EXHIBIT 10.1
Execution Copy
================================================================================
$360,000,000
CREDIT AGREEMENT
AMONG
GENERAL NUTRITION CENTERS HOLDING COMPANY,
GENERAL NUTRITION CENTERS, INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
XXXXXX BROTHERS INC. AND
X.X. XXXXXX SECURITIES INC.,
AS JOINT LEAD ARRANGERS
JPMORGAN CHASE BANK,
AS SYNDICATION AGENT
AND
XXXXXX COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
DATED AS OF DECEMBER 5, 2003
================================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS............................................................................... 1
1.1 Defined Terms........................................................................ 1
1.2 Other Definitional Provisions........................................................ 27
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS........................................................... 28
2.1 Term Loan Commitments................................................................ 28
2.2 Procedure for Term Loan Borrowing.................................................... 28
2.3 Repayment of Term Loans.............................................................. 28
2.4 Revolving Credit Commitments......................................................... 29
2.5 Procedure for Revolving Credit Borrowing............................................. 29
2.6 Swing Line Commitment................................................................ 30
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans.................... 30
2.8 Repayment of Loans; Evidence of Debt................................................. 32
2.9 Commitment Fees, etc................................................................. 33
2.10 Termination or Reduction of Revolving Credit Commitments............................. 33
2.11 Optional Prepayments................................................................. 33
2.12 Mandatory Prepayments and Commitment Reductions...................................... 34
2.13 Conversion and Continuation Options.................................................. 35
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches............................ 36
2.15 Interest Rates and Payment Dates..................................................... 36
2.16 Computation of Interest and Fees..................................................... 36
2.17 Inability to Determine Interest Rate................................................. 37
2.18 Pro Rata Treatment and Payments...................................................... 37
2.19 Requirements of Law.................................................................. 39
2.20 Taxes................................................................................ 40
2.21 Indemnity............................................................................ 43
2.22 Illegality........................................................................... 43
2.23 Change of Lending Office............................................................. 43
2.24 Replacement of Lenders............................................................... 43
SECTION 3. LETTERS OF CREDIT......................................................................... 44
3.1 L/C Commitment....................................................................... 44
3.2 Procedure for Issuance of Letter of Credit........................................... 45
3.3 Fees and Other Charges............................................................... 45
3.4 L/C Participations................................................................... 45
3.5 Reimbursement Obligation of the Borrower............................................. 46
3.6 Obligations Absolute................................................................. 47
3.7 Letter of Credit Payments............................................................ 47
3.8 Applications......................................................................... 48
SECTION 4. REPRESENTATIONS AND WARRANTIES............................................................ 48
i
4.1 Financial Condition.................................................................. 48
4.2 No Change............................................................................ 49
4.3 Corporate Existence; Compliance with Law............................................. 49
4.4 Corporate Power; Authorization; Enforceable Obligations.............................. 49
4.5 No Legal Bar......................................................................... 49
4.6 No Material Litigation............................................................... 50
4.7 No Default........................................................................... 50
4.8 Ownership of Property; Liens......................................................... 50
4.9 Intellectual Property................................................................ 50
4.10 Taxes................................................................................ 50
4.11 Federal Regulations.................................................................. 51
4.12 Labor Matters........................................................................ 51
4.13 ERISA................................................................................ 51
4.14 Investment Company Act; Other Regulations............................................ 52
4.15 Subsidiaries......................................................................... 52
4.16 Use of Proceeds...................................................................... 52
