Execution Copy
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$480,000,000
CREDIT AGREEMENT
among
CA ACQUISITION HOLDINGS, INC.,
XXXXXX AMERICAN CORP.,
as Borrower,
BEAR XXXXXXX CORPORATE LENDING INC.,
as Administrative Agent,
The Several Lenders from Time to Time Parties Hereto,
JPMORGAN CHASE BANK, N.A.,
as Syndication Agent
and
AMEGY BANK N.A. and NATEXIS BANQUES POPULAIRES,
as Co-Documentation Agents
Dated as of December 15, 2005
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BEAR, XXXXXXX & CO. INC. and X.X. XXXXXX SECURITIES INC.,
as Joint Lead Arrangers and Joint Book Running Managers
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS................................................. 1
1.1 Defined Terms............................................... 1
1.2 Other Definitional Provisions............................... 23
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS............................. 24
2.1 Term Commitments............................................ 24
2.2 Procedure for Term Loan Borrowing........................... 24
2.3 Repayment of Term Loans..................................... 24
2.4 Revolving Commitments....................................... 25
2.5 Procedure for Revolving Loan Borrowing...................... 25
2.6 Swingline Commitment........................................ 26
2.7 Procedure for Swingline Borrowing; Refunding
of Swingline Loans....................................... 26
2.8 Commitment Fees, etc........................................ 27
2.9 Termination or Reduction of Revolving Commitments........... 28
2.10 Optional Prepayments........................................ 28
2.11 Mandatory Prepayments....................................... 28
2.12 Conversion and Continuation Options......................... 29
2.13 Limitations on Eurodollar Tranches.......................... 30
2.14 Interest Rates and Payment Dates............................ 30
2.15 Computation of Interest and Fees............................ 30
2.16 Inability to Determine Interest Rate........................ 31
2.17 Pro Rata Treatment and Payments............................. 31
2.18 Requirements of Law......................................... 32
2.19 Taxes....................................................... 33
2.20 Indemnity................................................... 35
2.21 Change of Lending Office.................................... 36
2.22 Replacement of Lenders...................................... 36
2.23 Illegality.................................................. 36
SECTION 3. LETTERS OF CREDIT........................................... 37
3.1 L/C Commitment.............................................. 37
3.2 Procedure for Issuance of Letter of Credit.................. 37
3.3 Fees and Other Charges...................................... 37
3.4 L/C Participations.......................................... 38
3.5 Reimbursement Obligation of the Borrower.................... 39
3.6 Obligations Absolute........................................ 39
3.7 Letter of Credit Payments................................... 39
3.8 Applications................................................ 40
SECTION 4. REPRESENTATIONS AND WARRANTIES.............................. 40
4.1 Financial Condition......................................... 40
4.2 No Change................................................... 40
4.3 Existence; Compliance with Law.............................. 41
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4.4 Power; Authorization; Enforceable Obligations............... 41
4.5 No Legal Bar................................................ 41
4.6 Litigation.................................................. 41
4.7 No Default.................................................. 41
4.8 Ownership of Property; Liens................................ 41
4.9 Intellectual Property....................................... 42
4.10 Taxes....................................................... 42
4.11 Federal Regulations......................................... 42
4.12 Labor Matters............................................... 42
4.13 ERISA....................................................... 42
4.14 Investment Company Act; Other Regulations................... 43
4.15 Subsidiaries................................................ 43
4.16 Use of Proceeds............................................. 43
4.17 Environmental Matters....................................... 43
4.18 Accuracy of Information, etc................................ 44
4.19 Security Documents.......................................... 45
4.20 Solvency.................................................... 45
4.21 Regulation H................................................ 45
4.22 Certain Documents........................................... 45
4.23 Anti-Terrorism Laws......................................... 45
SECTION 5. CONDITIONS PRECEDENT........................................ 46
5.1 Conditions to Initial Extension of Credit................... 46
5.2 Conditions to Each Extension of Credit...................... 50
SECTION 6. AFFIRMATIVE COVENANTS....................................... 50
6.1 Financial Statements........................................ 50
6.2 Certificates; Other Information............................. 51
6.3 Payment of Obligations...................................... 52
6.4 Maintenance of Existence; Compliance........................ 53
6.5 Maintenance of Property; Insurance.......................... 53
6.6 Inspection of Property; Books and Records; Discussions...... 53
6.7 Notices..................................................... 53
6.8 Environmental Laws.......................................... 54
6.9 Additional Collateral, etc.................................. 55
6.10 Further Assurances.......................................... 56
6.11 Post-Closing Obligations.................................... 57
SECTION 7. NEGATIVE COVENANTS.......................................... 57
7.1 Financial Covenants......................................... 57
7.2 Indebtedness................................................ 58
7.3 Liens....................................................... 59
7.4 Fundamental Changes......................................... 61
7.5 Disposition of Property..................................... 62
7.6 Restricted Payments......................................... 62
7.7 Capital Expenditures........................................ 63
7.8 Investments................................................. 63
7.9 Optional Payments and Modifications of Certain Debt
Instruments.............................................. 64
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7.10 Transactions with Affiliates................................ 64
7.11 Sales and Leasebacks........................................ 65
7.12 Swap Agreements............................................. 65
7.13 Changes in Fiscal Periods................................... 65
7.14 Negative Pledge Clauses..................................... 65
7.15 Clauses Restricting Subsidiary Distributions................ 65
7.16 Lines of Business........................................... 66
7.17 Amendments to Acquisition Documents......................... 66
7.18 Change in Structure......................................... 66
7.19 Limitation on Activities of Holdings........................ 66
7.20 Limitation on Modifications of Tax Sharing Agreement........ 66
SECTION 8. EVENTS OF DEFAULT........................................... 67
SECTION 9. THE AGENTS.................................................. 69
9.1 Appointment................................................. 69
9.2 Delegation of Duties........................................ 70
9.3 Exculpatory Provisions...................................... 70
9.4 Reliance by Administrative Agent............................ 70
9.5 Notice of Default........................................... 71
9.6 Non-Reliance on Agents and Other Lenders.................... 71
9.7 Indemnification............................................. 71
9.8 Agent in Its Individual Capacity............................ 72
9.9 Successor Administrative Agent.............................. 72
9.10 Syndication Agent, Co-Documentation Agents and
Arrangers................................................ 72
9.11 Withholding Tax............................................. 72
SECTION 10. MISCELLANEOUS............................................... 72
10.1 Amendments and Waivers...................................... 72
10.2 Notices..................................................... 73
10.3 No Waiver; Cumulative Remedies.............................. 74
10.4 Survival of Representations and Warranties.................. 74
10.5 Payment of Expenses and Taxes............................... 75
10.6 Successors and Assigns; Participations and Assignments...... 75
10.7 Adjustments; Set-off........................................ 79
10.8 Counterparts................................................ 79
10.9 Severability................................................ 79
10.10 Integration................................................. 79
10.11 GOVERNING LAW............................................... 80
10.12 Submission To Jurisdiction; Waivers......................... 80
10.13 Acknowledgements............................................ 80
10.14 Releases of Guarantees and Liens............................ 80
10.15 Confidentiality............................................. 81
10.16 WAIVERS OF JURY TRIAL....................................... 81
10.17 Acknowledgement and Agreement............................... 81
10.18 Lender Addenda.............................................. 82
10.19 Supplemental Schedules...................................... 82
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SCHEDULES:
4.1(b) Dispositions
4.4 Consents, Authorizations, Filings and Notices
4.8 Real Property
4.9 Intellectual Property
4.10 Taxes
4.15 Subsidiaries
4.19(a) UCC Filings
4.19(b) Mortgage Filing Jurisdictions
5.1(k)(vi) Landlord Personal Property Collateral Access Agreements
6.11 Post-Closing Obligations
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.8 Investments
7.10 Transactions with Affiliates
7.15 Restrictions on Subsidiary Distributions
EXHIBITS:
A-1 Form of Guarantee and Collateral Agreement
A-2 Form of Control Agreement
A-3 Form of Intercompany Note
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Assumption
E-1 Form of Legal Opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
LLP
E-2 Form of Legal Opinion of Graves, Dougherty, Xxxxxx & Xxxxx
E-3 Form of Legal Opinion of Xxxxxx, Xxxxxx, Xxxxxxx & Xxxxxxxx
F Form of Exemption Certificate
G Form of Solvency Certificate
H Form of Lender Addendum
I-1 Form of Term Loan Note
I-2 Form of Revolving Loan Note
I-3 Form of Swingline Loan Note
J Form of Mortgage
K Form of Landlord Personal Property Collateral Access Agreement
L Form of Intellectual Property Security Agreement
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CREDIT AGREEMENT (this "Agreement"), dated as of December 15, 2005,
among XXXXXX AMERICAN CORP., a Delaware corporation (the "Borrower"), CA
ACQUISITION HOLDINGS, INC., a Delaware corporation ("Holdings"), the several
banks and other financial institutions or entities from time to time parties to
this Agreement (the "Lenders"), JPMORGAN CHASE BANK, N.A. ("JPM"), as
syndication agent (in such capacity, the "Syndication Agent"), BEAR XXXXXXX
CORPORATE LENDING INC., as Administrative Agent (as hereinafter defined), AMEGY
BANK N.A. ("Amegy") and NATEXIS BANQUES POPULAIRES ("Natexis"), as
co-documentation agents (each in such capacity, a "Co-Documentation Agent"), and
BEAR, XXXXXXX & CO. INC. and X.X. XXXXXX SECURITIES, INC., as joint lead
arrangers and joint book running managers.
WITNESSETH:
WHEREAS, M&F Worldwide Corp., a Delaware corporation ("M&F"), intends
to acquire all the capital stock of Novar USA Inc., a Delaware corporation
("Novar"), a wholly owned subsidiary of Honeywell International Inc., a Delaware
corporation ("Honeywell"), for a total purchase price of approximately
$800,000,000 (the "Acquisition") pursuant to the Stock Purchase Agreement, dated
as of October 31, 2005, by and between M&F Worldwide Corp. and Honeywell (the
"Acquisition Agreement");
WHEREAS, on the Closing Date, Novar and Security Printing, Inc., a
Delaware corporation, shall be consolidated with and into the Borrower;
WHEREAS, the Borrower has requested that the Lenders make available
the Term Commitments (as defined below) and the Revolving Commitments (as
defined below) to finance, in part, the Acquisition and to pay related fees,
expenses and premiums and for other general corporate purposes of the Borrower
and its Subsidiaries; and
WHEREAS, the Lenders are willing to make available the Term
Commitments and the Revolving Commitments for such purposes on the terms and
subject to the conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by The Bank of New York as its prime
rate in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by The Bank of New York
in connection with extensions of credit to debtors). Any change in the ABR due
to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.
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"Acquisition": as defined in the recitals hereto.
"Acquisition Agreement": as defined in the recitals hereto.
"Acquisition Documents": the collective reference to the Acquisition
Agreement and all schedules, exhibits and annexes thereto and all side letters
and agreements affecting the terms thereof or entered into in connection
therewith.
"Administrative Agent": Bear Xxxxxxx Corporate Lending Inc., together
with its affiliates, as the administrative agent for the Lenders under this
Agreement and the other Loan Documents, together with any of its successors.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise. In no case shall any Agent or Lender be deemed to be an Affiliate of
any Group Member or any Affiliate thereof, for purposes of this Agreement or any
other Loan Document, solely because of such Agent or Lender being a party to
this Agreement or any other Loan Document.
"Agents": the collective reference to the Syndication Agent, the
Co-Documentation Agents, the Arrangers and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Commitment then in effect or, if the Revolving
Commitments have been terminated, the aggregate amount of such Lender's
Revolving Extensions of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": this Credit Agreement, dated as of December 15, 2005, as
it may be amended, supplemented or otherwise modified from time to time.
"Amegy" : as defined in the preamble hereto.
"Anti-Terrorism Laws" shall mean Executive Order No. 13224, the
Patriot Act, the laws comprising or implementing the Bank Secrecy Act and the
laws administered by the United States Treasury Department's Office of Foreign
Asset Control (each as from time to time in effect) and any similar laws
relating to terrorism.
"Applicable Margin": for each Type of Loan, the rate per annum set
forth under the relevant column heading below:
ABR Loans Eurodollar Loans
--------- ----------------
Revolving Loans 2.00% 3.00%
Term Loans 2.25% 3.25%
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Swingline Loans 2.00% N/A
"Application": an application, in such form as an Issuing Lender may
specify from time to time, requesting an Issuing Lender to issue a Letter of
Credit.
"Approved Fund": as defined in Section 10.6(b).
"Arrangers": Bear, Xxxxxxx & Co. Inc., together with its affiliates
and X.X. Xxxxxx Securities Inc., together with its affiliates, each as arranger
of the Commitments.
"Asset Sale": any Disposition of property or series of related
Dispositions of property, including any issuance or sale of Capital Stock of a
Subsidiary (excluding any such Disposition permitted by clause (a), (b), (c),
(d), (e), (g), (i) or (j) of Section 7.5), that yields Net Cash Proceeds to any
Group Member in excess of $500,000. Notwithstanding the foregoing, any
Disposition of property or series of related Dispositions of property by the
Borrower or any of its Subsidiaries that constitutes an Asset Sale under and as
defined in the Senior Note Indenture shall be an Asset Sale for purposes of this
definition.
"Assignee": as defined in Section 10.6(b).
"Assignment and Assumption": an Assignment and Assumption,
substantially in the form of Exhibit D.
"Available Revolving Commitment": as to any Revolving Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Revolving
Commitment then in effect over (b) such Lender's Revolving Extensions of Credit
then outstanding; provided, that in calculating any Lender's Revolving
Extensions of Credit for the purpose of determining such Lender's Available
Revolving Commitment pursuant to Section 2.8(a), the aggregate principal amount
of Swingline Loans then outstanding shall be deemed to be zero.
"Benefitted Lender": as defined in Section 10.7(a).
"Blocked Person": as defined in Section 4.23(b).
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": Xxxxxx American Corp., a Delaware corporation.
"Borrowing Date": any Business Day specified by the Borrower as a date
on which the Borrower requests the relevant Lenders to make Loans hereunder.
"Business": as defined in Section 4.17(b).
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close; provided, that with respect to notices and determinations in connection
with, and payments of principal of and interest on, Eurodollar Loans, such day
is also a day for trading by and between banks in Dollar deposits in the
interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease)
4
of fixed or capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) that should be
capitalized under GAAP on a consolidated balance sheet of such Person and its
Subsidiaries; provided that Capital Expenditures shall not include capitalized
pre-paid incentive payments.
"Capital Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of three months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by Xxxxx'x
Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) money market mutual or similar funds that invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition; or (h) money market funds that (i) comply with the criteria set
forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended,
(ii) are rated AAA by S&P and Aaa by Moody's and (iii) have portfolio assets of
at least $5,000,000,000.
"Change of Control": if any time (i) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), excluding the Sponsor Group, shall
become, or obtain rights (whether by means of warrants, options or otherwise) to
become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under
the Exchange Act), directly or indirectly, of more than the greater of (x) 35%
of the outstanding common stock of M&F, and (y) the amount of outstanding common
stock of M&F then beneficially owned by the Sponsor Group and each of its
beneficial owners; (ii) the board of directors of M&F shall cease to consist of
a majority of Continuing Directors; (iii) M&F shall cease to own and control, of
record and beneficially, directly or indirectly, 100% of each class of
outstanding Capital Stock of the Borrower free
5
and clear of all Liens (except Liens created by the Guarantee and Collateral
Agreement); or (iv) a "Change of Control" (or any other defined term having a
similar purpose) as defined in the Senior Notes Documents shall occur.
"Closing Date": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied or waived, which date is December 15,
2005.
"Co-Documentation Agent": as defined in the preamble hereto.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is created by any Security Document.
"Commitment": as to any Lender, the sum of the Term Commitment and the
Revolving Commitment of such Lender.
"Commitment Fee Rate": 0.50% per annum; provided, that so long as no
Default or Event of Default has occurred and is continuing, the Commitment Fee
Rate shall be adjusted, on and after the first Adjustment Date (as defined
below) occurring after the completion of two full fiscal quarters of the
Borrower after the Closing Date, based on changes in the Consolidated Leverage
Ratio, with such adjustments to become effective on the date (the "Adjustment
Date") that is three Business Days after the date on which the relevant
financial statements are delivered to the Lenders pursuant to Section 6.1 and to
remain in effect until the next adjustment to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified in Section 6.1, then, until the date that is
three Business Days after the date on which such financial statements are
delivered, the highest Commitment Fee Rate set forth in the table shown below
shall apply. On each Adjustment Date, the Commitment Fee Rate shall be adjusted
to be equal to the Commitment Fee Rate opposite the Pricing Level determined to
exist on such Adjustment Date from the financial statements relating to such
Adjustment Date.
Pricing Level Commitment Fee Rate
------------- -------------------
I 0.50%
II .375%
As used herein, the following rules shall govern the determination of Pricing
Levels on each Adjustment Date:
"Pricing Level I" shall exist on an Adjustment Date if the
Consolidated Leverage Ratio for the relevant period of four consecutive
fiscal quarters is greater than or equal to 2.5 to 1.
"Pricing Level II" shall exist on an Adjustment Date if the
Consolidated Leverage Ratio for the relevant period of four consecutive
fiscal quarters is less than 2.5 to 1.
"Commonly Controlled Entity": an entity, whether or not incorporated,
that is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.
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"Conduit Lender": any special purpose corporation organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument;
provided, that the designation by any Lender of a Conduit Lender shall not
relieve the designating Lender of any of its obligations to fund a Loan under
this Agreement if, for any reason, its Conduit Lender fails to fund any such
Loan, and the designating Lender (and not the Conduit Lender) shall have the
sole right and responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender, and provided,
further, that no Conduit Lender shall (a) be entitled to receive any greater
amount pursuant to Section 2.18, 2.19, 2.20 or 10.5 than the designating Lender
would have been entitled to receive in respect of the extensions of credit made
by such Conduit Lender or (b) be deemed to have any Commitment.
"Confidential Information": as defined in Section 10.15.
"Consolidated Current Assets": at any date, all amounts (other than
cash and Cash Equivalents) that would, in conformity with GAAP, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of the Borrower and its Subsidiaries and (b) without
duplication of clause (a) above, all Indebtedness consisting of Revolving Loans
or Swingline Loans to the extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, amortization or write-off of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans, the Letters of Credit
and the Senior Notes), (c) depreciation and amortization expense, other than
amortization expense related to capitalized prepaid incentive payments, (d) any
extraordinary non-cash expenses or losses, (e) any costs and expenses incurred
in connection with the transactions consummated under the Transaction Documents
in an amount not to exceed $20,000,000 and (f) any other non-cash charges,
expenses or losses, provided, that to the extent any of the income of any Person
is excluded from Consolidated Net Income pursuant to the definition thereof for
such period, any amounts set forth in the preceding clauses (a) through (e) that
are attributable to such Person shall not be included herein for such period,
and minus, (a) to the extent included in the statement of such Consolidated Net
Income for such period, the sum of (i) interest income, (ii) any extraordinary
or non-recurring income or gains (including, whether or not otherwise includable
as a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of business
but excluding non-recurring income or gains arising from the termination of
customer contracts in the ordinary course of business), (iii) income tax credits
(to the extent not netted from income tax expense) and (iv) any other non-cash
income and (b) any cash payments made during such period in respect of items
described in clause (d) or (f) above subsequent to the fiscal quarter in which
the relevant non-cash charges, expenses or losses were reflected as a charge in
the statement of Consolidated Net Income, all as determined on a consolidated
basis; provided, that (i) Consolidated EBITDA for the fiscal quarter ending June
30, 2005 will be deemed to be equal to $33,829,000 and (ii) Consolidated EBITDA
for the fiscal quarter ending September 30, 2005 will be deemed to be equal to
$36,435,000. For the purposes of calculating Consolidated EBITDA for any period
of four consecutive fiscal quarters (each, a "Reference Period") pursuant to any
determination of the Consolidated Leverage Ratio or the Consolidated Senior
Secured Debt Ratio, (i) if at any time during such Reference Period the Borrower
or any Subsidiary shall have made any Material Disposition, the
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Consolidated EBITDA for such Reference Period shall be reduced by an amount
equal to the Consolidated EBITDA (if positive) attributable to the property that
is the subject of such Material Disposition for such Reference Period or
increased by an amount equal to the Consolidated EBITDA (if negative)
attributable thereto for such Reference Period and (ii) if during such Reference
Period the Borrower or any Subsidiary shall have made a Material Acquisition,
Consolidated EBITDA for such Reference Period shall be calculated after giving
pro forma effect thereto as if such Material Acquisition occurred on the first
day of such Reference Period.
As used in this definition, "Material Acquisition" means any
acquisition of property or series of related acquisitions of property that (a)
constitutes assets comprising all or substantially all of an operating unit of a
business or constitutes all or substantially all of the common stock or
equivalent of a Person and (b) involves the payment of consideration by the
Borrower and its Subsidiaries in excess of $250,000; and "Material Disposition"
means any Disposition of property or series of related Dispositions of property
that yields Net Cash Proceeds to the Borrower or any of its Subsidiaries in
excess of $250,000 during any fiscal year.
