt Service Expense for regularly scheduled principal payments
of the Term Loans (but not any other regularly scheduled principal payments of
any other Funded Debt, including without limitation, any scheduled payments of
the Term Loans under Section 2.3(a)) shall be deemed to be
$450,000.
Default Rate shall
mean, on any day, as follows: (a) with respect to principal
which is outstanding under any Term Note, the sum of the interest
applicable pursuant to the terms of this Agreement on such day plus two percent
per annum (it being understood that the Default Rate with respect to the
applicable principal amount shall only be calculated with reference to the
applicable Adjusted LIBO Rate until the Interest Period applicable thereto
expires, and upon the expiration of such applicable Interest Period, the Default
Rate for such applicable principal amount shall be computed on the basis of the
Alternate Base Rate for such day plus two percent per annum), and (b) with respect to accrued
interest, fees and other Obligations (other than past due principal
outstanding under any Term Note), the sum of the Alternate Base Rate for such
day plus two percent per annum.
Discontinued
Operations shall mean, as of any day, operations of any Credit Party or
any of its Subsidiaries which have been discontinued, and which, as of such day,
have been fully terminated, disposed of or liquidated.
Domestic Lending
Office shall mean, with respect to any Lender, the office of such Lender
specified as its “Domestic Lending Office” opposite its name on the signature
pages hereof, or such other office of such Lender as such Lender may from time
to time specify to the Borrower and the Agent.
Domestic Subsidiary
shall mean any Subsidiary of that is organized and domiciled in the Unites
States of America.
EBITDA shall mean,
with respect to the Credit Parties for any period, Net Income for such period
plus (a)
without duplication and to only the extent deducted in determining Net Income
for such period, the sum of (i) Interest Expense, (ii) federal, state and local
income or franchise taxes, (iii) all amounts attributable to depreciation and
amortization expense, (iv) any extraordinary charges, (v) Permitted Management
Fees and customary and reasonable director’s fees and board expenses for board
of directors of the Credit Parties, (vi) amounts used to repurchase from
Charlesbank and/or any of its Affiliates the equity securities of the Parent to
the extent included within Permitted Affiliate Transactions, and (vii) any other
non-cash charges (including without limitation, (A) the issuance of restricted
stock or stock options, (B) equity losses of Affiliates that are not a
Subsidiary of any Credit Party, and (C) all charges attributable to the use of
the purchase accounting method), but excluding any non-cash charge in respect of
an item that was included in Net Income in a prior period and any non-cash
charge that relates to the write-down or write-off of Inventory, minus (b) without
duplication and to the extent included in Net Income, (i) any cash payments made
during such period in respect of non-cash charges described in clause (a)(vii)
taken in a prior period and (ii) any extraordinary gains and any non-cash items
of income, in each case of such Person for such period, computed and calculated,
without duplication, on a Consolidated basis and in accordance with GAAP,
consistently applied.
Eligible Assignee
shall mean (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund,
or (iv) any other commercial lender, finance company, insurance company,
financial institution or fund reasonably acceptable to the Agent and the
Borrower; provided, however, that if an
Event of Default has occurred and is continuing, such approval by the Borrower
shall not be required.
Environmental Claim
shall mean any third party (including any Governmental Authority) action,
lawsuit, claim or proceeding (including claims or proceedings at common law)
which seeks to impose or alleges any liability for (i) pollution or
contamination by, or releases or threatened releases of, Hazardous Substances
into the air, surface water, ground water or land or the clean-up, abatement,
removal, remediation or monitoring of such pollution, contamination or Hazardous
Substances; (ii) generation, recycling, reclamation, handling, treatment,
storage, disposal or transportation of Hazardous Substances; (iii) exposure to
Hazardous Substances; (iv) the safety or health of employees or other Persons in
connection with any of the activities specified in any other subclause of this
definition; or (v) the manufacture, processing, distribution in commerce,
presence or use of Hazardous Substances. An “Environmental Claim”
includes a common law action, as well as a proceeding to issue, modify or
terminate an Environmental Permit, or to adopt or amend a regulation, to the
extent that such a proceeding attempts to redress violations of the applicable
permit, license, or regulation as alleged by any Governmental
Authority.
Environmental
Liabilities shall mean all liabilities arising from any Environmental
Claim or Requirement of Environmental Law under any theory of recovery, at law
or in equity, and whether based on negligence, strict liability or otherwise,
including: remedial, removal, response, abatement, restoration (including
natural resources), investigative, or monitoring liabilities, personal injury
and damage to property, natural resources or injuries to persons, and any other
related costs, expenses, losses, damages, penalties, fines or liabilities,
including attorney’s fees and court costs. Environmental
Liability shall mean any one of them.
Environmental Permit
shall mean any permit, license, approval or other authorization under any
applicable law or regulation of the United States or of any state, municipality
or other subdivision thereof relating to pollution or protection of health or
the environment, including laws or regulations relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
Hazardous Substances or toxic materials or wastes into ambient air, surface
water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, recycling, presence, use, treatment, storage,
disposal, transport, or handling of wastes, pollutants, contaminants or
Hazardous Substances.
Equipment shall have
the meaning set forth in Article 9 of the UCC and in the PPSA.
Equity Interests
shall mean as to a Business Entity, all capital stock, partnership interests,
membership interests or other indicia of equity rights, including without
limitation, any warrants, options or other rights to acquire such interests,
issued by such Business Entity from time to time.
ERISA shall mean the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and all rules, regulations, rulings and interpretations adopted by the Internal
Revenue Service or the Department of Labor thereunder.
ERISA Affiliate shall
mean any trade or business (whether or not incorporated) which together with the
Borrower or any Subsidiary of the Borrower would be treated as a single employer
under the provisions of Title I or Title IV of ERISA.
Event of Default
shall mean any of the events specified in Section 8.1 hereof or
otherwise specified as an Event of Default in any other Loan Document, provided there has
been satisfied any requirement in connection with any such event for the giving
of notice or the lapse of time, or both, and Default shall mean
any of such events, whether or not any such requirement for the giving of
notice, or the lapse of any applicable grace or curative period (if any), or
both, has been satisfied.
Excess Cash Flow
shall mean, for any fiscal year of the Credit Parties, the amount, if any, of
(a) the sum, without duplication, of (i) Net Income for such fiscal year, (ii)
the amount of all non-cash charges (including depreciation and amortization, but
excluding any depreciation and amortization applicable to Discontinued
Operations) deducted in arriving at such Net Income, (iii) the aggregate net
amount of non-cash loss on the disposition of property by the Credit Parties and
their Subsidiaries during such fiscal year (other than sales of Inventory in the
ordinary course of business), but only to the extent deducted in arriving at
such Net Income, (iv) equity losses during such fiscal year attributable to
Affiliates that are not a Subsidiary of any Credit Party, but only to the extent
deducted in arriving at such Net Income, and (v) decreases, if any, in Net
Working Capital as of the end of such fiscal year when compared to Net Working
Capital at the beginning of such fiscal year, minus (b) the sum,
without duplication, of (i) the amount of all non-cash credits included in
arriving at such Net Income, (ii) the aggregate amount Unfinanced Capital
Expenditures of the Credit Parties and their Subsidiaries during such fiscal
year, (iii) Debt Service Expense for such fiscal year, (iv) all optional
prepayments of the Term Loans during such fiscal year, (v) the aggregate net
amount of non-cash gain on the disposition of Property by the Credit Parties and
their Subsidiaries during such fiscal year (other than sales of Inventory in the
ordinary course of business), but only to the extent included in arriving at
such Net Income, (vi) amounts used during such fiscal year to repurchase from
Charlesbank and/or any of its Affiliates the equity securities of the Parent to
the extent included within Permitted Affiliate Transactions, but only to the
extent included in arriving at such Net Income, (vii) equity gains during such
fiscal year attributable to Affiliates that are not a Subsidiary of any Credit
Party, but only to the extent included in arriving at such Net Income, (viii)
increases, if any, in Net Working Capital as of the end of such fiscal year when
compared to Net Working Capital at the beginning of such fiscal year, and (ix)
Cash Dividends during such fiscal year to the extent permitted under Section
7.10.
Excess Interest
Amount shall have the meaning attributed to such term in Section 2.14
hereof.
Federal Funds Effective
Rate shall mean, for any day, a rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by it.
Financed Capital
Expenditures shall mean (i) Capital Expenditures which are financed
at the time of purchase with Indebtedness otherwise permitted hereunder, and
(ii) Capital Lease Obligations to the extent the same constitute Capital
Expenditures otherwise permitted hereunder.
First Lien Intercreditor
Agreement shall mean the Intercreditor and Collateral Agency Agreement,
dated as of the Closing Date, by and among the Borrower, the other Credit
Parties, the Agent, the Collateral Agent, and the Revolving Credit Agent, as the
same may be amended, modified, supplemented, renewed, restated or replaced in
accordance with the terms of this Agreement.
Fixed Charge Coverage
Ratio shall mean, with respect to the Credit Parties and their
Subsidiaries for any period, the ratio of (a) EBITDA less (i) Unfinanced Capital
Expenditures less (ii) cash payments of federal, state and local income or
franchise taxes to (b) the sum of (i)
Debt Service Expense, (ii) cash Interest Expense, and (iii) Unfinanced Cash
Dividends, in each case of such Person for the applicable period, computed and
calculated on a Consolidated basis in accordance with GAAP, consistently applied
and without duplication. All components of the Fixed Charge Coverage
Ratio shall be determined (1) on a Consolidated basis for the twelve (12) most
recent consecutive calendar months ending on or prior to the date of
determination and (2) in accordance with GAAP, consistently
applied.
Funded Debt shall
mean, as to a particular Person at any particular time, the sum of (a) all
obligations for borrowed money (whether as a direct obligor on a promissory
note, bond, debenture or other similar instrument, as a reimbursement obligor
with respect to an issued letter of credit or similar instrument, as an obligor
under a Contingent Obligation in respect of borrowed money, or as any other type
of direct or contingent obligor), and (b) all Capital Lease Obligations (other
than the interest component of such obligations), each calculated without
duplication, on a Consolidated basis, and in accordance with GAAP.
GAAP shall mean, as
to a particular Person, those principles and practices (a) which are recognized
as such by the Financial Accounting Standards Board or successor organization,
and (b) which are consistently applied (or with respect to which any change in
principles and practice mandated by the Financial Accounting Standards Board or
successor organization are disclosed in writing to the Agent) for all periods
after the date hereof in a manner consistent with the manner in which such
principles and practices were applied to the most recent audited financial
statements of the relevant Person furnished to the Agent and the Lenders prior
to the Closing Date (or with respect to which any change in principles and
practice mandated by the Financial Accounting Standards Board or successor
organization are disclosed in writing to the Agent).
Global Amendment
shall mean the Global Amendment, dated as of the Closing Date, executed by and
among the Credit Parties, the Agent, the Collateral Agent and the Revolving
Credit Agent.
Governmental
Authority shall mean any foreign governmental authority, the United
States of America, any state of the United States and any political subdivision
of any of the foregoing, and any agency, instrumentality, department,
commission, board, bureau, central bank, authority, court or other tribunal, in
each case whether executive, legislative, judicial, regulatory or
administrative, having jurisdiction over the Agent, any of the Lenders, any
Credit Party, any Subsidiary of any Credit Party, or their respective
Property.
Grantor shall mean
any Grantor, Assignor, Pledgor or Debtor, as such terms are defined in any of
the Security Documents.
Guarantors shall mean
the Parent and its Subsidiaries, other than the Borrower and any non-Domestic
Subsidiaries not required to become a Guarantor pursuant to Section
6.10. In no event shall Inactive Subsidiaries shall be
required to execute or join in a Guaranty or any applicable Security Agreements
except as required under the terms of Section
6.10.
Guaranty shall mean
each and every guaranty of the Obligations from time to time executed and
delivered to the Agent by any Guarantor, as amended supplemented, modified,
joined in pursuant to a Joinder Agreement and restated from time to
time.
Hazardous Substance
shall mean any hazardous or toxic waste, substance or product or material
defined or regulated by any Requirements of Environmental Law, including solid
waste (as defined under The Resource Conservation and Recovery Act or its
regulations, as amended), petroleum and any fraction thereof and any radioactive
materials and waste.
Hedging Obligations
of a Person shall mean any and all obligations of such Person, whether absolute
or contingent and howsoever and whensoever created, arising, evidenced or
acquired (including all renewals, extensions and modifications thereof and
substitutions therefor), under (a) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates applicable to
such party’s assets, liabilities or exchange transactions, including, but not
limited to, dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or
collateral protection agreements, forward rate currency or interest rate
options, puts and warrants, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any of the foregoing.
Highest Lawful Rate
shall mean, with respect to the Agent or any Lender, the maximum nonusurious
rate of interest permitted to be charged by, as applicable, the Agent or such
Lender under applicable laws (if any) of the United States or any state from
time to time in effect.
Inactive Subsidiaries
shall mean each of the Subsidiaries listed as inactive on Schedule
5.8.
Indebtedness shall
mean, as to any Person, without duplication: (a) all indebtedness (including
principal, interest, fees and charges) of such Person for borrowed money; (b)
any other indebtedness which is evidenced by a bond, debenture or similar
instrument; (c) all Capital Lease Obligations of such Person; (d) all
obligations of such Person for the deferred purchase price of Property or
services (except current trade accounts payable arising in the ordinary course
of business and current accrued expenses, not the result of borrowing, arising
in the ordinary course of business); (e) all reimbursement obligations of such
Person in respect of outstanding letters of credit, acceptances and similar
obligations created for the account of such Person; (f) all indebtedness,
liabilities, and obligations secured by any Lien on any Property owned by such
Person even though such Person has not assumed or has not otherwise become
liable for the payment of any such indebtedness, liabilities or obligations
secured by such Lien, but only to the extent of the value of the Property
subject to such Lien (or, if less, the amount of the underlying indebtedness,
liability or obligation); (g) all Cash Management Obligations of such Person and
net liabilities of such Person in respect of Hedging Obligations (calculated on
a basis satisfactory to the Agent and in accordance with accepted practice); (h)
all liabilities of such Person in respect of unfunded vested benefits under any
Plan; and (i) all other indebtedness, liabilities and obligations of such Person
which are required to be included or listed in the liabilities section of such
Person’s balance sheet according to GAAP; provided, that such
term shall not mean or include (1) any Indebtedness in respect of which monies
sufficient to pay and discharge the same in full (either on the expressed date
of maturity thereof or on such earlier date as such Indebtedness may be duly
called for redemption and payment) shall be deposited with a depository, agency
or trustee acceptable to the Agent in trust for the payment thereof, (2) any
operating leases entered into in the ordinary course of business (to the extent
such operating leases do not constitute Capital Lease Obligations) or (3)
Permitted Management Fees.
Interest Expense
shall mean, for any period, the total interest expense of the Credit Parties and
their Subsidiaries, determined on a Consolidated basis in accordance with GAAP,
consistently applied, and shall in any event include, without limitation, (a)
the amortization or write-off of debt discounts, (b) the amortization or
write-off of all debt issuance costs, commissions, discounts and other fees
payable in connection with the incurrence, amendment or refinancing of
Indebtedness (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptance financing), (c)
the portion of payments under Capital Lease Obligation allocable to interest
expense, and (d) net costs under Hedging Obligations in respect of interest
rates to the extent such net costs are allocable to such period in accordance
with GAAP.
Interest Payment
Dates shall mean (a) for Alternate Base Rate
Borrowings, (1) the last Business Day of each calendar month prior to the
Term Loan Maturity Date, and (2) the Term Loan Maturity Date; and (b) for LIBOR Borrowings,
(1) if the Interest Period applicable to such LIBOR Borrowing is equal to or
less than three (3) months, the end of such Interest Period, and (2) in all
other cases, on that day which is three (3) calendar months following the first
day of the applicable Interest Period (or, if there be no corresponding day, on
the next succeeding day which is a Business Day) and at the end of such Interest
Period.
Interest Period shall
mean the period commencing on the date of the applicable LIBOR Borrowing and
ending on the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is one (1), two
(2) or three (3) months thereafter; provided, however, that (a) if
an Interest Period would end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day, unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, (b) no
Interest Period shall end later than the Term Loan Maturity Date, and (c)
interest shall accrue from and including the first day of an Interest Period to,
but excluding, the last day of such Interest Period.
Inventory shall have
the meaning set forth in Article 9 of the UCC and in the PPSA.
Investment shall mean
the purchase or other acquisition of any securities or Indebtedness of, or the
making of any loan, advance, extension of credit, transfer of Property or
capital contribution to, or the incurring of any Contingent Obligation in
respect of the Indebtedness of, any Person.
Joinder Agreement
shall mean any agreement, in Proper Form, executed by a Subsidiary of any Credit
Party from time to time in accordance with Section 6.10 hereof,
pursuant to which such Subsidiary joins in the execution and delivery of this
Agreement, a Guaranty, the applicable Security Documents and the Contribution
Agreement.
Legal Requirement
shall mean any law, statute, ordinance, decree, requirement, order, judgment,
rule, regulation (or interpretation of any of the foregoing) of, and the terms
of any license or permit issued by, any Governmental Authority.
Lender or Lenders shall have
the meaning specified in the preamble of this Agreement.
Leverage Ratio shall
mean, with respect to the Credit Parties and their Subsidiaries as of any date
that the Leverage Ratio is calculated, the ratio of (a) Funded Debt of the
Credit Parties and their Subsidiaries as of such date to (b)(i) EBITDA for
the Credit Parties and their Subsidiaries for the applicable calculation
period. For purposes of calculating the Leverage Ratio, the
components of the Leverage Ratio shall be determined on a Consolidated basis and
the EBITDA component shall be determined for the four most recent consecutive
fiscal quarters of the Credit Parties ending on or prior to the date of
determination.
LIBOR Borrowing shall
mean, as of any date, that portion of the principal balance of the Term Loans
bearing interest at the Adjusted LIBO Rate as of such date.
LIBOR Lending Office
shall mean, with respect to any Lender, the office of such Lender specified as
its “LIBOR Lending Office” opposite or below its name on the signature pages
hereof, or (if no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time to time specify in
writing to the Borrower and the Agent.
LIBO Rate shall mean,
with respect to any LIBOR Borrowing for any Interest Period, the rate per annum
determined by the Agent at approximately 11:00 a.m. (London time) on the date
that is two Business Days prior to the commencement of such Interest Period by
reference to the British Bankers’ Association LIBOR (as set forth by any service
selected by the Agent that has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
such rates) for U.S. dollars for a period equal to such Interest Period; provided that, to the extent
that an interest rate is not ascertainable pursuant to the foregoing provisions
of this definition, the “LIBO Rate” shall be the interest rate per annum
determined by the Agent to be the average of the rates per annum at which
deposits in dollars are offered for such relevant Interest Period to major banks
in the London interbank market in London, England by the Agent at approximately
11:00 a.m. (London time) on the date that is two Business Days prior to the
beginning of such Interest Period.
Lien shall mean, with
respect to any asset of any Person, (a) any mortgage, pledge, charge,
encumbrance, security interest, collateral assignment or other lien or
restriction of any kind on such asset, whether based on common law,
constitutional provision, statute or contract, (b) the interest of any vendor or
a lessor under any conditional sale agreement, title retention agreement or
capital lease relating to such asset, (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities, or (d) any other right of or arrangement with any creditor to have
such creditor’s claim satisfied out of such assets, or the proceeds therefrom,
prior to the general creditors of such Person owning such assets.
Loan Documents shall
mean this Agreement, the Term Notes, the Security Documents, the Guaranties, the
Contribution Agreement, the Joinder Agreements, the First Lien Intercreditor
Agreement, all instruments, certificates and agreements now or hereafter
executed and delivered to the Agent and/or the Lenders in connection with or
pursuant to any of the foregoing and all amendments, modifications, renewals,
extensions, increases and rearrangements of, and substitutions for, any of the
foregoing.
Lockbox Agreement
shall collectively mean one or more lockbox agreements required by the
Collateral Agent, in Proper Form, to be executed and delivered to the Collateral
Agent by the Borrower and each of its Subsidiaries required by the Collateral
Agent, together with all modifications and/or replacements thereof which are
approved in writing by the Collateral Agent, for purposes of facilitating the
collection of Accounts in accordance with the terms of Section 6.15
hereof. On or prior to the Closing Date, the Borrower and each of its
applicable Subsidiaries has executed and delivered to the Collateral Agent one
or more Lockbox Agreements in Proper Form. No Inactive Subsidiary
shall be required to execute and deliver any Lockbox Agreement unless and until
such Inactive Subsidiary is required to become a Guarantor under the terms of
Section
6.10.
Loan Notice shall
have the meaning specified in Section
2.11.
Material Adverse
Effect shall mean a material adverse effect on (a) the business, assets,
property, or condition (financial or otherwise) of the Credit Parties taken as a
whole, (b) the ability of the Credit Parties to perform or pay the Obligations
in accordance with the terms hereof or of any other Loan Document, (c) the
validity or enforceability of this Agreement, any of the Term Notes or any other
Loan Documents or the rights or remedies of the Agent or the Lenders hereunder
or thereunder, or (d) the validity or enforceability of the Agent’s Lien on any
material portion of the Collateral or the priority of such Lien.
Monthly Unaudited Financial
Statements shall mean the financial statements of the Credit Parties and
their Subsidiaries, including all notes thereto, which statements shall include
(a) a balance sheet as of the end of the respective calendar month or fiscal
quarter, as applicable, (b) a statement of operations for such respective
calendar month or fiscal quarter, as applicable, and for the fiscal year to
date, subject to normal year-end adjustments, all setting forth in comparative
form the corresponding figures for the corresponding period of the preceding
fiscal year and for the Credit Parties’ Consolidated projections for such period
and (c) a statement of cash flows for the fiscal year to date, subject to normal
year-end adjustments, setting forth in comparative form the corresponding
figures in the corresponding period of the preceding fiscal year and for the
Credit Parties’ Consolidated projections for such period, all prepared in
reasonable detail and in accordance with GAAP and certified by a Responsible
Officer of the Parent as fairly and accurately presenting in all material
respects the financial condition and results of operations of the Credit Parties
and their Subsidiaries, on a Consolidated basis, at the dates and for the
periods indicated therein. The Monthly Unaudited Financial Statements
for the Credit Parties and their Subsidiaries shall be prepared on a
Consolidated basis, and to the extent required by the Agent, a consolidating
basis, the parties recognizing that such consolidating statements will be
prepared in accordance with GAAP only to the extent normal and
customary.
Net Income shall
mean, for any period, the consolidated net income (or loss) of the Credit
Parties and their Subsidiaries, determined on a Consolidated basis in accordance
with GAAP; provided that there
shall be excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Subsidiary of any Credit Party or is merged into or
consolidated with any Credit Party or any of its Subsidiaries, (b) the income
(or deficit) of any Person (other than a Subsidiary of any Credit Party) in
which any Credit Party or any of its Subsidiaries has an ownership interest,
except to the extent that any such income is actually received by such Credit
Party or such Subsidiary in the form of dividends or similar distributions and
(c) the undistributed earnings of any Subsidiary of any Credit Party to the
extent that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any contractual
obligation (other than under any Loan Document) or any Legal Requirement
applicable to such Subsidiary.
Net Working Capital
shall mean, on any date of calculation thereof, the remainder of (a) the
aggregate amount of Eligible Accounts and Eligible Inventory (valued, in each
case, at the lower of cost or fair market value on a first-in first-out basis)
as determined in accordance with GAAP consistently applied, minus (b) the
Consolidated current liabilities of all Credit Parties determined on such date
in accordance with GAAP.
Net Recovery Rate
shall mean the “net recovery value percentage” or “net recovery rate” under an
orderly liquidation scenario for the Inventory or Equipment, as applicable, of
the applicable Credit Parties, as specifically set forth and described in the
most recent “net orderly liquidation value” appraisal of such
Inventory or Equipment, as applicable, received by and acceptable to the Agent
in all respects.
Obligations shall
mean, without duplication, all obligations, liabilities and Indebtedness of the
Borrower and the Guarantors with respect to the Security Documents and all other
Loan Documents, including without limitation, (i) the principal of and interest
on the Term Loans and (ii) the payment or performance of all other
obligations, liabilities and Indebtedness of the Borrower or the Guarantors to
the Agent and the Lenders hereunder, under the Term Notes, or under any one or
more of the other Loan Documents, including all fees, costs, expenses and
indemnity obligations hereunder and thereunder. The Obligations
include interest (including post-petition interest, whether or not such interest
would be an allowable claim under any applicable bankruptcy or other similar
proceeding) and other obligations accruing or arising after (a) commencement of
any case under any bankruptcy or similar laws by or against the Borrower or any
Guarantor or (b) the personal liability of the Borrower or any Guarantor for the
Obligations shall be discharged or otherwise cease to exist by operation of law
or for any other reason.
Officer’s Certificate
shall mean a certificate substantially in the form of Exhibit B attached
hereto.
Organizational
Documents shall mean, with respect to a corporation, the certificate of
incorporation, articles of incorporation and bylaws of such corporation; with
respect to a limited partnership, the limited partnership agreement and
certificate of limited partnership of such limited partnership; with respect to
a joint venture, the joint venture agreement establishing such joint venture;
with respect to a limited liability company, the articles of organization or
certificate of formation and regulations or limited liability company agreement
of such limited liability company; and with respect to a trust, the
instrument establishing such trust; in each case including any and
all modifications thereof as of the date of the Loan Document referring to such
Organizational Document and any and all future modifications thereof which are
materially adverse to the Lenders and which are consented to by the
Agent.
Parent shall mean
collectively Animal Health International, Inc., a Delaware corporation, Steer
Intermediate Corporation, a Delaware corporation, Walco Holdings, Inc., a
Delaware corporation, and Walco Intermediate, Inc., a Delaware
corporation. When the context of any applicable provision hereof
requires that each such entity be referred to separately and not collectively,
the term Parent
shall be construed accordingly.
Parties shall mean
all Persons other than the Agent, the Collateral Agent or any Lender executing
any Loan Documents.
PBGC shall mean the
Pension Benefit Guaranty Corporation.