4.17 Environmental Matters................................................................ 52
4.18 Accuracy of Information, etc......................................................... 53
4.19 Security Documents................................................................... 54
4.20 Solvency............................................................................. 55
4.21 Senior Indebtedness.................................................................. 55
4.22 Regulation H......................................................................... 55
4.23 Insurance............................................................................ 55
4.24 Lease Payments....................................................................... 55
4.25 Acquisition Documentation............................................................ 56
4.26 Real Estate.......................................................................... 56
4.27 New GNC.............................................................................. 56
SECTION 5. CONDITIONS PRECEDENT...................................................................... 56
5.1 Conditions to Initial Extension of Credit............................................ 56
5.2 Conditions to Each Extension of Credit............................................... 62
SECTION 6. AFFIRMATIVE COVENANTS..................................................................... 62
6.1 Financial Statements................................................................. 62
6.2 Certificates; Other Information...................................................... 63
6.3 Payment of Obligations............................................................... 65
6.4 Conduct of Business and Maintenance of Existence, etc................................ 65
6.5 Maintenance of Property; Insurance................................................... 65
6.6 Inspection of Property; Books and Records; Discussions............................... 65
6.7 Notices.............................................................................. 66
6.8 Environmental Laws................................................................... 66
6.9 Interest Rate Protection............................................................. 67
6.10 Additional Collateral, etc........................................................... 67
6.11 Use of Proceeds...................................................................... 69
6.12 ERISA Documents...................................................................... 69
ii
6.13 Further Assurances................................................................... 69
6.14 Post Closing Obligations............................................................. 70
SECTION 7. NEGATIVE COVENANTS........................................................................ 70
7.1 Financial Condition Covenants........................................................ 70
7.2 Limitation on Indebtedness........................................................... 71
7.3 Limitation on Liens.................................................................. 73
7.4 Limitation on Fundamental Changes.................................................... 75
7.5 Limitation on Disposition of Property................................................ 75
7.6 Limitation on Restricted Payments.................................................... 76
7.7 Limitation on Capital Expenditures................................................... 78
7.8 Limitation on Investments............................................................ 78
7.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc........... 80
7.10 Limitation on Transactions with Affiliates........................................... 81
7.11 Limitation on Sales and Leasebacks................................................... 81
7.12 Limitation on Changes in Fiscal Periods.............................................. 81
7.13 Limitation on Negative Pledge Clauses................................................ 82
7.14 Limitation on Restrictions on Subsidiary Distributions............................... 82
7.15 Limitation on Lines of Business...................................................... 82
7.16 Limitation on Amendments to Acquisition Documentation................................ 83
7.17 Limitation on Activities of Holdings................................................. 83
7.18 Limitation on Hedge Agreements....................................................... 83
7.19 Limitation on Activities of New GNC.................................................. 83
7.20 Limitation on Indebtedness of Gustine Associates..................................... 83
SECTION 8. EVENTS OF DEFAULT......................................................................... 84
SECTION 9. THE AGENTS; THE ARRANGERS................................................................. 87
9.1 Appointment.......................................................................... 87
9.2 Delegation of Duties................................................................. 87
9.3 Exculpatory Provisions............................................................... 88
9.4 Reliance by Agents................................................................... 88
9.5 Notice of Default.................................................................... 88
9.6 Non-Reliance on Arrangers, Agents and Other Lenders.................................. 89
9.7 Indemnification...................................................................... 89
9.8 Arrangers and Agents in their Individual Capacities.................................. 90