"Consolidated Fixed Charge Coverage Ratio": for any period, the ratio
of (a) Consolidated EBITDA for such period to (b) Consolidated Fixed Charges for
such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b) provision
for cash income taxes made by Holdings, the Borrower or any of its Subsidiaries
on a consolidated basis in respect of such period, including payment of deferred
tax liabilities associated with the amortization of intangibles and (c)
scheduled payments made during such period on account of principal of
Indebtedness of the Borrower or any of its Subsidiaries (including scheduled
principal payments in respect of the Term Loans and excluding, for the avoidance
of doubt, payments required by Section 2.11(d)).
"Consolidated Interest Expense": for any period, total cash interest
expense (including that attributable to Capital Lease Obligations) of the
Borrower and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP, for such period with respect to all outstanding Indebtedness of the
Borrower and its Subsidiaries (including all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing and net costs under Swap Agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with GAAP
and any interest expenses incurred in respect of the financing of insurance
premiums).
"Consolidated Leverage Ratio": as at the last day of any period of
four consecutive fiscal quarters, the ratio of (a) Consolidated Total Debt on
such day to (b) Consolidated EBITDA for such period.
"Consolidated Net Income": for any period, the consolidated net income
(or loss) of the Borrower and its 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 the Borrower or is merged into or consolidated with the Borrower
or any of its Subsidiaries, (b) the income (or deficit) of any Person (other
than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower 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 Requirement of Law applicable to such Subsidiary.
8
"Consolidated Senior Secured Debt": Consolidated Total Debt which
constitutes secured Indebtedness.
"Consolidated Senior Secured Debt Ratio": as at the last day of any
period of four consecutive fiscal quarters, the ratio of (a) Consolidated Senior
Secured Debt on such day to (b) Consolidated EBITDA for such period.
"Consolidated Total Debt": at any date, the aggregate principal amount
of all Indebtedness of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Continuing Directors": the directors of M&F on the Closing Date,
after giving effect to the Transactions and the other transactions contemplated
thereby, and each other director if, in each case, such other director's
nomination for election to the board of directors of M&F is recommended by at
least a majority of the then Continuing Directors.
"Control Agreements": the Control Agreements to be executed and
delivered by the Borrower and each Subsidiary Guarantor, substantially in the
form of Exhibit A-2, or in such other form that is reasonably satisfactory to
the Administrative Agent.
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Disposition": with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollars" and "$": dollars in lawful currency of the United States.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, judgments, requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning Materials of Environmental Concern,
pollution, protection of the environment, natural resources and human health and
safety, as now or may at any time hereafter be in effect.
"Environmental Liability": all liabilities, obligations, damages,
losses, claims, actions, suits, judgments, orders, fines, penalties, fees,
expenses and costs (including, without limitation, administrative oversight
costs, natural resource damages, investigation and remediation costs, and legal
and consulting fees), whether contingent or otherwise, arising out of or
relating to (a) compliance or non-compliance with any Environmental Law, (b) the
generation, use, handling, transportation, storage,
9
treatment, disposal or Release of any Materials of Environmental Concern, (c)
exposure to any Materials of Environmental Concern, (d) the Release or
threatened Release of any Materials of Environmental Concern, or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Telerate screen as of 11:00 A.M., London time, two Business Days
prior to the beginning of such Interest Period. In the event that such rate does
not appear on Page 3750 of the Telerate screen (or otherwise on such screen),
the "Eurodollar Base Rate" shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent or, in the absence of such availability, by
reference to the rate at which the Administrative Agent is offered Dollar
deposits at or about 11:00 A.M., New York City time, two Business Days prior to
the beginning of such Interest Period in the interbank eurodollar market where
its eurodollar and foreign currency and exchange operations are then being
conducted for delivery on the first day of such Interest Period for the number
of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
under a particular Facility the then current Interest Periods with respect to
all of which begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided, that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the excess,
if any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income, (iii) decreases in Consolidated Working Capital for such fiscal year,
and (iv) the aggregate net amount of non-cash loss on the Disposition of
property by the Borrower and its Subsidiaries during such
10
fiscal year (other than sales of inventory in the ordinary course of business),
to the extent deducted in arriving at such Consolidated Net Income, over (b) the
sum, without duplication, of (i) the amount of all non-cash credits included in
arriving at such Consolidated Net Income, (ii) the aggregate amount actually
paid by the Borrower and its Subsidiaries in cash during such fiscal year on
account of Capital Expenditures permitted pursuant to the terms of this
Agreement (excluding the principal amount of Indebtedness incurred in connection
with such expenditures and any such expenditures financed with the proceeds of
any Reinvestment Deferred Amount), (iii) the aggregate amount of all prepayments
of Revolving Loans and Swingline Loans during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Commitments and all
optional prepayments of the Term Loans during such fiscal year, (iv) the
aggregate amount of all principal payments of Funded Debt (including the Term
Loans) of the Borrower and its Subsidiaries permitted pursuant to the terms of
this Agreement made during such fiscal year (other than in respect of any
revolving credit facility to the extent there is not an equivalent permanent
reduction in commitments thereunder), (v) increases in Consolidated Working
Capital for such fiscal year, (vi) the aggregate net amount of non-cash gain on
the Disposition of property by the Borrower and its Subsidiaries during such
fiscal year (other than sales of inventory in the ordinary course of business),
to the extent included in arriving at such Consolidated Net Income, (vii) earn
out payments in connection with the acquisition of Xxxxxx Xxxxxx, Inc. made in
the fiscal year ending December 31, 2007 in an aggregate amount not to exceed
$3,000,000, (viii) payments in respect of pre-paid incentives to customers, (ix)
payment of deferred tax liabilities associated with the amortization of
intangibles and (x) without duplication, the aggregate amount of Restricted
Payments made under Section 7.6(b)(i) and Section 7.6(b)(ii).
"Excess Cash Flow Application Date": as defined in Section 2.11(d).
"Excess Cash Flow Percentage": 75%; provided, that the Excess Cash
Flow Percentage for any fiscal year shall be reduced to 50% if the Consolidated
Leverage Ratio as of the last day of such fiscal year is not greater than 3.0 to
1.
"Excluded Foreign Subsidiary": any entity organized under the laws of
a jurisdiction other than the United States or any political subdivision
thereof.
"Excluded Taxes": as defined in Section 2.19(a).
"Facility": each of (a) the Term Commitments and the Term Loans made
thereunder (the "Term Facility") and (b) the Revolving Commitments and the
extensions of credit made thereunder (the "Revolving Facility").
"Federal Funds Effective Rate": for any day, 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 that is a Business Day, the average of the
quotations for the day of such transactions received by Bear Xxxxxxx Corporate
Lending Inc. from three federal funds brokers of recognized standing selected by
it.
"Fee Payment Date": (a) the last day of each March, June, September
and December and (b) the last day of the Revolving Commitment Period.
"Fully Satisfied" or "Full Satisfaction": shall mean, with respect to:
(a) the Payment Obligations as of any date, that on or before such
date, (i) the principal of and interest accrued to such date on such Payment
Obligations shall have been paid in full in cash, (ii)
11
Letters of Credit shall have expired, been terminated or shall have been Fully
Secured, (iii) all fees, expenses and other amounts then due and payable which
constitute Payment Obligations shall have been paid in full in cash and (iv) the
Commitments shall have expired or irrevocably been terminated; and
(b) the Obligations as of any date, that, on or before such date, (i)
the Payment Obligations shall have been Fully Satisfied (as provided in clause
(a) above) and (ii) all Obligations in respect of each Specified Swap Agreement
shall have been paid in full in cash or shall have been secured by a collateral
arrangement satisfactory to the Qualified Counterparty in its sole discretion.
"Fully Secured": shall mean, with respect to any Letter of Credit as
of any date, that, on or before such date, the Undrawn L/C Obligations with
respect to such Letter of Credit shall have been secured by the grant to an
Issuing Lender with respect to such Letter of Credit by the Borrower of a first
priority, perfected security interest in, and Lien on, cash in an amount and
pursuant to documentation satisfactory to such Issuing Lender with respect to
such Letter of Credit.
"Funded Debt": as to any Person, all Indebtedness of such Person that
matures more than one year from the date of its creation or matures within one
year from such date but is renewable or extendible, at the option of such
Person, to a date more than one year from such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date, including all
current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date of
its creation and, in the case of the Borrower, Indebtedness in respect of the
Loans.
"Funding Office": the office of the Administrative Agent specified in
Section 10.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United States
as in effect from time to time. In the event that any Accounting Change (as
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to reflect equitably such
Accounting Changes with the desired result that the criteria for evaluating the
Borrower's financial condition shall be the same after such Accounting Changes
as if such Accounting Changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting Changes"
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Group Members": the collective reference to Holdings, the Borrower
and its Subsidiaries.
12
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by Holdings, the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A-1.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation, including a reimbursement, counterindemnity or similar
obligation, of the guaranteeing Person that guarantees or in effect guarantees,
or which is given to induce the creation of a separate obligation by another
Person (including any bank under any letter of credit) that guarantees or in
effect guarantees, any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantors": the collective reference to Holdings and the Subsidiary
Guarantors.
"Holdings": as defined in the preamble to this Agreement.
"Honeywell": as defined in the recitals to this Agreement.
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of a default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements (to the extent any such acceptance,
letter of credit, surety bond or similar arrangement has been drawn and the
amounts drawn have not been reimbursed to the issuer of such acceptance, letter
of credit, surety bond or similar arrangement), (g) the liquidation value of all
mandatorily redeemable preferred Capital Stock of such Person, (h) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above, (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including accounts and contract rights) owned by such Person,
whether or not such Person has assumed or become liable for the payment of such
obligation, and (j) for the purposes of Section 7.2 and Section
13
8(f) only, all net payment obligations of such Person in respect of Swap
Agreements. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness expressly provide that such Person is
not liable therefor.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to xxx at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Intellectual Property Security Agreement": the Intellectual Property
Security Agreement to be executed and delivered by Holdings, the Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit L.
"Intercompany Note": the Subordinated Intercompany Note to be executed
and delivered by each Group Member, substantially in the form of Exhibit A-3.
"Interest Payment Date": (a) as to any ABR Loan (other than any
Swingline Loan), the last day of each March, June, September and December to
occur while such Loan is outstanding and the final maturity date of such Loan,
(b) as to any Eurodollar Loan having an Interest Period of three months or less,
the last day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day that is three months, or a
whole multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period, (d) as to any Loan (other than any Revolving Loan
that is an ABR Loan and any Swingline Loan), the date of any repayment or
prepayment made in respect thereof with respect to the amount so repaid or
prepaid and (e) as to any Swingline Loan, the day that such Loan is required to
be repaid.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not later than 11:00 A.M., New York City time, on the date
that is three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided, that, all of the foregoing provisions
relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such Interest
Period shall end on the immediately preceding Business Day;
14
(ii) the Borrower may not select an Interest Period under a particular
Facility that would extend beyond the Revolving Termination Date or beyond
the date final payment is due on the Term Loans, as the case may be;
(iii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to require a
payment or prepayment of any Eurodollar Loan during an Interest Period for
such Loan.
"Investments": as defined in Section 7.8.
"Issuing Lender": JPMorgan Chase Bank, N.A., or any affiliate thereof,
in its capacity as issuer of any Letter of Credit, or such other Lender
reasonably acceptable to the Administrative Agent, as the Borrower may appoint
from time to time.
"JPM" : as defined in the preamble hereto.
"L/C Commitment": $20,000,000.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit (including any automatic increase in the face amount of any Letter of
Credit provided for by the terms of such Letter of Credit, whether or not any
such increase has become effective) and (b) the aggregate amount of drawings
under Letters of Credit that have not then been reimbursed pursuant to Section
3.5.
"L/C Participants": the collective reference to all the Revolving
Lenders other than any Issuing Lender.
"Landlord Personal Property Collateral Access Agreement": a Landlord
Personal Property Collateral Access Agreement substantially in the form of
Exhibit K with such amendments or modifications as may be approved by
Administrative Agent in its reasonable discretion.
"Lender Addendum": an instrument, substantially in the form of Exhibit
H, by which a Lender becomes a party to this Agreement as of the Closing Date.
"Lenders": as defined in the preamble hereto; provided, that unless
the context otherwise requires, each reference herein to the Lenders shall be
deemed to include any Conduit Lender.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or other security interest in,
on or of such asset and (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset.
"Loan": any loan made by any Lender pursuant to this Agreement.
15
"Loan Documents": this Agreement, the Security Documents, the Notes,
the Intercompany Note and any amendment, waiver, supplement or other
modification to any of the foregoing.
"Loan Parties": each Group Member that is a party to a Loan Document.
"M&F": as defined in the recitals to this agreement.
"Mafco": MacAndrews & Forbes Holdings Inc., a Delaware corporation.
"Majority Facility Lenders": with respect to any Facility, the holders
of more than 50% of the aggregate unpaid principal amount of the Term Loans or
the Total Revolving Extensions of Credit, as the case may be, outstanding under
such Facility (or, in the case of the Revolving Facility, prior to any
termination of the Revolving Commitments, the holders of more than 50% of the
Total Revolving Commitments).
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise), or results of
operations of the Borrower and its Subsidiaries, taken as a whole, provided,
however, that solely for purposes of any representation given on the Closing
Date, Material Adverse Effect shall not include events, developments or
circumstances, alone or in combination, that directly arise out of or result
directly from changes in economic conditions or financial or securities markets
in general or in the industries and markets in which the Borrower and its
Subsidiaries operate (provided that such events do not disproportionately affect
the Borrower and its Subsidiaries, taken as a whole, relative to other
participants in its industry) or (b) the validity or enforceability of this
Agreement or any of the other Loan Documents or the rights and remedies of the
Secured Parties hereunder or thereunder or the validity, perfection or priority
of the Administrative Agent's liens upon the Collateral.
"Materials of Environmental Concern": any pollutant, contaminant,
chemical, compound, constituent, or any hazardous or toxic substances, materials
or wastes, defined, listed or regulated as such in or under any Environmental
Law, or requiring removal, remediation or reporting under any Environmental Law,
including asbestos, or asbestos containing material, gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or
byproducts, radon or other radioactive material, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Mortgaged Properties": the real properties listed on Schedule 1.1, as
to which the Administrative Agent for the benefit of the Lenders shall be
granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Secured Parties substantially in the form of Exhibit J (with such
changes thereto as shall be advisable under the law of the jurisdiction in which
such mortgage or deed of trust is to be recorded).
"Multiemployer Plan": a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Natexis" : as defined in the preamble hereto.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
16
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured by
a Lien expressly permitted hereunder on any asset that is the subject of such
Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith (including the collection of any such proceeds), in each case payable
to any Person other than a Group Member, net of (i) amounts reasonably reserved
for the payment of adjustments and indemnities under the documentation related
to such Asset Sale or Recovery Event, and (ii) taxes paid or reasonably
estimated to be payable as a result thereof by the Borrower or any Subsidiary
(after taking into account any available tax credits or deductions and any tax
sharing agreements), and (b) in connection with any issuance or sale of Capital
Stock or any incurrence of Indebtedness, the cash proceeds received from such
issuance or incurrence, net of reasonable attorneys' fees, investment banking
fees, accountants' fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith, in each
case payable to any Person other than a Group Member.
"Non-Excluded Taxes": as defined in Section 2.19(a).
"Non-Subsidiary Guarantor": a Subsidiary that is not a Subsidiary
Guarantor.
"Non-U.S. Lender": as defined in Section 2.19(d).
"Notes": the collective reference to any promissory note evidencing
Loans in the form of Exhibit I-1, I-2 or I-3, as applicable.
"Novar": as defined in the recitals hereto.
"Obligations": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy or
reorganization or the commencement of any insolvency or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Borrower to any Agent or to any Lender (or,
in the case of Specified Swap Agreements or Specified Cash Management
Agreements, any Qualified Counterparty), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other Loan
Document, the Letters of Credit, any Specified Swap Agreement, any Specified
Cash Management Agreement, or any amendment, waiver or modification hereof or
thereof, whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including all fees, charges and
disbursements of counsel to any Agent or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"Participant": as defined in Section 10.6(c).
"Payment Obligations": all Obligations other than Obligations arising
under Specified Swap Agreements and Specified Cash Management Agreements.
17
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": any acquisition, whether in a single
transaction or series of related transactions, by the Borrower or any one or
more Subsidiaries, or any combination thereof, of all or a substantial part of
the assets or Capital Stock, or a going concern business or division, of any
Person, whether through the purchase of assets or Capital Stock, by merger or
otherwise; provided, that:
(a) both before and immediately after giving effect to such
acquisition, no Default or Event of Default shall have occurred and be
continuing;
(b) the Person whose assets or Capital Stock are being acquired is
engaged in substantially similar business activity as the Borrower or one or
more of its Subsidiaries and businesses reasonably related or incidental thereto
in compliance with Section 7.16;
(c) immediately after giving effect to such acquisition (including the
incurrence or assumption of Indebtedness in connection therewith), the Borrower
shall be in pro forma compliance with the Consolidated Leverage Ratio for its
most recently completed four fiscal quarters as required under Section 7.1(a),
as in effect on the date hereof, less 0.25 to 1;
(d) immediately after giving effect to such acquisition (including the
incurrence or assumption of Indebtedness in connection therewith), the Borrower
shall be in pro forma compliance with the Consolidated Senior Secured Debt Ratio
for its most recently completed four fiscal quarters as required under Section
7.1(b), as in effect on the date hereof;
(e) the Target must not have any material contingent liabilities
unless such liabilities either are cash collateralized pursuant to appropriate
escrow arrangements or are covered by insurance, except to the extent that a
reasonable estimate of the payments that will be required in respect of such
liabilities are included in the calculation of the purchase price thereof for
purposes of Section 7.8(h);
(f) if, immediately after giving effect to such acquisition, the
Borrower shall have any additional Subsidiaries, the Borrower shall have
complied with the provisions of Section 6.9 with respect thereto; and
(g) such acquisition would not cause a default or event of default
under and as defined in the Senior Note Indenture.
"Permitted Encumbrances": as defined in Section 5.1(k)(iii)(C).
"Permitted Liens": as defined in Section 7.3.
"Permitted Refinancing Indebtedness": any Indebtedness of the Borrower
or any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to renew, refund, refinance, replace, defease or discharge, other
Indebtedness of the Borrower or any of its Subsidiaries (other than intercompany
Indebtedness); provided, that:
(a) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness renewed, refunded,
refinanced, replaced, defeased or discharged (plus all accrued interest on the
Indebtedness and the amount of all fees and expenses, including premiums,
incurred in connection therewith);
18
(b) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged;
(c) if the Indebtedness being renewed, refunded, refinanced, replaced,
defeased or discharged is subordinated in right of payment to the Obligations,
such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the
Obligations on terms at least as favorable to the Lenders as those contained in
the documentation governing the Indebtedness being renewed, refunded,
refinanced, replaced, defeased or discharged; and
(d) such Indebtedness is incurred either by the Borrower or by the
Subsidiary that is the obligor on the Indebtedness being renewed, refunded,
refinanced, replaced, defeased or discharged.
"Permitted Transferees": with respect to any Person that is a natural
person (and any Permitted Transferee of such Person), (a) such Person's
immediate family, including his or her spouse, ex-spouse, children,
step-children and their respective lineal descendants and (b) any trust or other
legal entity the beneficiary of which is such Person's immediate family,
including his or her spouse, ex-spouse, children, step-children or their
respective lineal descendants and which is controlled by such Person.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledged Equity": the collective reference to Pledged LLC Interests,
Pledged Notes, Pledged Partnership Interests and Pledged Stock (each as defined
in the Guarantee and Collateral Agreement).
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Pro Forma Financial Statements": as defined in Section 4.1(a).
"Pro Forma Income Statements": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Properties": as defined in Section 4.17(a).
"Qualified Counterparty": with respect to any Specified Swap Agreement
or Specified Cash Management Agreement, any counterparty thereto that, at the
time such Specified Swap Agreement or Specified Cash Management Agreement was
entered into, was a Lender or an Affiliate of a Lender or an Agent or an
Affiliate of an Agent.
19
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of any Group Member that yields Net Cash Proceeds to any Group Member
in excess of $500,000 during any fiscal year.
"Refunded Swingline Loans": as defined in Section 2.7.
"Register": as defined in Section 10.6(b).
"Regulation H": Regulation H of the Board as in effect from time to
time.