Permitted Affiliate
Transactions shall mean any of the following: (a) transactions with or
among any Credit Party and any wholly-owned Subsidiary of any Credit Party that
is a Guarantor; (b) reasonable and customary directors’ fees, reasonable and
customary directors’ indemnifications and similar arrangements for directors and
officers of the Credit Parties or any of its Subsidiaries entered into in the
ordinary course of business, together with any payments made under any such
indemnification arrangements; (c) customary and reasonable loans and advances to
officers, directors and employees of the Credit Parties or any of their
Subsidiaries for travel, entertainment, moving and other relocation expenses, in
each case made in the ordinary course of business; (d) the incurrence of
intercompany Indebtedness permitted pursuant to Section 7.1(g)
hereof; (e) Permitted Management Fees; and (f) other transactions, contracts or
agreements existing on the date of this Agreement and which are set forth on
Schedule 7.6
attached hereto, together with any renewals and extensions of such existing
transactions, contracts or agreements, so long as such renewals and extensions
are upon terms and conditions substantially identical to the terms and
conditions set forth in such existing transactions, contracts and agreements (or
otherwise no less favorable to the applicable Credit Party and its Subsidiaries,
as applicable).
Permitted Investment
Securities shall mean each of the following, to the extent the same is
pledged as additional Collateral hereunder and is subject to a first priority
perfected Lien in favor of the Collateral Agent for the ratable benefit of the
Lenders (including a control or dominion agreement from any applicable Person in
favor of the Agent that is in all respects satisfactory to the
Agent): (a) readily marketable, direct obligations of the United
States of America or any agency or wholly owned corporation thereof which are
backed by the full faith and credit of the United States, maturing within one
(1) year after the date of acquisition thereof, (b) certificates of deposit,
commercial paper (if rated no lower than A-1/P-1) or other short-term direct
obligations of any domestic financial institution having capital and surplus in
excess of $5,000,000,000, maturing within six months after the date of
acquisition thereof, (c) money market funds having aggregate assets in excess of
$5,000,000,000, and (d) other Investments mutually agreed to in writing by the
Borrower and the Agent.
Permitted Management
Fees shall mean management fees, monitoring fees and/or service fees
payable to Charlesbank and/or any of its Affiliates in an amount up to, but not
exceeding $250,000 in the aggregate during any fiscal year of the Credit
Parties, plus reimbursement to Charlesbank and/or any of its Affiliates of
reasonable and customary out-of-pocket expenses incurred in connection with such
management services provided by Charlesbank and/or any of its Affiliates,
provided that if any Event of Default has occurred and is continuing at the time
for payment of such fees or expense reimbursement, as applicable (or would occur
after giving effect thereto), such fees and expense reimbursement shall accrue
and be payable only upon the cure (or waiver) of such Event of
Default.
Person shall mean any
individual, corporation, business trust, unincorporated organization or
association, partnership, joint venture, limited liability company, Governmental
Authority or any other form of entity.
Plan shall mean any
plan subject to Title IV of ERISA and maintained for employees of the Borrower
or of any member of a “controlled group of corporations”, as such term is
defined in the Code, of which the Borrower, any of its Subsidiaries or any ERISA
Affiliate it may acquire from time to time is a part, or any such plan to which
the Borrower, any of its Subsidiaries or any ERISA Affiliate is required to
contribute on behalf of its employees.
PPSA shall mean the
Personal Property Security Act (Alberta), as amended.
Prime Rate shall mean
the rate of interest announced, from time to time, within Xxxxx Fargo at its
principal office in San Francisco as its “prime rate”, with the understanding
that the “prime rate” is one of Xxxxx Fargo’s base rates (not necessarily the
lowest of such rates) and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal
publications as Xxxxx Fargo may designate. Without notice to the
Borrower or any other Person, the Prime Rate shall change automatically from
time to time as and in the amount by which said Prime Rate shall fluctuate, with
each such change to be effective as of the date of each change in such Prime
Rate.
Principal Office
shall mean the principal office in San Francisco, California of the Agent, or
such other place as the Agent may from time to time by notice to the Borrower
designate.
Prohibited
Transaction shall mean any non-exempt prohibited transaction set forth in
Section 406 of ERISA or Section 4975 of the Code.
Proper Form shall
mean in form and substance satisfactory to the Agent, except that as used in
Section 4(g) hereof with respect to the Lenders, such term shall mean in form
and substance satisfactory to the Lenders.
Property shall mean
any interest in any kind of property or asset, whether real, personal or mixed,
tangible or intangible.
Refinancing
Indebtedness shall mean any Indebtedness of any Credit Parties or any of
its Subsidiaries issued in exchange for, or the net proceeds of which are used
to extend, refinance, renew, replace, defease or refund, other Indebtedness of
such Person, provided,
that:
(a) such
Refinancing Indebtedness is incurred only by such Persons who are obligors on
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded,
(b) the
principal amount of such Refinancing Indebtedness does not exceed the then
outstanding principal amount of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded;
(c) the
interest rate or rates to accrue under such Refinancing Indebtedness do not
exceed the lesser of (i) the interest rate or rates then accruing on the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded or
(ii) the prevailing market interest rate or rates which are then applicable to,
and generally available for, Indebtedness which is similar in type, amount,
maturity and other terms to the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded;
(d) the
maturities, amortization schedules, covenants, defaults, remedies, subordination
provisions (with respect to any Subordinated Indebtedness), collateral security
provisions (or absence thereof) and other terms of such Refinancing Indebtedness
are in each case the same or more favorable to the applicable Credit Party
and/or its applicable Subsidiaries as those in the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded;
(e) no
Default or Event of Default has occurred and is continuing or would result from
the issuance or origination of such Refinancing Indebtedness;
(f) if the
Indebtedness that is extended, refinanced, renewed, replaced, defeased or
refunded was subordinated in right of payment to the Obligations and/or priority
as to the Liens of the Collateral Agent for the ratable benefit of the Lenders,
then the terms and conditions of such Refinancing Indebtedness must include
subordination terms and conditions that are at least as favorable to the Agent
and the Lenders as those that were applicable to the extended, refinanced,
renewed, replaced, defeased or refunded Indebtedness; and
(g) if the
Indebtedness being refinanced is subject to the First Lien Intercreditor
Agreement, such Refinancing Indebtedness is either (1) permitted under the terms
of the First Lien Intercreditor Agreement and will remain subject to the terms
of the First Lien Intercreditor Agreement or (2) subject to an intercreditor
agreement on terms no less favorable to the Agent and the Lenders as those
contained in the First Lien Intercreditor Agreement.
Regulation D shall
mean Regulation D of the Board of Governors of the Federal Reserve System from
time to time in effect and shall include any successor or other regulation
relating to reserve requirements applicable to member Lenders of the Federal
Reserve System.
Regulatory Change
shall mean, with respect to any Lender, any change on or after the date of this
Agreement in any Legal Requirement (including Regulation D) or the adoption or
making on or after such date of any Legal Requirement applying to a class of
Lenders including such Lender under any Legal Requirement (whether or not having
the force of law) by any Governmental Authority charged with the interpretation
or administration thereof.
Reportable Event
shall mean a “reportable event” as defined in Section 4043(c) of ERISA for which
the notice requirement is not waived by the regulations thereunder.
Required Lenders
shall mean Lenders having greater than 66.67% of the Total Term Loan Commitment;
provided that
after termination of the Total Term Loan Commitment, Required Lenders
shall mean Lenders having greater than 66.67% of the aggregate amount of the
outstanding Term Loans; provided further,
however, if
only two (2) Lenders are then parties to this Agreement, Required Lenders
shall mean both of such Lenders.
Requirements of
Environmental Law shall mean all requirements imposed by any law
(including The Resource Conservation and Recovery Act, The Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water Act,
the Clean Air Act, and any state analogues of any of the foregoing), rule,
regulation, or order of any Governmental Authority which relate to (i)
pollution, protection or clean-up of the air, surface water, ground water,
soils, or subsurface strata; (ii) solid, liquid or gaseous waste or Hazardous
Substance generation, recycling, reclamation, release, threatened release,
treatment, storage, disposal or transportation; (iii) exposure of Persons or
property to Hazardous Substances; (iv) the manufacture, presence, processing,
distribution in commerce, use, discharge, releases, threatened releases, or
emissions of Hazardous Substances into the environment; or (v) the storage of
any Hazardous Substances. Requirement of Environmental
Law shall mean any one of them.
Responsible Officer
shall mean, with respect to any Person, the chief executive officer, the
president, any vice president, the chief financial officer, the controller or
the treasurer of such Person.
Revolving Credit
Agent shall mean JPMorgan Chase Bank, N.A., in its capacity as
administrative agent under the Revolving Credit Agreement, and any successor
administrative agent under the terms of the Revolving Credit
Agreement.
Revolving Credit
Agreement shall mean that certain Amended and Restated Credit Agreement,
dated as of September 26, 2006, by and among the Credit Parties, the Revolving
Credit Lenders, JPMorgan Chase Bank, N.A., as administrative agent, General
Electric Capital Corporation, as documentation agent and X.X. Xxxxxx Securities
Inc. as lead arranger and book runner, as amended pursuant that certain First
Amendment to Amended and Restated Credit Agreement, dated as of June 29, 2007,
and as further amended, restated or otherwise modified from time to
time.
Revolving Credit Agreement
Debt shall mean any indebtedness issued pursuant to the Revolving Credit
Agreement.
Revolving Credit
Lenders shall mean the lenders party to the Revolving Credit Agreement
from time to time.
Security Agreements
shall mean (a) the Amended and Restated Security Agreement (Personal
Property-Borrower), dated effective as of September 26, 2006, between the
Borrower and the Collateral Agent, for the ratable benefit of the Lenders and
the Revolving Credit Lenders, covering all Accounts, Inventory, Equipment and
all other tangible and intangible personal Property of the Borrower as more
particularly described therein, (b) the Amended and Restated Security Agreement
(Personal Property-Domestic Subsidiaries), dated as of September 26, 2006,
between each of the Borrower’s Domestic Subsidiaries that is a Guarantor and the
Collateral Agent, for the ratable benefit of the Lenders and the Revolving
Credit Lenders, covering all Accounts, Inventory, Equipment and other tangible
and intangible personal Property of each of the Borrower’s Domestic Subsidiaries
that is a Guarantor as more particularly described therein, as the same may
hereafter be joined in pursuant to a Joinder Agreement, (c) the Amended and
Restated Security Agreement (Personal Property-Canadian Subsidiaries), dated
effective as of September 26, 2006, between each of the Borrower’s Canadian
Subsidiaries that is a Guarantor and the Collateral Agent, for the ratable
benefit of the Lenders and the Revolving Credit Lenders, covering all Accounts,
Inventory, Equipment and other tangible and intangible personal Property of each
of the Borrower’s Canadian Subsidiaries that is a Guarantor as more particularly
described therein, as the same may hereafter be joined in pursuant to a Joinder
Agreement, (d) the Amended and Restated Pledge Agreement, dated effective as of
the September 26, 2006, between the Borrower and the Collateral Agent, for the
ratable benefit of the Lenders and the Revolving Credit Lenders, covering (i)
all issued and outstanding Equity Interests in each of the Borrower’s direct
Subsidiaries that is a Guarantor and (ii) 65% of all issued and outstanding
Equity Interests in each of the Borrower’s non-Domestic Subsidiaries that is not
a Guarantor, (e) the Amended and Restated Pledge Agreement, dated effective as
of the September 26, 2006, between Province Livestock Supply, Ltd. and the
Collateral Agent, for the ratable benefit of the Lenders and the Revolving
Credit Lenders, covering all issued and outstanding Equity Interests in each of
the Borrower’s Subsidiaries that is a Guarantor and for which Province Livestock
Supply, Ltd. is the parent, (f) the Amended and Restated Pledge Agreement, dated
effective as of September 26, 2006, between Walco Intermediate, Inc. and the
Collateral Agent for the ratable benefit of the Lenders and the Revolving Credit
Lenders, covering all Equity Interests in the Borrower, (g) any and all other
security agreements, pledge agreements, collateral assignments or other similar
documents now or hereafter executed in favor of the Collateral Agent, for the
ratable benefit of the Lenders and the Revolving Credit Lenders, as security for
the payment or performance of any and/or all of the Obligations, and (h) any
amendment, modification, restatement or supplement of all or any of the
above-described agreements and assignments (including, without limitation, the
Global Amendment).
Security Documents
shall mean the Security Agreements, all related financing statements and any and
all other agreements, mortgages, deeds of trust, chattel mortgages, security
agreements, pledges, guaranties, assignments of income, assignments of contract
rights, assignments or pledges of stock or partnership interests, standby
agreements, subordination agreements, undertakings and other instruments and
financing statements now or hereafter executed and delivered as security for the
payment and performance of the Obligations, as any of them may from time to time
be amended, modified, restated or supplemented. Notwithstanding the
foregoing or any other provision herein or in any Loan Document or any Security
Document to the contrary, the real property Collateral and the Liens of any
Security Documents covering any real property Collateral shall only secure the
Obligations (as defined in the Revolving Credit Agreement) and the Collateral
Obligations (as defined in the First Lien Intercreditor Agreement) and shall not
secure any of the Obligations.
Statutory Reserves
shall mean a fraction (expressed as a decimal), the numerator of which is the
number one and the denominator of which is the number one minus the aggregate of
the maximum reserve percentage (including without limitation, any marginal,
special, emergency or supplemental reserves) expressed as a decimal, established
by the Board of Governors of the Federal Reserve System of the United States and
any other banking authority to which any Lender is subject with respect to the
Adjusted LIBO Rate for Eurocurrency Liabilities (as defined in Regulation D),
including without limitation, those reserve percentages imposed under Regulation
D.
Subordinated
Indebtedness shall mean, with respect to any Credit Party, Indebtedness
subordinated in right of payment to the Credit Parties’ monetary Obligations on
terms satisfactory to and approved in writing by the Agent and the Required
Lenders, in their discretion, so long as all other terms thereof (including
without limitation, regularly scheduled payments and financial and negative
covenants) are satisfactory to and approved in writing by the Agent and the
Required Lenders, in their discretion.
Subsidiary shall
mean, as to a particular parent Business Entity, any Business Entity of which
more than fifty
percent (50%) of the Equity Interests issued by such Business Entity is at the
time directly or indirectly owned by such parent Business Entity or by one or
more of its Affiliates.
Term Loan Commitment
shall mean, as to any Lender, the obligation of such Lender to make a Term Loan
in a principal amount up to, but not exceeding, the amount set forth as such
Lender’s Term Loan Commitment in Schedule 1.1 attached
hereto.
Term Loan Commitment
Percentage shall mean, with respect to any Lender, the ratio, expressed
as a percentage, of such Lender’s Term Loan Commitment to the Total Term Loan
Commitment.
Term Loan Maturity
Date shall mean the earlier of (a) May 31, 2011 and (b) any date the Term
Loan Maturity Date is accelerated by the Agent pursuant to Section 8.1
hereof.
Term Loans shall mean
the Term Loans made pursuant to Section 2.1
hereof. Term Loan shall mean
any one of such Term Loans.
Term Notes shall mean
the promissory notes, each substantially in the form of Exhibit A attached
hereto, of the Borrower evidencing the Term Loans, payable to the order of the
respective Lenders in the amount of each of said Lender’s Term Loan Commitment,
and all renewals, extensions, modifications, rearrangements and replacements
thereof, and substitutions therefor. Term Note shall mean
any one of such promissory notes.
Total Term Loan
Commitment shall mean, on any day, the aggregate of all of the Lenders’
Term Loan Commitments on such day. As of the Closing Date, the Total
Term Loan Commitment is $44,550,000.
Tri-Party Agreements
shall collectively mean tri-party agreements, in Proper Form, to be executed and
delivered by and among the Collateral Agent, the Borrower (and each of its
Subsidiaries required by the Collateral Agent) and the applicable financial
institutions described in Schedule 6.15
attached hereto, together with all modifications and/or replacements thereof
which are approved in writing by the Agent, for purposes of either (a)
facilitating the collection of Accounts in accordance with the terms of Section 6.15 hereof,
to the extent payments of Accounts are processed through cash management
services (including lockbox arrangements) provided by any such specified
financial institution and/or deposited in one or more accounts maintained by the
Borrower or its applicable Subsidiary with any such specified financial
institution or (b) evidencing control for purposes of perfection of the
Collateral Agent’s Lien, for the ratable benefit of the Lenders, against one or
more deposit accounts maintained by the Borrower or its applicable Subsidiary
with any such specified financial institution. As of the Closing
Date, Schedule
6.15 attached hereto describes all such accounts to be covered by a
Tri-Party Agreement and specifies whether the applicable Tri-Party Agreement is
for purposes of facilitating the collection of Accounts or perfecting the
Collateral Agent’s Lien against such accounts. The Borrower agrees
that neither the Borrower nor any of its Subsidiaries shall establish any
additional deposit accounts permitted to be maintained hereunder with a
financial institution other than the Collateral Agent unless such additional
deposit accounts are covered by a Tri-Party Agreement.
Type shall mean, with
respect to the Term Loan or any portion thereof, its character as a LIBOR
Borrowing or an Alternate Base Rate Borrowing.
UCC shall mean the
Uniform Commercial Code as in effect from time to time in the State of New York
or of any other state the laws of which are required as a result thereof to be
applied in connection with the attachment, perfection or priority of, or
remedies with respect to, the Collateral Agent’s or any Lender’s Lien on any
Collateral.
Unfinanced Capital
Expenditures shall mean all Capital Expenditures other than Financed
Capital Expenditures.
Unfinanced Cash
Dividends shall mean, with respect to any Person for any period, all Cash
Dividends of such Person for such period that are not paid either from net
proceeds of the Term Loans, net proceeds of the Term Loans (as defined in that
certain Term Loan Agreement dated as of September 26, 2006, by and among the
Credit Parties, the lenders party thereto and Wilmington Trust Company, as
administrative agent) or from net proceeds of any other permitted Indebtedness
of such Person incurred after September 26, 2006.
Xxxxx Fargo shall
mean Xxxxx Fargo Bank, National Association.
1.2. Accounting Terms and
Determinations. Except where specifically otherwise
provided:
(a) The
symbol “$” and the word “dollars” shall mean lawful money of the United States
of America.
(b) Any
accounting term not otherwise defined shall have the meaning ascribed to it
under GAAP. If any of the Credit Parties are required after the
Closing Date to implement any change(s) in its accounting principles and
practice as a result of any changes in GAAP mandated by the Financial Accounting
Standards Board or successor organization, and if such change(s) result in any
material change in the method of calculation of the Fixed Charge Coverage Ratio,
Excess Cash Flow, Leverage Ratio and/or any other financial covenant under this
Agreement, then for all periods after the date of implementation of such
change(s) until one or more appropriate amendments of this Agreement addressing
such change(s) in GAAP are negotiated, executed and delivered by the parties
hereto in a form acceptable to all such parties, the Fixed Charge Coverage
Ratio, Excess Cash Flow, Leverage Ratio and/or such other financial covenant, as
applicable, shall be calculated hereunder utilizing GAAP as in effect prior to
such change(s).
(c) Unless
otherwise expressly provided, any accounting concept and all financial covenants
shall be determined on a Consolidated basis, and financial measurements shall be
computed without duplication.
(d) Wherever
the term “including” or any of its correlatives appears in the Loan Documents,
it shall be read as if it were written “including (by way of example and without
limiting the generality of the subject or concept referred to)”.
(e) Wherever
the word “herein” or “hereof” is used in any Loan Document, it is a reference to
that entire Loan Document and not just to the subdivision of it in which the
word is used.
(f) References
in any Loan Document to Section numbers are references to the Sections of such
Loan Document.
(g) References
in any Loan Document to Exhibits, Schedules, Annexes and Appendices are to the
Exhibits, Schedules, Annexes and Appendices to such Loan Document, and they
shall be deemed incorporated into such Loan Document by reference.
(h) Any term
defined in the Loan Documents which refers to a particular agreement, instrument
or document shall also mean, refer to and include all modifications, amendments,
supplements, restatements, renewals, extensions and substitutions of the same;
provided, that
nothing in this subsection shall be construed to authorize any such
modification, amendment, supplement, restatement, renewal, extension or
substitution except as may be permitted by other provisions of the Loan
Documents.
(j) Defined
terms may be used in the singular or plural, as the context
requires.
1.3. UCC and PPSA
Changes. All terms used herein which are defined in the UCC
and/or the PPSA shall, unless otherwise provided, have the meanings ascribed to
them in the UCC and/or the PPSA, as applicable, both as in effect on the date of
this Agreement and as hereafter amended. The parties intend that the
terms used herein which are defined in the UCC and/or the PPSA, as applicable,
have, at all times, the broadest and most inclusive meanings
possible. Accordingly, if the UCC and/or the PPSA, as applicable,
shall in the future be amended or held by a court to define any term used herein
more broadly or inclusively than the UCC and/or the PPSA, as applicable, in
effect on the date of this Agreement, then such term as used herein shall be
given such broadened meaning. If the UCC and/or the PPSA, as applicable, shall
in the future be amended or held by a court to define any term used herein more
narrowly, or less inclusively, than the UCC and/or the PPSA, as applicable, in
effect on the date of this Agreement, such amendment or holding shall be
disregarded in defining terms used in this Agreement.
2. Term Loans; Term Notes;
Payments; Prepayments; Interest Rates.
2.1. Term Loan
Commitments. Subject to the terms and conditions hereof, each
Lender, severally and not jointly, agrees to make a Term Loan to the Borrower on
the Closing Date, but in no event on or after 5:00 p.m., Eastern Daylight Time,
on the Closing Date, in a principal amount equal to the amount of such Lender’s
Term Loan Commitment.
2.2. Term
Loans.
(a) Subject
to Section 4
hereof, the Term Loans (i) shall be advanced and made ratably by the Lenders in
accordance with the Lenders’ respective Term Loan Commitments, and (ii) the Term
Loans shall be made by the Lenders on the Closing Date but in no event on or
after the Term Loan Commitment Termination Date.
(b) Each
Lender shall make its Term Loan available on the proposed dates thereof by
causing its Applicable Lending Office to pay the amount required to a deposit
account designated and maintained by the Borrower with JPMorgan Chase Bank, N.A.
in immediately available funds not later than 1:00 p.m.
(c) The
obligations of the Lenders hereunder are several and not joint; therefore,
notwithstanding anything herein to the contrary: (i) no Lender shall
be required to make a Term Loan in excess of such Lender’s Term Loan Commitment;
(ii) if a Lender fails to make its Term Loan as or when required hereunder and
the Borrower subsequently makes a repayment on the Term Loans, such repayment
shall be split among the non-defaulting Lenders in accordance with their
respective Term Loan Commitment Percentages until each non-defaulting Lender has
received its Term Loan Commitment Percentage of all of the outstanding Term
Loans, then the balance of such repayment shall be divided among all of the
Lenders in accordance with their respective Term Loan Commitments; and (iii) the
failure of any Lender to make any Term Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (provided, that no
Lender shall be responsible for the failure of any other Lender to make a Term
Loan such other Lender is obligated to make hereunder).
2.3. Mandatory and Voluntary
Prepayments.
(a) To the
extent permitted by Section 7.11(f) of the Revolving Credit Agreement, the
Borrower shall make a prepayment of the Term Loans, to the extent the same are
then outstanding, in an amount equal to twenty-five percent (25%) of Excess Cash
Flow for each fiscal year of the Credit Parties (commencing with the fiscal year
ending June 30, 2008). For purposes hereof, Excess Cash Flow will be
computed by the Borrower and be subject to the review and reasonable approval of
the Required Lenders, based on the Credit Parties’ Annual Audited Financial
Statements for the applicable fiscal year. The Borrower shall submit such
computation in reasonable detail to the Agent, along with the amount of such
resulting prepayment of the Terms Loans required by this subparagraph (a) based
on such calculations by the Borrower, at the same time the applicable Annual
Audited Financial Statements of the Credit Parties are delivered to and received
by the Agent in accordance with the terms of Section 6.3
hereof. Upon receipt of such payment, the Agent shall immediately
apply such payment against the Term Loans in accordance with the terms hereof,
reserving any right to require payment of any deficiency in such amount. Within
ten (10) Business Days after receipt by the Agent of such calculations of and
payment by the Borrower, the Agent, at the request of the Required Lenders,
shall notify the Borrower in writing of any error by the Borrower in the
computation of the amount of the prepayment of the Term Loans required by this
subparagraph (a), and in the event of any such error, the Borrower shall pay to
the Agent any deficiency in the amount of the requisite prepayment of the Term
Loans within five (5) Business Days after receipt of such notification from the
Agent. Any prepayments required by this subparagraph (a) shall be
applied to outstanding Term Loans (together with any Consequential Loss
resulting from such prepayment); provided, however, that the
Borrower shall not be required to make any prepayment of any LIBOR Borrowings
pursuant to this subparagraph (a) until the last day of the Interest Period with
respect thereto so
long as such prepayment is deposited by the Borrower in a cash collateral
account with the Agent to be held in such account on terms satisfactory to the
Agent, with all amounts in such cash collateral account (including any interest
earned thereon, if any) to be automatically applied by the Agent against the
applicable Term LIBOR Borrowings on the last day of the Interest Period with
respect thereto. Any amount of the Term Loans prepaid in accordance
with the provisions of this subparagraph (a) may not be reborrowed.
(b) In
addition to the mandatory prepayments required by Section 2.3(a)
above, and to the extent permitted by Section 7.11(f) of the Revolving Credit
Agreement, the Borrower shall have the right, at its option, to prepay any of
the Term Loans in whole at any time or in part from time to time, without
premium or penalty, except as otherwise provided in this Section 2.3 or
subsections (a), (b) or (c) of Section 2.7
hereof. Each prepayment of Term Loans under this subsection shall be
in a minimum amount of $100,000, and applied to the prepayment of the aggregate
unpaid principal amount of the Term Notes. Prepayments under this
subsection (b) shall be subject to the following additional
conditions:
(1) In giving
notice of prepayment as hereinafter provided, the Borrower shall specify, for
the purpose of paragraphs (2) and (3) immediately following, the manner of
application of such prepayment as between Alternate Base Rate Borrowings and
LIBO Rate Borrowings; provided, that in no
event shall any LIBO Rate Borrowing be partially prepaid.