9.9 Successor Agents..................................................................... 90
9.10 Authorization to Release Liens and Guarantees........................................ 90
9.11 The Arrangers; the Syndication Agent................................................. 90
9.12 Withholding Tax...................................................................... 91
SECTION 10. MISCELLANEOUS............................................................................ 91
10.1 Amendments and Waivers............................................................... 91
iii
10.2 Notices.............................................................................. 93
10.3 No Waiver; Cumulative Remedies....................................................... 95
10.4 Survival of Representations and Warranties........................................... 95
10.5 Payment of Expenses.................................................................. 95
10.6 Successors and Assigns; Participations and Assignments............................... 97
10.7 Adjustments; Set-off................................................................. 100
10.8 Counterparts......................................................................... 100
10.9 Severability......................................................................... 101
10.10 Integration.......................................................................... 101
10.11 GOVERNING LAW........................................................................ 101
10.12 Submission To Jurisdiction; Waivers.................................................. 101
10.13 Acknowledgments...................................................................... 102
10.14 Confidentiality...................................................................... 102
10.15 Release of Collateral and Guarantee Obligations...................................... 103
10.16 Accounting Changes................................................................... 104
10.17 Delivery of Lender Addenda........................................................... 104
10.18 WAIVERS OF JURY TRIAL................................................................ 104
10.19 Subordination of Intercompany Indebtedness........................................... 104
iv
ANNEXES:
A Pricing Grid
SCHEDULES:
1.1 Mortgaged Property
4.3 Subsidiaries Not In Good Standing
4.4 Consents, Authorizations, Filings and Notices
4.15(a) Subsidiaries
4.15(b) Agreements Related to Capital Stock
4.16 Store Closings
4.19(a)-1 UCC Filing Jurisdictions
4.19(a)-2 UCC Financing Statements to be Terminated
4.19(b) Mortgage Filing Jurisdictions
4.25 Acquisition Documentation
4.26 Owned Property; Manufacturing and Distribution Facilities
6.14 Post-Closing Obligations
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.10 Affiliate Transactions
7.13(h) Existing Negative Pledge Clauses
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
F-2 Form of Legal Opinion of Xxxxx Xxxxxx
F-3 Form of Legal Opinion of Kennedy, Covington, Xxxxxxx & Xxxxxxx, LLP
F-4 Form of Legal Opinion of Xxxxx & Roca LLP
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
G-3 Form of Swing Line Note
H Form of Exemption Certificate
I Form of Lender Addendum
J Form of Borrowing Notice
v
CREDIT AGREEMENT, dated as of December 5, 2003, among GENERAL
NUTRITION CENTERS HOLDING COMPANY, a Delaware corporation ("Holdings"), GENERAL
NUTRITION CENTERS, INC., a Delaware corporation (the "Borrower"), the several
banks and other financial institutions or entities from time to time parties to
this Agreement (the "Lenders"), XXXXXX BROTHERS INC. and X.X. XXXXXX SECURITIES
INC., as joint lead arrangers and joint bookrunners (in such capacities, the
"Arrangers"), JPMORGAN CHASE BANK, as syndication agent (in such capacity, the
"Syndication Agent"), and XXXXXX COMMERCIAL PAPER INC., as administrative agent
(in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, Numico USA, Inc. a Delaware corporation ("Numico"),
owns all of the sole membership interest in GNC US Newco 1 LLC, a Delaware
limited liability company ("Newco 1 LLC"), and a partnership interest in GNC
Newco DGP 1, a Delaware general partnership ("Newco DGP1") of which Newco 1 LLC
is the only other partner;
WHEREAS, Newco DGP1 owns all of the sole membership interest
in GNC US Newco 2 LLC, a Delaware limited liability company ("Newco 2 LLC"), and
a partnership interest in GNC Newco DGP2, a Delaware general partnership ("Newco
DGP2") of which Newco 2 LLC is the only other partner;
WHEREAS, Newco DGP2 is the sole owner of General Nutrition
Companies, Inc., ("New GNC") a newly formed Delaware corporation which holds all
of the former assets of GNC (as defined below);
WHEREAS, pursuant to the Acquisition Agreement (as defined
below), the Borrower will acquire all of the Interests (as defined in the
Acquisition Agreement) of Newco 1 LLC and Newco DGP1 and upon such acquisition
it is anticipated that Newco 1 LLC, Newco DGP1, Newco 2 LLC, Newco DGP2 and New
GNC will immediately be merged with and into the Borrower, a direct Wholly Owned
Subsidiary of Holdings and newly formed Delaware corporation, with the Borrower
as the surviving corporation (the "Mergers");
WHEREAS, the Borrower has requested that the Lenders make
credit facilities available to the Borrower in order to finance the foregoing
transactions and for the other purposes set forth herein; and
WHEREAS, the Lenders are willing to make such credit
facilities available upon and subject to the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby 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.
"Acquisition": as defined in Section 5.1.