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse an Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by any Group Member in
connection therewith that are not applied to prepay the Term Loans or reduce the
Revolving Commitments pursuant to Section 2.11(c) as a result of the delivery of
a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and that
the Borrower (directly or indirectly through a Subsidiary) intends and expects
to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or
Recovery Event to acquire or repair assets useful in its business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire or repair
assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring 12 months after such Reinvestment
Event and (b) the date on which the Borrower shall have determined not to, or
shall have otherwise ceased to, acquire or repair assets useful in the
Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Release": any release, spill, seepage, emission, leaking, pumping,
injection, pouring, emptying, deposit, disposal, discharge, dispersal, dumping,
escaping, leaching or migration into, onto or through the environment or within
or upon any building, structure, facility or fixture.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
Section 4043.
"Required Lenders": at any time, both (a) the holders of more than 50%
of (i) until the Closing Date, the Term Commitments then in effect and (ii)
thereafter, the aggregate unpaid principal amount of the Term Loans then
outstanding and (b) the holders of more than 50% of the Total Revolving
20
Commitments then in effect or, if the Revolving Commitments have been
terminated, the Total Revolving Extensions of Credit then outstanding.
"Requirement of Law": as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Responsible Officer": the chief executive officer, president,
executive vice president or chief financial officer of the Borrower, but in any
event, with respect to financial matters, the chief financial officer of the
Borrower.
"Restricted Payments": as defined in Section 7.6.
"Revolving Commitment": as to any Lender, the obligation of such
Lender, if any, to make Revolving Loans and participate in Swingline Loans and
Letters of Credit in an aggregate amount not to exceed the amount set forth
under the heading "Revolving Commitment" under such Lender's name on such
Lender's Lender Addendum or in the Assignment and Assumption pursuant to which
such Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The amount of the Total Revolving Commitments as
of the date hereof is $40,000,000.
"Revolving Commitment Period": the period from and including the
Closing Date to the Revolving Termination Date.
"Revolving Extensions of Credit": as to any Revolving Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of all
Revolving Loans held by such Lender then outstanding, (b) such Lender's
Revolving Percentage of the L/C Obligations then outstanding and (c) such
Lender's Revolving Percentage of the aggregate principal amount of Swingline
Loans then outstanding.
"Revolving Lender": each Lender that has a Revolving Commitment or
that holds Revolving Loans.
"Revolving Loans": as defined in Section 2.4(a).
"Revolving Percentage": as to any Revolving Lender at any time, the
percentage which such Lender's Revolving Commitment then constitutes of the
Total Revolving Commitments or, at any time after the Revolving Commitments
shall have expired or terminated, the percentage which such Lender's Revolving
Extensions of Credit then outstanding constitutes of the Total Revolving
Extensions of Credit then outstanding.
"Revolving Termination Date": December 15, 2010.
"SEC": the Securities and Exchange Commission, any successor thereto
and any analogous Governmental Authority.
"Secured Parties": the collective reference to (a) the Agents, (b) the
Lenders and (c) any Qualified Counterparty.
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement, the Control Agreements, any Mortgages and all other
security documents delivered to the
21
Administrative Agent granting a Lien on any property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.
"Senior Notes Indenture": the Indenture entered into by the Borrower
in connection with the issuance of the Senior Notes, together with all
instruments and other agreements entered into by the Borrower in connection
therewith.
"Senior Notes": the $175,000,000 aggregate principal amount of 11.75%
senior notes due 2013 issued pursuant to the Senior Note Indenture.
"Senior Notes Documents": the Senior Notes Indenture and the Senior
Notes, together with any other instruments or agreements entered into by
Holdings, the Borrower or its Subsidiaries in connection therewith.
"Single Employer Plan": any Plan that is covered by Title IV of ERISA,
but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Cash Management Agreement": any arrangement for treasury,
depositary or cash management services provided to the Borrower or any of its
Subsidiaries by a Qualified Counterparty in connection with any transfer or
disbursement of funds through an automated clearinghouse or on a same day or
immediate or accelerated availability basis that has been designated as a
Specified Cash Management Agreement. The designation of any such arrangement as
a Specified Cash Management Agreement shall not create in favor of the Qualified
Counterparty that is a party thereto any rights in connection with the
management, enforcement or release of any Collateral or any claim against any
Guarantor under the Guarantee and Collateral Agreement.
"Specified Swap Agreement": any Swap Agreement entered into by the
Borrower and any Qualified Counterparty in respect of interest rates.
"Sponsor Group": the collective reference to (i) Mafco and its direct
and indirect Subsidiaries, (ii) Xxxxxx X. Xxxxxxxx, (iii) any of the directors
or executive officers of Mafco and (iv) any of their respective Permitted
Transferees.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
22
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than any
Excluded Foreign Subsidiary.
"Swap Agreement": any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided, that no phantom
stock or similar plan providing for payments only on account of services
provided by current or former directors, managers, officers, employees or
consultants of the Borrower or any of its Subsidiaries shall be a "Swap
Agreement".
"Swingline Commitment": the obligation of the Swingline Lender to make
Swingline Loans pursuant to Section 2.6 in an aggregate principal amount at any
one time outstanding not to exceed $5,000,000.
"Swingline Lender": Bear Xxxxxxx Corporate Lending Inc., in its
capacity as the lender of Swingline Loans.
"Swingline Loans": as defined in Section 2.6(a).
"Swingline Participation Amount": as defined in Section 2.7(c).
"Syndication Agent": as defined in the preamble hereto.
"Target": any other Person or business unit, division or asset group
of any other Person, acquired or proposed to be acquired in a Permitted
Acquisition.
"Tax Sharing Agreement": the Tax Sharing Agreement dated as of
December 15, 2005, among M&F, the Borrower and PCT International Holdings Inc.,
a Delaware corporation.
"Term Commitment": as to any Lender, the amount set forth under the
heading "Term Commitment" under such Lender's name on such Lender's Lender
Addendum. The aggregate amount of the Term Commitments as of the date hereof is
$440,000,000.
"Term Lender": each Lender that has a Term Commitment or that holds a
Term Loan.
"Term Loan": as defined in Section 2.1.
"Term Percentage": as to any Term Lender at any time, the percentage
which such Lender's Term Commitment then constitutes of the aggregate Term
Commitments (or, at any time after the Closing Date, the percentage which the
aggregate principal amount of such Lender's Term Loans then outstanding
constitutes of the aggregate principal amount of the Term Loans then
outstanding).
"Title Insurance Company": as defined in Section 5.1(k)(ii).
23
"Total Revolving Commitments": at any time, the aggregate amount of
the Revolving Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"Transaction Documents": the collective reference to the Loan
Documents, the Senior Notes Documents and the Acquisition Documents.
"Transactions": the collective reference to the Acquisition, the
payment of related fees, expenses and premiums, the financing of any of the
foregoing and any other transactions ancillary thereto.
"Transferee": any Assignee or Participant.
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"Undrawn L/C Obligations": with respect to any Letter of Credit, the
maximum aggregate amount which is, or at any time thereafter may become,
available for drawing under such Letter of Credit.
"United States": the United States of America.
"U.S. Lender": as defined in Section 2.19(e).
"Weighted Average Life to Maturity": when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(a) the sum of the products obtained by multiplying (x) the amount of
each then remaining installment, sinking fund, serial maturity or other
scheduled payments of principal, including payment at final maturity, in respect
of the Indebtedness, by (y) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment;
by
(b) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is
a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have such defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to any Group Member not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP, (ii) the words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation", (iii) the word "incur" shall be construed to mean incur, create,
issue, assume, become liable in respect of or suffer
24
to exist (and the words "incurred" and "incurrence" shall have correlative
meanings), (iv) the words "asset" and "property" shall be construed to have the
same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights, and (v) references to
agreements or other Contractual Obligations shall, unless otherwise specified,
be deemed to refer to such agreements or Contractual Obligations as amended,
supplemented, restated or otherwise modified from time to time.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Commitments. Subject to the terms and conditions hereof, each
Term Lender severally agrees to make a term loan (a "Term Loan") to the Borrower
on the Closing Date in an amount not to exceed the amount of the Term Commitment
of such Lender. The Term Loans may from time to time be Eurodollar Loans or ABR
Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.12.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, one Business Day
prior to the anticipated Closing Date) requesting that the Term Lenders make the
Term Loans on the Closing Date and specifying the amount to be borrowed. The
Term Loans made on the Closing Date shall initially be ABR Loans. Upon receipt
of such notice the Administrative Agent shall promptly notify each Term Lender
thereof. Not later than 1:00 P.M., New York City time, on the Closing Date each
Term Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to the Term Loan or Term
Loans to be made by such Lender. The Administrative Agent shall credit the
account of the Borrower on the books of such office of the Administrative Agent
with the aggregate of the amounts made available to the Administrative Agent by
the Term Lenders in immediately available funds.
2.3 Repayment of Term Loans. The Term Loan of each Term Lender shall
mature in 24 consecutive quarterly installments, commencing on March 31, 2006,
each of which shall be in an amount equal to such Lender's Term Percentage
multiplied by the amount set forth below opposite such installment:
Installment Principal Amount
------------------ ----------------
March 31, 2006 $3,750,000
June 30, 2006 $3,750,000
September 30, 2006 $3,750,000
December 31, 2006 $3,750,000
March 31, 2007 $5,000,000
June 30, 2007 $5,000,000
September 30, 2007 $5,000,000
December 31, 2007 $5,000,000
March 31, 2008 $7,500,000
25
June 30, 2008 $7,500,000
September 30, 2008 $7,500,000
December 31, 2008 $7,500,000
March 31, 2009 $8,750,000
June 30, 2009 $8,750,000
September 30, 2009 $8,750,000
December 31, 2009 $8,750,000
March 31, 2010 $10,000,000
June 30, 2010 $10,000,000
September 30, 2010 $10,000,000
December 31, 2010 $10,000,000
March 31, 2011 $75,000,000
June 30, 2011 $75,000,000
September 30, 2011 $75,000,000
December 15, 2011 $75,000,000 or remainder
2.4 Revolving Commitments. (a) Subject to the terms and conditions
hereof, each Revolving Lender severally agrees to make revolving credit loans
("Revolving Loans") to the Borrower from time to time during the Revolving
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender's Revolving Percentage of the sum of (i) the
L/C Obligations then outstanding and (ii) the aggregate principal amount of the
Swingline Loans then outstanding, does not exceed the amount of such Lender's
Revolving Commitment, after giving effect to the use of the proceeds of such
Revolving Loans. During the Revolving Commitment Period the Borrower may use the
Revolving Commitments by borrowing, prepaying the Revolving Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
The Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.5 and 2.12.
(b) The Borrower shall repay all outstanding Revolving Loans on the
Revolving Termination Date.
2.5 Procedure for Revolving Loan Borrowing. The Borrower may borrow
under the Revolving Commitments during the Revolving Commitment Period on any
Business Day, provided, that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 noon, New York City time, (a) three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business
Day prior to the requested Borrowing Date, in the case of ABR Loans) (provided,
that any such notice of a borrowing of ABR Loans under the Revolving Facility to
finance payments required by Section 3.5 may be given not later than 10:00 A.M.,
New York City time, on the date of the proposed borrowing), (i) specifying the
amount and Type of Revolving Loans to be borrowed, (ii) specifying the requested
Borrowing Date, (iii) specifying in the case of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the initial
Interest Period therefor and (iv) containing a certification of a Responsible
Officer or the Treasurer of the Borrower certifying, as of the Borrowing Date,
as to the satisfaction of each of the conditions set forth in Section 5.2. Any
Revolving Loans made on the Closing Date shall initially be ABR Loans and,
unless otherwise agreed by the Administrative Agent in its sole discretion, no
Revolving Loan may be made as, converted into or continued as a Eurodollar Loan
having an Interest Period in excess of one month prior to the date that is 60
days after the Closing Date. Each borrowing under the Revolving Commitments
shall be in an amount equal to (x) in the case of ABR Loans, $1,000,000 or a
whole multiple of $250,000 in excess thereof (or, if the then aggregate
Available Revolving Commitments are less than $1,000,000, such lesser amount)
and (y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of
$250,000 in excess thereof; provided, that the Swingline Lender may
26
request, on behalf of the Borrower, borrowings under the Revolving Commitments
that are ABR Loans in other amounts pursuant to Section 2.7. Upon receipt of any
such notice from the Borrower, the Administrative Agent shall promptly notify
each Revolving Lender thereof. Each Revolving Lender will make the amount of its
pro rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the Funding Office prior to 1:00 P.M., New York City
time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent crediting the account of
the Borrower on the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Revolving Lenders and in like funds
as received by the Administrative Agent. Not more than $7,250,000 of Revolving
Loans shall be made on the Closing Date.
2.6 Swingline Commitment. (a) Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Commitments from time to time
during the Revolving Commitment Period by making swing line loans ("Swingline
Loans") to the Borrower; provided, that (i) the aggregate principal amount of
Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender's other outstanding
Revolving Loans, may exceed the Swingline Commitment then in effect) and (ii)
the Borrower shall not request, and the Swingline Lender shall not make, any
Swingline Loan if, after giving effect to the making of such Swingline Loan, the
aggregate amount of the Available Revolving Commitments would be less than zero.
During the Revolving Commitment Period, the Borrower may use the Swingline
Commitment by borrowing, repaying and reborrowing Swingline Loans, all in
accordance with the terms and conditions hereof. Swingline Loans shall be ABR
Loans only.
(b) The Borrower shall repay to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the earlier of the Revolving
Termination Date and the first date after such Swingline Loan is made that is
the 15th or last day of a calendar month and is at least two Business Days after
such Swingline Loan is made; provided, that on each date a Revolving Loan is
borrowed, the Borrower shall repay all Swingline Loans then outstanding.
2.7 Procedure for Swingline Borrowing; Refunding of Swingline Loans.
(a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans
it shall give the Swingline Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swingline
Lender not later than 1:00 P.M., New York City time, on the proposed Borrowing
Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing
Date (which shall be a Business Day during the Revolving Commitment Period).
Each borrowing under the Swingline Commitment shall be in an amount equal to
$100,000 or a whole multiple thereof. Not later than 3:00 P.M., New York City
time, on the Borrowing Date specified in a notice in respect of Swingline Loans,
the Swingline Lender shall make available to the Administrative Agent at the
Funding Office an amount in immediately available funds equal to the amount of
the Swingline Loan to be made by the Swingline Lender. The Administrative Agent
shall make the proceeds of such Swingline Loan available to the Borrower on such
Borrowing Date by depositing such proceeds in the account of the Borrower with
the Administrative Agent on such Borrowing Date in immediately available funds.
(b) The Swingline Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swingline Lender to act on its behalf), on one Business
Day's notice given by the Swingline Lender no later than 12:00 Noon, New York
City time, request each Revolving Lender to make, and each Revolving Lender
hereby agrees to make, a Revolving Loan, in an amount equal to such Revolving
Lender's Revolving Percentage of the aggregate amount of the Swingline Loans
(the "Refunded Swingline Loans") outstanding on the date of such notice, to
repay the Swingline Lender. Each Revolving Lender shall make the amount of such
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Revolving Loan available to the Administrative Agent at the Funding Office in
immediately available funds, not later than 10:00 A.M., New York City time, one
Business Day after the date of such notice. The proceeds of such Revolving Loans
shall be immediately made available by the Administrative Agent to the Swingline
Lender for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to
charge the Borrower's accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swingline Loans to the extent amounts received from the Revolving
Lenders are not sufficient to repay in full such Refunded Swingline Loans.
(c) If prior to the time a Revolving Loan would have otherwise been
made pursuant to Section 2.7(b), one of the events described in Section 8(g)
shall have occurred and be continuing with respect to the Borrower or if for any
other reason, as determined by the Swingline Lender in its sole discretion,
Revolving Loans may not be made as contemplated by Section 2.7(b), each
Revolving Lender shall, on the date such Revolving Loan was to have been made
pursuant to the notice referred to in Section 2.7(b), purchase for cash an
undivided participating interest in the then outstanding Swingline Loans by
paying to the Swingline Lender an amount (the "Swingline Participation Amount")
equal to (i) such Revolving Lender's Revolving Percentage times (ii) the sum of
the aggregate principal amount of Swingline Loans then outstanding that were to
have been repaid with such Revolving Loans.
(d) Whenever, at any time after the Swingline Lender has received from
any Revolving Lender such Lender's Swingline Participation Amount, the Swingline
Lender receives any payment on account of the Swingline Loans, the Swingline
Lender will distribute to such Lender its Swingline Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded and, in the case of principal and interest payments, to reflect such
Lender's pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.
(e) Each Revolving Lender's obligation to make the Loans referred to
in Section 2.7(b) and to purchase participating interests pursuant to Section
2.7(c) shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any setoff, counterclaim, recoupment, defense or
other right that such Revolving Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 5, (iii) any
adverse change in the condition (financial or otherwise) of the Borrower, (iv)
any breach of this Agreement or any other Loan Document by the Borrower, any
other Loan Party or any other Revolving Lender or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
2.8 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period from and including the Closing Date to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on each Fee
Payment Date, commencing on the first such date to occur after the date hereof.
(b) The Borrower agrees to pay to each of the Agents the fees in the
amounts and on the dates as set forth in any fee agreements with the Agents and
to perform any other obligations contained therein.
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2.9 Termination or Reduction of Revolving Commitments. The Borrower
shall have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments; provided, that no such
termination or reduction of Revolving Commitments shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit would exceed the Total Revolving Commitments. Any such
reduction shall be in an amount equal to $1,000,000 or a whole multiple thereof,
and shall reduce permanently the Revolving Commitments then in effect.
2.10 Optional Prepayments.
(a) The Borrower may at any time and from time to time prepay the
Loans, in whole or in part, without premium or penalty, upon irrevocable notice
delivered to the Administrative Agent no later than 11:00 A.M., New York City
time, three Business Days prior thereto, in the case of Eurodollar Loans, and no
later than 11:00 A.M., New York City time, one Business Day prior thereto, in
the case of ABR Loans, which notice shall specify the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans or ABR Loans;
provided, that if a Eurodollar Loan is prepaid on any day other than the last
day of the Interest Period applicable thereto, the Borrower shall also pay any
amounts owing pursuant to Section 2.20. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Swingline Loans) accrued interest to such date on the amount prepaid. Partial
prepayments of Term Loans and Revolving Loans shall be in an aggregate principal
amount of $1,000,000 or a whole multiple of $250,000 in excess thereof. Partial
prepayments of Swingline Loans shall be in an aggregate principal amount of
$100,000 or a whole multiple thereof.
(b) In the event that any prepayment of Term Loans on or prior to the
date that is 18 months after the Closing Date is made with the Net Cash Proceeds
of one or more senior secured credit facilities provided by banks or other
financial institutions bearing interest at a lower rate than the interest rate
then applicable to such Term Loans being prepaid (whether by reason of the
interest rate applicable to such senior secured credit facility or by reason of
the issuance of such senior secured credit facility at a discount), the Borrower
shall pay to the applicable Term Lenders with respect to such prepaid Term Loans
a prepayment premium equal to 1% of the principal amount of the Term Loans so
prepaid at the time of such prepayment.
2.11 Mandatory Prepayments.
(a) If any Capital Stock shall be issued by Holdings or the Borrower
an amount equal to 50% of the Net Cash Proceeds thereof shall be applied on the
date of such issuance toward the prepayment of the Term Loans as set forth in
Section 2.11(e).
(b) If any Indebtedness shall be incurred by any Group Member
(excluding any Indebtedness incurred in accordance with Section 7.2, including
in such excluded Indebtedness the Senior Notes and any Guarantee Obligations in
respect thereof), an amount equal to 100% of the Net Cash Proceeds thereof shall
be applied on the date of such incurrence toward the prepayment of the Term
Loans as set forth in Section 2.11(e).
(c) If on any date any Group Member shall receive Net Cash Proceeds
from any Asset Sale or Recovery Event, then, unless a Reinvestment Notice shall
be delivered in respect thereof, 100% of such Net Cash Proceeds shall be applied
on such date toward the prepayment of the Term Loans as set forth in Section
2.11(e); provided, that notwithstanding the foregoing, on each Reinvestment
Prepayment
29
Date, an amount equal to the Reinvestment Prepayment Amount with respect to the
relevant Reinvestment Event shall be applied toward the prepayment of the Term
Loans as set forth in Section 2.11(e).
(d) If, for any fiscal year of the Borrower commencing with the fiscal
year ending December 31, 2006 there shall be Excess Cash Flow, the Borrower
shall, on the relevant Excess Cash Flow Application Date, apply the Excess Cash
Flow Percentage of such Excess Cash Flow toward the prepayment of the Term Loans
as set forth in Section 2.11(e). Each such prepayment and commitment reduction
shall be made on a date (an "Excess Cash Flow Application Date") no later than
five days after the earlier of (i) the date on which the financial statements of
the Borrower referred to in Section 6.1(a), for the fiscal year with respect to
which such prepayment is made, are required to be delivered to the Lenders and
(ii) the date such financial statements are actually delivered.
(e) Amounts to be applied in connection with prepayments made pursuant
to Section 2.11 shall be applied to the prepayment of the Term Loans in
accordance with Section 2.17(b). The application of any prepayment pursuant to
Section 2.11 shall be made, first, to ABR Loans and, second, to Eurodollar
Loans. Each prepayment of the Loans under Section 2.11 (except in the case of
Swingline Loans) shall be accompanied by accrued interest to the date of such
prepayment on the amount prepaid.