(2) Prepayments
applied to any LIBO Rate Borrowing may be made on any Business Day, provided, that (i)
the Borrower shall have given the Agent at least five (5) Business Days’ prior
irrevocable written or telecopied notice of such prepayment, specifying the
principal amount of the LIBOR Borrowing to be prepaid and the prepayment date;
and (ii) if such prepayment is made on any day other than the last day of the
Interest Period corresponding to the LIBOR Borrowing to be prepaid, the Borrower
shall pay upon demand directly to the Agent for the account of the Lenders the
Consequential Loss as a result of such prepayment.
(3) Prepayments
applied to any Alternate Base Rate Borrowing may be made on any Business Day,
provided, that
with respect thereto, the Borrower shall have given the Agent prior irrevocable
written notice or notice by telephone (which is to be promptly confirmed in
writing) of any such prepayment on the Business Day of such prepayment,
specifying the principal amount of the Alternate Base Rate Borrowing to be
prepaid.
(c) If any
notice of any prepayment has been given, the principal amount specified in such
notice, together with (in the case of any prepayment of a LIBOR Borrowing)
interest thereon to the date of prepayment and any resulting Consequential Loss,
shall be due and payable on such prepayment date.
2.4. Term Notes;
Payments.
(a) Subject
to the provisions of Section 10.12 hereof
relating to replacement and substitution of the Term Notes, the Term Loan made
by a Lender shall be evidenced by a single Term Note dated as of the Closing
Date, delivered and payable to such Lender in a principal amount equal to such
Lender’s Term Loan Commitment as of the Closing Date.
(b) If not
earlier prepaid in full, and to the extent permitted by Section 7.11(f) of the
Revolving Credit Agreement, the aggregate principal balance of the Term Loans,
as evidenced by the Term Notes, shall be due and payable in quarterly
installments of $112,500, each due on each September 30, December 31, March 31,
and June 30 of each calendar year, commencing on September 30,
2007. To the extent not previously paid, the aggregate outstanding
principal balance of the Term Loans shall be finally due and payable on the Term
Loan Maturity Date.
(c) Subject
to Section 10.6
hereof, the Borrower hereby agrees to pay accrued interest on the unpaid
principal balance of the Term Loans on the Interest Payment Dates, commencing
with the first of such dates to occur after the date hereof. After
the Term Loan Maturity Date, accrued and unpaid interest on the Term Loans shall
be payable on demand.
2.5. Application of Payments and
Prepayments.
(a) Prepayments
on the Term Loans, including without limitation, prepayments in accordance with
Sections 2.3(a)
hereof, shall be applied to payment of the aggregate unpaid principal amounts of
the Term Notes in inverse order of maturity, with the balance of any such
prepayments, if any, being applied to accrued interest. Payments of
accrued interest on each Term Note in accordance with Section 2.4(c) hereof
shall be applied to the aggregate accrued interest then outstanding under the
Term Notes. Payments of regularly scheduled installments of principal
on each Term Note in accordance with Section 2.4(b) hereof
shall be applied to the aggregate principal amount outstanding under the Term
Notes in direct order of maturity, while payment by the Borrower of the
aggregate principal amount outstanding under the Term Notes on the Term Loan
Maturity Date shall be applied to principal.
(b) All
payments remitted to the Agent, and, absent the existence of an Event of
Default, all such payments not relating to principal or interest of specific
Term Loans, or not constituting payment of specific fees or other specific
Obligations, and all proceeds of Collateral received by the Agent, shall be
applied, ratably, subject to the provisions of this Agreement, first, to pay any
fees, indemnities or expense reimbursements then due to the Agent hereunder;
second, to pay
any fees or expense reimbursements then due to the Lenders from any Credit
Party; third,
to pay interest due in respect of all Term Loans; fourth, to pay or
prepay principal of the Term Loans; and fifth, to the payment
of any other Obligation due to the Agent or any
Lender. Notwithstanding anything to the contrary contained in this
Agreement, unless so directed by the Borrower, or unless an Event of Default has
occurred and is continuing, neither the Agent nor any Lender shall apply any
payments which it receives to any LIBOR Borrowing, except (a) on the
expiration date of the Interest Period applicable to any such LIBOR Borrowing,
or (b) in the event, and only to the extent, that there are no outstanding
Alternate Base Rate Borrowings and the Borrower has consented to such
application.
(c) Each
payment or prepayment received by the Agent hereunder or under any Term Note for
the account of a Lender shall be paid promptly to such Lender, in immediately
available funds.
(d) All sums
payable by the Borrower to the Agent hereunder or pursuant to the Term Notes or
any of the other Loan Documents for its own account or the account of the
Lenders shall be payable in United States dollars in immediately available funds
not later than 12:00 noon on the date such payment or prepayment is due and
shall be made without set-off, counterclaim or deduction of any
kind. Any such payment or prepayment received and accepted by the
Agent after 12:00 noon shall be considered for all purposes (including the
payment of interest, to the extent permitted by law) as having been made on the
next succeeding Business Day. All such payments or prepayments shall
be made at the Principal Office. If any payment or prepayment becomes
due and payable on a day which is not a Business Day, then the date for the
payment thereof shall be extended to the next succeeding Business Day and
interest shall be payable thereon at the then applicable rate per annum during
such extension.
2.6. Interest Rates for Term
Loans.
(a) Subject
to Section 10.6
hereof, the Term Notes shall bear interest on their respective outstanding
principal balances at the LIBO Rate; provided, that (1)
all principal outstanding, whether then due and payable, after the occurrence of
an Event of Default which has not been cured to the satisfaction of the Agent
and the Required Lenders or waived in writing by the Agent and the Required
Lenders shall bear interest at the Default Rate, which shall be due and payable
upon demand, and (2) past due principal and interest shall bear interest at the
Default Rate, which shall be payable on demand. Interest on the Term
Loans shall be calculated at the LIBO Rate, except where it is expressly
provided pursuant to this Agreement, the Alternate Base Rate is to
apply.
(b) All
interest and fees will be computed on the basis of a year of 360 days and actual
days elapsed (including the first day but excluding the last day) occurring in
the period for which payable, unless the effect of so computing shall be to
cause the rate of interest to exceed the Highest Lawful Rate.
2.7. Special Provisions
Applicable to LIBOR Borrowings.
(a) If, after
the date of this Agreement, the adoption of any applicable Legal Requirement or
any change in any applicable Legal Requirement or in the interpretation or
administration thereof by any Governmental Authority or compliance by the Agent
or any Lender with any request or directive (whether or not having the force of
law) of any Governmental Authority shall at any time make it unlawful or
impracticable for any Lender to permit the establishment of or to maintain any
LIBOR Borrowing, the commitment of the Lenders to establish or maintain the
Adjusted LIBO Rate affected by such adoption or change shall forthwith be
canceled, the Agent or such Lender shall use reasonable efforts to give the
Borrower written notice thereof within a reasonable time after discovery of such
adoption or change by the Agent or such Lender, as applicable (it being agreed,
however, that any failure to provide such notice to the Borrower shall not in
any manner affect the rights under this Section 2.7(a) of the
Agent or any Lender), and the Borrower shall forthwith, upon demand by the Agent
to the Borrower, (1) convert the Adjusted LIBO Rate with respect to which such
demand was made to the Alternate Base Rate; (2) pay all accrued and unpaid
interest to date on the amount so converted; and (3) pay any amounts required to
compensate the Agent and the Lenders for any additional cost or expense which
the Agent or any Lender may incur as a result of such adoption of or change in
such Legal Requirement or in the interpretation or administration thereof and
any Consequential Loss which the Agent or any Lender may incur as a result of
such conversion to the Alternate Base Rate.
(b) If the
adoption of any applicable Legal Requirement or any change in any applicable
Legal Requirement or in the interpretation or administration thereof by any
Governmental Authority or compliance by the Agent or any Lender with any request
or directive (whether or not having the force of law) from any Governmental
Authority shall at any time as a result of any portion of the principal balance
of the Term Notes being maintained on the basis of the Adjusted LIBO
Rate:
(1) impose,
modify, increase or deem applicable any reserve requirement (excluding that
portion of any reserve requirement included in the calculation of the Statutory
Reserves), special deposit requirement or similar requirement (including state
law requirements and Regulation D) imposed, modified, increased or deemed
applicable by any Governmental Authority against assets held by the Agent or any
Lender, or against deposits or accounts in or for the account of the Agent or
any Lender, or against loans made by the Agent or any Lender, or against any
other funds, obligations or other Property owned or held by the Agent or any
Lender; or
(2) impose on
the Agent or any Lender any other materially restrictive or limiting condition
regarding any LIBOR Borrowing; and the result of any of the foregoing is to
increase the cost to any Lender of agreeing to make or of making, renewing or
maintaining such borrowing on the basis of the Adjusted LIBO Rate, or reduce the
amount of principal or interest received by any Lender, then the Agent or such
Lender shall use reasonable efforts to give the Borrower written notice thereof
within a reasonable time after discovery of such adoption or change by the Agent
or such Lender, as applicable (it being agreed, however, that any failure to
provide such notice to the Borrower shall not in any manner affect the rights
under this Section
2.7(b) of the Agent or any Lender), and, upon demand by such Lender, the
Borrower shall pay to such Lender, from time to time as specified by such
Lender, additional amounts which shall compensate such Lender for such increased
cost or reduced amount. Such Lender will promptly notify the Borrower
in writing of any event, upon becoming actually aware of it, which will entitle
any Lender to additional amounts pursuant to this paragraph. Such
Lender’s determination of the amount of any such increased cost, increased
reserve requirement or reduced amount shall be conclusive and binding, absent
manifest error, provided that the calculation thereof and reason therefore is
certified and is set forth in reasonable detail in such certification by such
Lender.
The
Borrower shall have the right, if it receives from any Lender any notice
referred to in the preceding paragraph, upon three (3) Business Days’ notice to
the Agent, either (i) to repay in full (but not in part) any borrowing with
respect to which such notice was given, together with any accrued interest
thereon, or (ii) to convert the Adjusted LIBO Rate in effect with respect to
such borrowing from such Lender to the Alternate Base Rate; provided, that any
such repayment or conversion shall be accompanied by payment of (x) the amount
required to compensate the appropriate Lender or Lenders for the increased cost
or reduced amount referred to in the preceding paragraph; (y) all accrued and
unpaid interest to date on the amount so repaid or converted; and (z) any
Consequential Loss which may be incurred as a result of such repayment or
conversion. Additionally, if it receives from any Lender any notice
referred to in the preceding paragraph, the Borrower shall also have the
corresponding rights in Section
10.16(c).
(c) If for
any reason with respect to any Interest Period the Agent shall have in good
faith determined (which determination shall be conclusive and binding upon the
Borrower) that: (1) the Agent is unable through its customary general practices
to determine a rate at which the Agent is offered deposits in United States
dollars by prime banks in the London interbank market, in the appropriate amount
for the appropriate period, or by reason of circumstances affecting the London
interbank market, generally, the Agent is not being offered deposits for the
applicable Interest Period and in an amount equal to the amount of the Agent’s
pro-rata portion of any LIBOR Borrowing requested by the Borrower, or (2) the
Adjusted LIBO Rate will not adequately and fairly reflect the cost to any Lender
of making and maintaining any LIBOR Borrowing hereunder for any proposed
Interest Period, then the Agent shall give the Borrower notice thereof and
thereupon each outstanding LIBOR Borrowing then in effect shall be converted,
without any notice to or from the Borrower, upon the termination of the Interest
Period then in effect to an Alternate Base Rate Borrowing.
(d) Each
Credit Party,
jointly and severally with all other Credit Parties, hereby agrees to
indemnify the Agent and each of the Lenders against and hold each of them
harmless from any Consequential Loss which it may incur or sustain as a
consequence of any prepayment (mandatory or optional) or default by the Borrower
in the payment of any principal amount of or interest on each Term Note or any
failure by the Borrower to convert or to borrow any LIBOR Borrowing on the date
specified by the Borrower. This agreement shall survive the payment
of each Term Note. A certificate as to any additional amounts payable
to the Agent or any Lender pursuant to this paragraph, detailing the basis
therefore and submitted by the Agent or such Lender to the Borrower shall be
conclusive and binding upon the Credit Parties, absent manifest error, provided
the calculation thereof is set forth in reasonable detail in such
notice.
(e) If the
Borrower requests quotes of the Adjusted LIBO Rate for different Interest
Periods being considered for election by the Borrower, the Agent will use
reasonable efforts to provide such quotes to the Borrower
promptly. However, all such quotes provided shall be representative
only and shall not be binding on the Agent or any Lender, nor shall they be
determinative, directly or indirectly, of any Adjusted LIBO Rate or any
component of any such rate, nor will the Borrower’s failure to receive or the
Agent’s failure to provide any requested quote or quotes either (1) excuse or
extend the time for performance of any obligation of the Borrower or for the
exercise of any right, option or election of the Borrower or (2) impose any duty
or liability on the Agent or any Lender. If the Borrower requests a
list of the Business Days in any calendar month, the Agent will use reasonable
efforts to provide such list promptly. However, any such list
provided shall be understood to identify only those days which the Agent
believes in good faith at the time such list is prepared will be the Business
Days for such month. The Agent shall not have any liability for any
failure to provide, delay in providing, error or mistake in or omission from,
any such quote or list.
(f) With
respect to any Lender having a LIBOR Lending Office which differs from its
Domestic Lending Office, all Term Loans advanced by such Lender’s LIBOR Lending
Office shall be deemed to have been made by such Lender and the obligation of
the Borrower to repay such Term Loans shall nevertheless be to such Lender and
shall be deemed held by such Lender, to the extent of such portions of the Term
Loan, for the account of such Lender’s LIBOR Lending Office.
(g) Notwithstanding
any provision of this Agreement to the contrary, each Lender shall be entitled
to fund and maintain its funding of all or any part of the Term Loans hereunder
in any manner it sees fit, it being understood, however, that for the purposes
of this Agreement, all determinations hereunder shall be made as if such Lender
had actually funded and maintained its portion of each LIBOR Borrowing during
each Interest Period for the Term Loans through the purchase of deposits having
a maturity corresponding to such Interest Period and bearing an interest rate
equal to the LIBO Rate for such Interest Period.
(h) The
Borrower’s obligation to pay increased costs and Consequential Loss with regard
to each LIBOR Borrowing as specified in this Section 2.7 hereof
shall survive termination of this Agreement.
2.8. Pro-Rata
Treatment.
(a) Except to
the extent otherwise provided herein: (a) each borrowing from the
Lenders under Section
2.1 hereof shall be made pro-rata, according
to each Lender’s Term Loan Commitment Percentage as applicable; and (b) each
payment or prepayment by the Borrower of principal of or interest on Term Loans
shall be made to the Agent for the account of the Lenders pro-rata in
accordance with the respective unpaid principal amounts of such Term Loans held
by the Lenders.
(b) (a) Unless
the Agent shall have been notified in writing by any Lender prior to the Closing
Date that such Lender will not make the amount that would constitute such
Lender’s Term Loan Commitment Percentage of the Term Loans on the Closing Date
available to the Agent at the Principal Office, the Agent may assume that such
Lender has made such amount available to the Agent on such date, and the Agent
may, in reliance upon such assumption and subject to the terms and conditions of
this Agreement, but shall not be obligated to, make such amount available to the
Borrower by depositing the same, in immediately available funds, in a deposit
account designated and maintained by the Borrower with JPMorgan Chase Bank,
N.A. Any Lender failing to timely deliver its requisite portion of
the Term Loans shall deliver the same to the Agent as soon as possible
thereafter, together with interest on such amount for each day from the due date
for such payment to the date of payment by such Lender to the Agent of such
amount at a rate of interest per annum equal to the Federal Funds Effective Rate
for such period. In addition, the Borrower hereby agrees that upon
demand by the Agent, the Borrower shall reimburse the Agent for any such amount
which any Lender has failed to timely deliver to the Agent, but which the Agent
may have previously made available to the Borrower in accordance with the other
provisions of this Section 2.8(b).
2.9. Sharing of Payments,
Etc. Each of the Credit Parties agrees that, in addition to
(and without limitation of) any right of set-off, bankers’ lien or counterclaim
a Lender may otherwise have, each Lender shall be entitled, at its option, to
offset balances held by it for the account of any of the Credit Parties at any
of its offices against any principal of or interest on any of such Lender’s Term
Loans to the Borrower hereunder, or any other Obligation of the Borrower
hereunder (regardless of whether such Obligations of the Borrower are then due
and regardless of whether such offset balances are then due to the Borrower), in
which case it shall promptly notify the Borrower and the Agent thereof, provided, that such
Lender’s failure to give such notice shall not affect the validity
thereof. If a Lender shall obtain payment of any principal of or
interest on any Term Loan made by it under this Agreement, or other obligation
then due to such Lender hereunder, through the exercise of any right of set-off
(including, without limitation, any right of set-off or lien granted under Section 10.19
hereof), banker’s lien, counterclaim or similar right, or otherwise, it shall
promptly purchase from the other Lenders participations in the Term Loans made
by, or the other obligations of the Borrower hereunder of, the other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro-rata in
accordance with their respective Term Loan Commitment Percentages. To
such end all the Lenders shall make appropriate adjustments among themselves (by
the resale of participations sold or otherwise) if such payment is rescinded or
must otherwise be restored. Each of the Credit Parties agrees, to the
fullest extent it may effectively do so under applicable law, that any Lender so
purchasing a participation in the Loans made by or other obligations hereunder
of, the other Lenders may exercise all rights of set-off, bankers’ lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender were a direct holder of said Loans or other obligations in the
amount of such participation. Nothing contained herein shall require
any Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness or obligation of the Borrower.
2.10. Recapture. If
on any Interest Payment Date the Agent does not receive for the account of one
or more Lenders payment in full of interest computed at the Alternate Base Rate
and/or the Adjusted LIBO Rate, as applicable (computed without regard to any
limitation by the Highest Lawful Rate), because the sum of the Alternate Base
Rate and/or the Adjusted LIBO Rate, as applicable (so computed), exceeds or has
exceeded the Highest Lawful Rate applicable to such Lenders, the Borrower shall
pay to the Agent for the account of such Lenders, in addition to interest
otherwise required, on each Interest Payment Date thereafter, the Excess
Interest Amount (calculated as of each such subsequent Interest Payment Date);
provided, that
in no event shall the Borrower be required to pay, for any computation period,
interest at a rate exceeding the Highest Lawful Rate applicable to such Lenders
during such period. As used herein, the term “Excess Interest
Amount” shall mean, on any day, the amount by which (a) the amount of all
interest which would have accrued prior to such day on the outstanding principal
of the Term Notes of the applicable Lender (had the Alternate Base Rate and/or
the Adjusted LIBO Rate, as applicable, at all times been in effect without
limitation by the Highest Lawful Rate applicable to such Lender) exceeds (b) the
aggregate amount of interest actually paid to the Agent for the account of such
Lender on its Term Notes on or prior to such day.
2.11. Conversion and Continuation
of Term Loan. Each conversion of the Term Loan or any portion
thereof from one Type to another, and each continuation of a LIBOR Borrowing
shall be made upon the Borrower’s irrevocable notice to the Agent, which may be
given by telephone. Each such notice must be received by the Agent
not later than 12:00 p.m. three (3) Business Days prior to the requested date of
any conversion to or continuation of a LIBOR Borrowing or of any conversion of a
LIBOR Borrowing to an Alternate Base Rate Borrowing. Each telephonic
notice by the Borrower pursuant to this Section 2.11
must be confirmed promptly by delivery to the Agent of a written request in the
form of Exhibit
C attached hereto (each, a “Loan Notice”),
appropriately completed and signed by a Responsible Officer of the Borrower.
Each Loan Notice (whether telephonic or written) shall specify (i) whether
the Borrower is requesting a conversion of the Term Loan from one Type to
another or a continuation of a LIBOR Borrowing, (ii) the requested date of the
conversion or continuation (which shall be a Business Day), (iii) the principal
amount of the Term Loan to be converted or continued, and (iv) if applicable,
the duration of the Interest Period with respect thereto. If the
Borrowers fail to give a timely notice requesting a conversion or continuation,
then the Term Loan shall be continued or converted to, a LIBOR Borrowing with
the same Interest Period as in effect immediately prior thereto with respect to
such Term Loan. Any such automatic conversion shall be effective as
of the last day of the Interest Period then in effect. If the
Borrower requests a conversion to, or continuation of a LIBOR Borrowing in any
such Loan Notice, but fails to specify an Interest Period, it will be deemed to
have specified an Interest Period of one month. Except as otherwise
provided herein, a LIBOR Borrowing may be continued or converted only on the
last day of an Interest Period for such LIBOR Borrowing. During the
existence of a Default, no Term Loan may be converted to or continued as a LIBOR
Borrowing without the consent of the Required Lenders.
3. Collateral.
3.1. Security
Documents. The Term Loans and all other Obligations shall be
secured by the Collateral described in the Security Documents and the First Lien
Intercreditor Agreement, and the Agent and the Lenders are entitled to the
benefits thereof. The Credit Parties shall duly execute and deliver
the Security Documents, all consents of third parties necessary to permit the
effective granting of the Liens created thereby, and other documents, all in
Proper Form, as may be reasonably required by the Collateral Agent to grant to
the Collateral Agent, for the ratable benefit of the Lenders and the Revolving
Credit Lenders, a valid, perfected and enforceable first priority Lien on and
security interest in the Collateral (subject only to the Liens permitted under
Section 7.2
hereof), including without limitation, any and all original stock certificates,
stock transfer powers, assignments and other documents and instruments necessary
or desirable under the laws of any applicable jurisdiction with regard to the
Equity Interests covered by any Security Agreement.
3.2. Filing and
Recording. The Credit Parties shall, at their sole cost and
expense, cooperate with the Collateral Agent in causing all financing statements
and other Security Documents pursuant to this Agreement to be duly recorded
and/or filed or otherwise perfected in all places necessary to perfect the Liens
of the Collateral Agent, in the opinion of the Collateral Agent, and the Credit
Parties shall take such other actions as the Collateral Agent may reasonably
request, in order to perfect and protect the Liens of the Collateral Agent, for
the ratable benefit of the Lenders, in the Collateral. Each of the
Credit Parties, to the extent permitted by law, hereby authorizes the Collateral
Agent to file any financing statement or other Security Document in respect of
any Lien created pursuant to the Security Documents which may at any time be
required to perfect such Liens or which, in the reasonable opinion of the
Collateral Agent, may at any time be desirable, although the same may have been
executed only by the Collateral Agent or, at the option of the Collateral Agent,
to sign such financing statement on behalf of any Credit Party, and file the
same, and each of the Credit Parties hereby irrevocably designates the
Collateral Agent, its agents, representatives and designees as its agent and
attorney-in-fact for this purpose. In the event that any re-recording
or refiling thereof (or the filing of any statements of continuation or
assignment of any financing statement) is required to protect and preserve such
Lien, the Credit Parties shall, at the Credit Parties’ cost and expense, cause
the same to be recorded and/or refiled at the time and in the manner requested
by the Collateral Agent.
4. Conditions. The
obligation of the Lenders to make the Term Loans is subject to the satisfaction
of the following conditions:
(a) all
representations and warranties of any of the Credit Parties set forth in this
Agreement and in any other Loan Document shall be true and correct in all
material respects with the same effect as though made on and as of such date,
except for (i) those representations and warranties which relate only to the
Closing Date and (ii) those changes in such representations and warranties
otherwise permitted by the terms of this Agreement;
(b) there
shall have occurred no Material Adverse Effect, after giving effect to the Term
Loans;
(c) no
Default or Event of Default shall have occurred and be continuing;
(d) if
requested by the Agent, it shall have received a certificate executed by a
Responsible Officer of the Borrower as to the compliance with subparagraphs (a)
through (c) above;
(e) the
making of the Term Loans shall not be prohibited by, or subject the Agent or any
Lender to, any penalty or onerous condition under any Legal Requirement;
and
(f) the
Borrower shall have paid all legal fees and other expenses of the type described
in Section 10.9
hereof for which invoices have been presented through the date of the Term
Loans;
(g) the Agent
and the Lenders shall have received the following which shall be duly executed
and in Proper Form:
(1) the Loan
Documents executed by the applicable Credit Parties;
(2) a
certificate of corporate resolutions and incumbency executed by the Secretary or
an Assistant Secretary of the Borrower dated as of the date hereof, authorizing
(i) the Borrower’s entering into the transactions contemplated hereby and (ii)
the delivery by the Borrower of the Loan Documents to be executed and delivered
by the Borrower;
(3) a
certificate of corporate resolutions and incumbency executed by the Secretary or
an Assistant Secretary of each of the Guarantors dated as of the date hereof,
authorizing each of the Guarantors to (i) enter into the transactions
contemplated hereby and (ii) deliver the Loan Documents to be executed and
delivered by the Guarantors;
(4) certified
copies of the Organizational Documents of the Borrower, each of the Borrower’s
Subsidiaries, and the Parent;
(5) certificates
from the Secretary of State or other appropriate public official of the State of
Delaware as to the continued existence and good standing of the Borrower in the
State of Delaware;
(6) certificates
from the Secretary of State or other appropriate public official as to the
continued existence and good standing of each of the Guarantors in its
applicable State of formation;
(7) certificates
from the appropriate public officials of the States of Texas, California,
Colorado, Florida, Idaho, Iowa, Kansas, Nebraska, Oklahoma, Tennessee, Utah and
Wisconsin for the
Borrower as to the good standing and qualification as a foreign corporation, to
the extent it is necessary to be qualified to do business as a foreign
corporation in these jurisdictions;
(8) [intentionally
omitted];
(9) copies of
the following financial information: (i) audited consolidated financial
statements of the Borrower and its Subsidiaries for the two most recent fiscal
years ended prior to the Closing Date as to which such financial statements are
available, (ii) unaudited interim consolidated financial statements of the
Borrower and its Subsidiaries for each quarterly period ended subsequent to the
date of the latest financial statements delivered pursuant to clause (i) of this
paragraph and (iii) the most recent projected income statement, balance sheet
and cash flows for each of the Borrower’s fiscal years through June 30, 2011
(setting forth such projections on both an annual basis and on a monthly basis
for the fiscal year ending June 30, 2008 and on an annual basis only for the
remaining fiscal years);
(10) evidence
that all material governmental and third party approvals necessary in connection
with the financing thereof and the continuing operations of the Borrower and its
Subsidiaries (including shareholder approvals, if any) have been obtained on
terms satisfactory to the Lenders and shall be in full force and effect, and all
applicable waiting periods have expired without any action being taken or
threatened by any competent authority that would restrain, prevent or otherwise
impose adverse conditions on the financing thereof or, any of the transactions
contemplated hereby;
(11) the First
Lien Intercreditor Agreement;
(12) a payoff
letter from Wilmington Trust Company, indicating the amount of the obligations
of the Credit Parties to Wilmington Trust Company and certain other lenders
under the Term Loan Agreement dated as of September 26, 2006, and an
acknowledgment by Wilmington Trust Company (on behalf of itself and such
lenders) that upon receipt of such funds neither Wilmington Trust Company nor
any such lender will have any rights or interests under the Security Documents
or that certain Intercreditor Agreement, dated as of September 26, 2006, by and
among the Credit Parties, the Revolving Credit Agent, the Collateral Agent and
Wilmington Trust Company;
(13) evidence
that all legal (including tax implications) and regulatory matters in connection
with the Term Loans are satisfactory to the Agent and the Lenders;
(14) a legal
opinion from Xxxxxxx Procter LLP, the independent counsel for the Credit
Parties, dated as of the Closing Date, addressed to the Agent and acceptable in
all respects to the Agent and the Lenders in their sole reasonable
discretion;
(15) certificates
of insurance satisfactory to the Collateral Agent in all respects evidencing the
existence of all insurance required to be maintained by the Borrower and its
Subsidiaries pursuant to the terms of this Agreement and the Security
Documents;
(16) copies of
all material employment agreements, management fee agreements and tax sharing
agreements with respect to any of the Credit Parties which the Agent shall have
requested;
(h) payment
by the Borrower to the Lenders, the Agent and the Agent’s applicable Affiliates
of all fees required to be paid under the Loan Documents and all expenses
required to be paid under the Loan Documents for which invoices have been
presented; and
(i) receipt
by the Agent and the Lenders of all other Loan Documents and any other
instruments or documents consistent with the terms of this Agreement and
relating to the transactions contemplated hereby as the Agent may reasonably
request, executed by the Credit Parties or any other Person required by the
Agent.