"Acquisition Agreement": the Purchase Agreement, dated as of
October 16, 2003, among Royal Numico N.V., Numico USA, Inc. and the Borrower, as
amended as of December 4, 2003, as the same may be further amended,
supplemented, replaced or otherwise modified from time to time in accordance
with this Agreement.
"Acquisition Documentation": collectively, the Acquisition
Agreement and all schedules, exhibits, annexes and amendments thereto and all
side letters and agreements affecting the terms thereof or entered into in
connection therewith, in each case, as amended, supplemented, replaced or
otherwise modified from time to time.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the preamble hereto.
"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.
"Agents": the collective reference to the Syndication Agent
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 Credit Commitment then in effect or, if the
Revolving Credit Commitments have been terminated, the 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 sum of the Aggregate Exposures of all Lenders at
such time.
"Agreement": this Credit Agreement, as amended, supplemented,
replaced or otherwise modified from time to time.
"Applicable Margin": for each Type of Loan under each
Facility, the rate per annum set forth opposite such Facility under the relevant
column heading below:
2
Base Rate Eurodollar
Loans Loans
--------- ----------
Revolving Credit Facilities 2.00% 3.00%
(including Swing Line Loans)
Tranche B Term Loan Facility 2.00% 3.00%
provided, that on and after the first Adjustment Date occurring after the
completion of two full fiscal quarters of the Borrower after the Closing Date,
the (a) Applicable Margins with respect to Revolving Credit Loans and Swing Line
Loans will be determined pursuant to the Pricing Grid and (b) the Applicable
Margin with respect to the Tranche B Term Loans shall be adjusted to 2.75% with
respect to Eurodollar Loans and 1.75% with respect to Base Rate Loans (i) on
such Adjustment Date and (ii) on any subsequent Adjustment Date, in each case,
if the financial statements relating to such Adjustment Date demonstrate that
the Consolidated Leverage Ratio is less than 3.00 to 1.00, with such adjustment
to become effective on 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.
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"Arrangers": as defined in the preamble hereto.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c), (d), (h) or (l) of Section 7.5) which yields gross proceeds to
Holdings, the Borrower or any of its Subsidiaries (valued at the initial
principal amount thereof in the case of non-cash proceeds consisting of notes or
other debt securities and valued at fair market value in the case of other
non-cash proceeds) in excess of $750,000.
"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Cash": (a) cash amounts available to the Borrower
for Restricted Payments under Section 7.6(d) (to the extent not so used), (b)
the Net Cash Proceeds of Excluded Equity and (c) the Net Cash Proceeds of any
other issuance of Capital Stock not required to be applied to the prepayment of
Loans and/or the permanent reduction of the Revolving Credit Commitment pursuant
to Section 2.12(a).
"Available Revolving Credit Commitment": with respect to any
Revolving Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Lender's Revolving Credit 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 Credit Commitment pursuant to
Section 2.9(a), the aggregate principal amount of Swing Line Loans then
outstanding shall be deemed to be zero.
3
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/100 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 prime
lending rate as set forth on the British Banking Association Telerate Page 5 (or
such other comparable page as may, in the opinion of the Administrative Agent,
replace such page for the purpose of displaying such rate), as in effect from
time to time. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually available. Any change in the Base
Rate 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.
"Base Rate Loans": Loans for which the applicable rate of
interest is based upon the Base Rate.
"Benefited Lender": as defined in Section 10.7.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Borrowing Notice": with respect to any request for borrowing
of Loans hereunder, a notice from the Borrower, substantially in the form of,
and containing the information prescribed by, Exhibit J, delivered to the
Administrative Agent.
"Business Day": (a) for all purposes other than as covered by
clause (b) below, 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 and
(b) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (a) and which 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 for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which are required to be capitalized under GAAP on a balance sheet
of such Person it being understood that Capital Expenditures do not include
amounts expended to purchase assets constituting an on-going business,
including, without limitation, investments that constitute Permitted
Acquisitions.