(f) If, as a result of the making of any payment required to be made
pursuant to this Section 2.11, the Borrower would incur costs pursuant to
Section 2.20, the Borrower may deposit the amount of such payment with the
Administrative Agent, for the benefit of the Lenders, in a cash collateral
account, until the end of the applicable Interest Period at which time such
payment shall be made. The Borrower hereby grants to the Administrative Agent,
for the benefit of the Lenders, a security interest in all amounts from time to
time on deposit in such cash collateral account and expressly waives all rights
(which rights the Borrower hereby acknowledges and agrees are vested exclusively
in the Administrative Agent) to exercise dominion or control over any such
amounts.
2.12 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent prior irrevocable notice of such election no later than
12:00 noon, New York City time, on the Business Day preceding the proposed
conversion date, provided, that any such conversion of Eurodollar Loans may only
be made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent prior irrevocable notice of such election no later than
12:00 noon, New York City time, on the third Business Day preceding the proposed
conversion date (which notice shall specify the length of the initial Interest
Period therefor), provided, that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such conversions. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided,
that no Eurodollar Loan under a particular Facility may be continued as such
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations, and
provided, further, that if the Borrower shall fail to give any required notice
as described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be
30
automatically converted to ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
2.13 Limitations on Eurodollar Tranches. Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that, (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $250,000
in excess thereof and (b) no more than ten Eurodollar Tranches shall be
outstanding at any one time.
2.14 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) shall bear interest at a rate per annum
equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus 2%
or (y) in the case of Reimbursement Obligations, the rate applicable to ABR
Loans under the Revolving Facility plus 2%, and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any commitment fee
or other amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate then applicable to ABR Loans
under the relevant Facility plus 2% (or, in the case of any such other amounts
that do not relate to a particular Facility, the rate then applicable to ABR
Loans under the Revolving Facility plus 2%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided, that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.15 Computation of Interest and Fees. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to ABR Loans the rate of interest
on which is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.14(a) or 2.14(b).
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2.16 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility
shall be converted, on the last day of the then-current Interest Period, to ABR
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans under the relevant Facility shall be made or continued
as such, nor shall the Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.
2.17 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Term Percentages or Revolving
Percentages, as the case may be, of the relevant Lenders (other than in the case
of Swingline Loans).
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Lenders. The amount of each principal prepayment of the Term
Loans shall be applied to reduce the then remaining installments of the Term
Loans pro rata. Amounts repaid or prepaid on account of the Term Loans may not
be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Loans shall be made pro
rata according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders.
(d) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Funding Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of
32
any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon, at a
rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, for the period until such Lender makes such
amount immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If
such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to ABR Loans under
the relevant Facility, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment due to be made by the
Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required
to, in reliance upon such assumption, make available to the Lenders their
respective pro rata shares of a corresponding amount. If such payment is not
made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the Federal Funds Effective Rate. Nothing herein shall be deemed
to limit the rights of the Administrative Agent or any Lender against the
Borrower.
2.18 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any Application or any
Eurodollar Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (other than Excluded Taxes and Non-Excluded
Taxes covered by Section 2.19);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender reasonably deems to be material, of making,
converting into, continuing or maintaining Eurodollar
33
Loans or issuing or participating in Letters of Credit, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower
shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this paragraph, it shall promptly notify the Borrower (with a copy
to the Administrative Agent) of the event by reason of which it has become so
entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any Person
controlling such Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any Governmental Authority made
subsequent to the date hereof shall have the effect of reducing the rate of
return on such Lender's or such Person's capital as a consequence of its
obligations hereunder or under or in respect of any Letter of Credit to a level
below that which such Lender or such Person could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's or such
Person's policies with respect to capital adequacy) by an amount deemed by such
Lender to be material, then from time to time, after submission by such Lender
to the Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such Person for such reduction.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error.
Notwithstanding anything to the contrary in this Section, the Borrower shall not
be required to compensate a Lender pursuant to this Section for any amounts
incurred more than nine months prior to the date that such Lender notifies the
Borrower of such Lender's intention to claim compensation therefor; provided,
that, if the circumstances giving rise to such claim have a retroactive effect,
then such nine-month period shall be extended to include the period of such
retroactive effect. The obligations of the Borrower pursuant to this Section
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
2.19 Taxes. (a) All payments made by or on behalf of the Borrower
under this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes, branch profit taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on any Agent or any Lender as a result of a present or
former connection between such Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
such Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
other Loan Document) and taxes imposed as a result of the Agent's or Lender's
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction (the "Excluded Taxes"). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or Other Taxes are required to be withheld from any
amounts payable to any Agent or any Lender hereunder, the amounts so payable to
such Agent or such Lender shall be increased to the extent necessary to yield to
such Agent or such Lender (after payment of all Non-Excluded Taxes and Other
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement, provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender with
respect to any Non-Excluded Taxes (i) that are attributable to such Lender's
failure to comply with the requirements of paragraph (d), (e) or (f) of this
Section, (ii) that are United States withholding taxes imposed on amounts
payable to such Lender at the time such Lender becomes a party to this
Agreement, except to the extent that such Lender's assignor (if
34
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph
or (iii) that are attributable to a change in such Lender's lending office
(unless such change was requested by the Borrower), in respect of the Loan,
except to the extent that such Lender was entitled immediately prior to such
change in lending office, in respect of the Loan, to receive amounts payable
with respect to Non-Excluded Taxes.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Agent or for the account of the relevant Lender, as the case may be, a certified
copy of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay (or cause to be paid) any Non-Excluded
Taxes or Other Taxes when due to the appropriate Governmental Authority or fails
to remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agents and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure within 15 days of written
demand therefor.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as defined
in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of U.S. Internal Revenue Service Form W-8BEN, Form W-8ECI and/or Form
W-8IMY, as appropriate, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest," a statement substantially in
the form of Exhibit F and a Form W-8BEN, or any subsequent versions thereof or
successors thereto, properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal withholding
tax on all payments by the Borrower under this Agreement and the other Loan
Documents. Such forms shall be delivered by each Non-U.S. Lender on or before
the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver. If any Non-U.S. Lender provides
a Form W-8IMY, such Non-U.S. Lender must also attach the additional
documentation that must be transmitted with Form W-8IMY, including the
appropriate forms described in this Section 2.19(d).
(e) Each Lender (or Transferee) that is a "U.S. Person" as defined in
Section 7701(a)(30) of the Code (a "U.S. Lender"), other than a U.S. Lender that
may be treated as an exempt recipient based on the indicators described in the
U.S. Treasury Regulation Section 1.6049-4(c)(1)(ii), shall deliver to the
Borrower and the Administrative Agent two properly completed and duly executed
copies of U.S. Internal Revenue Service Form W-9. Such forms shall be delivered
by each U.S. Lender on or before the date it becomes a party to this Agreement.
In addition, each U.S. Lender shall deliver such forms promptly upon
obsolescence or invalidity of any form previously delivered by such U.S. Lender.
Each U.S. Lender shall promptly notify the Borrower at any time it determines
that it is no longer in a position to provide any previously delivered
certificate to the Borrower (or any other form of certification adopted by the
U.S. taxing authorities for such purpose). Notwithstanding any other provision
of this paragraph, a U.S.
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Lender shall not be required to deliver any form pursuant to this paragraph that
such U.S. Lender is not legally able to deliver.
(f) A Lender (or Transferee) that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law and as reasonably requested by the Borrower, such properly
completed and executed documentation prescribed by applicable law as will permit
such payments to be made without withholding or at a reduced rate, provided,
that such Lender is legally entitled to complete, execute and deliver such
documentation and in such Lender's judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.
(g) If the Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Non-Excluded Taxes or Other
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower has paid additional amounts pursuant to this Section 2.19, it
shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
2.19 with respect to the Non-Excluded Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of such Agent or such Lender and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Borrower, upon the
request of such Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to such Agent or such Lender in the event such
Agent or such Lender is required to repay such refund to such Governmental
Authority. This paragraph shall not be construed to require any Agent or any
Lender to make available its tax returns (or any other information relating to
its taxes which it deems confidential) to the Borrower or any other Person.
(h) Each assignee of a Lender's interest in this Agreement shall be
bound by this Section 2.19, so that such assignee will have all of the
obligations and provide all of the forms and statements required to be given
under this Section 2.19.
(i) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.20 Indemnity. The Borrower agrees to indemnify each Lender for, and
to hold each Lender harmless from, any loss or expense that such Lender may
sustain or incur as a consequence of (i) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (ii) default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (iii) the
making of a prepayment of Eurodollar Loans on a day that is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (x) the amount of interest that would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (y) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section (containing in reasonable detail the
manner of computation thereof) submitted to
36
the Borrower by any Lender shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
2.21 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.18 or 2.19(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of the Borrower or the rights of any Lender
pursuant to Section 2.18 or 2.19(a).
2.22 Replacement of Lenders. The Borrower shall be permitted to
replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 2.18 or 2.19(a), (b) defaults in its obligation to make Loans hereunder,
or (c) does not consent to a proposed amendment, modification or waiver of this
Agreement requested by the Borrower which requires the consent of all of the
Lenders to become effective (and which is approved by at least 66 2/3% of the
Lenders) with a replacement financial institution; provided, that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) prior to any such replacement, such Lender shall have taken no action
under Section 2.21 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 2.18 or 2.19(a), (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) if such replaced
Lender is an Issuing Lender, no Letters of Credit issued by such replaced Lender
shall remain outstanding after giving effect to such replacement, (vi) the
Borrower shall be liable to such replaced Lender under Section 2.20 if any
Eurodollar Loan owing to such replaced Lender shall be purchased other than on
the last day of the Interest Period relating thereto, (vii) the replacement
financial institution, if not already a Lender, shall be reasonably satisfactory
to the Administrative Agent and, if the replacement financial institution will
have a Revolving Commitment, each Issuing Lender, (viii) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 10.6; provided that no assignment fees shall be payable by the replaced
Lender and if the replaced Lender has not executed the applicable Assignment and
Assumption within five Business Days of receipt thereof, the Administrative
Agent may sign such Assignment and Assumption in such replaced Lender's stead,
(ix) until such time as such replacement shall be consummated, the Borrower
shall pay all additional amounts (if any) required pursuant to Section 2.18 or
2.19(a), as the case may be, and (x) any such replacement shall not be deemed to
be a waiver of any rights that the Borrower, the Administrative Agent or any
other Lender shall have against the replaced Lender.
2.23 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be canceled and (b) such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.20.
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SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
each Issuing Lender, in reliance on the agreements of the other Revolving
Lenders set forth in Section 3.4(a), agrees to issue letters of credit ("Letters
of Credit") for the account of the Borrower on any Business Day during the
Revolving Commitment Period in such form as may be approved from time to time by
such Issuing Lender; provided, that no Issuing Lender shall have any obligation
to issue any Letter of Credit if, after giving effect to such issuance, (i) the
L/C Obligations would exceed the L/C Commitment or (ii) the aggregate amount of
the Available Revolving Commitments would be less than zero. Each Letter of
Credit shall (i) be denominated in Dollars and (ii) expire no later than the
earlier of (x) the first anniversary of its date of issuance and (y) the date
that is five Business Days prior to the Revolving Termination Date, provided,
that any Letter of Credit with a one-year term may provide for the renewal
thereof for additional one-year periods (which shall in no event extend beyond
the date referred to in clause (y) above).
(b) No Issuing Lender shall at any time be obligated to issue any
Letter of Credit if such issuance would conflict with, or cause such Issuing
Lender or any L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. (a) The Borrower may
from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to the Administrative Agent and such Issuing Lender at their
respective addresses for notices specified herein an Application therefor,
completed to the satisfaction of such Issuing Lender, and such other
certificates, documents and other papers and information as such Issuing Lender
may request. Upon receipt of any Application, the applicable Issuing Lender will
process such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and upon receipt of confirmation from the Administrative
Agent that its records show that after giving effect to such issuance the (x)
Available Revolving Commitments would not be less than zero and (y) the L/C
Obligations would not exceed the L/C Commitment, shall promptly issue the Letter
of Credit requested thereby (but in no event shall an Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its receipt
of the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed to by the
applicable Issuing Lender and the Borrower. An Issuing Lender shall furnish a
copy of such Letter of Credit to the Borrower promptly following the issuance
thereof. An Issuing Lender shall promptly furnish to the Administrative Agent,
which shall in turn promptly furnish to the Lenders, notice of the issuance of
each Letter of Credit (including the amount thereof).
(b) The making of each request for a Letter of Credit by the Borrower
shall be deemed to be a representation and warranty by the Borrower that such
Letter of Credit may be issued in accordance with, and will not violate the
requirements of, Section 3.1. Unless an Issuing Lender has received notice from
the Administrative Agent before it issues a Letter of Credit that one or more of
the applicable conditions specified in Section 5 are not then satisfied, then
such Issuing Lender may issue the requested Letter of Credit for the account of
the Borrower in accordance with such Issuing Lender's usual and customary
practices.
3.3 Fees and Other Charges. (a) The Borrower shall pay a fee on all
outstanding Letters of Credit at a per annum rate equal to the Applicable Margin
then in effect with respect to Eurodollar Loans under the Revolving Facility,
shared ratably among the Revolving Lenders and payable quarterly in arrears on
each Fee Payment Date after the issuance date. In addition, the Borrower shall
pay to the applicable Issuing Lender for its own account a fronting fee of 0.25%
on the undrawn and unexpired
38
amount of each Letter of Credit issued by it as agreed by the Borrower and such
Issuing Lender, payable quarterly in arrears on each Fee Payment Date after the
issuance date.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse each Issuing Lender for such normal and customary costs and expenses
as are incurred or charged by such Issuing Lender in issuing, negotiating,
effecting payment under, amending or otherwise administering any Letter of
Credit.
3.4 L/C Participations. (a) Each Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce each Issuing
Lender to issue Letters of Credit, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from such Issuing Lender,
without recourse or warranty, on the terms and conditions set forth below, for
such L/C Participant's own account and risk an undivided interest equal to such
L/C Participant's Revolving Percentage in such Issuing Lender's obligations and
rights under and in respect of each Letter of Credit, the amount of each draft
paid by such Issuing Lender thereunder and the Obligations of the Borrower with
respect thereto. Each L/C Participant agrees with each Issuing Lender that, if a
draft is paid under any Letter of Credit for which such Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to such Issuing Lender upon demand at
such Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Revolving Percentage of the amount of such draft, or any
part thereof, that is not so reimbursed. Each L/C Participant's obligation to
pay such amount shall be absolute and unconditional and shall not be affected by
any circumstance, including (i) any setoff, counterclaim, recoupment, defense or
other right that such L/C Participant may have against an Issuing Lender, the
Borrower or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any of
the other conditions specified in Section 5, (iii) any adverse change in the
condition (financial or otherwise) of the Borrower, (iv) any breach of this
Agreement or any other Loan Document by the Borrower, any other Loan Party or
any other L/C Participant or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing
(b) If any amount required to be paid by any L/C Participant to an
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by such Issuing Lender under any Letter of Credit is paid to
such Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to such Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is made by such Issuing Lender under such Letter of Credit to the date on which
such payment is immediately available to such Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any L/C Participant pursuant to Section 3.4(a) is not made available to
such Issuing Lender by such L/C Participant within three Business Days after the
date such payment is due, such Issuing Lender shall be entitled to recover from
such L/C Participant, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to ABR Loans under the
Revolving Facility. A certificate of an Issuing Lender submitted to any L/C
Participant with respect to any amounts owing under this Section shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after any Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with Section 3.4(a), such Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by such Issuing Lender), or any payment of interest on account thereof, such
Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment received
39
by such Issuing Lender shall be required to be returned by such Issuing Lender,
such L/C Participant shall return to such Issuing Lender the portion thereof
previously distributed by such Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. If any draft is paid
under any Letter of Credit, the Borrower shall reimburse the Issuing Lender of
such Letter of Credit for the amount of (a) the draft so paid and (b) any taxes,
fees, charges or other costs or expenses incurred by such Issuing Lender in
connection with such payment, not later than 12:00 Noon, New York City time, on
the second Business Day succeeding the Business Day on which the Borrower
receives notice of such draft. Each such payment shall be made to such Issuing
Lender at its address for notices referred to herein in Dollars and in
immediately available funds. Interest shall be payable on any such amounts from
the date on which the relevant draft is paid until payment in full at the rate
set forth in (x) until the Business Day next succeeding the date of the relevant
notice, Section 2.14(b) and (y) thereafter, Section 2.14(c). Each drawing under
any Letter of Credit shall (unless an event of the type described in clause (i)
or (ii) of Section 8(g) shall have occurred and be continuing with respect to
the Borrower, in which case the procedures specified in Section 3.4 for funding
by L/C Participants shall apply) constitute a request by the Borrower to the
Administrative Agent for a borrowing pursuant to Section 2.5 of ABR Loans (or,
at the option of the Administrative Agent and the Swingline Lender in their sole
discretion, a borrowing pursuant to Section 2.7 of Swingline Loans) in the
amount of such drawing. The Borrowing Date with respect to such borrowing shall
be the first date on which a borrowing of Revolving Loans (or, if applicable,
Swingline Loans) could be made, pursuant to Section 2.5 (or, if applicable,
Section 2.7), if the Administrative Agent had received a notice of such
borrowing at the time the Administrative Agent receives notice from the
applicable Issuing Lender of such drawing under such Letter of Credit.
3.6 Obligations Absolute. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against any Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. Each of the Borrower and each L/C
Participant agrees with each Issuing Lender that no Issuing Lender shall be
responsible for, and the Borrower's Reimbursement Obligations under Section 3.5
shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even though such documents shall in
fact prove to be invalid, fraudulent or forged, or any dispute between or among
the Borrower and any beneficiary of any Letter of Credit or any other party to
which such Letter of Credit may be transferred or any claims whatsoever of the
Borrower against any beneficiary of such Letter of Credit or any such
transferee. No Issuing Lender shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions that have resulted from the gross negligence or willful
misconduct of such Issuing Lender. The Borrower agrees that any action taken or
omitted by any Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct, shall be binding on the Borrower and shall not result in
any liability of such Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender with respect to such
Letter of Credit shall promptly notify the Borrower of the date and amount
thereof. The responsibility of such Issuing Lender to the Borrower in connection
with any draft presented for payment under any Letter of Credit shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are
substantially in conformity with such Letter of Credit.
40
3.8 Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans and issue or participate in the Letters of Credit, the
Borrower hereby represents and warrants to the Agents and each Lender as of the
Closing Date and the date of each extension of credit hereunder on and after the
Closing Date that:
4.1 Financial Condition. (a) The (i) unaudited pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as of September
30, 2005 (including the notes thereto) (the "Pro Forma Balance Sheet") and (ii)
unaudited pro forma consolidated statements of income for the 12 month period
ended on September 30, 2005 (the "Pro Forma Income Statements" and, together
with the Pro Forma Balance Sheet, the "Pro Forma Financial Statements"), copies
of which have heretofore been furnished to each Lender, have been prepared
giving effect (as if such events had occurred on such date) to (i) the
consummation of the Transactions, (ii) the issuance of the Senior Notes and the
use of proceeds thereof, (iii) the Loans to be made on the Closing Date and the
use of proceeds thereof and (iv) the payment of fees, expenses and premiums in
connection with the foregoing. The Pro Forma Financial Statements have been
prepared based on the best information available to the Borrower as of the date
of delivery thereof, and present fairly on a pro forma basis the estimated
financial position of the Borrower and its consolidated Subsidiaries as of
September 30, 2005 and the estimated results of operations of the Borrower and
its consolidated Subsidiaries for the periods stated above, assuming that the
events specified in the preceding sentence had actually occurred at such date
and at the beginning of such periods, as applicable.
(b) The (i) audited consolidated balance sheets of Novar and its
consolidated Subsidiaries as of December 31, 2003 and December 31, 2004, and the
related consolidated statements of income and cash flows for the fiscal years
ended on such dates, together with the consolidated statements of income and
cash flows of Novar and its consolidated Subsidiaries for the fiscal year ended
December 31, 2002, reported on by and accompanied by an unqualified report from
PricewaterhouseCoopers, present fairly the consolidated financial condition of
Novar and its consolidated Subsidiaries as at such dates, and the consolidated
results of its operations and its consolidated cash flows for the respective
periods, and (ii) the unaudited consolidated balance sheet of Novar and its
consolidated Subsidiaries as of September 30, 2005, and the related unaudited
consolidated statements of income and cash flows for the nine-month period ended
on such date, present fairly the consolidated financial condition of Novar and
its consolidated Subsidiaries as at such date, and the consolidated results of
its operations and its consolidated cash flows for the three-month period then
ended (subject to normal year-end audit adjustments). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by the aforementioned firm of accountants and
disclosed therein). No Group Member has any material Guarantee Obligations,
material contingent liabilities or material liabilities for taxes, or any
long-term leases or material forward or long-term commitments, including any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, that are not reflected in the most recent
financial statements referred to in this paragraph. Except as set forth on
Schedule 4.1(b), during the period from December 31, 2004 to and including the
date hereof there has been no Disposition by any Group Member of any material
part of its business or property.