5. Representations and
Warranties.
Each of
the Credit Parties represents and warrants to the Agent and the Lenders, as to
itself and each other Credit Party, that:
5.1. Organization. Each
Credit Party is duly organized, validly existing and in good standing under the
laws of the state of its incorporation or formation; has all power and authority
under its organizational documents to own its respective Property and assets and
to conduct its respective businesses as presently conducted; and is duly
qualified to do business and in good standing in each and every state
jurisdiction where its respective business requires such qualification, except
for those jurisdictions in which the failure to qualify and/or be in good
standing would not reasonably be expected to result in a Material Adverse
Effect.
5.2. Financial
Statements.
(a) The
Consolidated financial statements of the Credit Parties and their Subsidiaries
delivered to the Agent and the Lenders in connection with this Agreement,
including without limitation, (i) the Annual Audited Financial Statements dated
as of June 30, 2006 and (ii) the Monthly Unaudited Financial Statements dated as
of May 31, 2007, fairly present in all material respects, in accordance with
GAAP, the Consolidated financial condition and the results of operations of the
Credit Parties and their Subsidiaries as of the dates and for the periods
indicated, subject to year-end audit adjustments and the absence of footnotes in
the case of such unaudited or any pro forma statements, and no Material Adverse
Effect has occurred since the dates of such financial statements.
(b) The
Credit Parties have heretofore furnished to the Agent, for the calendar months
from the projected Closing Date through June 30, 2008 and for each fiscal year
of the Credit Parties thereafter through the Term Loan Maturity Date, projected
income statements, balance sheets and cash flows of the Credit Parties and their
Subsidiaries, on a Consolidated basis, together with one or more schedules
demonstrating prospective compliance with all financial covenants contained in
this Agreement, such projections disclosing all material assumptions made by the
Credit Parties in formulating such projections. The projections are
based upon estimates and assumptions which the Credit Parties believe are
reasonable in light of the conditions which existed as of the time the
projections were made, have been prepared on the basis of the material
assumptions stated therein and reflect as of the Closing Date an estimate
believed reasonable by the Credit Parties as to the results of operations and
other information projected therein.
5.3. Enforceable Obligations;
Authorization. The Loan Documents are legal, valid and binding
obligations of the respective Credit Parties executing and delivering the same,
enforceable against such Credit Parties in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, and other similar laws affecting creditors rights generally and by
general equitable principles regardless of whether considered in a proceeding in
equity or at law. The execution, delivery and performance of the Loan
Documents have all been duly authorized by all necessary corporate, and if
necessary shareholder, action; are within the power and authority of each of the
Credit Parties; do not and will not violate any Legal Requirement material to
the business, assets or operations of any of the Credit Parties taken as a whole
or the Organizational Documents of any of the Credit Parties; do not and will
not constitute a default under, any material agreement or instrument by which
any of the Credit Parties or any material portion of any of the Credit Parties’
Property is bound or affected; and do not and will not result in the creation of
any Lien upon any Property of any of the Credit Parties except as expressly
contemplated therein. All necessary approvals of any Governmental
Authority and all other requisite material permits, registrations and consents
for the performance have been obtained for the delivery and performance of the
Loan Documents.
5.4. Other
Debt. Except as set forth on Schedule 5.4 attached
hereto, no Credit Party is in default in the payment of any other Indebtedness
or under any agreement, mortgage, deed of trust, security agreement or lease to
which it is a party, the result of which would or could reasonably be expected
to result in a Material Adverse Effect.
5.5. Litigation. Except
as set forth on Schedule 5.5 attached
hereto, to the knowledge of the Credit Parties, there is no litigation or
administrative proceeding pending or threatened against, nor any outstanding
judgment, order or decree affecting, any of the Credit Parties or any of their
Subsidiaries before or by any Governmental Authority or arbitral body as to
which there is a reasonable possibility of an adverse determination and which
individually or in the aggregate have, or if adversely determined could
reasonably be expected to have, a Material Adverse Effect. Except as
set forth on Schedule
5.5 attached hereto, as of the Closing Date there is no litigation or
administrative proceeding pending against, nor any outstanding judgment, order
or decree affecting, any of the Credit Parties or any of their Subsidiaries
before or by any Governmental Authority or arbitral body. Except as
set forth on Schedule
5.5 attached hereto, none of the Credit Parties, nor any of their
Subsidiaries, is knowingly in material default with respect to any judgment,
writ, rule, regulation, order or decree of any Governmental
Authority.
5.6. Taxes. Except
as set forth on Schedule 5.6 attached
hereto, the Credit Parties and their Subsidiaries have filed all federal, state,
local or foreign tax returns required to have been filed by them and paid all
taxes shown thereon to be due, except those for which extensions have been
obtained, and except for those which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained
in accordance with GAAP. There is no outstanding federal audit by the
Internal Revenue Service of the income tax returns of any of the Credit Parties
or any of their Subsidiaries claimed or raised in writing, and none of the
Credit Parties or any of their Subsidiaries have, as of the Closing Date, any
extension of time with respect to an assessment or deficiency relating to any
Federal tax return that is still in effect. None of the Credit
Parties or any of their Subsidiaries have, as of the Closing Date, any extension
of time with respect to an assessment or deficiency relating to any state, local
or foreign tax return that is still in effect, other than extensions with
respect to tax liabilities where the failure by the applicable Credit Party to
pay such tax liabilities would not have a Material Adverse
Effect. None of the Credit Parties or any of their Subsidiaries is a
party to any tax sharing arrangement with any Person (other than the affiliated
group of which Walco Holdings is the parent).
5.7. No Material
Misstatements. No information, report, financial statement,
exhibit or schedule prepared and furnished by or on behalf of any Credit Party
to the Agent or any Lender in connection with this Agreement or any other Loan
Documents knowingly contains any material misstatement of fact or knowingly
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading at the
time prepared or furnished.
5.8. Subsidiaries. As
of the date hereof, the Credit Parties have no Subsidiaries other than as listed
on Schedule 5.8
attached hereto. Except as expressly indicated on Schedule 5.8 attached
hereto, as of the Closing Date, each of the Subsidiaries listed on Schedule 5.8 is
wholly owned by the applicable Credit Party. As of the Closing Date, Schedule 5.8 sets
forth (a) the jurisdiction of incorporation or organization of each
Subsidiary of the Credit Parties, and (b) the percentage of the applicable
Credit Party’s ownership of the Equity Interests of each Subsidiary of the
Credit Parties.
5.9. Representations by
Others. All representations and warranties made by or on
behalf of any of the Credit Parties in any Loan Document shall constitute
representations and warranties of the Credit Parties hereunder.
5.10. Permits, Licenses,
Etc. Each of the Credit Parties possess all material permits
from each applicable Governmental Authority, licenses from each applicable
Governmental Authority, patents, patent rights, trademarks, trademark rights,
trade names, trade name rights and copyrights which are reasonably required to
conduct their respective businesses.
5.11. ERISA. No
Reportable Event has occurred with respect to any Plan which, when taken
together with all other such Reportable Events for which liability is reasonably
expected to occur, could reasonably be expected to result in any material
liability. Each Plan complies in all material respects with all
applicable provisions of ERISA, and the Borrower or each ERISA Affiliate have
filed all reports required by ERISA and the Code to be filed with respect to
each Plan. The Borrower does not have any knowledge of any event
which could reasonably be expected to result in a liability of the Borrower or
any ERISA Affiliate to the PBGC other than for applicable
premiums. No accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not waived, exists with
respect to any Plan. No event has occurred and no condition exists
that could reasonably be expected to constitute grounds for a Plan to be
terminated under circumstances which would cause the Lien provided under Section
4068 of ERISA to attach to any Property of the Borrower or any ERISA
Affiliate. No event has occurred and no condition exists that could
reasonably be expected to cause the Lien provided under Section 302 of ERISA or
Section 412 of the Code to attach to any Property of the Borrower or any ERISA
Affiliate.
5.12. Title to Properties;
Possession Under Leases.
(a) Except as
set forth on Schedule
5.12 attached hereto, the Credit Parties and each of their respective
Subsidiaries have good and marketable title to, or a valid leasehold interest
in, all of their respective Property and assets that are material to their
respective business taken as a whole shown on the most recent Consolidated
balance sheet for the Credit Parties and their Subsidiaries provided under the
terms of Section
6.3(a) or Section 6.3(b), and
all assets and Property that are material to their respective business taken as
a whole, acquired since the date of such respective balance sheets, except for
such Property as is no longer used or useful in the conduct of their respective
businesses or as have been disposed of in the ordinary course of business or
otherwise in accordance with this Agreement, and except for minor defects in
title that do not interfere with the ability of the Credit Parties or any of
their Subsidiaries to conduct their respective businesses as now conducted, all
such assets and Property are free and clear of all Liens other than those
permitted by Section
7.2 hereof.
(b) Except as
set forth on Schedule
5.12 attached hereto, the Borrower and each of its Subsidiaries have no
knowledge of any material default under any material leases to which any of them
is a party and under which any of them is in occupancy, except where
non-compliance does not affect the Borrower’s or such Subsidiary’s use or
occupancy thereof, as applicable, and all such material leases are in full force
and effect. Schedule 5.12
attached hereto sets forth each of such leases of real Property in existence as
of the Closing Date, and upon the request of the Agent, the Borrower will
provide the Agent with complete and correct copies of all of such leases of real
Property then in effect.
5.13. Assumed
Names. As of the Closing Date, neither the Borrower, nor any
of its Subsidiaries, is currently conducting its business under any assumed name
or names, except as set forth on Schedule 5.13
attached hereto. Upon written request by the Agent, the Borrower shall promptly
furnish the Agent with a then current listing of all assumed names that the
Borrower and/or any of its Subsidiaries is then utilizing in conducting their
respective businesses.
5.14. Investment Company
Act. None of the Credit Parties or any of their Subsidiaries
is an investment company within the meaning of the Investment Company Act of
1940, as amended.
5.15. Public Utility Holding
Company Act. None of the Credit Parties or any of their
Subsidiaries is a “public utility company,” or an “affiliate” or a “subsidiary
company” of a “public utility company,” or a “holding company,” or a “subsidiary
company” of a “registered holding company,” or an “affiliate” of a “registered
holding company” as such terms are defined in the Public Utility Holding Company
Act of 1935, as amended (“PUHCA”).
5.16. Agreements. Schedule 5.16
attached hereto is a complete and correct list, as of the Closing Date, of (i)
all credit agreements or indentures for borrowed money and capitalized leases to
which any of the Credit Parties or any of their Subsidiaries is a party and all
Property of any of the Credit Parties or any of their Subsidiaries subject to
any Lien securing such Indebtedness or capitalized lease obligation, (ii) each
letter of credit and guaranty to which any of the Credit Parties or any of their
Subsidiaries is a party, (iii) all other material instruments in effect as of
the date hereof providing for, evidencing, securing or otherwise relating to any
Indebtedness for borrowed money of any of the Credit Parties or any of their
Subsidiaries (other than the Indebtedness hereunder), and (iv) all obligations
of any of the Credit Parties or any of their Subsidiaries to issuers of appeal
bonds issued for account of any Credit Party or any of its
Subsidiaries. The Borrower shall, upon, request by the Agent, deliver
to the Agent and the Lenders a complete and correct copy of all such credit
agreements, indentures, capitalized leases, letters of credit, guarantees and
other instruments described in Schedule 5.16 or
arising after the date hereof, including any modifications or supplements
thereto, as in effect on the date hereof.
5.17. Environmental
Matters. Except as disclosed on Schedule 5.17
attached hereto or in any of the environmental assessments or studies described
on Schedule 5.17
attached hereto, to the Credit Parties’ knowledge: (a) each of the Credit
Parties and their Subsidiaries are in material compliance with all limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Requirement of
Environmental Law or Environmental Permit reasonably necessary to the conduct of
any material aspect of the business of any Credit Party or any of its
Subsidiaries; (b) each of the Credit Parties and their Subsidiaries (i) have
obtained and maintained in effect all Environmental Permits reasonably necessary
to the conduct of any material aspect of the business of any Credit Party or any
of its Subsidiaries, (ii) along with their respective Properties (whether leased
or owned) have been and are in material compliance with all applicable
Requirements of Environmental Law and Environmental Permits, (iii) along with
their respective Properties (whether leased or owned) are not subject to any
material (A) Environmental Claims or (B) Environmental Liabilities arising from
or based upon any act, omission, event, condition or circumstance occurring or
existing on or prior to the date hereof, and (iv) have not received individually
or collectively any notice of any material violation or alleged material
violation of any Requirements of Environmental Law or Environmental Permit or
any Environmental Claim in connection with their respective Properties; and (c)
none of the Credit Parties or any of their Subsidiaries has actual knowledge of
any material violation of any applicable Requirements of Environmental Law and
Environmental Permits by, or of any material Environmental Claims or
Environmental Liabilities arising against, any of the prior owners or operators
and predecessors in interest with respect to any of the Credit Parties’ or any
of their Subsidiaries’ respective Property.
5.18. Solvency.
(a) Immediately
after the consummation of the transactions contemplated hereunder to occur on
the Closing Date, (i) the fair value of the assets of each Credit Party, at a
fair valuation, will exceed its debts and liabilities, subordinated, contingent
or otherwise; (ii) the present fair saleable value of the property of each
Credit Party will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and other liabilities become absolute and matured;
(iii) each Credit Party will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (iv) each Credit Party will not have unreasonably
small capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted after the Closing
Date; provided,
however, that
for purposes of the foregoing representations and warranties by the Canadian
Subsidiaries of the Borrower set forth in clauses (i), (ii) and (iii), the
contingent liabilities of such Canadian Subsidiaries under the terms of the
Guaranty and under the terms of the guaranty by such Canadian Subsidiaries of
the Revolving Credit Agreement shall be excluded. Notwithstanding the
foregoing proviso, however, each Canadian Subsidiary of the Borrower represents
and warrants that applicable Canadian bankruptcy and insolvency laws do not
provide such Canadian Subsidiary with any fraudulent conveyance or other similar
defense to the enforcement of such Canadian Subsidiary’s Obligations under the
Guaranty or any applicable Security Document to which such Canadian Subsidiary
is a party.
(b) No Credit
Party intends to, or will permit any of its Subsidiaries to, and no Credit Party
believes that it or any of its Subsidiaries will, incur debts beyond its ability
to pay such debts as they mature, taking into account the timing of and amounts
of cash to be received by it or any such Subsidiary and the timing of the
amounts of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary.
5.19. Status of
Collateral. The Credit Parties are and shall be the sole
owners, free and clear of all Liens except in favor of the Collateral Agent or
otherwise permitted under Section 7.2
hereunder, of and fully authorized to sell, transfer, pledge and/or grant a
security interest in all of the Collateral (other than Excluded Collateral, as
defined in the applicable Security Documents).
5.20. Revolving Credit Agreement
Debt. The Revolving Credit Agreement constitutes the valid and
binding obligation of the applicable Credit Parties, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, and moratorium laws and other laws affecting creditors’ rights
generally and by general principles of equity regardless of whether considered
in a proceeding in equity or at law. The Credit Parties have no
knowledge that any of the representations and warranties contained in the
Revolving Credit Agreement were not true and correct in all material respects on
and as of the date given or, except as consented to by the Agent in writing or
otherwise disclosed in writing to the Agent prior to the Closing Date, that any
of the material terms thereof have been modified, amended or waived other than
as permitted under Section 7.19.
5.21. Transactions with Related
Parties. Except
as set forth on Schedule 5.21
attached hereto, any and all transactions, contracts, or other agreements
existing on the Closing Date which have been entered into by and among any
Credit Party and any officer, director, shareholder or Affiliate of any of the
Credit Parties (other than Permitted Affiliate Transactions), has been entered
into and made upon terms and conditions not less favorable to the applicable
Credit Parties than those terms which could have been obtained from wholly
independent and unrelated sources.
5.22. Patents, Trademarks and
Copyrights. Schedule 5.22 hereto
sets forth a true, accurate and complete listing, as of the date hereof, of all
patents, registered trademarks and copyrights, and applications therefor, of
each of the Credit Parties and each of their Subsidiaries as of the Closing
Date. Except as created or permitted under the Loan Documents, no
Lien exists with respect to the interest of any Credit Party or any of its
Subsidiaries in any such patents, registered trademarks or copyrights or
applications therefor, and no Credit Party or any of its Subsidiaries has
transferred or subordinated any interest it may have in such patents, registered
trademarks and copyrights and applications therefor. The Borrower
shall, from time to time as necessary, deliver to the Agent an updated Schedule 5.22 to this
Agreement, together with a certificate of a Responsible Officer of the Borrower
certifying that the information set forth on such schedule is true, correct and
complete as of such date, which schedule may be used to prepare additional
Security Agreements, if necessary.
6. Affirmative
Covenants.
Until the
Obligations shall have been paid in full, each Credit Party executing this
Agreement covenants and agrees, jointly and severally with all of the Credit
Parties, to perform and observe (and cause each of its Subsidiaries to perform
and observe) each and all of the following covenants and
agreements:
6.1. Businesses and
Properties. At all times: (a) do or cause to be done all
things necessary to obtain, preserve, renew and keep in full force and effect
the rights, licenses, permits, franchises, patents, copyrights, trademarks and
trade names material to the conduct of its businesses; (b) maintain and operate
such businesses in the same general manner in which they are presently conducted
and operated, provided that the foregoing
shall not prohibit any merger, consolidation, liquidation, dissolution or any
discontinuance or sale of such business permitted under Section 7.4; (c)
comply in all material respects with all Legal Requirements applicable to the
operation of such businesses whether now in effect or hereafter enacted
(including without limitation, all Legal Requirements relating to public and
employee health and safety and all Environmental Laws) and with any and all
other Legal Requirements; and (d) keep and maintain all Property material to the
conduct of such businesses in good repair, working order and condition, ordinary
wear and tear excepted, and from time to time make, or cause to be made, all
necessary repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.
6.2. Taxes. Pay
and discharge promptly when due (giving effect to all extensions of time
permitted by the applicable Governmental Authority) all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
in respect of its Property, before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies or
otherwise, which, if unpaid, might give rise to Liens upon such properties or
any part thereof (except as otherwise permitted by Section 7.2 hereof),
unless being contested in good faith by appropriate proceedings and as to which
adequate reserves in an amount not less than the aggregate amount secured by
such Liens have been established in accordance with GAAP; provided, however, that such
contested amounts giving rise to such Liens shall be immediately paid upon
commencement of any procedure or proceeding to foreclose any of such Liens
unless the same shall be validly stayed by a court of competent jurisdiction or
a surety bond, which is satisfactory in all respects to the Agent, is delivered
to the Agent for the ratable benefit of the Lenders in an amount no less than
such contested amounts.
6.3. Financial Statements and
Information. Furnish to the Agent each of the
following:
(a) as soon
as available and in any event within ninety (90) days after the end of each
fiscal year of the Credit Parties, Annual Audited Financial Statements of the
Credit Parties and their Subsidiaries;
(b) as soon
as available and in any event within thirty (30) days after the end of each
calendar month, Monthly Unaudited Financial Statements of the Credit Parties and
their Subsidiaries;
(c) concurrently
with the financial statements provided for in Subsections 6.3(a)
and 6.3(b)
hereof, (1) an Officer’s Certificate, signed by a Responsible Officer of
applicable Credit Party, and (2) if applicable, a written certificate in Proper
Form, identifying each Subsidiary which is otherwise required by the provisions
of Section 6.10
hereof to become a Guarantor at the request of the Agent, but which has not yet
done so as of the date of such certificate, and providing an explanation of the
reasons why each such Subsidiary is not a Guarantor, signed by a Responsible
Officer of the applicable Credit Party;
(d) as soon
as available and in any event within five (5) Business Days after the date of
issuance thereof (if any such audit report or management letter is ever issued),
any (1) interim or special audit report made by independent accountants of the
books of the Credit Parties or any of their Subsidiaries or (2) management
letter prepared by the independent public accountants who reported on the
financial statements provided for in Subsection 6.3(a)
above, with respect to the internal audit and financial controls of the Credit
Parties and their Subsidiaries;
(e) as soon
as available and in any event within thirty (30) days prior to the commencement
of each fiscal year of the Credit Parties, management-prepared Consolidated
financial projections of the Credit Parties and their Subsidiaries for the
immediately following three (3) fiscal years (setting forth such projections on
both an annual basis and on a monthly basis for the upcoming fiscal year and on
an annual basis only for the two (2) fiscal years thereafter), such projections
to be prepared and submitted in such format and detail as reasonably requested
by the Agent; and
(f) such
other information relating to the financial condition, operations and business
affairs of any Credit Party or any of its Subsidiaries as from time to time may
be reasonably requested by the Agent.
6.4. Inspections; Field
Examinations; Appraisals and Physical Counts.
(a) Upon
reasonable notice (which may be telephonic notice), at all reasonable times and
as often as the Agent may request, permit any authorized representative
designated by the Agent, including without limitation, any consultant engaged by
the Agent, together with any authorized representatives of any Lender desiring
to accompany the Agent, to visit and inspect the Properties and financial
records of the Credit Parties and to make extracts from such financial records
and permit any authorized representative designated by the Agent (together with
any accompanying representatives of any Lender) to discuss the affairs, finances
and condition of the Credit Parties with any Responsible Officer and the Credit
Parties’ independent public accountants, as applicable. The Agent
agrees that it shall schedule any meeting with any such independent public
accountant through the Borrower, and a Responsible Officer of the Borrower shall
have the right to be present at any such meeting.
(b) The Agent
and any of its consultants shall each have the right to examine (and any
authorized representatives of any Lender shall have the right to accompany the
Agent during any such examination), as often as they may request, the existence
and condition of the Accounts, books and records of the Borrower and its
Subsidiaries and to review their compliance with the terms and conditions of
this Agreement and the other Loan Documents, subject to governmental
confidentiality requirements. They shall also have the right to
verify with any and all customers of the Borrower and its Subsidiaries the
existence and condition of the Accounts, as often as they may require, without
prior notice to or consent of the Borrower or any of its
Subsidiaries. Without in any way limiting the foregoing, the Agent,
and any of its consultants shall have the right to (i) conduct field
examinations of the Borrower and its Subsidiaries operations at the Borrower’s
expense as often as they may request and (ii) to order and obtain an appraisal
of the Collateral by an appraisal firm satisfactory to the Agent, and any of
their consultants as often as they may request. Without in any way
limiting the foregoing, the Borrower agrees to cooperate and to cause its
Subsidiaries to cooperate in all respects with the Agent, and any of their
consultants in connection with any and all inspections, examinations and other
actions taken by them pursuant to this Section
6.4. The Borrower hereby agrees to promptly pay, upon demand
by the Agent (or the applicable Lender, if appropriate), any and all fees and
expenses incurred by the Agent or any Lender in connection with any inspection,
examination, appraisal or review permitted by the terms of this Section 6.4; provided, however, that so long
as no Default or Event of Default is continuing, the Borrower shall only be
obligated to pay for (x) two field examinations during each consecutive 12-month
period (limited to the prevailing rate then charged for field examinations,
which is initially anticipated to be $850.00 per day per examiner, plus all
out-of-pocket expenses of the relevant examiner related to such filed
examinations), (y) one Collateral appraisal (other than the initial field
examinations and appraisals for any Accounts, Equipment and/or Inventory
acquired through an acquisition or other Investment permitted under the terms of
this agreement, it being agreed that the Borrower shall be obligated to pay for
each such initial field examination and/or appraisal, as applicable, conducted
with respect to each such acquisition or Investment); provided further,
however, that
the Borrower shall only be obligated to pay or reimburse such fees and expenses
of any Lender other than the Agent to the extent incurred by such Lender after
the occurrence of any Default or Event of Default which has not been cured to
the satisfaction of the Agent or waived in writing by the Agent and the Required
Lenders.