"Capital Lease Obligations": with respect 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;
4
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) United States dollars; (b) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality of the United States government
(provided that the full faith and credit of the United States is pledged in
support of those securities) having maturities of not more than one year from
the date of acquisition; (c) certificates of deposit and eurodollar time
deposits with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year and overnight bank
deposits, in each case, with any Lender or with any domestic commercial bank
having capital and surplus in excess of $500,000,000 and a Thomson Bank Watch
Rating of "B" or better; (d) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses (b) and
(c) above entered into with any financial institution meeting the qualifications
specified in clause (c) above; (e) commercial paper having one of the two
highest ratings obtainable from Xxxxx'x Investor Service, Inc. ("Moody's") or
Standard & Poor's Rating Services ("S&P") and, in each case, maturing within one
year after the date of acquisition; and (f) money market funds at least 95% of
the assets of which constitute Cash Equivalents of the kinds described in
clauses (a) through (e) of this definition.
"Change of Control": the occurrence of any of the following
events: (a) prior to an initial public offering with respect to Holdings, the
Permitted Investors shall cease to beneficially own (as defined in Rules 13(d)3
and 13(d)5 under the Exchange Act) securities having a majority of the ordinary
voting power for the election of directors of Holdings measured by voting power
rather than number of shares (determined on a fully diluted basis but not giving
effect to contingent voting rights which have not vested); (b) the Permitted
Investors shall cease to beneficially own (as defined in Rules 13(d)3 and
13(d)(5) under the Exchange Act) shares of common stock of Holdings (i) prior to
an initial public offering with respect to Holdings, equal to at least 50% of
the aggregate number of shares of common stock of Holdings determined on a fully
diluted basis (counting all outstanding shares and giving effect to all
issuances and transfers that would result from the exercise of any and all
outstanding options, warrants, conversions, privileges and other rights relating
to the issuance or transfer of any Holdings common stock, whether or not such
rights are conditional) and (ii) at any time after an initial public offering
with respect to Holdings, equal to at least 30% of the Capital Stock of Holdings
entitled to vote in the election of directors of Holdings measured by voting
power rather than number of shares; (c) at any time after an initial public
offering with respect to Holdings, any "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act) (excluding from any
determination of the amount of Capital Stock beneficially owned by such "person"
or "group", where such person or group includes a person that is not a Permitted
Investor, any Capital Stock beneficially owned by Permitted Investors), other
than any "person" or "group" comprised solely of Permitted Investors, shall
become, or obtain rights (whether by means of warrants, options or otherwise) to
become, the "beneficial owner" (as
5
defined in Rules 13(d) 3 and 13(d) 5 under the Exchange Act), directly or
indirectly, of more than the lesser of (i) 35% of the Capital Stock of Holdings
entitled to vote in the election of directors of Holdings, measured by voting
power rather than the number of shares and (ii) the amount of Capital Stock of
Holdings entitled to vote in the election of directors of Holdings, measured by
voting power rather than number of shares then beneficially owned (as defined in
Rules 13(d)3 and 13(d)5 under the Exchange Act) by the Permitted Investors; (d)
the board of directors of Holdings shall cease to consist of a majority of
Continuing Directors; (e) Holdings shall cease to own and control, of record and
beneficially, directly, 100% of each class of outstanding Capital Stock of the
Borrower free and clear of all Liens (except Liens created by the Guarantee and
Collateral Agreement); or (f) a Specified Change of Control.
"Closing Date": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied or waived.
"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 purported to be created by any Security
Document.
"Commitment": with respect to any Lender, the sum of the
Tranche B Term Loan Commitment and the Revolving Credit Commitment of such
Lender.
"Commitment Fee Rate": 1/2 of 1% per annum.
"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.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated November 2003 and furnished to the initial Lenders
in connection with the syndication of the Facilities.
"Consolidated Current Assets": of any Person 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 such Person and its Subsidiaries at
such date.
"Consolidated Current Liabilities": of any Person 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 such Person and its Subsidiaries at such date, but excluding,
with respect to the Borrower, (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 Credit Loans or Swing Line Loans, to
the extent otherwise included therein.