4.2 No Change. Since December 31, 2004, there has been no development,
event or circumstance that has had or would reasonably be expected to have a
Material Adverse Effect.
41
4.3 Existence; Compliance with Law. Each Group Member (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and, except as would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect, to conduct the business in which it is currently
engaged, (c) is duly qualified as a foreign entity and in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification and (d) is
in compliance with all Requirements of Law, except in the case of clauses (c)
and (d) above to the extent that the failure to be so qualified or to comply
therewith, as the case may be, would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.4 Power; Authorization; Enforceable Obligations. Each Loan Party has
the power and authority, and the legal right, to execute, deliver and perform
its obligations under the Loan Documents to which it is a party and, in the case
of the Borrower, to obtain extensions of credit hereunder. Each Loan Party has
taken all necessary organizational action to authorize the execution, delivery
and performance of the Loan Documents to which it is a party and, in the case of
the Borrower, to authorize the extensions of credit on the terms and conditions
of this Agreement. No material consent or authorization of, filing with, notice
to or other act by or in respect of, any Governmental Authority is required in
connection with the Transactions, the extensions of credit hereunder or the
execution, delivery and performance of this Agreement or any of the other Loan
Documents, except (i) consents, authorizations, filings and notices described in
Schedule 4.4 and (ii) the filings referred to in Section 4.19. Each Loan
Document has been duly executed and delivered on behalf of each Loan Party party
thereto. This Agreement constitutes, and each other Loan Document upon execution
by each party thereto will constitute, a legal, valid and binding obligation of
each Loan Party party thereto, enforceable against each such Loan Party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or violate or require any consent or approval not obtained
under any organizational document or any material Contractual Obligation of any
Group Member and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any such
Requirement of Law or any such material Contractual Obligation (other than the
Liens created by the Security Documents).
4.6 Litigation. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened by or against any Group Member or against any of
their respective properties or revenues (a) as of the date hereof with respect
to the Transactions, this Agreement, any of the other Transaction Documents or
any of the transactions contemplated hereby or thereby, or (b) that would
reasonably be expected to have a Material Adverse Effect.
4.7 No Default. No Group Member is in default under or with respect to
any of its Contractual Obligations in any respect that would reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
4.8 Ownership of Property; Liens. Each Group Member has title in fee
simple to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, all its other property, and none of
such property is subject to any Lien except Permitted Liens. Schedule 4.8
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lists, as of the Closing Date, each parcel of owned real property and each
leasehold interest in real property located in the United States and held by the
Borrower or any of its Subsidiaries.
4.9 Intellectual Property. Other than as set forth on Schedule 4.9,
(a) each Group Member owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted, and (b) no
material claim has been asserted in writing and is pending by any Person against
any Group Member challenging or questioning the use of any Group Member's
Intellectual Property or the validity or effectiveness of any Group Member's
Intellectual Property, nor does the Borrower know of any reasonable basis for
any such claim, except for claims that could not reasonably be expected to have
a Material Adverse Effect. To the knowledge of the Borrower, the use of each
Group Member's Intellectual Property by such Group Member does not infringe on
the Intellectual Property rights of any Person in any material respect, except
for infringements that could not reasonably be expected to have a Material
Adverse Effect.
4.10 Taxes. Except as set forth on Schedule 4.10, each Group Member
has filed or caused to be filed all Federal, state and other material tax
returns that are required to be filed and has paid all material taxes shown to
be due and payable on said returns or on any material assessments made in
writing against it or any of its property and all other material taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any taxes the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the relevant
Group Member); all tax returns filed by each Group Member are accurate in all
material respects; no material tax Lien, other than a Lien for taxes not yet due
and payable or the validity of which are being contested in good faith by
appropriate proceedings and for which adequate reserves are maintained on the
books of the relevant Group Member in conformity with GAAP, exists with respect
to the property of any Group Member.
4.11 Federal Regulations. No part of the proceeds of any Loans, and no
other extensions of credit hereunder, will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.
4.12 Labor Matters. Except as would not reasonably be expected to have
a Material Adverse Effect: (a) there are no strikes or other labor disputes
against any Group Member pending or, to the knowledge of the Borrower,
threatened; (b) hours worked by and payment made to employees of each Group
Member have not been in violation of the Fair Labor Standards Act or any other
applicable Requirement of Law dealing with such matters; and (c) all payments
due from any Group Member on account of employee health and welfare insurance
have been paid or accrued as a liability on the books of the relevant Group
Member.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Single Employer Plan
that resulted in any unpaid liability, and each Plan (other than any
Multiemployer Plan or any multiemployer health and welfare plan) has complied in
all material respects with the applicable provisions of ERISA and the Code
except any such Reportable Event or such failure to comply which could not
reasonably be expected to have a Material Adverse Effect. No termination of a
Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan
has arisen, during such five-year period except any such termination or Lien
which could not reasonably be expected to have a
43
Material Adverse Effect. The present value of all accrued benefits under each
Single Employer Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits, except where any such shortfall does
not result in any Group Member incurring a material annual charge or cash outlay
and is not reasonably expected to result in the same in the future. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or could reasonably be
expected to result in a material liability to any Group Member under ERISA and
neither the Borrower nor any Commonly Controlled Entity would be subject to any
material liability under ERISA if the Borrower or any such Commonly Controlled
Entity were to withdraw completely from any of the Multiemployer Plans as of the
valuation date most closely preceding the date on which this representation is
made or deemed made. To the Borrower's knowledge, no such Multiemployer Plan is
in Reorganization or Insolvent such that any Group Member has incurred a
material annual charge or cash outlay related thereto or may reasonably be
expected to incur the same in the future.
4.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
4.15 Subsidiaries. Except as disclosed to the Administrative Agent by
the Borrower in writing from time to time after the Closing Date, (a) Schedule
4.15 sets forth the name and jurisdiction of organization of each Subsidiary and
the percentage of each class of Capital Stock (or other economic interest) owned
by any Loan Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors' qualifying shares) of
any nature relating to any Capital Stock of the Borrower or any Subsidiary,
except as created by the Transaction Documents as in effect on the date hereof.
All of the issued and outstanding Capital Stock of the Borrower is owned by
Holdings.
4.16 Use of Proceeds. The proceeds of the Term Loans shall be used to
finance a portion of the Acquisition, and to pay related fees, expenses and
premiums. The proceeds of the Revolving Loans shall be used to finance a portion
of the Acquisition, and to pay related fees, expenses and premiums and,
following the consummation of the Transactions, shall be used, together with the
proceeds of Swingline Loans and the Letters of Credit, for general corporate
purposes of the Borrower and its Subsidiaries.
4.17 Environmental Matters. Except as, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by any
Group Member (the "Properties") do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts or concentrations
or under circumstances that constitute or constituted a violation by any Group
Member of, or could give rise to Environmental Liability of any Group Member;
(b) no Group Member has received any written notice or has actual
knowledge of the receipt of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the business operated by any Group Member (the "Business"), nor does the
Borrower have actual knowledge that any such notice will be received or is being
threatened;
44
(c) Materials of Environmental Concern have not been generated,
treated, stored, transported or disposed of by any Group Member from the
Properties in violation of, or in a manner or to a location that could give rise
to liability under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of by any
Group Member or, to the knowledge of any Group Member, any other Person, at, on
or under any of the Properties in violation of, or in a manner that could give
rise to Environmental Liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which any Group Member is or will be named as a party with
respect to the Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Business or, to the knowledge of any Group Member, the
Properties;
(e) there has been no Release or threat of Release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of any Group Member in connection with the Properties or
otherwise in connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws;
(f) each Group Member's operations at, and use and lease of, the
Properties are in compliance, and to the extent applicable have in the last five
years been in compliance, with all applicable Environmental Laws, and there is
no contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Business or, to the knowledge of any Group
Member, the Properties;
(g) no Group Member is aware of any facts, circumstances, conditions
or occurrences in respect of any of the Properties owned, leased or operated
that are reasonably likely to interfere with or prevent continued compliance
with applicable Environmental Laws by, or result in Environmental Liability of,
any Group Member; and
(h) no Group Member has pursuant to any order, decree, judgment or
agreement by which it is bound become subject to any Environmental Liability or
has assumed any Environmental Liability of any other Person.
4.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document or any other document,
certificate or statement furnished by or on behalf of any Loan Party to the
Administrative Agent or the Lenders, or any of them, for use in connection with
the transactions contemplated by this Agreement or the other Loan Documents,
when taken as a whole, contained as of the date such statement, information,
document or certificate was so furnished any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements contained
herein or therein not materially misleading in light of the circumstances under
which such statements were made. The projections and pro forma financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. As of the date hereof, the representations and warranties
contained in the Acquisition Documents made by the Borrower and, to the
knowledge of the Borrower, made by Persons other than the Borrower are true and
correct in all material respects. There is no fact known to any Loan Party that
would reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements
45
furnished to the Administrative Agent and the Lenders for use in connection with
the transactions contemplated hereby and by the other Loan Documents.
4.19 Security Documents. (a) Each of the Security Documents is
effective to create in favor of the Administrative Agent, for the benefit of the
Secured Parties, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. (x) In the case of the
Pledged Equity described in the Security Documents, when certificates or other
instruments representing such Pledged Equity are delivered to the Administrative
Agent or financing statements in appropriate form are filed in the offices
specified in Schedule 4.19, as applicable, (y) in the case of Collateral
constituting deposit accounts or securities accounts, when Control Agreements
covering such accounts are executed and delivered by the parties thereto, and
(z) in the case of other Collateral described in the Security Documents, when
financing statements and other filings specified in Schedule 4.19(a) in
appropriate form are filed in the offices specified in Schedule 4.19(a) and the
other actions specified on Schedule 4.19(a) have been duly taken, the Lien
created by the Security Documents shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
such Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Security Documents), in each case prior and superior in right to
any other Person (except, in the case of Collateral other than Pledged Equity,
Permitted Liens).
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a legal, valid and
enforceable Lien, subject only to the Permitted Encumbrances, on the Mortgaged
Properties described therein and proceeds and products thereof, and when the
Mortgages are filed in the offices specified on Schedule 4.19(b), each such
Mortgage shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in the Mortgaged Properties
and the proceeds thereof, as security for the Obligations (as defined in the
relevant Mortgage), in each case prior and superior in right to any other
Person, subject only to the Permitted Encumbrances.
4.20 Solvency. As of the Closing Date, each Loan Party is, and the
Loan Parties taken as a whole are, and after giving effect to the Transactions
will be, Solvent.
4.21 Regulation H. No Mortgage encumbers improved real property that
is located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of 1968
(except any Mortgaged Properties as to which such flood insurance as required by
Regulation H has been obtained and is in full force and effect as required by
this Agreement).
4.22 Certain Documents. As of the date hereof, the Borrower has
delivered to the Administrative Agent a complete and correct copy of the
Acquisition Documents and the Senior Note Indenture, including any amendments,
supplements or modifications with respect to any of the foregoing.
4.23 Anti-Terrorism Laws. (a) No Loan Party or, to the knowledge of
any Loan Party, any of its Affiliates is in violation of any Anti-Terrorism Law
or engages in or conspires 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 any Anti-Terrorism Law.
(b) None of the Loan Parties, nor, to the knowledge of the Loan
Parties, any Affiliate of any Loan Party or their respective agents acting or
benefiting in any capacity in connection with the Loans, Letters of Credit or
other transactions hereunder, is any of the following (each a "Blocked Person"):
46
(i) a person that is listed in the annex to, or is otherwise subject
to the provisions of, 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, Executive Order No. 13224;
(iii) a person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;
(iv) a person that commits, threatens or conspires to commit or
supports "terrorism" as defined in Executive Order No. 13224;
(v) a person that is named as a "specially designated national" on the
most current list published by the United States Treasury Department's
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 who is affiliated or associated with any person
described above.
(c) No Loan Party, or to the knowledge of any Loan Party, any of its
agents acting in any capacity in connection with the Loans, Letters of Credit or
other transactions hereunder (i) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of
any Blocked Person or (ii) deals in, or otherwise engages in any transaction
relating to, any property or interests in property blocked pursuant to Executive
Order No. 13224.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on or after
the Closing Date, and the effectiveness of this Agreement, are subject to the
satisfaction, on or before December 15, 2005 of the following conditions
precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, or, in the case of Lenders, a Lender Addendum, executed and
delivered by each of the Administrative Agent, Holdings, the Borrower and
each Person that is a Lender as of the Closing Date, (ii) the Guarantee and
Collateral Agreement, executed and delivered by the Borrower, Holdings and
each Subsidiary Guarantor, (iii) an Acknowledgment and Consent in the form
attached to the Guarantee and Collateral Agreement, executed and delivered
by each Issuer (as defined therein), if any, that is not a Loan Party, (iv)
the Control Agreements required to be delivered on the Closing Date by the
Guarantee and Collateral Agreement, executed and delivered by each
applicable Loan Party, (v) the Intercompany Note, executed and delivered by
each Loan Party, (vi) any Notes requested by a Lender and (vii) the
Intellectual Property Security Agreement, executed and delivered by each
applicable Loan Party.
(b) Acquisition, etc.
(i) The following transactions shall have occurred, in each case
in accordance with the Acquisition Agreement or otherwise on terms and
conditions reasonably satisfactory to the Agents and the Lenders:
47
(A) the consummation of the Acquisition in accordance with
all applicable Requirements of Law for aggregate consideration
(excluding related fees and expenses) not exceeding $800,000,000;
(B) the issuance of the Senior Notes in an aggregate amount
of not less than $175,000,000 as contemplated by the Senior Note
Indenture; and
(C) the contribution by M&F to Holdings of at least
$203,000,000 in cash as common equity and the further
contribution of such cash to the Borrower as common equity.
(ii) The capital and ownership structure of the Borrower and its
Subsidiaries, after giving effect to the Transactions, shall be
satisfactory to the Arrangers and the Administrative Agent shall have
received certificates of merger with respect to the merger of Security
Printing, Inc. with and into Novar and the merger of Novar with and
into the Borrower.
(iii) The Administrative Agent shall have received satisfactory
evidence that the fees, expenses and premiums to be incurred in
connection with the Acquisition and the financing thereof shall not
exceed $20,000,000.
(c) Financial Statements. The Lenders shall have received the
financial statements referred to in Section 4.1.
(d) Approvals. All governmental and third party approvals (including
landlords' consents, Xxxx-Xxxxx-Xxxxxx clearance and other consents)
necessary or, in the case of the financing contemplated hereby, advisable
in the reasonable discretion of the Administrative Agent, in connection
with the Transactions, the financing contemplated hereby and the continuing
operations of the Borrower and its Subsidiaries (including shareholder
approvals, if any) shall have been obtained and be in full force and
effect, and all applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose materially adverse conditions on the
Acquisition or the financing contemplated hereby. No default or event of
default shall exist or shall occur as a result of such transactions under
and as defined in the Senior Note Indenture.
(e) Lien Searches. The Administrative Agent shall have received the
results of such lien searches as it may request in each relevant
jurisdiction with respect to Holdings, the Borrower and its Subsidiaries,
and such searches shall reveal no liens on any of the assets of Holdings,
the Borrower and its Subsidiaries or any other Collateral, except for
Permitted Liens or liens to be discharged on or prior to the Closing Date
pursuant to documentation reasonably satisfactory to the Administrative
Agent.
(f) Fees. The Lenders and the Agents shall have received all fees
required to be paid, and all reasonable expenses for which invoices have
been presented (including the reasonable and documented fees and expenses
of one firm of legal counsel) (in addition to any local counsel), on or
before the Closing Date. All such amounts will be paid with proceeds of
Loans made on the Closing Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or before
the Closing Date.
(g) Closing Certificate; Certified Certificate of Incorporation; Good
Standing Certificates. The Administrative Agent shall have received, (i) a
certificate of each Loan Party,
48
dated the Closing Date, substantially in the form of Exhibit C, with
appropriate insertions and attachments, including the certificate of
incorporation (or similar document) of each Loan Party certified by the
relevant authority of the jurisdiction of organization of such Loan Party,
(ii) a long form good standing certificate for each Loan Party from its
jurisdiction of organization and (iii) a good standing certificate for each
Loan Party from each jurisdiction in which such Loan Party has foreign
qualification to the extent that the failure to obtain such foreign
qualification would reasonably be expected to have a Material Adverse
Effect.
(h) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
LLP, counsel to the Borrower and its Subsidiaries, substantially in
the form of Exhibit E-1;
(ii) the legal opinion of Graves, Dougherty, Xxxxxx & Xxxxx,
local Texas counsel to the Borrower and its Subsidiaries,
substantially in the form of Exhibit E-2; and
(iii) the legal opinion of Xxxxxx, Xxxxxx, Xxxxxxx & Xxxxxxxx,
local Tennessee counsel to the Borrower and its Subsidiaries,
substantially in the form of Exhibit E-3.
(i) Pledged Equity. The Administrative Agent shall have received (i)
the certificates representing the Pledged Equity, if any, together with an
undated stock power (or similar instrument) for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof and
(ii) each promissory note (if any) pledged to the Administrative Agent
pursuant to the Guarantee and Collateral Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank)
by the pledgor thereof.
(j) Filings, Registrations and Recordings. Each document (including
any Uniform Commercial Code financing statement) required by the Security
Documents to be filed, registered or recorded in order to create in favor
of the Administrative Agent, for the benefit of the Secured Parties, a
perfected Lien on the Collateral described therein, prior and superior in
right to any other Person (other than with respect to Permitted Liens),
including the filings described in Schedule 4.19, shall be in proper form
for filing, registration or recordation.
(k) Mortgages, etc.
(i) The Administrative Agent shall have received a Mortgage with
respect to each Mortgaged Property, executed and delivered by a duly
authorized officer of each party thereto.
(ii) If requested by the Administrative Agent, the Administrative
Agent shall have received, and the title insurance company issuing the
policy referred to in clause (iii) below (the "Title Insurance
Company") shall have received, maps or plats of an as-built survey of
the sites of the Mortgaged Properties certified to the Administrative
Agent and the Title Insurance Company in a manner satisfactory to
them, dated a date satisfactory to the Administrative Agent and the
Title Insurance Company by an independent professional licensed land
surveyor satisfactory to the Administrative Agent and the Title
Insurance Company, which maps or plats and the surveys on which they
are based shall be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted by
the American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without
49
limiting the generality of the foregoing, there shall be surveyed and
shown on such maps, plats or surveys the following: (A) the locations
on such sites of all the buildings, structures and other improvements
and the established building setback lines; (B) the lines of streets
abutting the sites and width thereof; (C) all access and other
easements appurtenant to the sites; (D) all roadways, paths,
driveways, easements, encroachments and overhanging projections and
similar encumbrances affecting the site, whether recorded, apparent
from a physical inspection of the sites or otherwise known to the
surveyor; (E) any encroachments on any adjoining property by the
building structures and improvements on the sites; (F) if the site is
described as being on a filed map, a legend relating the survey to
said map; and (G) the flood zone designations, if any, in which the
Mortgaged Properties are located.
(iii) The Administrative Agent shall have received in respect of
each Mortgaged Property a mortgagee's title insurance policy (or
policies) or marked up unconditional binder for such insurance. Each
such policy shall (A) be in an amount satisfactory to the
Administrative Agent; (B) be issued at ordinary rates; (C) insure that
the Mortgage insured thereby creates a valid first Lien on such
Mortgaged Property free and clear of all defects and encumbrances,
except as disclosed therein (the "Permitted Encumbrances"); (D) name
the Administrative Agent for the benefit of the Secured Parties as the
insured thereunder; (E) be in the form of ALTA Loan Policy - 1970
(Amended 10/17/70 and 10/17/84) (or equivalent policies); (F) contain
such endorsements and affirmative coverage as the Administrative Agent
may reasonably request and (G) be issued by title companies
satisfactory to the Administrative Agent (including any such title
companies acting as co-insurers or reinsurers, at the option of the
Administrative Agent). The Administrative Agent shall have received
evidence satisfactory to it that all premiums in respect of each such
policy, all charges for mortgage recording tax, and all related
expenses, if any, have been paid.
(iv) If requested by the Administrative Agent, the Administrative
Agent shall have received (A) a policy of flood insurance that (1)
covers any parcel of improved real property that is encumbered by any
Mortgage (2) is written in an amount not less than the outstanding
principal amount of the indebtedness secured by such Mortgage that is
reasonably allocable to such real property or the maximum limit of
coverage made available with respect to the particular type of
property under the National Flood Insurance Act of 1968, whichever is
less, and (3) has a term ending not later than the maturity of the
Indebtedness secured by such Mortgage and (B) confirmation that the
Borrower has received the notice required pursuant to Section
208(e)(3) of Regulation H of the Board.
(v) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in,
the title policy or policies referred to in clause (iii) above and a
copy of all other material documents affecting the Mortgaged
Properties.