6.5. Further
Assurances. Upon request by the Agent, promptly execute and
deliver any and all other and further agreements and instruments and take such
further action as may be reasonably requested by the Agent to (a) cure any
defect in the execution and delivery of any Loan Document or more fully to
describe particular aspects of any of the Credit Parties’ agreements set forth
in the Loan Documents or so intended to be, (b) to carry out the provisions and
purposes of this Agreement an the other Loan Documents, and (c) grant, preserve,
protect and perfect the first priority Liens created or intended to be created
by the Security Documents in the Collateral.
6.6. Books and
Records. Maintain financial records and books in accordance
with accepted financial practice and GAAP.
6.7. Insurance.
(a) Keep its
insurable Properties adequately insured at all times by financially sound and
reputable insurers.
(b) Maintain
such other insurance, to such extent and against such risks, including fire and
other risks insured against by extended coverage and employee liability, as is
customary with companies similarly situated and in the same or similar
businesses, provided, however, that such
insurance shall insure the Property of the Borrower and each of its Subsidiaries
against all risk of physical damage, including without limitation, loss by fire,
explosion, theft, fraud and such other casualties as may be reasonably
satisfactory to the Agent, but in no event at any time in an amount less than
the replacement value of the Collateral.
(c) Maintain
in full force and effect worker’s compensation coverage and public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with its operations and with the use
of any Properties owned, occupied or controlled by the Borrower or any of its
Subsidiaries, in such amounts as the Agent shall reasonably deem
necessary.
(d) Maintain
such other insurance as may be required by law or as may be reasonably requested
by the Agent for purposes of assuring compliance with this Section
6.7.
All
insurance covering tangible personal Property subject to a Lien in favor of the
Agent for the benefit of the Lenders granted pursuant to the Security Documents
shall provide that, in the case of each separate loss, the full amount of
insurance proceeds shall be payable to the Agent and shall further provide for
at least 30 days’ prior written notice to the Agent of the cancellation or
substantial modification thereof.
6.8. ERISA. At
all times, except where a failure to comply with any of the following,
individually or in the aggregate, would or could reasonably be expected to
result in a material obligation or liability of any Credit Party: (a) make
contributions to each Plan in a timely manner and in an amount sufficient to
comply with the minimum funding standards requirements of ERISA; (b) immediately
upon acquiring knowledge of (i) any Reportable Event in connection with any Plan
for which no administrative or statutory exemption exists or (ii) any Prohibited
Transaction in connection with any Plan, that could result in the imposition of
material damages or a material excise tax on the Borrower or any Subsidiary
thereof, furnish the Agent a statement executed by a Responsible Officer of the
Borrower or such Subsidiary setting forth the details thereof and the action
which the Borrower or any such Subsidiary proposes to take with respect thereto
and, when known, any action taken by the Internal Revenue Service with respect
thereto; (c) notify the Agent promptly upon receipt by the Borrower or any
Subsidiary thereof of any notice of the institution of any proceedings or other
actions which may result in the termination of any Plan by the PBGC and furnish
the Agent with copies of such notice; (d) pay when due, or within any applicable
grace period allowed by the PBGC, all required premium payments to the PBGC; (e)
furnish the Agent with copies of the annual report for each Plan filed with the
Internal Revenue Service not later than ten (10) days after the Agent requests
such report; (f) furnish the Agent with copies of any request for waiver of the
funding standards or extension of the amortization periods required by Sections
303 and 304 of ERISA or Section 412 of the Code promptly after the request is
submitted to the Secretary of the Treasury, the Department of Labor or the
Internal Revenue Service, as the case may be; and (g) pay when due all
installment contributions required under Section 302 of ERISA or Section 412 of
the Code or within 10 days of a failure to make any such required contributions
when due furnish the Agent with written notice of such failure.
6.9. Use of
Proceeds. Subject to the terms and conditions contained
herein, use the proceeds of the Term Loans for refinancing the exiting
obligations of the Credit Parties to Wilmington Trust Company and certain other
lenders under the Term Loan Agreement dated as of September 26,
2006; provided, that no
proceeds of any Term Loan shall be used (w) for the purpose of purchasing or
carrying directly or indirectly any margin stock as defined in Regulation U
(“Reg U”) of
the Board of Governors of the Federal Reserve System, (x) for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry any such margin stock, (y) for any other purpose which would cause such
Loan to be a “purpose credit” within the meaning of Reg U and (z) for any
purpose which would constitute a violation of Reg U or of Regulations G, T or X
of the Board of Governors of the Federal Reserve System or any successor
regulation of any thereof or of any other rule, statute or regulation governing
margin stock from time to time.
6.10. Guarantors, Joinder
Agreements. Promptly inform the Agent of the creation or
acquisition of any Subsidiary of any Credit Party or the commencement of any
business operations by any Inactive Subsidiary after the Closing Date and,
within thirty (30) days after the written request of the Agent delivered in
accordance with Section 10.2 below,
cause (a) each such Subsidiary that is a Domestic Subsidiary or created
under the laws of Canada to become a Guarantor by execution and delivery to the
Agent, for the ratable benefit of the Lenders, of a Guaranty or a Joinder
Agreement (if a Joinder Agreement is requested by the Agent in lieu of a
Guaranty), (b) a first priority perfected security interest (subject to the
terms of the First Lien Intercreditor Agreement) to be granted to the Collateral
Agent, for the ratable benefit of the Lenders, in all of the Equity Interests of
such Subsidiary owned by any Credit Party or any of its other Subsidiaries if
such newly acquired or created Subsidiary or previously Inactive Subsidiary is a
Domestic Subsidiary or created under the laws of Canada, or if such newly
acquired or created Subsidiary or previously Inactive Subsidiary is not a
Domestic Subsidiary or a Subsidiary created under the laws of Canada, then not
more than sixty-five percent (65%) of all issued and outstanding Equity
Interests of such Subsidiary shall be pledged as Collateral pursuant to the
foregoing pledge requirement for Equity Interests, (c) cause each such
Subsidiary that is a Domestic Subsidiary or created under the laws of Canada to
grant to the Collateral Agent a security interest securing the Obligations, for
the ratable benefit of the Lenders (subject only to (i) the First Lien
Intercreditor Agreement, (ii) Liens permitted under Sections 7.2(b) and
(e) as to
Accounts and Permitted Investment Securities which do not have priority over the
Lien of the Collateral Agent for the ratable benefit of the Lenders, (ii) Liens
permitted under Section 7.2 as to all
other Collateral which do not have priority over the Lien of the Collateral
Agent for the ratable benefit of the Lenders, and (iii) purchase money Liens
existing as of the date of acquisition by Borrower or any other Subsidiary of
the Borrower of such newly acquired Subsidiary, if applicable) in all Accounts,
Inventory, Equipment, general intangibles and other tangible and intangible
personal Property owned at any time by such Subsidiary and all products and
proceeds thereof (subject to similar exceptions as set forth in the Security
Documents), and (d) cause such Subsidiary to deliver to the Agent such
related certificates, legal opinions and documents (including Organizational
Documents) as the Agent may reasonably require; provided, however, that any
Subsidiary that is not a Domestic Subsidiary or created under the laws of Canada
shall not be required to become a Guarantor or grant any Liens
hereunder. To the extent reasonably feasible, all of the foregoing
requirements shall be affected by the execution and delivery of a Joinder
Agreement in a form acceptable to the Agent.
6.11. Notice of
Events. Notify the Agent within one (1) Business Day after any
Responsible Officer of any of the Credit Parties acquires knowledge of the
occurrence of, or if any of the Credit Parties causes or intends to cause, as
the case may be, any of the following: (i) the institution of any lawsuit,
administrative proceeding or investigation affecting any Credit Party or any of
its Subsidiaries, including without limitation, any audit by the Internal
Revenue Service, the adverse determination under which could reasonably be
expected to have a Material Adverse Effect; (ii) any development or change in
the business or affairs of any Credit Party or any of its Subsidiaries which has
had or which is likely to have, in the reasonable judgment of any Responsible
Officer of any of the Credit Parties, a Material Adverse Effect; (iii) any Event
of Default or Default, together with a reasonably detailed statement by a
Responsible Officer on behalf of the Borrower of the steps being taken to cure
the effect of such Event of Default or Default; (iv) the occurrence of a default
or event of default by any Credit Party or any of its Subsidiaries under any
agreement or series of related agreements to which it is a party, which default
or event of default could reasonably be expected to have a Material Adverse
Effect; (v) any material violation by, or investigation of any Credit Party or
any of its Subsidiaries in connection with any actual or alleged material
violation of any Legal Requirement imposed by the Environmental Protection
Agency, the Occupational Safety and Health Administration or any other
Governmental Authority which has or is likely to have, in the reasonable
judgment of any Responsible Officer of any Credit Party, a Material Adverse
Effect; (vi) any significant change in the accuracy of any material
representations and warranties of the any Credit Party or any of its
Subsidiaries in this Agreement or any other Loan Document (including without
limitation, the representations and warranties in Section 5.20(b));
(vii) the delivery of any written notice of default or event of default to any
Credit Party by any Revolving Credit Lender; and (viii) any amendment or
modification of the Loan Documents (as defined in the Revolving Credit
Agreement), such notice to be accompanied by copies of the actual amendment or
modification documents; and (ix) any of the following: (1) the
occurrence of a Reportable Event with respect to any Plan; (2) the
institution of any steps by the Borrower, any ERISA Affiliate, the PBGC or any
other Person to terminate any Plan; (3) the institution of any steps by the
Borrower or any ERISA Affiliate to withdraw from any Plan; (4) a Prohibited
Transaction in connection with any Plan; (5) any material increase in the
contingent liability of the Borrower or any Subsidiary of the Borrower with
respect to any post-retirement welfare liability; or (6) the taking of any
action by, or the threatening of the taking of any action by, the Internal
Revenue Service, the Department of Labor or the PBGC with respect to any of the
foregoing.
6.12. Environmental
Matters. Without limiting the generality of Section 6.1(c)
hereof, (a) comply in all material respects with all material limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Requirement of
Environmental Law, or Environmental Permit; (b) obtain and maintain in effect
all Environmental Permits reasonably necessary to the conduct of any material
aspect of its business; and (c) keep its Property free of any Environmental
Claims or Environmental Liabilities, other than Environmental Claims or
Environmental Liabilities, contingent or otherwise, disclosed in Schedule 5.17
attached hereto or any of the environmental assessments or studies described in
Schedule 5.17
attached hereto. In the event that any Credit Party or any of its
Subsidiaries receives any demand or claim from any Person, including without
limitation, any Governmental Authority, asserting the liability of any Credit
Party or any of its Subsidiaries as a result of any Environmental Liabilities or
requesting or requiring that any Environmental Liabilities be remediated by any
Credit Party or any of its Subsidiaries, such Credit Party agrees to promptly
take action and thereafter diligently pursue the same to completion in a manner
necessary to cause the applicable Environmental Liabilities to be remediated as
soon as reasonably possible in accordance with all applicable Requirements of
Environmental Law. Each Credit Party,
jointly and severally with all other Credit Parties, hereby indemnifies and
agrees to hold the Agent and the Lenders harmless from and against any and all
liability, loss, damage, suit, action or proceeding arising out of its
respective business or the business of any of its Subsidiaries, pertaining to
any Environmental Liabilities, including without limitation, claims of any
Governmental Authority or any other Person arising under any Requirement of
Environmental Law; provided, that the foregoing indemnity shall not apply to the
extent, but only to the extent the applicable liability, loss, damage, suit,
action or proceeding is caused by the willful misconduct, knowing and willful
breach of any Loan Document or gross negligence of the party seeking
indemnification.
6.13. End of Fiscal
Year. Cause each of its fiscal years to end on June 30th of the
applicable year.
6.14. Pay Obligations and Perform
Other Covenants. Make full and timely payment of the
Obligations, whether now existing or hereafter arising, as and when due and
payable, duly comply with all of the terms and covenants contained in this
Agreement and in each of the other Loan Documents at all times and places and in
the manner set forth therein, and except for the filing of continuation
statements and the making of other filings by the Collateral Agent as secured
party or assignee, at all times take all actions necessary to maintain the Liens
and security interests provided for under or pursuant to this Agreement and the
Security Documents as valid perfected first priority Liens on the Collateral
intended to be covered thereby (subject to the terms of the First Lien
Intercreditor Agreement and subject only to the Liens expressly permitted by
Section 7.2
hereof) and supply all information to the Collateral Agent necessary for such
maintenance.
6.15. Cash Dominion; Collection
and Application of Accounts.
(a) At the
Borrower's own cost and expense, arrange (and cause each of its Subsidiaries to
arrange) for remittances on all Accounts to be made (i) directly to one or more
lockboxes designated by the Collateral Agent under the terms of the Lockbox
Agreement, or (ii) in such other manner as the Agent may
direct. Unless the procedures discussed in Section 6.15(b) below
are then in effect, and in any event, at all times that no Revolving Credit
Agreement Debt is outstanding, (1) the proceeds of all Accounts collected
through such lockboxes or any other manner shall not be required to be remitted
to the Collateral Agent for application to the Revolving Credit Agreement Debt
and for other disbursements approved by the Collateral Agent as set forth in
Section 6.15(b)
below, but instead shall be available for unrestricted use by the Borrower,
subject to the other terms of this Agreement (including without limitation, the
negative covenants of Article 7), so long as any collected cash proceeds not
applied against the Revolving Credit Agreement Debt or otherwise utilized as
permitted hereby, remain pledged as Collateral hereunder (i.e., invested as
Permitted Investment Securities or held in JPMorgan Chase Bank, N.A. deposit
accounts or other accounts covered by a Tri-Party Agreement) and (2) the
Collateral Agent shall not cause any funds then available in any deposit account
covered by any Tri-Party Agreement evidencing control for purposes of perfection
of the Collateral Agent’s Lien (as opposed to facilitating the collection of
Accounts) to be transferred or paid to the Collateral Agent for any
purpose.
(b) If (i) a
Default or Event of Default shall occur, (ii) average Availability (under and as
defined in the Revolving Credit Agreement) during any consecutive thirty (30)
day period shall be less than $20,000,000, or (iii) Availability (under and as
defined in the Revolving Credit Agreement) shall be less than $15,000,000 at any
time, then all remittances on all Accounts processed through the lockboxes and
received by the Collateral Agent in accordance with Section 6.15(a) shall
at all times thereafter be promptly deposited in one or more controlled
disbursement or other accounts designated by the Collateral Agent, subject to
withdrawal by the Collateral Agent only, as hereinafter provided and in
connection therewith, the Collateral Agent and JPMorgan Chase Bank N.A. are
irrevocably authorized to cause all remittances on all Accounts received by the
Collateral Agent or JPMorgan Chase Bank N.A. from whatever means, whether
pursuant to the Lockbox Agreement, any Tri-Party Agreement or otherwise, to be
promptly deposited in such account or accounts designated by the Collateral
Agent. All remittances and payments that are deposited and received
by the Collateral Agent in accordance with the foregoing provisions of this
Section 6.15(b)
will be applied by the Collateral Agent on the same day received (or on the next
Business Day in the case of remittances and payments received after 11:00 a.m.)
to reduce the outstanding balance of the Revolving Credit Agreement Debt,
subject to the continued accrual of interest for one (1) Business Day (or two
Business Days in the case of remittances and payments received after 11:00 a.m.)
on the Revolving Credit Agreement Debt balances paid by such remittances and
payments and in any event subject to final collection in cash of the item
deposited.
(c) Once the
procedures described in Section 6.15(b) above
are implemented in accordance with the terms thereof, such procedures shall
continue in effect at all times thereafter unless and until (i) the applicable
Default or Event of Default shall have been cured to the satisfaction of the
Agent, or (ii) average Availability (under and as defined in the Revolving
Credit Agreement) during any subsequent thirty (30) day consecutive day period
is greater than $30,000,000, as the case may be.
(d) Notwithstanding
any provision to the contrary in this Section 6.15, the
Borrower and its Subsidiaries shall be permitted to have from time to time local
depository accounts maintained with financial institutions other than JPMorgan
Chase Bank, N.A. for local remittances, payroll, trust and escrow services of
the Borrower and its Subsidiaries in the ordinary course of business, with not
more than $500,000 in the aggregate being permitted to be held in all such local
depository or remittance accounts at any one time, provided in each case all
such accounts remain subject to a Tri-Party Agreement and which such permitted
amounts in such accounts shall not be subject to periodic sweeps to a controlled
disbursement account with the Collateral Agent unless an Event of Default then
exists.
(e) As long
as the procedures implemented under Section 6.15(b) above
are in effect and are continuing, and except as otherwise permitted under Section 6.15(d)
above, the Borrower and its Subsidiaries shall cause all payments, if any,
received by the Borrower or any of its Subsidiaries on account of Accounts which
are not forwarded directly to the above-described lockbox(es) or accounts
(whether in the form of cash, checks, notes, drafts, bills of exchanges, money
orders or otherwise) to be promptly deposited in the form received (but with any
endorsements of the Borrower or the applicable Subsidiary necessary for deposit
or collection) in the account or accounts designated by the Collateral Agent in
accordance with the provisions of Section 6.15(a)
above.
6.16. Accounts and Other
Collateral Matters. Maintain books and records pertaining to
the respective Collateral owned by any Credit Party in detail, form and scope as
the Agent shall reasonably require. Each Credit Party will, promptly after any
of its Responsible Officers learns thereof, report to the Collateral Agent any
material loss or destruction of, or substantial damage to, any of the
Collateral, and any other matters materially affecting the value, enforceability
or collectibility of any of the Collateral. If any amount payable
under or in connection with any Account is evidenced by a promissory note or
other instrument, as such terms are defined in the Uniform Commercial Code, such
promissory note or instrument shall be promptly pledged, endorsed, assigned and
delivered to the Collateral Agent as additional Collateral if the original
principal amount of such promissory note or instrument is $50,000 or
greater. No Credit Party shall redate, or allow any of its
Subsidiaries to redate, any invoice or sale or without written notice to the
Collateral Agent, make or allow to be made sales on extended dating beyond that
customary in the industry. No Credit Party nor any of its Subsidiaries shall be
entitled to pledge the Agent’s or any Lender’s credit on any purchases or for
any purpose whatsoever.
6.17. Agreements. Promptly
after Agent’s request, the Borrower shall deliver or cause to be delivered to
the Agent copies of all material employment agreements, management fee
agreements, tax sharing agreements, loan agreements, notes and other
documentation evidencing any Indebtedness of any Credit Party or any of its
Subsidiaries which the Agent may request.
6.18. Post-Closing
Covenants.
(a) Within
sixty (60) days of the Closing Date, Borrower shall deliver to the Agent
certificates from the appropriate public officials of the States of New Mexico
and South Dakota for the Borrower as to the good standing and qualification as a
foreign corporation, to the extent it is necessary to be qualified to do
business as a foreign corporation in these jurisdictions.
(b) Within
sixty (60) days of the Closing Date, Veterinarian’s Outlet Incorporated, a
California corporation, shall have been merged with and into Xxxx X. Brackmer,
D.V.M., Inc., a California corporation; provided, that (i)
the Borrower shall have given the Agent ten (10) Business Days prior written
notice of such merger, (ii) upon consummation of such merger, Borrower shall
take or cause to have taken all steps deemed reasonably necessary by the Agent
or the Collateral Agent to perfect the Collateral Agent’s Liens in any assets
acquired by the surviving entity of such merger, including, without limitation,
any actions required to be taken pursuant to Section 6.10 of this
Agreement, and (iii) Borrower shall have delivered or cause to be delivered to
Agent, (A) a fully executed copy of the merger agreement (including all exhibits
and schedules thereto) in respect of such merger, together with all other
documents and instruments executed in connection therewith, all in form and
substance satisfactory to the Agent, (B) resolutions of the Board of Director’s
of each of the entities to be merged authorizing and approving such merger, each
in form and substance satisfactory to the Agent, and (C) upon consummation of
such merger, (x) certified copies of the Organizational Documents of the
surviving entity of such merger, (y) a certificate of the Secretary of State of
the State of California as to the continued existence and good standing of the
surviving entity of such merger in the State of California, and (z) updated
Disclosure Schedules to this Agreement modified, as applicable, to reflect such
merger.
7. Negative
Covenants.
Until the
Obligations shall have been paid in full, each Credit Party executing this
Agreement covenants and agrees, jointly and severally with all of the Credit
Parties, that it will not do (and will not suffer or permit any of its
Subsidiaries, if any, to do) any of the following:
7.1. Indebtedness. Create,
incur, suffer or permit to exist, or assume or guarantee or become or remain
liable with respect to any Indebtedness, absolute, contingent, or otherwise,
except the
following:
(a) Indebtedness
to the Lenders and the Agent pursuant hereto;
(b) Indebtedness
secured by Liens permitted by Section 7.2 hereof;
(c) Purchase
money Indebtedness (including the amount of any Capital Lease Obligations
required to be capitalized and included as a liability on the consolidated
balance sheet of the Borrower and its Subsidiaries) incurred to finance Capital
Expenditures (to the extent otherwise permitted hereunder);
(d) The
Revolving Credit Agreement Debt, with no renewals, extensions or increases of
any thereof being permitted (other than “payments-in-kind” of accrued and unpaid
interest), unless the same has been approved in writing by the Agent and the
Required Lenders or, in the case of the Revolving Credit Agreement Debt, the
same is expressly permitted under the terms of the First Lien Intercreditor
Agreement;
(e) Other
liabilities or Indebtedness existing on the date of this Agreement and set forth
on Schedule
5.16 attached hereto;
(f) Current
accounts payable and unsecured current liabilities (including current accrued
expenses), not the result of borrowings, to vendors, suppliers, landlords,
lessors and persons providing services, for expenditures on ordinary trade terms
for goods and services normally required by the Borrower or any of its
Subsidiaries in the ordinary course of business;
(g) Indebtedness
of any Guarantor (other than the Parent) to the Borrower or to any other
Guarantor (other than the Parent), or the Indebtedness of the Borrower to any
Guarantor (other than the Parent), provided that no such
Indebtedness may be cancelled, compromised or otherwise discounted in any
respect without the written consent of the Required Lenders;
(h) Current
and deferred taxes and other assessments and governmental charges (to the extent
permitted by Section
7.2(e) hereof).
(i) Cash
Management Obligations incurred under the Revolving Credit Agreement and related
documents, and customary and prudent Hedging Obligations entered into with
Revolving Credit Lenders for the sole purpose of protecting the Borrower and its
Subsidiaries against fluctuations in interest rates, currency exchange rates and
similar risks, so long as such Hedging Obligations are not speculative in nature
and are incurred in the normal course of business and consistent with industry
practices;
(j) Refinancing
Indebtedness, to the extent the same relates to any Indebtedness permitted by
Sections 7.1(c)
and 7.1(e)
hereof;
(k) Contingent
Liabilities permitted pursuant to Section
7.3;
(l) Indebtedness
arising under any performance or surety bond entered in the ordinary course of
business;
(m) Unsecured
Indebtedness assumed, acquired or incurred pursuant to any acquisition permitted
under Section
7.4(e)(7), provided, that (1)
all such Indebtedness constitutes Subordinated Indebtedness and (2) the
aggregate principal amount of all such Indebtedness assumed, acquired or
incurred, together with the cash purchase price paid, in connection with all
such acquisitions permitted under Section 7.4(e)(7)
does not exceed in the aggregate during the period from September 26, 2006
through the Term Loan Maturity Date the applicable aggregate consideration
limits set forth in Section
7.4(e)(7);
(n) Indebtedness
incurred to finance the purchase or maintenance of publicly-tradable securities
owned by any Credit Party, so long as (1) such Indebtedness is secured by all
such securities, and (2) such Indebtedness does not exceed $500,000 in the
aggregate at any one time outstanding;
(o) Subordinated
Indebtedness of Animal Health International, Inc. or Steer Intermediate
Corporation, provided, that
accrued and unpaid interest on such Indebtedness shall only be payable in the
form of “payments-in-kind”; and
(p) Other
Indebtedness in an aggregate amount not to exceed at any one time outstanding
the difference between $3,000,000 and the principal amount of Indebtedness then
outstanding and permitted under Section
7.1(n).
The
Agent, the Lenders and each Credit Party agree that, notwithstanding anything
contained in Section
7.1(g) or in any other provision contained in this Agreement which may
appear to be to the contrary, the payment of any and all Indebtedness permitted
by Sections
7.1(g) hereof, including without limitation, all Indebtedness, now or
hereafter outstanding and owing by any Credit Party to another Credit Party
under the Contribution Agreement (together with any and all Liens from time to
time securing the same as permitted by Section 7.2(i)
hereof), is hereby made and at all times hereafter shall be inferior and
subordinate in all respects to the Obligations from time to time owing to the
Agent or any Lender pursuant hereto and to any Lien against any Collateral from
time to time now or hereafter securing any of such Obligations pursuant to the
terms hereof and the Security Documents. Each of the Credit Parties
agrees to execute and deliver on its own behalf, and to cause to be executed and
delivered by and on behalf of any of its Subsidiaries, any and all subordination
agreements, in form and content reasonably acceptable to the Agent or the
Collateral Agent, which they may hereafter require to further evidence the
subordination of the payment of the Indebtedness permitted by Section 7.1(g)
above, and the Liens permitted by Section 7.2(i) and
any such contractual, statutory or constitutional landlord’s Liens held by the
Borrower.
7.2. Liens. Create
or suffer to exist any Lien upon any of its Property (including without
limitation, Equity Interests in any Credit Party’s Subsidiaries) now owned or
hereafter acquired, or acquire any Property upon any conditional sale or other
title retention device or arrangement or any purchase money security agreement;
provided, however, that the
Credit Parties and their Subsidiaries (or any of them) may create or suffer to
exist:
(a) Liens in
effect on the date hereof and which are described on Schedule 7.2 attached
hereto, provided, that the
Property covered thereby does not increase in scope and such Liens may not be
renewed and extended, unless the same relate to Refinancing Indebtedness
permitted by Section
7.1(e) above;
(b) Liens
against the Collateral in favor of the Collateral Agent for the ratable benefit
of the Lenders as security for the Obligations and the Revolving Credit
Agreement Debt;
(c) Liens
incurred and pledges and deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance, old-age pensions
and other social security benefits (not including any lien described in Section
412(m) of the Code);
(d) Liens
imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s,
vendors’ and landlords’ liens and other similar liens, incurred in good faith in
the ordinary course of business and securing obligations which are incurred in
the ordinary course of business and are not overdue for a period of more than 30
days or which are being contested in good faith by appropriate proceedings
pursued in good faith and as to which the Borrower or any of its Subsidiaries,
as the case may be, shall, to the extent required by GAAP, consistently applied,
have set aside on its books adequate reserves;
(e) Liens
securing the payment of taxes, assessments and governmental charges or levies
(excluding any Lien imposed pursuant to any of the provisions of ERISA), that
are not delinquent, are permitted by Section 6.2 hereof,
or are being diligently contested in good faith by appropriate proceedings and
as to which adequate reserves have been established in accordance with GAAP;
provided, however, that the
aggregate amount of overdue taxes being diligently contested in good faith at
any one time secured by such Liens shall not exceed $1,000,000;
(f) Zoning
restrictions, easements, licenses, reservations, provisions, covenants,
conditions, waivers, restrictions on the use of property or minor irregularities
of title (and with respect to leasehold interests, mortgages, obligations, liens
and other encumbrances incurred, created, assumed or permitted to exist and
arising by, through or under a landlord or owner of the leased property, with or
without consent of the lessee) which do not in the aggregate materially detract
from the value of its property or assets or materially impair the use thereof in
the operation of its business;
(g) Liens
securing the performance of bids, tenders, leases, contracts (other than for the
repayment of borrowed money), statutory obligations, surety, customs and appeal
bonds and other obligations of like nature, incurred as an incident to and in
the ordinary course of business;
(h) Purchase
money Liens securing the Indebtedness permitted by Section 7.1(c)
above, provided, as a result
of the creation of any such Lien, (i) no Default or Event of Default shall have
occurred and is continuing, (ii) the principal amount of such Lien does not
exceed 100% of the purchase price of the asset acquired with such permitted
Indebtedness plus accrued interest on such Indebtedness plus protective advances
made by the holder of such permitted Indebtedness, and (iii) such Lien shall not
apply to any other Property other than the asset acquired with such purchase
money Indebtedness;
(i) Liens in
favor of the Borrower or any Guarantor (other than the Parent) securing any
Indebtedness permitted pursuant to Sections 7.1(g)
hereof;
(j) Liens on
fixed assets securing Indebtedness permitted to be assumed, acquired or incurred
in connection with acquisitions permitted under Section 7.4(e)(7),
provided, (i)
the applicable Lien existed on the applicable Property prior to the acquisition
thereof by the Borrower or any Subsidiary or existed on any Property of any
Person that becomes a Subsidiary of the Borrower after the date hereof prior to
the time such Person becomes a Subsidiary, (ii) the applicable Lien shall
not apply to any other Property of the Borrower or any Subsidiary, and (iii) the
applicable Lien shall secure only those obligations which it secures on the date
of the applicable acquisition or the date such Person becomes a Subsidiary, as
the case may be;
(k) Liens
consisting of bankers’ liens and rights of setoff, but only to the extent
permitted under any applicable Tri-Party Agreements, and in each case, arising
by operation of law, and Liens on documents presented in letter of credit
drawings; and
(l) Liens on
securities securing Indebtedness to the extent permitted in accordance with
Section
7.1(n).
Provided, however,
notwithstanding anything contained above in this Section 7.2 to the
contrary, if any of the permitted Liens are of the type that are being contested
in good faith by appropriate proceedings as to the Borrower or any of its
Subsidiaries, the Indebtedness giving rise to such contested Lien(s) must be
immediately paid upon commencement of any foreclosure process or proceeding with
respect to such Lien(s) unless the same shall be effectively stayed or a surety
bond with respect thereto (which is satisfactory in all respects to the Agent),
is posted.
7.3. Contingent
Liabilities. Create, incur, suffer or permit to exist,
directly or indirectly, any Contingent Obligations, other than:
(a) The
Obligations of each Guarantor to the Agent and the Lenders under the terms of
any Guaranty;
(b) The
guarantees by the Parent and any other Credit Party of the Borrower of the
Revolving Credit Agreement Debt;
(c) Any
Contingent Obligations of the Borrower under any Hedging Obligations permitted
by Section
7.1(i) above;
(d) The
guarantees by the Borrower of any Indebtedness of any other Credit Party or by
any Credit Party of any Indebtedness of the Borrower if such Indebtedness so
guaranteed is permitted under the terms of Section 7.1
above;
(e) Endorsements
of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business;
(f) Obligations
in respect of letters of credit under the Revolving Credit
Agreement;
(g) Agreements
evidencing any Hedging Obligations to the extent permitted by Section 7.3(c);
and
(h) obligations
relating to Liens permitted under Sections 7.2(c),
7(d), 7(e), 7(f) or 7(g).
7.4. Mergers, Consolidations and
Dispositions and Acquisitions of Assets. In any single
transaction or series of related transactions, directly or
indirectly:
(a) Wind up
its affairs, liquidate or dissolve;
(b) Be a
party to any merger or consolidation;
(c) Sell,
convey, lease, transfer or otherwise dispose of all or any portion of the assets
(except for (1) the sale of Inventory in the ordinary course of business for
fair and adequate consideration and (2) the sale of equipment, fixtures and
other assets in accordance with the terms of Section 7.4(e)(5)
below) of the Borrower and/or its Subsidiaries, or agree to take any such
action;
(d) Sell,
assign, pledge, transfer or otherwise dispose of, or in any way part with
control of, any Equity Interests of any of its Subsidiaries or any Indebtedness
or obligations of any character of any of its Subsidiaries, or permit any such
Subsidiary to do so with respect to any Equity Interests of any other Subsidiary
or any Indebtedness or obligations of any character of the Borrower or any of
its Subsidiaries, or permit any of its Subsidiaries to issue any additional
Equity Interests other than to the Borrower or any wholly-owned Subsidiary of
the Borrower; or
(e) Purchase
or otherwise acquire, directly or indirectly, in a single transaction or a
series of related transactions, all or a substantial portion of the assets of
any Person or any shares of Equity Interests of, or similar interest in, any
Person;
provided, however that
notwithstanding the foregoing, any of the following described actions may be
undertaken, so long as no Default or Event of Default then exists or would exist
immediately after giving effect to the applicable event:
(1) any
Business Entity comprising the Parent may merge or consolidate with any other
Business Entity comprising the Parent or may be dissolved or liquidated, so long
as such dissolution or liquidation results in all assets of such Business Entity
being owned by another Business Entity comprising the Parent;
(2) any
Subsidiary of the Borrower may merge or consolidate with the Borrower or any
other Subsidiary of the Borrower, provided, that if one
or more of the entities so merging or consolidating was a Guarantor, and if the
surviving entity is not the Borrower or is not yet a Guarantor, such surviving
entity must become a Credit Party simultaneously with such merger by executing
and delivering to the Agent a Joinder Agreement, together with all requested
Security Documents, as required at such time by the Collateral Agent,
appropriately completed in Proper Form;
(3) any of
the Borrower’s Subsidiaries may sell, lease, transfer or otherwise dispose of
any of its assets to the Borrower or any other Subsidiary of the Borrower, provided, that if the
entity selling, leasing, transferring or otherwise disposing of its assets is a
Guarantor, and if the entity to whom the sale, lease, transfer or other
disposition was made is not the Borrower or is not yet a Guarantor, such entity
must become a Credit Party simultaneously with the consummation of such lease,
transfer or disposition by executing and delivering to the Agent a Joinder
Agreement, together with all requested Security Documents, as required at such
time by the Collateral Agent, appropriately completed in Proper
Form;
(4) any
Subsidiary of the Borrower may be dissolved or liquidated, so long as such
dissolution or liquidation results in all assets of such Subsidiary being owned
by the Borrower or a Subsidiary; provided, that if the
entity dissolving or liquidating is a Guarantor, and if the entity to whom all
assets of such dissolving or liquidating entity are transferred is not the
Borrower or is not yet a Guarantor, such entity to whom such assets are being
transferred must become a Credit Party simultaneously with the consummation of
such dissolution or liquidation by executing and delivering to the Agent a
Joinder Agreement, together with all requested Security Documents, as required
at such time by the Collateral Agent, appropriately completed in Proper
Form;
(5) the
Borrower and its Subsidiaries may (i) sell, exchange or otherwise dispose
of Permitted Investment Securities in the ordinary course of business; (ii)
terminate, surrender or sublease a lease of real Property by the Borrower or any
of its Subsidiaries in the ordinary course of business; (iii) sell
Equipment that is obsolete, worn out or no longer needed in the business of the
Borrower or any of its Subsidiaries; (iv) enter into sale-leaseback transactions
relating to Property having a fair market value not to exceed $1,000,000 in the
aggregate during the period from September 26, 2006 through the Term Loan
Maturity Date; and (v) sell any other fixed assets (including real Property,
equipment and fixtures) having a fair market value not to exceed $1,000,000 in
the aggregate during the period from September 26, 2006 through the Term Loan
Maturity Date; provided that all proceeds of any of the foregoing (other than
Section
7.4(e)(5)(ii) above) shall be paid to the Collateral Agent for
application to outstanding Loans (as defined in the Revolving Credit Agreement)
or Obligations, to the extent then outstanding, in accordance with the terms of
the First Lien Intercreditor Agreement;
(6) to the
extent any Collateral is sold or otherwise disposed of as permitted by this
Section 7.4,
such Collateral shall be sold or otherwise disposed of free and clear of the
Liens of the Security Documents and the Collateral Agent shall take such
actions, including executing and filing appropriate releases, as are appropriate
in connection therewith, and no approval of any of Lenders shall be required
therefor; and
(7) the
Borrower and/or any other Credit Party may purchase or otherwise acquire,
directly or indirectly, in a single transaction or a series of related
transactions, all or a substantial portion of the assets of any Person or all or
a majority of issued and outstanding shares of Equity Interests of, or similar
interest in, any Person, so long as (a) immediately after giving effect to the
applicable purchase or acquisition, no Default or Event of Default exists
(including without limitation, the Credit Parties are in compliance with the
Fixed Charge Coverage Ratio requirements of Section 7.11, tested
on a pro forma basis assuming that such purchase or acquisition had occurred at
the beginning of the four (4) most recent consecutive fiscal quarters of the
Credit Parties ending on or immediately prior to the date of such purchase or
acquisition), (b) the aggregate purchase price paid (including without
limitation, any Indebtedness permitted to be assumed, acquired or incurred by
the Borrower and/or any of its Subsidiaries in connection therewith under Section 7.1(m)) for
all such purchases and acquisitions does not exceed $60,000,000 in the aggregate
during the period from September 26, 2006 through the Term Loan Maturity Date
for all such other purchases and acquisitions and (c) if the purchase price
paid (including without limitation, any Indebtedness permitted to be assumed,
acquired or incurred by the Borrower and/or any of its Subsidiaries in
connection therewith under Section 7.1(m)) exceeds $15,000,000 in the
aggregate, the Required Lenders shall have consented in writing to such purchase
or acquisition; and
(8) The
Credit Parties may make Investments to the extent permitted by Section
7.7.
7.5. Nature of
Business. Materially change the nature of its business or
enter into any business (or at any time own, directly or indirectly, a majority
of the Equity Interests of any entity which is engaged in any business) which is
substantially different from the business in which the Borrower and its
Subsidiaries are engaged in as of the Closing Date.
7.6. Transactions with Related
Parties. Except for any Permitted Affiliate Transactions,
enter into or be a party to any other transaction, contract or agreement of any
kind with any officer, director, shareholder, partner, employee or Affiliate of
any Credit Party (including, without limitation, the purchase from, sale to or
exchange of property with, or the rendering of any service by or for, any such
Person), unless such transaction, contract or agreement is in the ordinary
course of and pursuant to the reasonable requirements of the Borrower’s or any
of its Subsidiaries’ business and is made upon fair and reasonable terms and
conditions not less favorable to such Person than those which could have been
obtained in a comparable transaction from wholly independent and unrelated
sources.
7.7. Investments,
Loans. Make, directly or indirectly, any loan or advance to or
have any Investment in any Person, or make any commitment to make such loan,
advance or Investment, except:
(a) Equity
Interests of any Credit Party acquired or issued in accordance with the other
provisions of this Agreement, including without limitation, the provisions of
Section 6.10
above, or Equity Interests of any other Subsidiary of any Credit Party with the
prior written consent of the Agent;
(b) Permitted
Investment Securities;
(c) loans
otherwise permitted by the provisions of Section 7.1(g)
above;
(d) loans to
employees of the Borrower or any Subsidiary made in the ordinary course of
business, so long as the aggregate amount of all such loans outstanding at any
time does not exceed $100,000;
(e) Investments
of the Borrower and the other Credit Parties permitted under the terms of Section
7.4(e)(7);
(f) Investments
consisting of Guarantees permitted by Section
7.3(d);
(g) Investments
consisting of deferred payment obligations in connection with sales of assets
permitted under Section 7.4(e)(5);
and
(h) Other
Investments, including joint venture interests in non-Subsidiary entities, in
the aggregate amount not to exceed $500,000, provided that such Investments have
been approved by the Agent, such approval not to be unreasonably withheld if the
aggregate amount of such Investments does not exceed $500,000 in the aggregate
during the period from September 26, 2006 through the Term Loan Maturity
Date.
7.8. ERISA
Compliance.
(a) At any
time engage in any Prohibited Transaction with respect to a Plan which could
reasonably be expected to result in a material liability; or permit any Plan to
be terminated in a manner which could result in the imposition of a Lien on any
Property of the Borrower or any of its Subsidiaries pursuant to
ERISA.
(b) Engage in
any transaction in connection with which the Borrower or any Subsidiary thereof
would or could reasonably be expected to be subject to either a material civil
penalty assessed pursuant to the provisions of Section 502 of ERISA or a
material tax imposed under the provisions of Section 4975 of the
Code.
(c) Terminate
any Plan in a “distress termination” under Section 4041 of ERISA, or take any
other action which could reasonably be expected to result in a material
liability of the Borrower or any Subsidiary thereof to the PBGC.
(d) Fail to
make payment when due of all amounts which, under the provisions of any Plan,
the Borrower or any Subsidiary thereof is required to pay as contributions
thereto, or, with respect to any Plan, permit to exist any material “accumulated
funding deficiency” (within the meaning of Section 302 of ERISA and Section 412
of the Code), whether or not waived, with respect thereto.
(e) Adopt an
amendment to any Plan requiring the provision of security under Section 307 of
ERISA or Section 401(a)(29) of the Code.
7.9. Change in Accounting
Method. Make or permit any change in accounting method or
financial reporting practices except as may be required by GAAP, as in effect
from time to time.
7.10. Redemption, Dividends,
Issuance of Equity Interests, Distributions and Restricted
Payments. At any time, other than any Permitted Affiliate
Transactions:
(a) Redeem
(whether as a result of mandatory or optional redemption obligations or rights),
purchase, retire or otherwise acquire, directly or indirectly, any of its Equity
Interests, any warrants or other similar instruments or set aside any amount for
any such purpose;
(b) Declare
or pay, directly or indirectly, (i) any dividend or fund any redemption,
purchase, retirement or other acquisition of its Equity Interests, except (1)
dividends paid to the Borrower or any Guarantor which is a direct parent of the
Subsidiary paying the dividend (other than Cash Dividends to the Parent, which
shall not be paid at any time), and (2) non-cash dividends paid to the holders
of any Equity Interests of the Borrower or the Parent in the form of additional
Equity Interests of the Borrower or the Parent, as applicable, or (ii) any
management, consulting or monitoring fees to any Affiliate of the Borrower or
the Parent or any officer, director, shareholder, partner or employee of any
Affiliate of the Borrower or the Parent, except management or consulting fees
paid to the Borrower or any Guarantor (other than the Parent, to which no
management or consulting fees shall be paid);
(c) Issue any
additional Equity Interests in the Borrower, except for Equity Interests issued
to the Parent;
(d) Make any
other distribution of any Property, cash, securities or a combination thereof,
with respect to (whether by reduction of capital or otherwise) any Equity
Interests except as permitted in Section 7.10(b)
above;
(e) Set apart
any money for a sinking fund or other analogous fund for any dividend or other
distribution on its Equity Interests or for any redemption, purchase,
retirement, or other acquisition of any of its Equity Interests; or
(f) Redeem
(whether as a result of mandatory or optional redemption obligations or rights),
purchase, defease or retire for value, or make any principal payment or
prepayment on, any Subordinated Indebtedness prior to the Term Loan Maturity
Date;
provided, however that
notwithstanding the foregoing, any payments, dividends or distributions on and
any redemptions, purchases, retirements or other acquisitions of Equity
Interests otherwise prohibited under Sections 7.10(b) or
(e) shall be
permitted to be made by the applicable Credit Party, so long as (1) immediately
after giving effect to the applicable payment, dividend or distribution on or
redemption, purchase, retirement or other acquisition of Equity Interests, no
Default or Event of Default exists (including without limitation, the Credit
Parties are in compliance with the Fixed Charge Coverage Ratio requirements of
Section 7.11,
tested on a pro forma basis assuming that payment, dividend, or distribution on
or redemption, purchase, retirement or other acquisition of Equity Interests had
occurred at the beginning of the twelve (12) most recent consecutive calendar
months ending on or immediately prior to the date of such payment, dividend,
distribution, redemption, purchase, retirement or acquisition of Equity
Interests), (2) the aggregate amount of all such payments, dividends or
distributions on and redemptions, purchases, retirements or other acquisitions
of Equity Interests actually made from September 26, 2006 through the Term Loan
Maturity Date (excluding “payments-in-kind” of accrued and unpaid interest) does
not exceed $55,000,000. Notwithstanding the foregoing, however, in no
event shall any payment, dividend, distribution, redemption, purchase,
retirement or acquisition of Equity Interests otherwise permitted under the
terms of the preceding sentence be made to the extent the same is prohibited
under the terms of the Loan Documents (as defined in the Revolving Credit
Agreement). Schedule
7.10 sets forth all payments, dividends or distributions on and any
redemptions, purchases, retirements or other acquisitions of Equity Interests
permitted to be made pursuant to the foregoing proviso to this Section 7.10 for the
period from September 26, 2006 through the Closing Date.
7.11. Fixed Charge Coverage
Ratio. Permit the Fixed Charge Coverage Ratio of the Credit
Parties and their Subsidiaries, on a Consolidated basis, to be less than 1.0 to
1.0 at any time.
7.12. Capital
Expenditures. Permit the Credit Parties and their
Subsidiaries, on a Consolidated basis, to make or incur Capital Expenditures
(not including in the definition of Capital Expenditures for this purpose any
Capital Expenditures included in any future acquisition permitted under Section
7.4(e)(7)) in excess of $6,000,000 in the aggregate during each fiscal
year.
7.13. Sale of
Accounts. Sell, assign, discount (other than customary and
reasonable discounts in the ordinary course of business), transfer or otherwise
dispose of any Accounts, promissory notes, drafts or trade acceptances or other
rights to receive payment held by it, with or without recourse.
7.14. Sale and Lease-Back
Transactions. Except as otherwise permitted under Section
7.4(e)(5)(iv), enter into any arrangement, directly or indirectly, with
any Person whereby any Credit Party or any of its Subsidiaries shall sell or
transfer any Property, real or personal, which is used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such Property or other Property which such Credit Party or such Subsidiary
intends to use for substantially the same purpose or purposes as the Property
being sold or transferred.
7.15. Change of Name or Place of
Business. Permit any Credit Party or any of its Subsidiaries
to change its address, name, jurisdiction of organization, location of its chief
executive office or principal place of business or the place it keeps its
material books and records, unless such Credit Party has (a) notified the Agent
and the Collateral Agent of such change in writing at least thirty (30) days
before the effective date of such change, (b) taken such action, reasonably
satisfactory to the Collateral Agent, to have caused the Liens against all
Collateral in favor of the Collateral Agent for the ratable benefit of the
Lenders to be at all times fully perfected and in full force and effect and (c)
delivered such certificates from Governmental Authorities as the Agent may
require substantiating such name change.
7.16. Restrictive
Agreements. Other than as imposed by law, identified on Schedule 7.16, or
provided in this Agreement, the Revolving Credit Agreement, directly or
indirectly agree to restrict or condition (a) the payment of any dividends
or other distributions to the Borrower or any of its Subsidiaries; (b) the
payment of any Indebtedness owed to the Borrower or any of its Subsidiaries;
(c) the making of any loans or advances to the Borrower or any of its
Subsidiaries; or (d) the transfer of any of its properties or assets to the
Borrower or any of its Subsidiaries.
7.17. Modification or Waiver of
Documents Governing Revolving Credit Debt. Request, join in or
otherwise consent to any modification, amendment or waiver of any material term
of the Revolving Credit Agreement, except as expressly permitted under the terms
of the First Lien Intercreditor Agreement.
7.18. Anti-Terrorism
Laws. (a) Knowingly
conduct any business or engage in any transaction or dealing with any Blocked
Person, including the making or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person.
(a) Knowingly
deal in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order No.
13224.
(b) Knowingly
engage in or conspire to engage in any transaction that evades or avoids, or has
the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in the Executive Order No. 13224, the USA PATRIOT Act or
any other Anti-Terrorism Law.
The
Borrower shall, and shall cause each other Credit Party to, deliver to Agent any
certification or other evidence requested from time to time by the Agent in its
sole discretion, confirming such Credit Party’s compliance with this Section
7.18.
8. Events of Default and
Remedies.
8.1. Events of
Default. If any of the following events shall occur and be
continuing, then the Agent may (and, if directed by the Required Lenders,
shall), by written notice (or facsimile notice) to the Borrower, take any or all
of the following actions at the same or different times: (1) accelerate the Term
Loan Maturity Date and declare the Term Notes and all other Obligations then
outstanding to be, and thereupon the Term Notes and all other Obligations shall
forthwith become, immediately due and payable, without further notice of any
kind, notice of intention to accelerate, presentment and demand or protest, or
other notice of any kind all of which are hereby expressly WAIVED by the
Borrower; and (2) terminate all or any portion of the Term Loan Commitments and
exercise any and all other rights pursuant to the Loan Documents or available
under applicable law:
(a) The
Borrower shall fail to pay or prepay any Obligation (including principal,
interest, fees or any other amount) as and when due and payable, whether at the
due date thereof (by acceleration, lapse of time or otherwise) or at any date
fixed for prepayment thereof in accordance with the other provisions of this
Agreement; or
(b) An Event
of Default (as defined in the Revolving Credit Agreement) shall occur, or the
Borrower or any of its Subsidiaries (i) shall fail to pay when due, or within
any applicable period of grace, any other Indebtedness (excluding the Revolving
Credit Agreement Debt and Indebtedness outstanding hereunder) aggregating in
excess of $250,000 in principal amount unless such payment is being contested in
good faith (by appropriate proceedings) and adequate reserves have been provided
therefor, or (ii) shall default (beyond any applicable grace and curative
periods) in any other manner with respect to any other Indebtedness (excluding
the Revolving Credit Agreement Debt and Indebtedness outstanding hereunder)
aggregating in excess of $250,000 in principal amount if the effect of any such
default or Event of Default shall be to accelerate or to permit the holder of
any such other Indebtedness, at its option, to accelerate the maturity of such
Indebtedness prior to the stated maturity thereof; or
(c) Any
representation or warranty made or deemed made by the Borrower or any Guarantor
in connection with any Loan Document or in any certificate, report, notice or
financial statement furnished at any time in connection with this Agreement
shall prove to have been incorrect, false or misleading in any material respect
when made or deemed to have been made; or
(d) Except as
provided in Sections 8.1(a)
or 8.1(e),
Default shall occur in the punctual and complete performance or observance of
any covenant, condition or agreement to be observed or performed on the part of
the Borrower, any of its Subsidiaries or the Parent pursuant to the terms of any
provision of this Agreement or any other Loan Document, and such Default remains
uncured five (5) Business Days after the earlier to occur of (1) the Agent
giving written notice of such Default to the Borrower or (2) any Responsible
Officer of the Borrower or any of its Subsidiaries acquired actual knowledge of
the existence of such Default; or
(e) Default
shall occur in the punctual and complete performance or observance of any
covenant, condition or agreement to be observed or performed on the part of any
Credit Party or any of its Subsidiaries pursuant to the terms of Section 6.2, Section 6.9, Section 6.11 or Article 7 hereof;
or
(f) Final
judgment or judgments (or any decree or decrees for the payment of any fine or
any penalty) for the payment of an uninsured money award in excess of $500,000
in the aggregate shall be rendered against any Credit Party or any of its
Subsidiaries and the same shall remain undischarged and unpaid for a period of
thirty (30) days during which execution shall not be effectively stayed or
bonded; or
(g) Any
Credit Party or any of its Subsidiaries shall have concealed, removed, or
permitted to be concealed or removed, any part of its Property, with intent to
hinder, delay or defraud its creditors or any of them, or made or suffered a
transfer of any of its Property which is or could reasonably be expected to be
fraudulent under any bankruptcy, fraudulent conveyance or similar law;
or
(h) Any of
the following shall occur where such occurrence could reasonably be expected to
result in any material liability of any Credit Party: (1) a Reportable Event
shall have occurred with respect to a Plan; (2) the filing by the Borrower, any
ERISA Affiliate, or an administrator of any Plan of a notice of intent to
terminate such Plan under the provisions of Section 4041 of ERISA; (3) the
receipt of notice by the Borrower, any ERISA Affiliate or an administrator of a
Plan that the PBGC has instituted proceedings to terminate (or appoint a trustee
to administer) such a Plan; (4) any other event or condition exists which might
reasonably be expected to, in the opinion of the Agent, constitute grounds under
the provisions of Section 4042 of ERISA for the termination of or the
appointment of a trustee to administer any Plan by the PBGC; (5) a Plan shall
fail to maintain a minimum funding standard required by Section 412 of the Code
for any plan year or a waiver of standard is granted under the provisions of
Section 412(d) of the Code; (6) the Borrower or any ERISA Affiliate has
incurred, or is likely to incur, a liability under the provisions of Section
4062, 4063, 4064 or 4201 of ERISA; (7) the Borrower or any ERISA Affiliate fails
to pay the full amount of an installment required under Section 412(m) of the
Code; (8) any Prohibited Transaction involving any Plan; or (9) the occurrence
of any other event or condition with respect to any Plan which would constitute
an event of default or default under any other material agreement entered into
by the Borrower or any ERISA Affiliate; or
(i) This
Agreement, any Term Note, any of the Security Documents or any other Loan
Documents, or any material provision thereof, shall for any reason cease to be,
or shall be asserted by any Credit Party, not to be, a legal, valid and binding
obligation of any Credit Party, enforceable in accordance with its terms, or the
Lien purported to be created by any of the Security Documents shall for any
reason cease to be, or be asserted by any Credit Party not to be, a valid, first
priority perfected Lien (subject to the terms of the First Lien Intercreditor
Agreement) against any material portion of the Collateral (except to the extent
otherwise permitted under this Agreement or any of the Security Documents);
or
(j) The
Borrower or any of its Subsidiaries which is a party to the Lockbox Agreement or
any Tri-Party Agreement fails to perform and observe, and/or cause to be
performed and observed, all material covenants, provisions and conditions to be
performed, discharged and observed by the Borrower or any such Subsidiary under
the terms of the Lockbox Agreement or any Tri-Party Agreement; or
(k) Any
financial institution which is a party to any Tri-Party Agreement fails to
perform and observe, and/or cause to be performed and observed, all material
covenants, provisions and conditions to be performed, discharged and observed by
such financial institution under the terms of any Tri-Party Agreement and such
failure remains uncured (or such defaulting financial institution and applicable
Tri-Party Agreement is not replaced by the Borrower with a substitute financial
institution and replacement Tri-Party Agreement both reasonably acceptable to
the Agent) five (5) Business Days after the Collateral Agent gives written
notice of such failure to the Borrower; or
(l) A Change
of Control shall occur; or
(m) Any
Credit Party or any of its Subsidiaries shall suffer any writ of attachment or
execution or any similar process to be issued or levied against it or any
substantial part of its Property having an aggregate value in excess of $500,000
which is not released, stayed, bonded or vacated within thirty (30) days after
its issue or levy.