(vi) With respect to the leased real properties described on
Schedule 5.1(k)(vi), the Administrative Agent shall have received a
Landlord Personal Property Collateral Access Agreement executed by the
applicable landlord.
(l) Solvency Certificate. The Administrative Agent shall have received
a solvency certificate in the form of Exhibit G, executed as of the Closing
Date by the chief financial officer of Holdings and the Borrower.
50
(m) Insurance. The Administrative Agent (i) shall be reasonably
satisfied with the insurance program to be maintained by the Borrower and
its Subsidiaries following the Closing Date and (ii) shall have received
insurance certificates satisfying the requirements of Section 5.2 of the
Guarantee and Collateral Agreement.
(n) Patriot Act, etc. The Administrative Agent shall have received all
documentation and other information required by bank regulatory authorities
under applicable "know your customer" and anti-money laundering rules and
regulations, including the Patriot Act, as reasonably requested by the
Administrative Agent.
5.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date (except to the extent that such
representations and warranties related to a particular date, in which case
such representations and warranties shall be true and correct in all
material respects on and as of such date).
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such particular date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect or the Payment Obligations have not
been Fully Satisfied, each of Holdings and the Borrower shall and shall cause
each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Lender, through the
Administrative Agent:
(a) as soon as available, but in any event not later than 90 days
after the end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year, setting
forth in each case in comparative form the figures for the previous year,
reported on without a "going concern" or like qualification or exception,
or qualification arising out of the scope of the audit, by Ernst & Young
LLP or other independent certified public accountants of nationally
recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures
for the previous year and the figures from the applicable portion of the
current budgeted statement of operations delivered pursuant to Section
6.2(c), certified by a
51
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments and the absence of
footnotes); and
(c) as soon as available, but in any event not later than 45 days
after the end of each month occurring during each fiscal year of the
Borrower (other than the third, sixth, ninth and twelfth such month), the
unaudited consolidated balance sheets of the Borrower and its consolidated
Subsidiaries as at the end of such month and the related unaudited
consolidated statements of income and of cash flows for such month and the
portion of the fiscal year through the end of such month, setting forth in
each case in comparative form the figures for the previous year and the
figures from the applicable portion of the current budgeted statement of
operations delivered pursuant to Section 6.2(c), certified by a Responsible
Officer as being fairly stated in all material respects (subject to normal
year-end audit adjustments and the absence of footnotes).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied (except as approved by such accountants or officer, as the case may be,
and disclosed in reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods.
6.2 Certificates; Other Information. Furnish to each Lender, through
the Administrative Agent (or, in the case of clause (h), to the Administrative
Agent or the relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default under Section 7.1, except as specified in such
certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that, to the best of such Responsible Officer's knowledge, each Loan Party
during such period has observed or performed all of its covenants in
Sections 6 and 7 and other material agreements, and satisfied every
material condition contained in this Agreement and the other Loan Documents
to which it is a party to be observed, performed or satisfied by it, and
that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) in the
case of quarterly or annual financial statements (x) a Compliance
Certificate containing all information and calculations necessary for
determining compliance by each Group Member with the provisions of this
Agreement referred to therein as of the last day of the fiscal quarter or
fiscal year of the Borrower, as the case may be, and (y) to the extent not
previously disclosed to the Administrative Agent, a description of any
change in the jurisdiction of organization of any Loan Party and a list of
any material Intellectual Property acquired by any Loan Party since the
date of the most recent report delivered pursuant to this clause (y) (or,
in the case of the first such report so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 30 days after
the end of each fiscal year of the Borrower, a detailed consolidated budget
for the following fiscal year, shown on a month-by-month basis (including a
projected consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of the following fiscal year, the related consolidated
statements of projected cash flow, projected changes in financial position
and projected income and a description of the underlying assumptions
applicable thereto), and, as soon as available, material revisions, if any,
to such budget and projections with respect to such fiscal year
(collectively, the "Projections"), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer stating that such
Projections are based on estimates, information and
52
assumptions believed by management to be reasonable at such time and that
such Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) within 90 days after the end of each fiscal year of the Borrower
and within 45 days after the end of the first three quarterly periods of
each fiscal year of the Borrower, a narrative discussion and analysis of
the financial condition and results of operations of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter, as
compared to the portion of the Projections covering such periods and to the
comparable periods of the previous year;
(e) no later than two Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect to the Senior Note
Indenture and the Acquisition Documents to the extent such amendment,
supplement, waiver or other modification would be materially adverse to the
Borrower or its Subsidiaries or reduce the indemnities furnished to the
Borrower or any of its Subsidiaries;
(f) within five days after the same are sent, copies of all financial
statements and reports that the Borrower sends to the holders of any class
of its debt securities or public equity securities and, within five days
after the same are filed, copies of all financial statements and reports
that the Borrower may make to, or file with, the SEC;
(g) no later than five Business Days prior to consummating any
transaction described in Section 7.2(f) or 7.8(h), (i) a transaction
summary with respect to the Target and such potential Permitted Acquisition
and (ii) a certificate of a Responsible Officer demonstrating in reasonable
detail (A) that both before and after giving effect to such transaction, no
Default or Event of Default shall be in effect (including, on a pro forma
basis, pursuant to Section 7.1) and (B) the Borrower shall be in compliance
with the financial tests referred to in clause (c) of the definition of
"Permitted Acquisition";
(h) concurrently with any delivery of financial statements under
paragraph (a) or (b) above, a written report on the status of (A) any
non-compliance with Environmental Law (b) any pending, threatened, or
reasonably anticipated action or proceeding asserting Environmental
Liabilities; and (C) any liability, remediation or corrective action
related to Materials of Environmental Concern, that, in each case, could
reasonably be expected to give rise to liability of or expenditures by any
Group Member of $500,000 or more. Such report shall specify in reasonable
detail (1) the status of the matter, including any significant developments
since the date of the prior report, (2) any material technical reports or
material correspondence prepared or received relating to the matter, (3)
the current plan for resolution or completion of the matter, and (4) the
anticipated cost to achieve such resolution or completion of the matter, as
applicable. At the request of the Administrative Agent or any Lender, the
Borrower shall provide the Administrative Agent with copies of all material
documents related to such matters that are in the possession or control of
any Group Member; and
(i) promptly, such additional financial and other information as the
Administrative Agent or any Lender may from time to time reasonably
request, including with respect to the Patriot Act.
6.3 Payment of Obligations. Except as would not reasonably be expected
to have a Material Adverse Effect, pay, discharge or otherwise satisfy at or
before maturity or before they become
53
delinquent, as the case may be, all its material obligations of whatever nature,
except where the amount or validity thereof is currently being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of the relevant Group Member.
6.4 Maintenance of Existence; Compliance. (a)(i) Preserve, renew and
keep in full force and effect its organizational existence and (ii) take all
reasonable action to maintain all material rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 7.4 and except, in the case of clause
(ii) above, to the extent that failure to do so would not reasonably be expected
to have a Material Adverse Effect; and (b) comply with all material Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition, ordinary wear
and tear excepted, (b) maintain with financially sound and reputable insurance
companies insurance on all its property in at least such amounts and against at
least such risks (but including in any event general liability, product
liability and business interruption) as are usually insured against in the same
general area by companies engaged in the same or a similar business and (c)
deliver to the Administrative Agent a report of a reputable insurance broker
with respect to insurance substantially concurrently with each delivery of the
Borrower's audited financial statements and such supplemental reports with
respect thereto as the Administrative Agent may from time to time reasonably
request.
6.6 Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity in all material respects with all Requirements of Law shall be made
of all dealings and transactions in relation to its business and activities and
which shall permit the preparation of financial statements in conformity with
GAAP and (b) permit representatives of the Agents or any Lender in coordination
with the Administrative Agent, to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Group Members
with officers of the Group Members and with their independent certified public
accountants. The costs and expenses of any such inspection will be paid by the
inspecting Lender, unless an Event of Default then exists, in which case the
costs and expenses will be paid by the Borrower and will constitute Obligations.
6.7 Notices. Promptly give notice to each Lender through the
Administrative Agent, of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any material Contractual
Obligation of any Group Member or (ii) litigation, investigation or
proceeding that may exist at any time between any Group Member and any
Governmental Authority, that in either case, would reasonably be expected
to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any Group Member (i) in
which the amount involved is $1,000,000 or more and not covered by
insurance, (ii) in which injunctive or similar relief is sought that could
reasonably be expected to have a Material Adverse Effect or (iii) which
relates to any Loan Document;
(d) any of the following environmental matters, specifying the nature
and extent thereof and the proposed response thereto, (1) any violation of
Environmental Law, or Release or
54
threatened Release of Materials of Environmental Concern, that could
reasonably be expected to require remediation, corrective action or other
response or give rise to Environmental Liability in excess of $500,000, (2)
any remediation, corrective action or other response taken by any Group
Member as a result of any Release or threatened Release of Materials of
Environmental Concern that could reasonably be expected to result in any
Environmental Liability in excess of $500,000, (3) any actions or
proceedings relating to any Environmental Liability (including any requests
for information by a Governmental Authority) that could reasonably be
expected to be in excess of $500,000, and (4) discovery by any Group Member
of any occurrence or condition at any Property, or on any adjoining real
property, that could cause such Property, or any part thereof, to be
subject to any material restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Law;
(e) the following events, as would reasonably be expected to create a
liability in excess of $1,000,000, as soon as practicable and in any event
within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence of any Reportable Event with respect to any Single Employer
Plan, a failure to make any required contribution to a Single Employer
Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination of, any Plan; and
(f) any development, event or circumstance that has had or would
reasonably be expected to have a Material Adverse Effect.
6.8 Environmental Laws. (a) Comply in all material respects with, and
ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except where the failure to so comply would not,
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, except where the failure to so conduct, complete and comply would not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(c) In the event that the Administrative Agent or any Lender shall
have reason to believe (i) that Materials of Environmental Concern have been
Released or are threatened to be Released on or from any Property or Business of
any Group Member in a manner which could reasonably be expected to have a
Material Adverse Effect, or (ii) that any such Property or Business is not being
operated in material compliance with applicable Environmental Law, the Borrower
shall, at the Administrative Agent's reasonable request, provide additional
documentation regarding such matter or retain an independent engineer or other
qualified environmental consultant to conduct such tests and investigations
necessary to evaluate the Borrower's response to any such matter, including
whether Materials of Environmental Concern are present in the soil, groundwater,
or surface water at such Property or Business in concentrations that could
reasonably be expected to result in Environmental Liability that could
reasonably be expected to have a Material Adverse Effect or whether the
Properties or Businesses are being operated and maintained in compliance in all
material respects with applicable Environmental Laws. If an Event of Default has
occurred and is continuing, or if the Borrower has not provided the
55
requested information (including any test or investigation reports prepared by
the independent engineer or environmental consultant) in a reasonably timely
manner, the Administrative Agent may, at its election and after reasonable
notice to the Borrower, retain an independent engineer or other qualified
environmental consultant to conduct such tests and investigations. Such
environmental assessments, tests and investigations may include visual
inspections of the Property or Business, including any and all storage areas,
storage tanks, drains, dry xxxxx and leaching areas, and the taking of soil
samples, surface water samples and groundwater samples as well as such other
reasonable investigations or analyses as are necessary. The scope of any such
environmental assessments, tests and investigations under this paragraph shall
be determined in the reasonable discretion of the Administrative Agent. Each
Group Member shall cooperate in the performance of any such environmental
assessment and permit any such engineer or consultant designated by the
Administrative Agent to have access to each property or facility at reasonable
times and after reasonable notice to the Group Member of the plans to conduct
such an environmental assessment. All environmental assessments, tests and
investigations conducted pursuant to this paragraph shall be at the Borrower's
sole cost and expense.
6.9 Additional Collateral, etc.
(a) With respect to any property acquired after the Closing Date by
any Group Member (other than (x) any property described in paragraph (b), (c) or
(d) below (y) any leasehold interest in real property and (z) property acquired
by any Excluded Foreign Subsidiary) as to which the Administrative Agent, for
the benefit of the Secured Parties, does not have a perfected Lien, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement or such other documents as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a security interest in such property and (ii)
take all actions necessary or advisable to grant to the Administrative Agent,
for the benefit of the Secured Parties, a perfected first priority security
interest in such property, including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be requested by the Administrative
Agent.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $1,000,000 acquired after
the Closing Date by any Group Member (other than (x) any such real property
subject to a Lien expressly permitted by Section 7.3(l) to the extent the
documentation relating to such Lien prohibits a second lien on such real
property and (y) real property acquired by any Excluded Foreign Subsidiary),
promptly (i) execute and deliver a first priority Mortgage, in favor of the
Administrative Agent, for the benefit of the Secured Parties, covering such real
property, (ii) if requested by the Administrative Agent, provide the Secured
Parties with (x) title and extended coverage insurance covering such real
property in an amount at least equal to the purchase price of such real property
(or such other amount as shall be reasonably specified by the Administrative
Agent) as well as a current ALTA survey thereof, together with a surveyor's
certificate and (y) any consents or estoppels reasonably deemed necessary or
advisable by the Administrative Agent in connection with such Mortgage, each of
the foregoing in form and substance reasonably satisfactory to the
Administrative Agent, (iii) if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent and (iv) deliver to the Administrative
Agent a notice identifying, and, upon request, a copy of, the consultant's
reports, environmental site assessments or other documents relied upon by any
Group Member to determine that any such real property included in such
Collateral does not contain Materials of Environmental Concern of a form or type
or in a quantity or location that could reasonably be expected to result in a
material Environmental Liability or otherwise cause any of the representations
and warranties contained in Section 4 of this Agreement to be untrue.
56
(c) With respect to any new Subsidiary (other than an Excluded Foreign
Subsidiary) created or acquired after the Closing Date by any Group Member which
for the purposes of this paragraph (c), shall include any existing Subsidiary
that ceases to be an Excluded Foreign Subsidiary, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable to
grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by any Group Member, (ii) deliver to the Administrative
Agent the certificates representing such Capital Stock and any intercompany
notes evidencing such obligations, together with undated stock powers (or
similar instruments), in blank, executed and delivered by a duly authorized
officer of the relevant Group Member, (iii) if such new Subsidiary is a Wholly
Owned Subsidiary, cause such Subsidiary (A) to become a party to the Guarantee
and Collateral Agreement, (B) to take such actions necessary or advisable to
grant to the Administrative Agent for the benefit of the Secured Parties a
perfected first priority security interest in the Collateral described in the
Guarantee and Collateral Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent and (C) to deliver to the
Administrative Agent a certificate of such Subsidiary, substantially in the form
of Exhibit C, with appropriate insertions and attachments and (iv) if requested
by the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by any Group Member (other than by any Group
Member that is an Excluded Foreign Subsidiary), promptly (i) execute and deliver
to the Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
that is owned by any such Group Member (provided, that in no event shall more
than 65% of the total outstanding voting Capital Stock of any such new
Subsidiary be required to be so pledged), (ii) deliver to the Administrative
Agent the certificates representing such Capital Stock and any intercompany
notes evidencing such obligations, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the relevant Group
Member, and take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Administrative Agent's security
interest therein and (iii) if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
6.10 Further Assurances. From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates or
documents, and take all such actions, as the Administrative Agent may reasonably
request for the purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Administrative Agent and the Secured Parties with respect to
the Collateral (or with respect to any additions thereto or replacements or
proceeds thereof or with respect to any other property or assets hereafter
acquired by the Borrower or any Subsidiary which may be deemed to be part of the
Collateral) pursuant hereto or thereto. Upon the exercise by the Administrative
Agent or any Secured Party of any power, right, privilege or remedy pursuant to
this Agreement or the other Loan Documents which requires any consent, approval,
recording, qualification or authorization of any Governmental Authority, the
Borrower will execute and deliver, or will cause the execution and delivery of,
all applications, certifications, instruments and other documents and papers
that the Administrative Agent or such Secured Party may be required to obtain
from the Borrower or any of its Subsidiaries for such governmental consent,
approval, recording, qualification or authorization.
57
6.11 Post-Closing Obligations. Take the actions required to be taken
on Schedule 6.11 within the time frames set forth therein.
SECTION 7. NEGATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect or the Payment Obligations have not
been Fully Satisfied, each of Holdings and the Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly:
7.1 Financial Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
March 31, 2006 5.50 to 1
June 30, 2006 5.50 to 1
September 30, 2006 5.50 to 1
December 31, 2006 5.50 to 1
March 31, 2007 5.25 to 1
June 30, 2007 5.00 to 1
September 30, 2007 5.00 to 1
December 31, 2007 4.75 to 1
March 31, 2008 4.50 to 1
June 30, 2008 4.50 to 1
September 30, 2008 4.50 to 1
December 31, 2008 4.25 to 1
March 31, 2009 4.00 to 1
June 30, 2009 4.00 to 1
September 30, 2009 4.00 to 1
December 31, 2009 3.75 to 1
March 31, 2010 3.50 to 1
June 30, 2010 3.50 to 1
September 30, 2010 3.50 to 1
December 31, 2010 and thereafter 3.50 to 1
(b) Consolidated Senior Secured Debt Ratio. Permit the Consolidated
Senior Secured Debt Ratio as at the last day of any period of four consecutive
fiscal quarters of the Borrower ending with any fiscal quarter set forth below
to exceed the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Senior Secured Debt Ratio
-------------- -------------------------
March 31, 2006 4.00 to 1
June 30, 2006 4.00 to 1
September 30, 2006 4.00 to 1
December 31, 2006 4.00 to 1
March 31, 2007 3.75 to 1
June 30, 2007 3.50 to 1
58
September 30, 2007 3.50 to 1
December 31, 2007 3.50 to 1
March 31, 2008 3.25 to 1
June 30, 2008 3.25 to 1
September 30, 2008 3.25 to 1
December 31, 2008 3.00 to 1
March 31, 2009 3.00 to 1
June 30, 2009 3.00 to 1
September 30, 2009 2.75 to 1
December 31, 2009 2.75 to 1
March 31, 2010 2.75 to 1
June 30, 2010 2.75 to 1
September 30, 2010 2.75 to 1
December 31, 2010 and thereafter 2.50 to 1
(c) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
of the Borrower (or, if less, the number of full fiscal quarters subsequent to
the Closing Date) commencing with the four consecutive fiscal quarters ending on
March 31, 2006 to be less than 1.10 to 1.
7.2 Indebtedness. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) (i) Indebtedness of (A) the Borrower to any Subsidiary, (B) any
Wholly Owned Subsidiary Guarantor to the Borrower or any other Subsidiary
and (C) any Non-Subsidiary Guarantor to a Non-Subsidiary Guarantor and (ii)
Indebtedness of any Non-Subsidiary Guarantor to the Borrower or any
Subsidiary Guarantor in an amount for this clause (ii) not to exceed
$5,000,000; provided, that any such Indebtedness is evidenced by, and
subject to the provisions (including the subordination provisions) of, the
Intercompany Note;
(c) Guarantee Obligations incurred in the ordinary course of business
by the Borrower or any Guarantor or its Subsidiaries of (i) obligations of
any Wholly Owned Subsidiary Guarantor or (ii) any Indebtedness of the
Borrower or any of its Subsidiaries permitted under this Section 7.2;
(d) Indebtedness outstanding on the Closing Date and listed on
Schedule 7.2(d) and any Permitted Refinancing Indebtedness incurred to
renew, refund, refinance, replace, defease or discharge such Indebtedness;
(e) (i) Indebtedness of the Borrower in respect of the Senior Notes in
an aggregate principal amount not to exceed $175,000,000, (ii) Guarantee
Obligations of any Guarantor in respect of such Indebtedness and (iii)
Permitted Refinancing Indebtedness incurred to renew, refund, refinance,
replace, defease or discharge the Indebtedness described in clause (i) of
this Section 7.2(e) and Guarantee Obligations of any Guarantor in respect
of such Indebtedness;
(f) (i) Indebtedness of the Borrower incurred to finance, or assumed
in connection with, any Permitted Acquisitions that are permitted by
Section 7.8(h) so long as (w) such Indebtedness is subordinated to the
Indebtedness created under the Loan Documents on subordination terms that
are no less favorable to the Lenders than those customary for high yield
senior subordinated
59
securities as reasonably determined by the Administrative Agent, (x) the
terms of such Indebtedness are no more restrictive than the terms
applicable to the Senior Notes, (y) the final maturity of such Indebtedness
is no earlier than six months after the final maturity of the Loans and (z)
such Indebtedness shall not require any payments of principal thereof prior
to the final maturity of the Loans; provided, that, (i) before and after
giving effect to the incurrence or assumption of such Indebtedness, no
Default or Event of Default shall have occurred and be continuing and (ii)
immediately after giving effect to the incurrence or assumption of such
Indebtedness, the Borrower shall be in compliance with (A) the financial
test referred to in clause (c) of the definition of "Permitted Acquisition"
and (B) any Permitted Refinancing Indebtedness incurred to renew, refund,
refinance, replace, defease or discharge Indebtedness described in clause
(i);
(g) Indebtedness in respect of any Specified Swap Agreement that is
otherwise permitted under Section 7.12;
(h) Indebtedness in respect of (i) workers compensation claims,
self-insurance obligations and bankers' acceptances in the ordinary course
of business and (ii) bid, performance or surety bonds, appeal bonds or
replevin bonds issued for the account of the Borrower or any of its
Subsidiaries in the ordinary course of business, including guarantees or
obligations of the Borrower or any of its Subsidiaries with respect to
letters of credit supporting such bid, performance or surety obligations
(in each case other than for an obligation for money borrowed);
(i) Indebtedness arising in connection with the endorsement of
instruments for deposit in the ordinary course of business;
(j) to the extent constituting Indebtedness and subject to Section
7.8(h), customary purchase price adjustments, earn outs, indemnification
obligations and similar items of the Borrower or any of its Subsidiaries in
connection with Permitted Acquisitions and Permitted Dispositions;
(k) Indebtedness incurred for the purpose of financing all or any part
of the purchase price or cost of design, construction, installation or
improvement of property, plant or equipment used in the business of the
Borrower or any of its Subsidiaries (including Capital Lease Obligations),
and any Permitted Refinancing Indebtedness incurred to renew, refund,
refinance, replace, defease or discharge such Indebtedness, in an aggregate
principal amount not to exceed $10,000,000 at any one time outstanding; and
(l) additional unsecured Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $20,000,000 at any one time outstanding.
7.3 Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, whether now owned or hereafter acquired, except the following
(collectively, "Permitted Liens"):
(a) Liens for taxes, fees, assessments or other governmental charges
not yet due or that are being contested in good faith by appropriate
proceedings, provided, that adequate reserves with respect thereto are
maintained on the books of the Borrower or its Subsidiaries, as the case
may be, in conformity with GAAP, or the nonpayment thereof is otherwise
permitted pursuant to Section 6.3;
60
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business that are not
overdue for a period of more than 60 days or that are being contested in
good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(e) easements, rights-of-way, zoning and other similar restrictions,
minor defects or other irregularities in title, and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the Closing Date listed on Schedule 7.3(f),
provided, that no such Lien is spread to cover any additional property
after the Closing Date and that the amount of Indebtedness secured thereby
is not increased;
(g) Liens created pursuant to the Security Documents;
(h) any interest or title of a lessor under any lease entered into by
the Borrower or any Subsidiary in the ordinary course of its business and
covering only the assets so leased;
(i) Liens arising from judgments or decrees in circumstances not
constituting an Event of Default under Section 8(i), except that any such
Lien securing an obligation of more than $15,000,000 shall not be in effect
for more than 60 days;
(j) Liens arising from precautionary UCC financing statements filed in
connection with operating leases;
(k) bankers' Liens, rights of setoff and other similar Liens existing
solely with respect to cash and Cash Equivalents on deposit in one or more
accounts maintained by the Borrower or any of its Subsidiaries (including
any restriction on the use of such cash and Cash Equivalents), in each case
granted in the ordinary course of business in favor of the bank or banks
with which such accounts are maintained, securing amounts owing to such
bank or banks with respect to cash management and operating account
arrangements, including those involving pooled accounts and netting
arrangements; provided, that unless such Liens are non-consensual and arise
by operation of law, in no case shall any such Liens secure (either
directly or indirectly) the repayment of any Indebtedness;
61
(l) Liens existing on any property or asset prior to the acquisition
thereof by the Borrower or any of its Subsidiaries or on any property of a
Person existing at the time such Person is acquired or merged with or into
or consolidated with the Borrower or any of its Subsidiaries to the extent
such acquisition or merger is permitted by this Agreement (and as long as
such Lien was not created in anticipation or contemplation of such
acquisition or merger); provided, that such Liens do not extend to property
not subject to such Liens at the time of the acquisition or merger (other
than improvements thereon) and are no more favorable to the lienholders
than such existing Liens and provided further that the amount of the
Indebtedness, if any, secured by such Liens does not exceed the amount of
assumed Indebtedness permitted pursuant to Section 7.2(f);
(m) Liens on xxxx xxxxxxx money deposits made in connection with
Permitted Acquisitions in an aggregate amount not to exceed $5,000,000 at
any time outstanding;
(n) Liens to secure Indebtedness permitted by Section 7.2(k) provided
such Liens shall only attach to the property, plant or equipment financed
thereby and improvements thereon or additions thereto;
(o) Permitted Encumbrances;
(p) Liens arising as a matter of law of any securities intermediary on
Permitted Investments held by such securities intermediary; and
(q) additional Liens securing obligations which are not Indebtedness
in an aggregate amount not to exceed $1,000,000 at any time.
7.4 Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided, that the Borrower shall be the continuing
or surviving entity) or with or into any Wholly Owned Subsidiary Guarantor
(provided, that the Wholly Owned Subsidiary Guarantor shall be the
continuing or surviving entity);
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (i) to the Borrower or any Wholly Owned Subsidiary Guarantor (upon
voluntary liquidation or otherwise) or (ii) pursuant to a Disposition
permitted by Section 7.5;
(c) any Investment expressly permitted by Section 7.8 may be
structured as a merger, consolidation or amalgamation;
(d) any Subsidiary of the Borrower may dissolve, liquidate or wind up
its affairs at any time following the Disposition by such Subsidiary of all
its assets in accordance with Section 7.4(b); provided that such
dissolution, liquidation or winding up, as applicable, could not reasonably
be expected to have a Material Adverse Effect; and
(e) any Non-Subsidiary Guarantor (i) may be merged or consolidated
with or into any other Non-Subsidiary Guarantor and (ii) may Dispose of any
or all of its assets to any other Non-Subsidiary Guarantor.
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7.5 Disposition of Property. Dispose of any of its property, whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete, surplus or worn out property in the
ordinary course of business;
(b) the sale of inventory and services in the ordinary course of
business;
(c) Dispositions permitted by clause (i) of Section 7.4(b) or clause
(ii) of Section 7.4(e);
(d) leasing or sub-leasing of property or licensing or sub-licensing
agreements entered into in the ordinary course of business;
(e) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Wholly Owned Subsidiary Guarantor;
(f) the Disposition of other property having a fair market value not
to exceed $5,000,000 in the aggregate for any fiscal year of the Borrower;
(g) Restricted Payments permitted by Section 7.6;
(h) Dispositions that occur as the result of a Recovery Event;
(i) Dispositions of cash or Cash Equivalents;
(j) the sale of directors' qualifying shares of Capital Stock as
required by applicable law;
(k) the entering into or the termination of any real property leases
or subleases; and
(l) the sale of real property having a fair market value not to exceed
$10,000,000 in the aggregate in connection with the substantially
simultaneous lease of such real property by any Group Member from the
purchaser thereof; provided that any Net Cash Proceeds received with
respect to such sale leaseback arrangement shall be applied in accordance
with Section 2.11(c) and may not be reinvested as otherwise permitted by
this Agreement.
7.6 Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in Capital Stock of the Person making such dividend)
on, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any Capital Stock of any Group Member, whether now or
hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations of any
Group Member (collectively, "Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the Borrower or any
Wholly Owned Subsidiary Guarantor;
(b) the Borrower may make Restricted Payments as required by the Tax
Sharing Agreement; and
(c) so long as no Event of Default shall have occurred and be
continuing, the Borrower may make Restricted Payments necessary for
Holdings or M&F (as applicable) to pay (i) franchise and similar taxes,
(ii) other reasonable fees required to maintain its corporate existence
63
and (iii) other reasonable out-of-pocket expenses incurred in the ordinary
course of business resulting from M&F's status as a publicly held
corporation, provided that Restricted Payments made pursuant to this clause
(c) shall not exceed, collectively with any loans or advances made pursuant
to Section 7.8(s), $2,000,000 in the aggregate per fiscal year.
7.7 Capital Expenditures. Make or commit to make any Capital
Expenditure, except Capital Expenditures of the Borrower and its Subsidiaries in
the ordinary course of business not exceeding (a) $30,000,000 for the fiscal
year ending December 31, 2006, (b) $27,500,000 for the fiscal year ending
December 31, 2007 and (c) $25,000,000 for each fiscal year thereafter; provided,
that (x) up to 50% of any such amount referred to above, if not so expended in
the fiscal year for which it is permitted, may be carried over for expenditure
in the next succeeding fiscal year and (y) Capital Expenditures made pursuant to
this Section during any fiscal year shall be deemed made, first, in respect of
amounts permitted for such fiscal year as provided above and, second, in respect
of amounts carried over from the prior fiscal year pursuant to clause (x) above.
7.8 Investments. Make any advance, loan, extension of credit (by way
of guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in cash and Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of any Group Member in the
ordinary course of business (including for travel, entertainment and
relocation expenses) in an aggregate amount for all Group Members not to
exceed $1,000,000 at any one time outstanding;
(e) the Acquisition;
(f) Investments in assets useful in the business of the Borrower and
its Subsidiaries made by the Borrower or any of its Subsidiaries with the
proceeds of any Reinvestment Deferred Amount;
(g) intercompany Investments by any Group Member in the Borrower or
any Person that, prior to such investment, is a Wholly Owned Subsidiary
Guarantor;
(h) Investments by the Borrower or any Subsidiary Guarantor not
otherwise permitted by the foregoing clauses of this Section and consisting
of Permitted Acquisitions; provided, that no Permitted Acquisition shall be
permitted if the aggregate purchase price to be paid by the Borrower and
its Subsidiaries (including the fair market value of any non-cash component
of such purchase price (other than Capital Stock of the Borrower), the
payment of any premiums, fees and expenses in connection therewith,
purchase price adjustments, earn outs and similar items, and the amount of
any Indebtedness refinanced or assumed by the Borrower or any of its
Subsidiaries in connection therewith) for all Permitted Acquisitions after
the date hereof exceeds $40,000,000;
(i) Investments consisting of the non-cash portion of the sales price
received for Dispositions permitted by Section 7.5;
64
(j) Investments in existence on the Closing Date and set forth on
Schedule 7.8;
(k) accounts receivable owing to the Borrower or any of its
Subsidiaries that are created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary terms;
(l) endorsements of negotiable instruments held for collection in the
ordinary course of business;
(m) lease, utility and other deposits or advances in the ordinary
course of business;
(n) any Specified Swap Agreement that is otherwise permitted under
Section 7.12;
(o) Investments in securities of trade creditors or customers in the
ordinary course of business and consistent with the Borrower's or any of
its Subsidiary's past practices that are received in settlement of bona
fide disputes or pursuant to any plan of reorganization or liquidation or
similar arrangement upon the bankruptcy or insolvency of such trade
creditors or customers;
(p) Investments received in compromise or resolution of any
litigation, arbitration or other disputes with Persons who are not
Affiliates;
(q) xxxx xxxxxxx money deposits made in connection with Permitted
Acquisitions in an aggregate amount not to exceed $10,000,000 at any time
outstanding;
(r) in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrower or any of its Subsidiaries in an
aggregate amount (valued at cost) not to exceed $15,000,000 during the term
of this Agreement;
(s) loans or advances to M&F for the purposes described in Section
7.6(c) not to exceed collectively with any Restricted Payments made in such
fiscal year pursuant to Section 7.6(c), $2,000,000 in the aggregate per
fiscal year; and
(t) payments of prepaid incentives to customers.
7.9 Optional Payments and Modifications of Certain Debt Instruments.
(a) Make or offer to make any optional or voluntary payment, prepayment,
repurchase or redemption of or otherwise optionally or voluntarily defease or
segregate funds with respect to the Senior Notes, other than with the proceeds
of Permitted Refinancing Indebtedness in accordance with Section 7.2(e); or (b)
change or amend, or agree to any change or amendment to, the terms of the Senior
Notes or the Senior Note Indenture if the effect of such change or amendment is
to: (i) increase the interest rate on the Senior Notes, (ii) shorten the dates
upon which payments of principal or interest are due on the Senior Notes, (iii)
add or change in a manner adverse to the Borrower any event of default or add or
make more restrictive any covenant with respect to the Senior Note Indenture,
(iv) change in a manner adverse to the Borrower the prepayment provisions in the
Senior Note Indenture, or (v) increase the obligations of the Borrower and its
Subsidiaries, taken as a whole, or confer additional rights on the holders of
the Senior Notes in a manner adverse to the Borrower and its Subsidiaries, taken
as a whole, or the Lenders.
7.10 Transactions with Affiliates. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory, consulting or similar
fees, with any Affiliate (other than Holdings, the Borrower or any Wholly
65
Owned Subsidiary Guarantor), other than: (a) any transaction that is (i)
otherwise permitted under this Agreement, (ii) in the ordinary course of
business of the relevant Group Member, and (iii) upon fair and reasonable terms
no less favorable to the relevant Group Member than it would obtain in a
comparable arm's length transaction with a Person that is not an Affiliate; (b)
any transaction pursuant to the contracts or agreements set forth on Schedule
7.10 and any amendment, modification or replacement of such contract or
agreement, provided, that any such amendment, modification or replacement of
such contract or agreement is on terms that are no less favorable to the Lenders
in any material respect than the original contract or agreement as in effect on
the Closing Date; (c) any transaction permitted by Section 7.4, 7.6 or 7.8; (d)
any issuance of Capital Stock of Holdings, (e) any transaction consisting of the
provision of services by the Borrower and/or the Subsidiary Guarantors to their
Affiliates in the ordinary course of business on terms that are not materially
adverse to the Lenders; (f) any transaction pursuant to which M&F or any of its
Affiliates provides the Borrower or any Subsidiaries, at their request and at
the cost to M&F, with services, including services to be purchased from third
party providers, such as legal and accounting services, insurance coverage and
other services; and (g) any employment agreement, employee benefit plan,
consultant agreement, officer or director indemnification agreement, or
confidentiality, non-competition, non-solicitation or any similar arrangement or
agreement entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business and payments pursuant thereto.
7.11 Sales and Leasebacks. Enter into any arrangement with any Person
providing for the leasing by any Group Member of real or personal property that
has been or is to be sold or transferred by such Group Member to such Person or
to any other Person to whom funds have been or are to be advanced by such Person
on the security of such property or rental obligations of such Group Member
except for any sale and leaseback with respect to real property disposed of in
accordance with Section 7.5(l).
7.12 Swap Agreements. Enter into any Swap Agreement, except (a) Swap
Agreements entered into to hedge or mitigate risks to which the Borrower or any
Subsidiary has actual exposure (other than those in respect of Capital Stock or
the Senior Notes) and (b) Swap Agreements entered into in order to effectively
cap, collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Borrower or any Subsidiary.
7.13 Changes in Fiscal Periods. Permit the fiscal year of the Borrower
to end on a day other than December 31 or change the Borrower's method of
determining fiscal quarters.
7.14 Negative Pledge Clauses. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of any Group Member
to create, incur, assume or suffer to exist any Lien upon any of its property or
revenues, whether now owned or hereafter acquired, other than (a) this
Agreement, any of the other the Loan Documents or the Senior Note Documents, (b)
any agreements governing any secured Indebtedness otherwise permitted hereby (in
which case any prohibition or limitation shall apply only to the property or
assets securing such Indebtedness), (c) customary provisions in leases, licenses
and other contracts restricting the assignment thereof and (d) customary
restrictions and conditions contained in any agreement governing any Disposition
permitted hereunder pending such Disposition, provided, that such restrictions
and conditions only apply to the property or Subsidiary that is to be sold.
7.15 Clauses Restricting Subsidiary Distributions. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer
66
any of its assets to the Borrower or any other Subsidiary of the Borrower,
except for such encumbrances or restrictions existing under or by reason of (i)
any restrictions existing under the Loan Documents and the Senior Note
Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary,
(iii) any restrictions or conditions imposed by any Requirement of Law, (iv)
customary minimum net worth restrictions in leases of real property (v) with
respect to clause (c) only, restrictions in agreements governing Indebtedness
permitted by Section 7.2(k) provided that such restrictions apply only to the
property or assets securing such Indebtedness and (vi) any restrictions or
conditions existing on the date hereof identified on Schedule 7.15 (but shall
not apply to any extension, renewal, amendment or modification of such
restriction or condition that expands the scope thereof).
7.16 Lines of Business. Enter into any material line of business,
either directly or through any Subsidiary, except for those businesses of the
same general type in which the Borrower and its Subsidiaries are engaged on the
date hereof (after giving effect to the Transactions) or that are reasonably
incidental or related thereto.
7.17 Amendments to Acquisition Documents. (a) Amend, supplement or
otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of
the indemnities and licenses furnished to the Borrower or any of its
Subsidiaries pursuant to the Acquisition Documents such that after giving effect
thereto such indemnities or licenses shall be materially less favorable to the
interests of the Loan Parties or the Lenders with respect thereto or (b)
otherwise amend, supplement or modify the terms and conditions of the
Acquisition Documents or any such other documents except for any such amendment,
supplement or modification that (i) becomes effective after the Closing Date and
(ii) would not reasonably be expected to have a Material Adverse Effect.
7.18 Change in Structure. Except as expressly permitted under Section
7.4, make or commit to make any material changes in its equity structure
(including in the terms of its outstanding Capital Stock), or amend, modify,
waive or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, its certificate of incorporation, certificate of
formation, operating agreement or other constituent documents in any respect
materially adverse to the Agents or the Lenders. Issuances of Capital Stock of
Holdings, or warrants or options to acquire Capital Stock of Holdings, shall not
be deemed a change in equity capital structure or a material amendment to the
constituent documents.
7.19 Limitation on Activities of Holdings. Holdings shall not (a)
conduct, transact or otherwise engage in, or commit to conduct, transact or
otherwise engage in, any business transaction or operations, or incur
Indebtedness or grant any Liens other than customary holding company activities
such as (i) those incidental to Holdings' ownership of the Capital Stock of the
Borrower, (ii) pursuant to the Guarantee and Collateral Agreement, (iii) the
issuance of its own Capital Stock, and (iv) such transactions as are required to
comply with its obligations under its Governing Documents and Contractual
Obligations entered into by Holdings on or prior to the Closing Date in
connection with the Acquisition or the financing thereof and otherwise permitted
hereunder, including the Senior Notes Documents and the Tax Sharing Agreement
(b) own, lease, manage or otherwise operate any properties or assets (including
cash (other than cash received in connection with dividends made by the Borrower
in accordance with Section 7.6) and Cash Equivalents) other than the ownership
of shares of the Capital Stock of the Borrower, (c) create or form any direct
Subsidiaries (other than the Borrower) or (d) otherwise cease to be solely a
holding company.
7.20 Limitation on Modifications of Tax Sharing Agreement. Modify or
waive any provision of the Tax Sharing Agreement to the extent such amendment,
modification or waiver would be reasonably likely to have a Material Adverse
Effect.
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SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes
due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) any Loan Party shall default in the observance or performance of
any agreement contained in clause (i) or (ii) of Section 6.4(a) (with
respect to Holdings and the Borrower only), Section 6.7(a) or Section 7 of
this Agreement or Section 5.5 or 5.7(c) of the Guarantee and Collateral
Agreement; or
(d) any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days after notice
to the Borrower from the Administrative Agent or the Required Lenders; or
(e) if on any date any Group Member or any Affiliate thereof shall
receive any payment from any party under any indemnification arrangements
under the Acquisition Documents or as a direct or indirect result of any
breach of any term or provision of the Acquisition Documents or otherwise
in respect of any claim by any Group Member or any Affiliate thereof
arising out of the Acquisition, and fails to contribute an amount equal to
100% of such payment (calculated after any taxes of the Borrower or any
Subsidiary related to such payment), promptly following the date of
receipt, to the Borrower; provided, that an Affiliate of a Group Member
that is a direct or indirect parent company of Holdings shall not be
required to make such contribution to the extent that such indemnification
payment is in respect of Losses (as defined in the Acquisition Agreement)
that are imposed directly on or incurred directly by such Affiliate; or
(f) any Group Member shall (i) default in making any payment of any
principal of any Indebtedness (including any Guarantee Obligation, but
excluding the Loans) on the scheduled or original due date with respect
thereto; or (ii) default in making any payment of any interest on any such
Indebtedness beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created; or (iii) default in
the observance or performance of any other agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is
to cause, or to permit the holder or beneficiary of such Indebtedness (or a
trustee or agent on behalf of such holder or beneficiary) to cause, with
the giving of notice if required, such Indebtedness to become due prior to
its stated maturity or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable, or the effect of which default is
to require the prepayment, redemption, repurchase or defeasance of, or
cause any Group Member to make any offer to
68
prepay, redeem, repurchase or defease, such Indebtedness; provided, that a
default, event or condition described in clause (i), (ii) or (iii) of this
paragraph (f) shall not at any time constitute an Event of Default unless,
at such time, one or more defaults, events or conditions of the type
described in clauses (i), (ii) and (iii) of this paragraph (f) shall have
occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $15,000,000; or
(g) (i) any Group Member shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or any Group Member shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against any Group Member
any case, proceeding or other action of a nature referred to in clause (i)
above that (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
any Group Member any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets that results in the entry of an order
for any such relief that shall not have been vacated, discharged, or stayed
or bonded pending appeal within 60 days from the entry thereof; or (iv) any
Group Member shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) any Group Member shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due; or
(h) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of any
Group Member or any Commonly Controlled Entity, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement
of proceedings or appointment of a trustee is likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) any
Group Member or any Commonly Controlled Entity shall incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of,
a Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events or
conditions, if any, would, reasonably be expected to have a Material
Adverse Effect; or
(i) one or more judgments or decrees shall be entered against any
Group Member involving in the aggregate a liability (not paid or fully
covered by insurance as to which the relevant insurance company has
acknowledged coverage) of $15,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or
(j) any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Loan Party or Affiliate thereof shall so
assert in writing, or any Lien created by any
69
of the Security Documents on any material portion of the Collateral shall
cease to be enforceable and of the same effect and priority purported to be
created thereby (other than as a result of any act on the part of the
Administrative Agent); or
(k) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect, or any Loan Party or Affiliate thereof shall so assert in writing;
or
(l) the occurrence of a Change of Control.