In
addition, if any of the following events shall occur, then (1) the Term Notes,
and all other Obligations then outstanding and payable hereunder shall
automatically, without demand, presentment, protest, notice of intent to
accelerate, notice of acceleration or other notice to any Person of any kind,
all of which are hereby expressly WAIVED by the Borrower, become immediately due
and payable and (2) all Term Loan Commitments shall be immediately and
automatically terminated.
(n) Any
Credit Party or any of its Subsidiaries shall commence a voluntary proceeding
seeking liquidation, reorganization, or other relief with respect to itself or
its debts under any bankruptcy, insolvency, or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or a substantial part of
its property or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for the
benefit of creditors or shall generally fail to pay its debts as they become due
or shall take any corporate action to authorize any of the foregoing;
or
(o) An
involuntary proceeding shall be commenced against any Credit Party or any of its
Subsidiaries seeking liquidation, reorganization, or other relief with respect
to it or its debts under any bankruptcy, insolvency, or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official for it or a substantial part of
its property, and such involuntary proceeding shall remain undismissed and
unstayed for a period of 60 days; or
(p) Any
involuntary order shall be entered in any proceeding against any Credit Party or
any of its Subsidiaries decreeing the dissolution, liquidation or split-up
thereof, and such order shall remain in effect for sixty (60) days;
or
(q) Any
Credit Party or any of its Subsidiaries shall admit in writing its inability to
pay its debts as they become due or fail generally to pay its debts as they
become due.
8.2. Remedies
Cumulative. No remedy, right or power conferred upon the Agent
or any Lender is intended to be exclusive of any other remedy, right or power
given hereunder or now or hereafter existing at law, in equity, or otherwise,
and all such remedies, rights and powers shall be cumulative.
9. The
Agent.
9.1. Appointment, Powers and
Immunities. Each Lender hereby irrevocably appoints and
authorizes the Agent to act as its agent hereunder and the other Loan Documents
with such powers as are specifically delegated to the Agent by the terms hereof
and thereof, together with such other powers as are reasonably incidental
thereto. The Agent (which such term as used in this Section 9, shall, in
each case, include reference to its Affiliates and its own and its Affiliates’
officers, directors, employees’ and agents) (a) shall not have duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and shall not by reason of this Agreement or any other
Loan Document be a trustee for any Lender; (b) shall not be responsible to any
Lender for, or have any duty to ascertain or inquire into, any recitals,
statements, representations or warranties contained in this Agreement or any
other Loan Document, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Loan Document, or the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
any other certificate or document referred to or provided for herein or therein
or any property covered thereby or any failure by any Party or any other Person
(other than the Agent) to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or any other Loan Document except to the extent
requested by the Required Lenders, provided that the Agent shall not be required
to take any action which exposes the Agent to personal liability or which is
contrary to this Agreement or any other Loan Documents or applicable law, and
(d) shall not be responsible for any action taken or omitted to be taken by it
hereunder or any other Loan Document or any other document or instrument
referred to or provided for herein or therein or in connection herewith or
therewith, INCLUDING
PURSUANT TO ITS OWN NEGLIGENCE, except for its own gross negligence or
willful misconduct. The Agent may engage agents and attorneys-in-fact
for purposes of performing its duties under this Agreement and the other Loan
Documents and shall not be responsible for the negligence or misconduct of any
such agents or attorneys-in-fact selected by them with reasonable
care. In any foreclosure proceeding concerning any collateral for the
Term Notes, each holder of a Term Note if bidding for its own account or for its
own account and the accounts of other Lenders is prohibited from including in
the amount of its bid an amount to be applied as a credit against its Term Note
or the Term Notes of the other Lenders, instead such holder must bid in cash
only. However, in any such foreclosure proceeding, the Agent may (but
shall not be obligated to) submit a bid for all Lenders (including itself) in
the form of a credit against the Term Notes of all of the Lenders, and the Agent
or its designee may (but shall not be obligated to), with the consent of the
Required Lenders, accept title to such collateral for and on behalf of all
Lenders. The Lenders hereby empower, authorize and direct the Agent,
on behalf of the Lenders, to execute and deliver this Agreement, the other Loan
Documents, the First Lien Intercreditor Agreement and all related agreements,
certificates, documents, or instruments as shall be necessary or appropriate to
effect the purposes of the Loan Documents. Each Lender agrees that
any action taken by the Agent in accordance with the terms of this Agreement,
the First Lien Intercreditor Agreement or the other Loan Documents, and the
exercise by the Agent of its powers set forth therein or herein, together with
such other powers that are reasonably incidental thereto, shall be binding upon
all of the Lenders. Notwithstanding anything herein or in any other
Loan Document to the contrary, to the extent there is a conflict between this
Agreement and any other Loan Document concerning the provisions of this Section
9, this Agreement shall govern and control.
9.2. Reliance. The
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel (which may be counsel for the Borrower), independent accountants
and other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement or any other Loan Document, the Agent
shall in all cases (i) have the right to seek instruction from the Required
Lenders and (ii) be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions of the Required
Lenders, and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders.
9.3. Defaults. The
Agent shall not be deemed to have knowledge of the occurrence of a Default or
Event of Default (other than the non-payment of principal of or interest on Term
Loans), unless it has received written notice from a Lender or a Credit Party
specifying such Default or Event of Default and stating that such notice is a
“Notice of Default.” In the event that the Agent receives such a
notice of the occurrence of a Default or Event of Default, the Agent shall give
prompt notice thereof to the Lenders (and shall give each Lender prompt notice
of each such non-payment). The Agent shall (subject to Section 9.7 hereof)
take such action with respect to such Default or Event of Default as shall be
directed by the Required Lenders and within its rights under the Loan Documents
and at law or in equity, provided that, unless
and until the Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
permitted or within its rights under any of the Loan Documents or under
applicable law with respect to such Default or Event of Default.
9.4. Rights as a
Lender. With respect to its Term Loan Commitments or the Term
Loans, if any, the Agent in its capacity as a Lender hereunder shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting as the Agent, and the term “Lender” or “Lenders”
shall, unless the context otherwise indicates, includes the Agent in its
individual capacity. The Agent may (without having to account
therefor to any Lender) accept deposits from, lend money to and generally engage
in any kind of banking, trust, letter of credit, agency or other business with
any Credit Party (and any of its Affiliates) as if it were not acting as the
Agent, and the Agent may accept fees and other consideration from any Credit
Party (in addition to the fees heretofore agreed to between the Borrower or any
other Credit Party and the Agent) for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders.
9.5. Indemnification. The
Lenders agree to indemnify the Agent (to the extent not reimbursed under Section 10.9 or Section 10.10 hereof,
but without limiting the obligations of the Borrower and the other Credit
Parties under said Sections 10.9 and
10.10), ratably
in accordance with their respective Term Loan Commitments, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever (INCLUDING
THE CONSEQUENCES OF THE NEGLIGENCE OF SUCH INDEMNIFIED PERSON, but excluding the
gross negligence or willful misconduct of such indemnified person) which may be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out of this Agreement or any other Loan Document or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses which the
Borrower and the other Credit Parties is obligated to pay under Sections 10.9 and
10.10 hereof
but excluding, unless a Default or Event of Default has occurred and is
continuing, normal administrative costs and expenses incident to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, INCLUDING THE NEGLIGENCE OF SUCH
INDEMNIFIED PERSON, but excluding the gross negligence or willful misconduct of
such indemnified person. The obligations of the Lenders under this
Section 9.5
shall survive the termination of this Agreement and the repayment of the
Indebtedness arising in connection with this Agreement.
9.6. Non-Reliance on Agent and
Other Lenders. Each Lender agrees that it has received current
financial information with respect to the Borrower and the other Credit Parties
and that it has independently and without reliance on the Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis of the Borrower and the other Credit Parties and
decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or any of the other Loan Documents. The Agent shall not be required
to keep itself informed as to the performance or observance by any Party of this
Agreement, or any of the other Loan Documents or any other document referred to
or provided for herein or therein or to inspect the properties or books of the
Borrower or any other Credit Party. Except for notices, reports and
other documents and information expressly required to be furnished to the
Lenders by the Agent, or the other Loan Documents, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any other Credit Party (or any of their Affiliates) which may come
into the possession of the Agent.
9.7. Failure to
Act. Notwithstanding anything herein to the contrary, the
Agent shall not be required to advance its own funds or otherwise incur
financial liability in the performance of its duties or the
exercise of its rights under the Loan Documents and shall in all
cases be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction by the Lenders of
their indemnification obligations under Section 9.5 hereof
and by the Credit Parties of their indemnification obligations under Section
10.01 hereof against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
9.8. Resignation or Removal of
Agent. Subject to the provisions of this paragraph, the Agent
may resign at any time by giving notice thereof to the Lenders and the Borrower,
and the Agent may be removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Agent reasonably acceptable to the
Borrower. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent’s giving of notice of resignation or the Required Lenders’
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, but in any event shall be discharged from
its duties and obligations hereunder. Any successor Agent shall be an
Eligible Assignee. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent. Such successor Agent shall promptly specify by notice
to the Borrower and the Lenders its office for the purpose of any notices and
payments hereunder. After any retiring Agent’s resignation or removal
hereunder as Agent, the provisions of this Section 9 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Agent.
10. Miscellaneous.
10.1. No
Waiver. No waiver of any Default or Event of Default shall be
deemed to be a waiver of any other Default or Event of Default. No
failure to exercise and no delay on the part of the Agent or any Lender in
exercising any right or power under any Loan Document or at law or in equity
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or the abandonment or discontinuance of steps to
enforce any such right or power, preclude any further or other exercise thereof
or the exercise of any other right or power. No course of dealing
between any Credit Party and the Agent or any Lender shall operate as a waiver
of any right or power of the Agent or any Lender. No notice to or
demand on any Credit Party or any other Person shall entitle any Credit Party or
any other Person to any other or further notice or demand in similar or other
circumstances.
10.2. Notices. Except
as otherwise expressly permitted hereunder or under any other Loan Document, all
notices under the Loan Documents shall be in writing and either (i) delivered to
the intended recipient, (ii) mailed by registered or certified mail, return
receipt requested, or (iii) sent by facsimile (promptly confirmed by mail,
except for any notice pursuant to Section 4. l(a)
hereof which need not be confirmed by mail), in each case to the intended
recipient at the “Address for Notices” specified below its name on the signature
pages hereof; or, as to any Lender who is a signatory hereto, at such other
address as shall be designated by such Lender in a notice to the Borrower and
the Agent given in accordance with this Section 10.2 or to
such other address as a party may designate in a notice given in accordance with
the provisions of this Section
10.2. The Borrower may change its address for purposes hereof
by providing written notice of such address change to the Lenders and the Agent
in accordance with the provisions of this Section 10.2, with
any such change in address only being effective ten (10) Business Days after
such change of address has been deemed given in accordance with the provisions
hereof. Notices shall be deemed to have been given (whether actually
received or not) when delivered (or, if mailed, on the next Business Day after
deposit of such notice into the mail); however, the notices required or
permitted by Section 4.1(a) hereof shall
be effective only when actually received by the Agent.
10.3. Governing
Law. Unless otherwise specified therein, each Loan Document
shall be governed by and construed in accordance with the laws of the State of
New York (other than the conflicts of laws principles thereof) and the United
States of America.
10.4. Survival; Parties
Bound. All representations, warranties, covenants and
agreements made by or on behalf of any Credit Party in connection herewith shall
survive the execution and delivery of the Loan Documents and shall not be
affected by any investigation made by any Person. The term of this
Agreement shall be until the termination or lapse of all Term Loan Commitments,
the final maturity of each Term Note, the payment of all amounts due under the
Loan Documents.
10.5. Counterparts. This
Agreement may be executed in several identical counterparts, and by the parties
hereto on separate counterparts, and each counterpart, when so executed and
delivered, shall constitute an original instrument, and all such separate
counterparts shall constitute but one and the same instrument.
10.6. Limitation of
Interest. The Borrower, the other Credit Parties and the
Lenders intend to strictly comply with all applicable laws, including applicable
usury laws, if any. Accordingly, the provisions of this Section 10.6 shall
govern and control over every other provision of this Agreement or any other
Loan Document which conflicts or is inconsistent with this Section, even if such
provision declares that it controls. As used in this Section, the
term “interest” includes the aggregate of all charges, fees, benefits or other
compensation which constitute interest under applicable law, provided, that, to
the maximum extent permitted by applicable law, (a) any non-principal payment
shall be characterized as an expense or as compensation for something other than
the use, forbearance or detention of money and not as interest, and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, in equal or in unequal parts during
the full term of the Term Loans and the Term Loan Commitments so that interest
for the entire term does not exceed the Highest Lawful Rate. In no
event shall the Borrower, any other Credit Party or any other Person be
obligated to pay, or the Agent or any Lender have any right or privilege to
reserve, receive or retain, (Y) any interest in excess of the maximum amount of
nonusurious interest permitted under the laws of the United Stales or of any
state, if any, which are applicable to the Agent or such Lender, respectively,
or (Z) total interest in excess of the amount which the Agent or such Lender
could lawfully have contracted for, reserved, received, retained or charged had
the interest been calculated for the full term of the Term Loans at the Highest
Lawful Rate, if any, applicable to the Agent or such Lender. None of
the terms and provisions contained in this Agreement or in any other Loan
Document which directly or indirectly relate to interest shall ever be construed
without reference to this Section 10.6, or be
construed to create a contract to pay any Lender for the use, forbearance or
detention of money at an interest rate in excess of the Highest
Lawful Rate applicable to such Lender. If the term of any Term Loans
or the Term Notes is shortened by reason of acceleration of maturity as a result
of any Default or Event of Default or by any other cause, or by reason of any
required or permitted prepayment, and if for that (or any other) reason the
Agent or any Lender at any time is owed or receives (and/or has received)
interest in excess of interest calculated at the Highest Lawful Rate applicable
to the Agent or such Lender, then and in any such event all of any such excess
interest owed to or received by the Agent or such Lender shall be canceled
automatically as of the date of such acceleration, prepayment or other event
which produces the excess, and, if such excess interest has been paid to the
Agent or such Lender, it shall be credited pro tanto against the
then-outstanding principal balance of the Obligations to the Agent or such
Lender, effective as of the date or dates when the event occurs which causes it
to be excess interest, until such excess is exhausted or all of such principal
has been fully paid and satisfied, whichever occurs first, and any remaining
balance of such excess shall be promptly refunded to its payor.
10.7. Survival. The
obligations of the Borrower or any other Credit Party, as applicable, under
Sections 2.7,
10.9, 10.10 and 10.17 hereof shall
survive the repayment of the Term Loans and all other Obligations, the
termination of the Term Loan Commitments.
10.8. Captions. The
headings and captions appearing in the Loan Documents have been included solely
for convenience and shall not be considered in construing the Loan
Documents.
10.9. Expenses,
Etc. The Borrower agrees to pay or reimburse on demand of the
Agent the following: (a) the reasonable fees, expenses, disbursements and other
charges of Xxxxxxx XxXxxxxxx LLP and any legal counsel engaged by the
Agent in connection with (i) the preparation, execution and delivery
of this Agreement (including the exhibits and schedules hereto) and the Loan
Documents and the making of the Term Loans hereunder and (ii) any modification,
supplement or waiver of any of the terms of this Agreement or any other Loan
Document; (b) all out-of-pocket costs and expenses (including the fees,
disbursements and other charges of counsel to the Agent and of one separate
counsel for Lenders other than the Agent), in connection with any Default or
Event of Default or the enforcement of this Agreement or any other Loan
Documents; (c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied on or against the Agent or any Lender by any
governmental or revenue authority in respect of this Agreement or any other Loan
Document; and (d) expenses of due diligence incurred by the Agent prior to or as
of the Closing Date and the Borrower agrees to pay or reimburse on demand the
Collateral Agent for all out-of-pocket costs, expenses, taxes, assessments and
other charges incurred by the Collateral Agent in connection with any filing,
registration, recording or perfection of any security interest contemplated by
this Agreement or any other Loan Document.
Except as
otherwise expressly limited elsewhere in this Agreement or in any other Loan
Document, the Borrower shall pay (i) all reasonable, documented out-of-pocket
expenses incurred by the Agent, the Collateral Agent, or their Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Agent or the Collateral Agent, in connection with the syndication and
distribution (including, without limitation, via the internet or through a
service such as Intralinks) of the credit facilities provided for herein, the
preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions of the Loan Documents (whether or not
the transactions contemplated hereby or thereby shall be consummated), and (ii)
all reasonable out-of-pocket expenses incurred by the Agent, the Collateral
Agent, or any Lender, including the fees, charges and disbursements of any
counsel for the Agent, the Collateral Agent and of one separate counsel for
Lenders other than the Agent or the Collateral Agent, in connection with the
enforcement, collection or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the
Loans made hereunder, including all such out-of pocket expenses incurred during
any workout, restructuring or negotiations in respect of such
Loans. Expenses being reimbursed by the Borrower under this Section
include, without limiting the generality of the foregoing, costs and expenses
(subject to express limitations set forth elsewhere in this Agreement or in any
other Loan Document) incurred in connection with:
(1) appraisals;
(2) field
examinations and the preparation of appraisal, field examination or audit
reports based on the fees charged by a third party retained by the Agent or the
internally allocated fees for each Person employed by the Agent with respect to
each field examination;
(3) lien and
title searches and title insurance;
(4) environmental
reviews;
(5) taxes,
fees and other charges for recording the mortgages, filing financing statements
and continuations, and other actions to perfect, protect, and continue the
Collateral Agent’s Liens;
(6) sums paid
or incurred to take any action required of any Credit Party under the Loan
Documents that such Credit Party fails to pay or take; and
(7) forwarding
loan proceeds, collecting checks and other items of payment, and establishing
and maintaining the accounts and lockboxes, and costs and expenses of preserving
and protecting the Collateral.
10.10. Indemnification. Each
Credit Party,
jointly and severally with all other Credit Parties, hereby agrees to
indemnify the Agent, the Lenders and each Affiliate thereof and their respective
directors, officers, employees and agents from, and hold each of them harmless
against, any and all losses, liabilities (including Environmental Liabilities),
claims (including Environmental Claims) or damages to which any of them may
become subject, insofar as such losses, liabilities, claims or damages arise out
of or result from any (a) actual or proposed use by the Borrower or any other
Credit Party of the proceeds of any extension of credit by any Lender hereunder,
(b) breach by any Credit Party of this Agreement or any other Loan Document, (c)
violation by any Credit Party or any of its Subsidiaries of any law, rule,
regulation or order including any Requirements of Environmental Law, (d) Liens
or security interests granted on any Property pursuant to or under the Loan
Documents, to the extent resulting from any Hazardous Substance located in, on
or under any such Property, (e) ownership by the Lenders or the Agent of any
Property following foreclosure under the Loan Documents, to the extent such
losses, liabilities, claims or damages arise out of or result from any Hazardous
Substance, located in, on or under such Property prior to or at the time of such
foreclosure, including losses, liabilities, claims or damages which are imposed
upon Persons under laws relating to or regulating Hazardous Substances, solely
by virtue of ownership, (f) any Lender or the Agent being deemed an operator of
any such Property by a court or other regulatory or administrative agency or
tribunal or other third party, to the extent such losses, liabilities, claims or
damages arise out of or result from any Hazardous Substance, petroleum,
petroleum product or petroleum waste located in on or under such Property at or
prior to the date of any foreclosure thereon under the Loan Document, or (g)
investigation, litigation or other proceeding (including any threatened
investigation or proceeding) relating to any of the foregoing (including any
proceeding brought by any Credit Party against the Agent, any Lender and/or
their respective Affiliates), and each Credit Party, jointly and severally with
all other Credit Parties, agrees to reimburse the Agent and each Lender,
and each Affiliate thereof and their respective directors, officers, employees,
counsel and agents, upon demand for any out-of-pocket expenses (including
reasonable legal fees) incurred in connection with any such investigation or
proceeding, AND WHETHER ANY SUCH LOSS, LIABILITY, CLAIM OR DAMAGE RESULTS FROM
THE NEGLIGENCE OF ANY SUCH INDEMNIFIED PERSON; but excluding any such losses,
liabilities, claims, damages or expenses incurred by a Person or any Affiliate
thereof or their respective directors, officers, employees, counsel or agents by
reason of (i) the gross negligence or willful misconduct of or willful and
knowing breach of any Loan Document by such Person, affiliate, director,
officer, employee or agent or (ii) ownership or operation of any Property by the
Lenders or the Agent following foreclosure under the Loan Documents to the
extent, but only to the extent, such losses, liabilities, etc. are attributable
to the post-foreclosure actions of the Lender or the Agent. Promptly
after receipt by an indemnified person of notice of any claim or the
commencement of any action, such indemnified person shall, if any claim in
respect thereof is to be made against any Credit Party under this Section 10.10,
notify the such Credit Party in writing of the claim or the commencement of that
action. The Credit Parties shall not be liable for any settlement of
any such claim or action involving the payment of monetary damages effected
without its written consent not to be unreasonably withheld. If any
such claim or action shall be brought against an indemnified person, it shall
notify the applicable Credit Parties thereof, and such Credit Parties shall be
entitled to participate in the joint defense thereof.
10.11. Amendments, Waivers,
Etc.
(a) Neither
this Agreement nor any other Loan Document nor any provision hereof or thereof
may be waived, amended or modified except (i) in the case of this Agreement,
pursuant to an agreement or agreements in writing entered into by the Borrower,
the Agent and the Required Lenders or (ii) in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by the
Agent and the Credit Party or Credit Parties that are parties thereto, with the
consent of the Required Lenders; provided that no such
agreement shall (i) increase the Term Loan Commitment of any Lender without the
written consent of such Lender, (ii) reduce or forgive the principal amount of
any Term Loan or reduce the rate of interest thereon, or reduce or forgive any
interest or fees payable hereunder, without the written consent of each Lender
directly affected thereby (provided, that any
waiver of Default Rate interest shall not be considered a reduction of
interest), (iii) postpone any scheduled date of payment of the principal amount
of any Term Loan or any date for the payment of any interest, fees or other
Obligations payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Term Loan
Commitment, without the written consent of each Lender directly affected
thereby, (iv) change any provision contained in Sections 2.2(c),
2.5, 2.8, 2.9, 10.9(b) or 10.10 hereof or this
Section 10.11
or Section
10.16 hereof, without the written consent of each Lender directly
affected thereby, (v) change any of the provisions of this Section or the
definition of “Required Lenders” or any other provision of any Loan Document
specifying the number or percentage of Lenders required to waive, amend or
modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender, (vi) release the
Borrower or any Guarantor from its obligation under its Guaranty (except as
otherwise permitted herein or in the other Loan Documents), without the written
consent of each Lender, or (vii) except as otherwise expressly provided herein,
including without limitation, in Section 10.11(b) or
in any Security Document, release any of the Collateral without the written
consent of each Lender. Anything in this Section 10.11 to the
contrary, no amendment, waiver or consent shall be made with respect to Section 9 without the
written consent of the Agent.
(b) The
Lenders hereby irrevocably authorize the Collateral Agent, at its option and in
its sole discretion, to release any Liens granted to the Collateral Agent by the
Credit Parties on any Collateral (i) upon the termination of the all Term Loan
Commitments, and payment and satisfaction in full in cash of all Term Loans and
other Obligations, (ii) constituting Property being sold or disposed of if
the Credit Party disposing of such Property certifies to the Agent that the sale
or disposition is made in compliance with the terms of this Agreement (and the
Agent may rely conclusively on any such certificate, without further inquiry),
(iii) constituting Property leased to a Credit Party under a lease which has
expired or been terminated in a transaction permitted under this Agreement, or
(iv) as required to effect any sale or other disposition of such Collateral in
connection with any exercise of remedies of the Collateral Agent and the Lenders
pursuant to Article
8. Except as provided in the preceding sentence or in Section 7.4(e)(5),
the Collateral Agent will not release any Liens on Collateral without the prior
written authorization of the Required Lenders; provided that, the
Collateral Agent may in its discretion, release its Liens on Collateral valued
in the aggregate not in excess of $1,000,000 during any calendar year without
the prior written authorization of the Required
Lenders. Any such release shall not in any manner discharge,
affect, or impair the Obligations or any Liens (other than those expressly being
released) upon (or obligations of the Credit Parties in respect of) all
interests retained by the Credit Parties, including the proceeds of any sale,
all of which shall continue to constitute part of the Collateral.
10.12. Successors and
Assigns.
(a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
other Credit Parties, the Agent, the Collateral Agent and the Lenders and their
respective successors and permitted assigns, provided that the
undertaking of the Lenders hereunder to make Term Loans to the Borrower shall
not inure to the benefit of any successor of the Borrower. Neither the Borrower
nor any Credit Party may assign or transfer any of its rights or obligations
hereunder without the prior written consent of all of the Lenders (and any
attempted assignment or transfer by any Credit Party without such consent shall
be null and void), and no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section
10.12. Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than (i) the parties hereto, their
respective successors and assigns permitted hereby, (ii) any participant of a
Lender (to the extent provided in subparagraph (b) below), and (iii) to the
extent expressly set forth herein, the Affiliates of the Agent and each of the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Each
Lender may sell participations to any Person in all or part of any Term Loan, or
all or part of its Term Notes, or Term Loan Commitments, to another bank or
other entity, in which event, without limiting the foregoing, the provisions of
Sections 10.10
and 10.16 shall
inure to the benefit of each purchaser of a participation and the pro-rata
treatment of payments, as described in Section 2.8, shall be
determined as if such Lender had not sold such participation. In the
event any Lender shall sell any participation, (i) the Borrower, the Agent, the
Collateral Agent and the other Lenders shall continue to deal solely and
directly with such selling Lender in connection with such selling Lender’s
rights and obligations under the Loan Documents (including the Term Note(s) held
by such selling Lender), (ii) such Lender shall retain the sole right and
responsibility to enforce the obligations of the Borrower and the other Credit
Parties relating to the Term Loans, including the right to approve any
amendment, modification or waiver of any provision of this Agreement other than
(and then only if expressly permitted by the applicable participation agreement)
amendments, modifications or waivers with respect to (A) any reduction of fees
payable hereunder to the Lender, (B) any reduction of the amount of principal or
the rate of interest payable on, or the dates fixed for the scheduled repayment
of principal of, the Term Loans and other sums to be paid to the Lenders
hereunder, and (C) any postponement of any date for the payment of any amount
payable in respect of the Term Loans of such Lender, (iii) the Credit Parties
each agree, to the fullest extent it may effectively do so under applicable law,
that any participant of a Lender may exercise all rights of set-off, bankers’
lien, counterclaim or similar rights with respect to such participation as fully
as if such participant were a direct holder of Term Loans if such Lender has
previously given notice of such participation to the Borrower.
(c) Each
Lender may assign to one or more Lenders or Eligible Assignees all or a portion
of its interests, rights and obligations under this Agreement (including all or
a portion of its Term Loan Commitment and or Term Loans at the time owing to it,
the related Term Note or Term Notes held by it) (an “Assignment”); provided, however, that, (i)
the aggregate amount of the applicable Term Loan Commitment or Term Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance (as defined below) with respect to such assignment is
delivered to the Agent) shall in no event be less than $500,000 (except for
certain exceptions approved by the Agent) and shall be in an amount that is an
integral multiple of $100,000 (unless all of the assigning Lender’s applicable
Term Loan Commitment or Term Loans is being assigned); and (ii) the parties to
each such assignment shall execute and deliver to the Agent, for its acceptance
and recording in its records, and to the Borrower, an Assignment and Acceptance
in a form required by the Agent (each an “Assignment and
Acceptance”) with blanks appropriately completed, together with any Term
Note or Term Notes and a processing and recordation fee of $1,000 (for which the
Borrower shall have no liability); provided that, (i) no
such fee shall be payable in connection with an assignment to a Lender, an
Affiliate of a Lender or an Approved Fund of a Lender, (ii) only one fee shall
be payable in connection with simultaneous assignments by a Lender to related
Approved Funds and (iii) no such fee shall be payable in connection with
assignments during the five Business Days following the Closing
Date. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, unless a shorter period of time may be agreed to by the Agent in its
sole and absolute discretion, (A) the assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder and (B) the Lender thereunder
shall, to the extent provided in such assignment, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(d) By
executing and delivering an Assignment and Acceptance, the Lender assignor
thereunder and the assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, such Lender assignor makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Loan Document or any other instrument or document
furnished pursuant thereto; (ii) such assignor Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Credit Party or any of its Subsidiaries or the performance or observance
by the Borrower or any other Credit Party of any of its obligations hereunder;
(iii) such assignee confirms that it has received a copy of this Agreement and
the other Loan Documents, together with copies of the financial statements of
the Borrower previously delivered in accordance herewith and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee confirms that it will keep confidential all information with respect to
any Credit Party furnished to it by the Borrower or such Credit Party, such
assignor Lender or the Agent (other than information generally available to the
public or otherwise available to the Agent on a non-confidential basis or
otherwise permitted pursuant to the terms of this Agreement); (v) such assignee
will, independently and without reliance upon the Agent, such assignor Lender or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents; (vi) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all obligations that by the terms of the Loan Documents are required to be
performed by it as a Lender.
(e) The Agent
shall maintain at its office a copy of each Assignment and Acceptance delivered
to it and a record of the names and addresses of the Lenders and the Term Loan
Commitments of, and principal amount of the Term Loans, accrued and unpaid
interest and other fees due thereunder owing to, each Lender from time to
time. The entries in the register shall be conclusive, in the absence
of manifest error, and the Borrower, the Agent and the Lenders may treat each
person the name of which is recorded therein as a Lender hereunder for all
purposes of the Loan Documents. Such records shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(f) Upon its
receipt of an Assignment and Acceptance executed by an assigning Lender and the
assignee thereunder together with the Term Note(s) subject to such assignment,
the written consent to such assignment and the fee, if any, payable with respect
thereto, the Agent shall, if such Assignment and Acceptance has been completed
with blanks appropriately filled, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt notice thereof to the Borrower and the
Lenders. Contemporaneously with the receipt by the Borrower of such
Assignment and Acceptance and the surrender Term Note(s), the Borrower, at its
own expense, shall execute and deliver to the Agent in exchange for the
surrendered Term Note(s), a new Term Note or Term Notes payable to the order of
such assignee in an amount equal to the applicable Term Loan Commitment, or Term
Loans, assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained Term Loan Commitments or Term Loans hereunder, a
new Term Note or Term Notes to the order of the assigning Lender in an amount
equal to the applicable Term Loans retained by it hereunder. Such new
Term Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Term Note(s), shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of the surrendered Term Note(s). Such surrendered
Term Note shall be marked canceled and returned to the
Borrower.
(g) Any
Lender may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 10.12,
disclose to the assignee or participant or proposed assignee or participant, any
information relating to any Credit Party and/or any of its Subsidiaries
furnished to such Lender by or on behalf of such Credit Party or such applicable
Subsidiary.
(h) Notwithstanding
anything herein to the contrary, any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including without limitation, any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section
shall not apply to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
10.13. Entire
Agreement. This Agreement and the other Loan Documents embody
the entire agreement and understanding among the Credit Parties, the Agent and
the Lenders relating to the subject matter hereof and supersedes all prior
proposals, agreements and understandings relating to the subject matter
hereof. Any conflict between the provisions of this Agreement and the
provisions of any other Loan Documents shall be governed by the provisions of
this Agreement. The Credit Parties certify that they are relying on
no representation, warranty, covenant or agreement except for those set forth in
this Agreement and the other Loan Documents of even date herewith.
10.14. Severability. If
any provision of any Loan Documents shall be invalid, illegal or unenforceable
in any respect under any applicable law, the validity, legality and
enforceability of the remaining provisions shall not be affected or impaired
thereby.
10.15. Disclosures. Every
reference in the Loan Documents to disclosures of the Borrower or any other
Credit Party to the Agent and the Lenders in writing, to the extent that such
references refer to disclosures at or prior to the execution of this Agreement,
shall be deemed strictly to refer only to written disclosures delivered to the
Agent and the Lenders in an orderly manner prior to or concurrently with the
execution hereof.
10.16. Capital
Adequacy.
(a) If after
the date of this Agreement, any Lender shall have determined that the adoption
or effectiveness (regardless of whether previously announced) of any applicable
Legal Requirement or treaty regarding capital adequacy, or any change therein,
or any change in the interpretation or administration thereof by any
Governmental Authority or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, has or would have the effect of increasing the
cost of, or reducing the rate of return on the capital of such Lender (or any
holding company of which such Lender is a part) as a consequence of its
obligations hereunder or its Term Note to a level below that which such Lender
or holding company could have achieved but for such adoption, change or
compliance by an amount deemed by such Lender to be material, then from time to
time, upon demand by such Lender (with a copy to the Agent) in the form of a
certificate stating the cause of such demand and reasonably detailed
calculations therefor, the Borrower (subject to Section 10.6 hereof)
agrees to pay to such Lender such additional amount or amounts as will
compensate such Lender or holding company for such reduction.
(b) The
certificate of any Lender setting forth such amount or amounts as shall be
necessary to compensate such Lender or its holding company as specified in Subsection 10.16(a)
above (and setting forth the calculation thereof in reasonable detail) shall be
conclusive and binding, absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within five days
after such Lender delivers such certificate. In preparing such
certificate, such Lender may employ such assumptions and allocations of costs
and expenses as it shall in good xxxxx xxxx reasonable and may use any
reasonable averaging and attribution method.
10.17. Taxes.
(a) As used
in this Section
10.17, the following terms shall have the following
meanings:
(1) “Indemnifiable Tax”
means any Tax, but excluding, in any case, any Tax that (a) would not be imposed
in respect of a payment to a Lender or the Agent under the Term Notes held by
such Lender or the Agent or under any of the other Loan Documents except for a
present or former connection between the jurisdiction of the Governmental
Authority imposing such Tax and such Lender or the Agent (or a shareholder or
other Person with an interest therein), including a connection arising from such
Lender’s or the Agent’s (or shareholder thereof) being or having been a citizen
or resident of such jurisdiction, or being or having been organized, present or
engaged in a trade or business in such jurisdiction, or having or having had a
permanent establishment or fixed place of business in such jurisdiction, but
excluding a connection arising solely from such Lender or the Agent having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement, the Term Notes held by such Lender or the Agent or any
other Loan Documents, (b) is imposed under United States federal income tax law
or any state income or franchise tax law or (c) is described in the final
sentence of Section 17(e).
(2) “Tax” means any
present or future tax, levy, impost, duty, charge, assessment or fee of any
nature (including interest thereon and penalties and additions thereto) that is
imposed by any Governmental Authority in respect of a payment to a Lender or the
Agent under the Term Notes or under any of the other Loan
Documents.
(b) If the
Borrower is required by any applicable Legal Requirement to make any deduction
or withholding for or on account of any Tax from any payment to be made by it
under this Agreement, under the Term Notes or under any other Loan Documents to
a Lender or the Agent, then the Borrower shall (i) promptly notify the Lender or
the Agent that is entitled to such payment of such requirement to so deduct or
withhold such Tax, (ii) pay to the relevant Governmental Authorities the full
amount required to be so deducted or withheld, (iii) promptly forward to such
Lender or the Agent an official receipt (or copies thereof), or other
documentation reasonably acceptable to such Lender or the Agent, evidencing such
payment to such Governmental Authorities and (iv) if such Tax is an
Indemnifiable Tax, pay, to the extent permitted by law to such Lender or the
Agent, in addition to whatever net amount of such payment is paid to such Lender
or the Agent, such additional amount as is necessary to ensure that the total
amount actually received by such Lender or the Agent (free and clear of
Indemnifiable Tax) will equal the full amount of the payment such Lender or the
Agent would have received had no such deduction or withholding been
required. If the Borrower pays any additional amount to a Lender or
the Agent pursuant to the preceding sentence and such Lender or the Agent shall
receive a refund of an Indemnifiable Tax with respect to which, in the good
faith opinion of such Lender or the Agent, such payment was made, such Lender or
the Agent shall pay to the Borrower the amount of such refund promptly upon
receipt thereof.
(c) In the
event that any Governmental Authority notifies the Borrower that it has
improperly failed to withhold or deduct any Tax from a payment received by any
Lender or the Agent under the Term Notes held by such Lender or the Agent or
under any other Loan Documents, the Borrower agrees to timely and fully pay such
Tax to such Governmental Authority and such Lender or the Agent shall, upon
receipt of written notice of such payment with respect to any Tax other than an
Indemnifiable Tax, promptly pay to the Borrower, an amount necessary in order
that the amount of such payment to the Borrower after payment of all Taxes with
respect to such payment, shall equal the amount of any Tax other than an
Indemnifiable Tax that the Borrower paid to such Governmental Authority pursuant
to this clause (c).
(d) Each
Lender or the Agent shall, upon request by the Borrower, take requested measures
to mitigate the amount of Indemnifiable Tax required to be deducted or withheld
from any payment made by the Borrower under this Agreement, under the Term Notes
or under any other Loan Documents if such measures can, in the sole and absolute
opinion of such Lender or the Agent, be taken without such Lender or the Agent
suffering any economic, legal, regulatory or other disadvantage (provided,
however, that no such Lender or the Agent shall be required to designate a
funding office that is not located in the United States of
America).
(e) Each
Lender or the Agent that (i) is organized under the laws of a jurisdiction other
than the United States of America and (ii)(A) is a party hereto on the Closing
Date or (B) becomes an assignee of an interest under this Agreement under Section 10.12 after
the Closing Date (unless such Lender or the Agent was already a Lender or the
Agent hereunder immediately prior to such assignment) shall execute and deliver
to the Borrower and the Agent one or more (as the Borrower or the Agent may
reasonably request) Forms W-8ECI, W-8BEN, W-8IMY (as applicable) or other
applicable form, certificate or document prescribed by the United States
Internal Revenue Service certifying as to such Lender’s or the Agent’s
entitlement to exemption from withholding or deduction of Taxes. The Borrower
shall not be required to pay additional amounts to any Lender or the Agent
pursuant to this Section 10.17 to the
extent that the obligation to pay such additional amounts would not have arisen
but for the failure of such Lender or the Agent to comply with this
paragraph.
(f) Each
Lender and the Agent agrees that if it subsequently recovers, or receives a
permanent net tax benefit with respect to any amounts of Taxes (i) previously
paid by it and as to which it has been indemnified by or on behalf of the
Borrower or (ii) previously deducted by the Borrower (including, without
limitation, any Taxes deducted from any additional sums payable under clause (b)
above), the relevant Lender or the Agent, as the case may be, shall reimburse
the Borrower to the extent of the amount of any such recovery or permanent net
tax benefit (but only to the extent of any indemnity payments made, or
additional amounts paid, by or on behalf of the Borrower under this Section 10.17 with
respect to the Taxes giving rise to such recovery or tax benefit); provided, however, that the
Borrower, upon the request of the Lender or the Agent, agrees to repay to such
Lender or the Agent, the amount paid over to the Borrower, in the event such
Lender or the Agent is required to repay such amount to the relevant taxing
authority.
(g) Notwithstanding
the foregoing, in no event shall the amount payable under this Section 10.17 (to the
extent, if any, constituting interest under applicable laws) together with all
amounts constituting interest under applicable laws and payable in connection
with this Agreement or the Term Notes, exceed the Highest Lawful Rate or the
maximum amount of interest permitted to be charged by applicable
laws.
10.18. Waiver of
Claims. Each Credit Party hereby waives and releases the
Agent, the Collateral Agent and all Lenders from any and all claims or causes of
action which the Borrower may own, hold or claim in respect of any of them as of
the date hereof.
10.19. Right of
Setoff. The Lenders each are hereby authorized at any time and
from time to time, without notice to any Credit Party (any such notice being
expressly waived by each Credit Party), to setoff and apply any and all deposits
(general or special, time or demand, provisional or final, whether or not such
setoff results in any loss of interest or other penalty, and including without
limitation all certificates of deposit) at any time held, and any other funds or
property at any time held, and other Indebtedness at any time owing by the Agent
or such Lender to or for the credit or the account of any such Credit Party
against any and all of the Obligations irrespective of whether or not any of the
Obligations are then due and irrespective of whether or not Agent or such Lender
shall have made any demand under this Agreement, the Term Notes or any other
Loan Document. Each Credit Party also hereby grants to Agent and to
each of the Lenders a security interest in and hereby transfers, assigns, sets
over, and conveys to the Agent and to each of the Lenders, as security for
payment of all Obligations, all such deposits, funds or property of any such
Credit Party or Indebtedness of the Agent or any Lender to any such Credit
Party. Should the right of the Agent or any Lender to realize funds in any
manner set forth hereinabove be challenged and any application of such funds be
reversed, whether by court order or otherwise, the Lenders shall make
restitution or refund to such Credit Party, pro rata in accordance with their
respective Term Loan Commitment Percentages. Each Lender agrees to
promptly notify the Borrower and the Agent after any such setoff and
application, provided that the failure to give such notice will not affect the
validity of such setoff and application. The rights of the Agent and
the Lenders under this Section are in addition to other rights and remedies
(including without limitation other rights of setoff) which the Agent or the
Lenders may have. This Section is subject to the terms and provisions
of Section 2.12
hereof.
10.20. Waiver of Right to Jury
Trial. EXCEPT AS PROHIBITED BY APPLICABLE LAW, EACH PARTY
HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT, THE NOTES, ANY OF THE OTHER LOAN DOCUMENTS OR ANY TRANSACTIONS
EVIDENCED THEREBY.
10.21. Additional Provisions
Regarding Collection of Accounts and other Collateral.
(a) Each
Credit Party hereby designates and constitutes the Collateral Agent or the
Collateral Agent’s designee as such Credit Party’s attorney-in-fact with power
to endorse such Credit Party’s name upon any notes, acceptances, checks, drafts,
money orders or other evidence of payment of any Accounts or any other
Collateral that may come into its possession; to sign or endorse such Credit
Party’s name on any invoice, xxxx of lading or other title or ownership
documents relating to any Accounts or Inventory, drafts against any customers of
any Credit Party, assignments and verifications of Accounts and notices to
customers of any Credit Party; to send verifications of Accounts; and to notify
the U.S. Postal Service authorities to change the address for delivery of mail
addressed to any Credit Party to such address as the Collateral Agent may
designate. All acts of said attorney or designee are hereby ratified
and approved by each Credit Party, and said attorneys or designee shall not be
liable for any acts of omission or commission, for any error of judgment or for
any mistake of fact or law, provided that the Agent or its designee shall not be
relieved of liability to the extent it is determined by a final judicial
decision that its act, error or mistake constituted gross negligence or willful
misconduct or willful and knowing breach of any Loan Document. The
power of attorney granted under this subparagraph is coupled with an interest
and is irrevocable until all of the Obligations are paid in full and this
Agreement and the Term Loan Commitments are terminated.
(b) The
Collateral Agent, without notice to or consent of any Credit Party, at any time
after the occurrence and during the continuation of an Event of Default, (i) may
xxx upon or otherwise collect, extend the time. of payment of, or compromise or
settle for cash, credit or otherwise upon any terms, any of the Accounts or any
instruments or insurance applicable thereto and/or release any account debtor
thereon; (ii) is authorized and empowered to accept or direct shipments of
Inventory and accept the return of the goods represented by any of the Accounts;
and (iii) shall have the right to receive, endorse, assign and/or deliver in its
name or the name of any Credit Party any and all checks, drafts and other
instruments for the payment of money relating to the Accounts, and each Credit
Party hereby waives notice of presentment, protest and non-payment of any
instrument so endorsed.
(c) Nothing
herein contained shall be construed to constitute any Credit Party as agent of
the Collateral Agent for any purpose whatsoever, and the Collateral Agent shall
not be responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same may be located and
regardless of the cause thereof (except to the extent it is determined by a
final judicial decision that the Collateral Agent’s or a Lender’s act or
omission constituted gross negligence of willful conduct or willful and knowing
breach of any Loan Document). The Collateral Agent and the Lenders
shall not, under any circumstances or in any event whatsoever, have any
liability for any error or omission or delay of any kind occurring in the
settlement, collection or payment of any of the Accounts or any instrument
received in payment thereof or for any damage resulting therefrom (except to the
extent it is determined by a final judicial decision that the Collateral Agent’s
or such Lender’s error, omission or delay constituted gross negligence or
willful misconduct or willful and knowing breach of any Loan
Document). The Collateral Agent and the Lenders do not, by anything
herein or in any assignment or otherwise, assume any Credit Party’s obligations
under any contract or agreement assigned to the Collateral Agent or the Lender,
and the Collateral Agent and the Lenders shall not be responsible in any way for
the performance by any Credit Party of any of the terms and conditions
thereof.
(d) Upon the
occurrence and during the continuation of any Event of Default: (i) if any of
the Accounts includes a charge for any tax payable to any governmental tax
authority, the Collateral Agent is hereby authorized (but in no event obligated)
in its discretion to pay the amount thereof to the proper taxing authority for,
the account of any Credit Party and to charge or any Credit Party’s account
therefor; and (ii) the Borrower shall notify the Collateral Agent if any
Accounts include any tax due to any such taxing authority and, in the absence of
such notice, the Collateral Agent shall have the right to retain the full
proceeds of such Accounts and shall not be liable for any taxes that may be due
from any Credit Party by reason of the sale and delivery creating such
Accounts.
(e) Upon the
occurrence and continuation of any Event of Default, the Collateral Agent may at
any time and from time to time employ and maintain in the premises of any Credit
Party a custodian selected by the Collateral Agent who shall have full authority
to do all acts necessary to protect the Collateral Agent’s and Lenders’
interests and to report to the Collateral Agent thereon. Each Credit
Party hereby agrees to cooperate with any such custodian and to do so whatever
the Collateral Agent may reasonably request to preserve the
Collateral. All costs and expenses incurred by the Collateral Agent
by reason of the employment of the custodian shall be charged to the Borrower’s
account and added to the Obligations.
10.22. Construction. Each
Credit Party, the Agent and each Lender acknowledge that each of them has had
the benefit of legal counsel of its own choice and has been afforded an
opportunity to review this Agreement and the other Loan Documents with its legal
counsel and that this Agreement and the other Loan Documents shall be construed
as if jointly drafted by the parties hereto.
10.23. Joint and Several
Obligations. Notwithstanding anything to the contrary
contained herein or in any other Loan Documents, each Credit Party acknowledges
that it and the other Credit Parties are jointly and severally responsible for
their respective agreements, covenants, representations, warranties and
obligations contained and set forth in this Agreement or in any other Loan
Document to which the applicable Credit Party is a party.
10.24. USA Patriot
Act. Each Lender hereby notifies the Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), it may be 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 Act.
10.25. Confidentiality. Each
Lender agrees to keep confidential information obtained by it pursuant hereto
and the other Loan Documents confidential in accordance with such Lender’s
customary practices and agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and not disclose
any of such information in connection with the transactions contemplated by this
Agreement and not disclose any of such information other than (a) to such
Lender’s employees, representatives, directors, attorneys, auditors, agents,
professional advisors, trustees or Affiliates who are advised of the
confidential nature of such information, (b) to the extent such information
presently is or hereafter becomes available to such Lender on a non-confidential
basis from any source of such information that is in the public domain at the
time of disclosure, (c) to the extent disclosure is required by law, regulation,
subpoena or judicial order or process (provided that notice
of such requirement or order shall be promptly furnished to the Borrower unless
such notice is legally prohibited or such disclosure is made during an
examination of a Lender’s books and records by any state or federal regulatory
agency), (d) to any rating agency to the extent required in connection with any
rating to be assigned to such Lender, (e) to assignees or participants or
prospective assignees or participants, (f) to the extent required in connection
with any litigation between any Credit Party and any Lender with respect to the
Loans or this Agreement and the other Loan Documents, or (g) with the Borrower’s
prior written consent
[Remainder
of Page Left Blank Intentionally]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
set forth above.
XXXXX
FARGO BANK, NATIONALASSOCIATION,
as Agent
and as a Lender
By: /s/
Xxxxxxxx X. Xxxxx
Name:
Xxxxxxxx X. Xxxxx
Title:
Senior Vice President
WALCO
INTERNATIONAL, INC.,
a
Delaware corporation, as Borrower
By: /s/
Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Sr. V.P. and CFO
WALCO
HOLDINGS, INC.,
a
Delaware corporation, as a Guarantor
By: /s/
Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Sr. V.P. and CFO
STEER
INTERMEDIATE CORPORATION,
a
Delaware corporation, as a Guarantor
By:
/s/ Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Sr. V.P. and CFO
a
Delaware corporation, as a Guarantor
By: /s/
Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Vice President
WALCO
INTERMEDIATE, INC.,
a
Delaware corporation, as a Guarantor
By: /s/
Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Sr. V.P. and CFO
AMERICAN
LIVESTOCK SUPPLY, INC.,
a
Delaware corporation, as a Guarantor
By: /s/
Xxx Xxxxx
Name: Xxx
Xxxxx
Title:
President
WALCO
TEXAS ANIMAL HEALTH, LLC,
a Texas
limited liability company, as a Guarantor
By:
/s/ Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Sr. V.P. and CFO
HAWAII
MEGA-COR., INC.,
a Hawaii
corporation, as a Guarantor
By: /s/
Xxxxxx Xxxxxxx
Name:
Xxxxxx Xxxxxxx
Title:
Secretary
PROVINCE
LIVESTOCK SUPPLY LTD.,
an
Alberta corporation, as a Guarantor
By: /s/
Xxxxx Xxxxxxxxxx
Name:
Xxxxx Xxxxxxxxxx
Title:
Secretary and Treasurer
WESTERN
VETERINARY SUPPLIES LTD.,
an
Alberta corporation, as a Guarantor
By: /s/
Xxxxx Xxxxxxxxxx
Name:
Xxxxx Xxxxxxxxxx
Title:
Secretary and Treasurer
WALCO
CANADA ANIMAL HEALTH LTD.,
an
Alberta corporation, as a Guarantor
By: /s/
Xxxxx Xxxxxxxxxx
Name:
Xxxxx Xxxxxxxxxx
Title:
Secretary and Treasurer