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents (including all amounts of L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both of
the following actions may be taken: (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower declare the
Revolving Commitments to be terminated forthwith, whereupon the Revolving
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrower hereunder and
under the other Loan Documents. After all Payment Obligations have been Fully
Satisfied, the balance, if any, in such cash collateral account shall be
returned to the Borrower (or such other Person as may be lawfully entitled
thereto). Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived by
the Borrower.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent. Each Lender hereby irrevocably
designates and
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appoints JPM, as Syndication Agent hereunder and each such Lender irrevocably
authorizes JPM to act as Syndication Agent in accordance with the provisions of
this Agreement and the other Loan Documents. Each Lender hereby irrevocably
designates and appoints Amegy and Natexis, as Co-Documentation Agents hereunder
and each such Lender irrevocably authorizes Amegy and Natexis to act as
Co-Documentation Agents in accordance with the provisions of this Agreement and
the other Loan Documents.
9.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of its
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to Holdings or the Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) or as is specified by this Agreement or as it
deems appropriate or unless it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense that may be incurred by it
by reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance with a
request of the Required Lenders (or, if so specified by this Agreement, all
Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans. Subject to this Section 9.4 and the other provisions of this Section 9,
the Administrative Agent shall exercise remedies under the Security Documents to
the extent directed by the Required Lenders to do so.
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9.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent has received notice from a Lender, Holdings or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
promptly give notice thereof to the Lenders. Subject to Section 9.4 and the
other provisions of this Section 9, the Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be directed by
the Required Lenders (or, if so specified by this Agreement, all Lenders);
provided, that unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any 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 credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent (which,
for purposes of this Section 9.7 shall include each Issuing Lender) in its
capacity as such (to the extent not reimbursed by Holdings or the Borrower and
without limiting the obligation of Holdings or the Borrower to do so), ratably
according to their respective Aggregate Exposure Percentages in effect on the
date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by such Agent under or in connection with any of the foregoing
(including, without limitation, with respect to any period prior to the Closing
Date); provided, that no Lender shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent's gross negligence or willful misconduct. The
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agreements in this Section shall survive the payment of the Loans and all other
amounts payable hereunder. This Section 9.7 shall not apply with respect to
taxes which are governed by Section 2.19.
9.8 Agent in Its Individual Capacity. Each Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent were not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(g) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
9.10 Syndication Agent, Co-Documentation Agents and Arrangers. Neither
the Syndication Agent, any Co-Documentation Agent nor any Arranger shall have
any duties or responsibilities hereunder in its capacity as such, and shall
incur no liability under this Agreement and the other Loan Documents.
9.11 Withholding Tax. To the extent required by any applicable law,
the Administrative Agent may withhold from any interest payment to any Lender an
amount equivalent to any applicable withholding tax. If the Internal Revenue
Service or any other Governmental Authority asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Lender because the appropriate form was not delivered or was
not properly executed or because such Lender failed to notify the Administrative
Agent of a change in circumstance which rendered the exemption from, or
reduction of, withholding tax ineffective or for any other reason, such Lender
shall indemnify the Administrative Agent fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax or otherwise, including any
penalties or interest and together with all expenses (including legal expenses,
allocated internal costs and out-of-pocket expenses) incurred.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan
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Document may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) forgive the
principal amount or extend the final scheduled date of maturity of any Loan,
extend the scheduled date of any amortization payment in respect of any Term
Loan, reduce the stated rate of any interest or fee payable hereunder (except
(x) in connection with the waiver of applicability of any post-default increase
in interest rates (which waiver shall be effective with the consent of the
Majority Facility Lenders of each adversely affected Facility) and (y) that any
amendment or modification of defined terms used in the financial covenants in
this Agreement shall not constitute a reduction in the rate of interest or fees
for purposes of this clause (i)) or extend the scheduled date of any payment
thereof, increase the amount or extend the expiration date of any Lender's
Revolving Commitment in each case without the written consent of each Lender
directly affected thereby; (ii) eliminate or reduce the voting rights of any
Lender under this Section 10.1 without the written consent of such Lender; (iii)
reduce any percentage specified in the definition of Required Lenders, consent
to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents, release all or
substantially all of the Collateral or release all or substantially all of the
Subsidiary Guarantors from their obligations under the Guarantee and Collateral
Agreement or amend the provisions requiring pro rata application of payments set
forth in Section 2.17, in each case without the written consent of all Lenders;
(iv) reduce the percentage specified in the definition of Majority Facility
Lenders with respect to any Facility without the written consent of all Lenders
under such Facility; (v) amend, modify or waive any provision of Section 9
without the written consent of each Agent affected thereby; (vi) amend, modify
or waive any provision of Section 2.6 or 2.7 without the written consent of the
Swingline Lender; (vii) amend, modify or waive any provision of Section 3
without the written consent of each Issuing Lender; or (viii) amend, modify or
waive this Agreement or the Guarantee and Collateral Agreement so as to alter
the ratable treatment of Obligations arising under Specified Swap Agreements in
a manner adverse to any Qualified Counterparty with any such Obligations
outstanding without the written consent of such Qualified Counterparty. Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the
Agents and all future holders of the Loans. In the case of any waiver, the Loan
Parties, the Lenders and the Agents shall be restored to their former position
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon.
Notwithstanding the foregoing, this Agreement may be amended (or
amended and restated) with the written consent of the Required Lenders, the
Administrative Agent and the Borrower (a) to add one or more additional credit
facilities to this Agreement and to permit the extensions of credit from time to
time outstanding thereunder and the accrued interest and fees in respect thereof
to share ratably in the benefits of this Agreement and the other Loan Documents
with the Term Loans and Revolving Extensions of Credit and the accrued interest
and fees in respect thereof and (b) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders and Majority
Facility Lenders. No Lender shall be required to provide any additional credit
without its prior consent.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided
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herein, shall be deemed to have been duly given or made when delivered, or three
Business Days after being deposited in the mail, postage prepaid, or, in the
case of telecopy notice, when received, addressed as follows in the case of
Holdings, the Borrower and the Administrative Agent, and as set forth in an
administrative questionnaire delivered to the Administrative Agent in the case
of the Lenders (including any Issuing Lender), or to such other address as may
be hereafter notified by the respective parties hereto:
Borrower: Xxxxxx American Corp.
00000 Xxxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: CA Acquisition Holdings, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Administrative Agent: Bear Xxxxxxx Corporate Lending Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X'Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
provided, that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided, that the foregoing shall not
apply to notices pursuant to Section 2 or 3 unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent, any
Issuing Lender or the Borrower may, in its discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant
to procedures approved by it; provided, that approval of such procedures may be
limited to particular notices or communications.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
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10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse each Agent (which for purposes of this Section 10.5 shall include any
Issuing Lender) for all of its reasonable and documented out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, the syndication of the Facilities and the consummation and
administration of the transactions contemplated hereby and thereby, including
the reasonable and documented fees and disbursements of one firm of counsel (in
addition to any local counsel) to the Administrative Agent and filing and
recording fees and expenses, with statements with respect to the foregoing to be
submitted to the Borrower prior to the Closing Date (in the case of amounts to
be paid on the Closing Date) and from time to time thereafter on a quarterly
basis or such other periodic basis as the Administrative Agent shall deem
appropriate, (b) to pay or reimburse each Lender and Agent for all of its
reasonable and documented costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including the fees and disbursements of
counsel (including the allocated fees and expenses of in house counsel) to each
Lender and of counsel to such Agent, (c) to pay, indemnify, and hold each Lender
and Agent harmless from any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender and Agent and their respective officers,
directors, trustees, advisors, employees, affiliates, agents and controlling
persons (each, an "Indemnitee") harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including any
of the foregoing relating to the use of proceeds of the Loans or Environmental
Liability or the unauthorized use by Persons of information or other materials
sent through electronic, telecommunications or other information transmission
systems that are intercepted by such Persons and the reasonable and documented
fees and expenses of legal counsel in connection with claims, actions or
proceedings by any Indemnitee against any Loan Party under any Loan Document
(all the foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), provided, that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities have resulted from the gross negligence or willful
misconduct of such Indemnitee, and provided further, that the Borrower shall not
be liable for settlement of any proceeding which is effected without the
Borrower's consent (such consent not to be unreasonably withheld). Without
limiting the foregoing, and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Subsidiaries not to assert, and
hereby waives and agrees to cause its Subsidiaries to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section 10.5 shall be payable not later than 10 days after written
demand therefor. Statements payable by the Borrower pursuant to this Section
10.5 shall be submitted to Chief Financial Officer (Telephone No. 000-000-0000)
(Telecopy No. 210-558-5254), or to such other Person or address as may be
hereafter designated by the Borrower in a written notice to the Administrative
Agent. The agreements in this Section 10.5 shall survive repayment of the Loans
and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any affiliate of any Issuing Lender that issues any
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Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees (each, an "Assignee") all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitments and the Loans at the time owing to it) with the
prior written consent (such consent not to be unreasonably withheld or delayed)
of:
(A) the Borrower, provided, that no consent of the Borrower shall
be required for (i) an assignment to a Lender, an affiliate of a
Lender, an Approved Fund (as defined below) or, if any Event of
Default has occurred and is continuing, any other Person, (ii) any
assignment by the Administrative Agent (or its affiliates) or (iii)
any assignment of Term Loans;
(B) the Administrative Agent, provided, that no consent of the
Administrative Agent shall be required for an assignment of (x) any
Revolving Commitment to an assignee that is a Lender with a Revolving
Commitment immediately prior to giving effect to such assignment or an
affiliate of such Lender or (y) all or any portion of a Term Loan to a
Lender, an Affiliate of a Lender or an Approved Fund;
(C) each Issuing Lender, for any assignment relating to the
Revolving Facility; and
(D) the Swingline Lender, for any assignment relating to the
Swingline Commitment or Swingline Loans, provided, that no consent of
the Swingline Lender shall be required for (i) an assignment to a
Lender, an affiliate of a Lender or an Approved Fund or (ii) any
assignment by the Administrative Agent (or its affiliates).
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an affiliate
of a Lender or an Approved Fund, an assignment effected within 60 days
of the Closing Date by any Agent in connection with the initial
syndication of the Term Commitments and Revolving Commitments or an
assignment of the entire remaining amount of the assigning Lender's
Commitments or Loans under any Facility, the amount of the Commitments
or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent) shall not
be less than $1,000,000, unless each of the Borrower and the
Administrative Agent otherwise consent, provided, that (1) no such
consent of the Borrower shall be required if any Event of Default has
occurred and is continuing and (2) such amounts shall be aggregated in
respect of each Lender and its affiliates or Approved Funds, if any;
(B) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption;
(C) the Assignee, if it was not a Lender prior to the assignment,
shall deliver to the Administrative Agent an administrative
questionnaire; and
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(D) the Assignee shall pay $3,500 with respect to each assignment
as an assignment fee to the account of the Administrative Agent
provided that only one assignment fee shall be payable in connection
with simultaneous assignments to one or more Approved Funds of the
same Lender.
For the purposes of this Section 10.6, the term "Approved Fund" has
the following meaning:
"Approved Fund" means 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 operations and
that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in
each Assignment and Assumption, the Assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 2.18, 2.19, 2.20
and 10.5). Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section 10.6 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph
(c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments
of, and principal amount of the Loans and L/C Obligations owing to, each
Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, each Issuing Lender and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by
any Lender (with respect to any entry relating to such Lender's Loans) at
any reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an Assignee, the Assignee's completed
administrative questionnaire (unless the Assignee shall already be a Lender
hereunder) and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment
and Assumption and record the information contained therein in the
Register. Except as set forth in the next sentence, no assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph. Notwithstanding the foregoing, any
assignment by a Lender to an affiliate of such Lender in accordance with
the terms of this Section 10.6 shall not be ineffective solely due to any
non-recordation by the Administrative Agent of such assignment pursuant to
this clause (v) as a condition to the effectiveness thereof to the extent
that such non-recordation results solely from any failure by such Lender to
furnish the Administrative Agent with an executed Assignment and Assumption
relating to such assignment; provided, however, that the Administrative
Agent shall be entitled to deal solely with the
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assigning Lender in connection with any matters under the Loan Documents
relating to the interests subject to such assignment, until the
Administrative Agent has been furnished with an executed Assignment and
Assumption relating to such assignment.
(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its
Commitments and the Loans owing to it); provided, that (A) such Lender's
obligations under this Agreement shall remain unchanged, (B) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrower, the Administrative
Agent, each Issuing Lender and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement pursuant to
which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement;
provided, that such agreement may provide that such Lender will not,
without the consent of the Participant, agree to any amendment,
modification or waiver that requires the consent of each Lender directly
affected thereby pursuant to clause (i) of the proviso to the second
sentence of Section 10.1. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.18, 2.19 and 2.20 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.7(b) as though it were a Lender,
provided such Participant shall be subject to Section 10.7(a) as though it
were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.18 or 2.19 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. Any Participant that is a
Non-U.S. Lender shall not be entitled to the benefits of Section 2.19
unless such Participant complies with Section 2.19(d).
(d) 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 any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section 10.6 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.
(e) The Borrower agrees to issue Notes to any Lender upon receipt of a
written request therefor from such Lender.
(f) Notwithstanding the foregoing, any Conduit Lender may assign any
or all of the Loans it may have funded hereunder to its designating Lender
without the consent of the Borrower or the Administrative Agent and without
regard to the limitations set forth in Section 10.6(b). Each of Holdings, the
Borrower, each Lender and the Administrative Agent hereby confirms that it will
not institute against a Conduit Lender or join any other Person in instituting
against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding under any state bankruptcy or similar law, for one
year and one day after the payment in full of the latest maturing commercial
paper note issued by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or
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expense arising out of its inability to institute such a proceeding against such
Conduit Lender during such period of forbearance.
10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a "Benefitted
Lender") shall, at any time after the Loans and other amounts payable hereunder
shall immediately become due and payable pursuant to Section 8, receive any
payment of all or part of the Obligations owing to it, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 8(g), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of the Obligations owing to
such other Lender, such Benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of the Obligations owing to
each such other Lender, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, after the occurrence and during the continuation of an Event of Default,
each Lender shall have the right, without prior notice to Holdings or the
Borrower, any such notice being expressly waived by Holdings and the Borrower to
the extent permitted by applicable law, upon any amount becoming due and payable
by Holdings or the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise), to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of Holdings or the Borrower,
as the case may be. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender,
provided, that the failure to give such notice shall not affect the validity of
such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of Holdings, the Borrower, the Agents and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by any Agent or any Lender
relative to the subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
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10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each of Holdings and the
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to Holdings
or the Borrower, as the case may be, at its address set forth in Section
10.2 or at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
10.13 Acknowledgements. Each of Holdings and the Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither any Agent nor any Lender has any fiduciary relationship
with or duty to Holdings or the Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between the Agents and Lenders, on one hand, and Holdings and
the Borrower, on the other hand, in connection herewith or therewith is
solely that of creditor and debtor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Agents and the Lenders or among Holdings, the Borrower, the Agents and
the Lenders.
10.14 Releases of Guarantees and Liens. (a) Notwithstanding anything
to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender or Qualified
81
Counterparty except with respect to any Lender as expressly required by Section
10.1) to take any action requested by the Borrower having the effect of
releasing any Collateral or guarantee obligations (i) to the extent necessary to
permit consummation of any transaction not prohibited by any Loan Document or
that has been consented to in accordance with Section 10.1 or (ii) under the
circumstances described in paragraph (b) below.
(b) At such time as the Payment Obligations have been Fully Satisfied
and the Obligations to any Qualified Counterparty under or in respect of
Specified Swap Agreements shall have been Fully Satisfied, the Collateral shall
be released from the Liens created by the Security Documents, and the Security
Documents and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Loan Party under the Security
Documents shall terminate, all without delivery of any instrument or performance
of any act by any Person. At the request and expense of any Loan Party following
any such termination, the Administrative Agent shall deliver to such Loan Party
any Collateral held by the Administrative Agent thereunder and execute and
deliver to such Loan Party such documents as it shall reasonably request to
evidence such termination.
10.15 Confidentiality. Each Agent and each Lender agrees to keep
confidential all non-public information provided to it by any Loan Party, any
Agent or any Lender pursuant to or in connection with this Agreement and
designated by such Person in writing as "non-public confidential information"
(the "Confidential Information"); provided, that nothing herein shall prevent
any Agent or any Lender from disclosing any such information (a) to any Agent or
any other Lender, (b) subject to an agreement to comply with the provisions of
this Section, to any actual or prospective Transferee or any direct or indirect
counterparty to any Swap Agreement (or any professional advisor to such
counterparty), (c) to its Affiliates, employees, directors, trustees, agents,
attorneys, accountants and other professional advisors or those of any of its
affiliates who need to know Confidential Information for purposes directly
related to this Agreement or any other Loan Document or any transactions
contemplated thereby in connection with the administration of this Agreement or
other Loan Documents and who are informed by the Agent or such Lender of the
confidential nature of such Confidential Information and, except for its
attorneys, who agree to be bound by the provisions of this Section 10.15, (d)
upon the request or demand of any Governmental Authority, (e) in response to any
order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) if requested or required to do
so in connection with any litigation, arbitration or similar proceeding;
provided, that such Agent or such Lender, as the case may be, shall promptly
inform the Borrower with respect thereto so that the Borrower may seek
appropriate protective relief, provided, that in the event that such protective
relief or other remedy is not obtained, such Agent or such Lender shall furnish
only that portion of the Confidential Information that is legally required and
shall disclose the Confidential Information in a manner reasonably designated to
preserve its confidential nature, (g) that has been publicly disclosed, other
than as a result of a breach of this Section 10.15, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender, or (i) in connection with the exercise of any remedy hereunder or
under any other Loan Document.
10.16 WAIVERS OF JURY TRIAL. THE BORROWER, HOLDINGS, THE AGENTS AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
10.17 Acknowledgement and Agreement. The Borrower hereby acknowledges
and agrees that (i) this Agreement shall constitute the Credit Agreement for all
purposes under each of the
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Security Documents and (ii) the obligations secured pursuant to the Security
Documents shall for all purposes include the Obligations.
10.18 Lender Addenda. Each initial Lender shall become a party to this
Agreement by delivering to the Administrative Agent a Lender Addendum duly
executed by such Lender.
10.19 Supplemental Schedules. From time to time, the Borrower shall be
permitted to deliver to the Administrative Agent one or more supplemental
Schedules updating the disclosures set forth on the Schedules hereto and upon
such delivery, such supplemental Schedules shall replace in their entirety such
prior Schedules, as the case may be, provided, that such supplemental Schedules
are in form and substance satisfactory to the Required Lenders. The
Administrative Agent shall provide to each Lender a copy of any supplemental
Schedules delivered by the Borrower pursuant to this Section 10.19.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
XXXXXX AMERICAN CORP.
By: /s/ Xxxxx X. Xxxx, Xx.
-------------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Senior Vice President and
Chief Financial Officer
[CREDIT AGREEMENT]
CA ACQUISITION HOLDINGS, INC.
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
[CREDIT AGREEMENT]
BEAR XXXXXXX CORPORATE LENDING INC., as
Administrative Agent
By: /s/ Xxxxxxx Xxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxx Xxxxx
Title: Vice President
[CREDIT AGREEMENT]
JPMORGAN CHASE BANK, N.A., as
Syndication Agent
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
[CREDIT AGREEMENT]
AMEGY BANK N.A., as Co-Documentation
Agent
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
[CREDIT AGREEMENT]
NATEXIS BANQUES POPULAIRES, as Co-
Documentation Agent
By: /s/ Xxxxx X. Xxxxxx, Xx.
------------------------------------
Name: XXXXX X. XXXXXX, XX.
Title: VICE PRESIDENT & GROUP MANAGER
/s/ Jordan X. Xxxx
JORDAN X. XXXX
ASSISTANT VICE PRESIDENT
[CREDIT AGREEMENT]