6
"Consolidated EBITDA": of any Person for any period,
Consolidated Net Income of such Person and its Subsidiaries 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) Consolidated Interest Expense and non-cash interest expense of
such Person and its Subsidiaries, interest expense of Income Restricted
Subsidiaries, interest expense with respect to Senior Subordinated Notes that
have been defeased or called for redemption, amortization or write-off of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness, including, in the case of the Borrower,
the Loans, Letters of Credit and Senior Subordinated Notes (including, the
exchange thereof pursuant to the Registration Rights Agreement (including
professional fees and expenses)), (c) depreciation and amortization expense, (d)
amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) any extraordinary, unusual or non-recurring expenses or
losses (including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, losses on sales of
assets outside of the ordinary course of business), (f) any fees or expenses
paid in connection with the Acquisition, in an amount not to exceed $28,000,000,
(g) any other non-cash charges (including any writedown of goodwill pursuant to
SFAS No. 142 and accrued but unpaid management fees), (h) severance costs for
Xxxxxxx X. Xxxxxx, (i) payments under Schedule 2.17(f)(i)-(v) of the Acquisition
Agreement that are required to be reimbursed by Numico, (j) fees and expenses
payable in connection with the issuance of the Preferred Stock or the resale,
following the Closing Date, to third party investors of the Preferred Stock
issued to the Initial Investors on or about the Closing Date and (k) legal and
accounting costs related to the calculation of, and resolution of disputes
relating to, purchase price adjustments under the Acquisition Agreement and
minus, to the extent included in the statement of such Consolidated Net Income
for such period, the sum of (a) interest income on cash and Cash Equivalents and
other similar securities (except to the extent deducted in determining
Consolidated Interest Expense), (b) any extraordinary, unusual 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), (c) any other
non-cash income (other than amounts accrued in the ordinary course of business
consistent under accrual-based revenue recognition procedures in accordance with
GAAP), all as determined on a consolidated basis, and (d) reimbursement payments
received from Numico in respect of payments under Schedule 2.17(f)(i)-(v) of the
Acquisition Agreement that have been or are required to be made by the Borrower;
provided that the Consolidated EBITDA of the Borrower and its Subsidiaries for
the fiscal quarter ending June 30, 2003 shall be conclusively deemed equal to
$41,300,000 and Consolidated EBITDA for the fiscal quarter ending September 30,
2003 shall be conclusively deemed equal to $45,400,000; provided further that,
for purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period, (i) the Consolidated EBITDA of any Person or
business segment acquired by the Borrower or its Subsidiaries during such period
shall be included on a pro forma basis for such period (assuming for purposes of
the calculation of Consolidated EBITDA the consummation of such acquisition and
the incurrence, assumption or repayment of any Indebtedness in connection
therewith occurred on the first day of such period) if the consolidated balance
sheet of such acquired Person or business segment as at the end of the period
preceding the acquisition of such Person or business segment and the related
consolidated statements of income and stockholders' equity and of cash flows for
the period in respect of which Consolidated EBITDA is to be calculated (x)
7
have been previously provided to the Administrative Agent and the Lenders and
(y) either (1) have been reported on without a qualification arising out of the
scope of the audit by independent certified public accountants of nationally
recognized standing or (2) have been found reasonably acceptable by the
Administrative Agent and (ii) the Consolidated EBITDA of any Person or business
segment Disposed of by the Borrower or its Subsidiaries during such period shall
be excluded for such period (assuming for purposes of the calculation of
Consolidated EBITDA the consummation of such Disposition and the repayment,
incurrence or assumption of any Indebtedness in connection therewith occurred on
the first day of such period).
"Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) Consolidated EBITDA of the Borrower and its Subsidiaries for
such period minus the aggregate amount actually paid by the Borrower and its
Subsidiaries in cash during such period on account of Capital Expenditures
(provided that for the fiscal quarters ending March 31, 2004, June 30, 2004 and
September 30, 2004, for purposes of this definition, amounts actually paid in
cash on account of Capital Expenditures in respect of the periods of four
consecutive fiscal quarters ending on the last day of each such fiscal quarter,
shall be deemed equal to amounts actually paid in cash during the first full
fiscal quarter commencing after the Closing Date, and, in the case of the latter
two such determinations, each previous full fiscal quarter commencing after the
Closing Date, multiplied by 4, 2, and 4/3, respectively) to (b) Consolidated
Fixed Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense of the Borrower and its
Subsidiaries for such period, (b) provision for cash income taxes made by the
Borrower or any of its Subsidiaries on a consolidated basis in respect of such
period, excluding up to $10,000,000 in payments made in respect of the election
under Section 338(h)(10) of the Code (and any corresponding election under
state, local, and foreign income tax laws) as set forth in the Acquisition
Agreement and (c) scheduled amortization payments (but excluding prepayments)
made during such period on account of principal of Indebtedness of the Borrower
or any of its Subsidiaries, other than Non-Recourse Indebtedness of any Income
Restricted Subsidiary (including scheduled principal amortization payments (but
excluding prepayments) in respect of the Term Loans); provided that, for the
fiscal quarters ending March 31, 2004, June 30, 2004 and September 30, 2004, for
purposes of this definition (i) provision for cash income taxes made in respect
of the periods of four consecutive fiscal quarters ending on the last day of
each such fiscal quarters, shall be deemed equal to the provision for cash
income taxes made in the first full fiscal quarter commencing after the Closing
Date, and, in the case of the latter two such determinations, each previous full
fiscal quarter commencing after the Closing Date, multiplied by 4, 2 and 4/3,
respectively, and (ii) scheduled amortization payments on account of principal
of Indebtedness during such periods shall be deemed equal to the scheduled
amortization payments of principal of Indebtedness for the first full fiscal
quarter commencing after the Closing Date, and, in the case of the latter two
such determinations, each previous full fiscal quarter commencing after the
Closing Date, multiplied by 4, 2, and 4/3, respectively.
"Consolidated Interest Expense": of any Person for any
period, total cash interest expense (including that attributable to Capital
Lease Obligations) net of interest income on cash, Cash Equivalents and other
similar securities of such Person and its Subsidiaries for such period with
respect to all outstanding Indebtedness of such Person and its Subsidiaries,
other than Non-Recourse
8
Indebtedness of any Income Restricted Subsidiary (including, without limitation,
all commissions, discounts and other fees and charges owed by such Person with
respect to letters of credit and bankers' acceptance financing and net costs of
such Person under Hedge Agreements in respect of interest rates to the extent
such net costs are allocable to such period in accordance with GAAP), minus, to
the extent included in such interest expense, amortization or write-off of
financing costs and minus interest expense with respect to any Senior
Subordinated Notes that have been defeased or called for redemption to the
extent and from the date that sufficient funds for such defeasance or redemption
have been set aside for such purpose; provided that for the fiscal quarters
ending March 31, 2004, June 30, 2004 and September 30, 2004, for purposes of
this definition, Consolidated Interest Expense for the periods of four
consecutive fiscal quarters ending on the last day of such fiscal quarter shall
be deemed equal to Consolidated Interest Expense for such fiscal quarter, and,
in the case of the latter two such determinations, each previous full fiscal
quarter commencing after the Closing Date, multiplied by 4, 2 and 4/3,
respectively.
"Consolidated Leverage Ratio": as at the last day of any
period of four consecutive fiscal quarters of the Borrower, the ratio of (a)
Consolidated Total Debt on such day to (b) Consolidated EBITDA of the Borrower
and its Subsidiaries for such period.
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided,
that in calculating Consolidated Net Income of the Borrower and its consolidated
Subsidiaries for any period, 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,
(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, (d) any reduction in net income (determined on a pre-tax
basis) caused by the amount, if any, of (i) non-cash charges relating to the
exercise of options and (ii) non-cash losses (or minus non-cash gains) from
foreign currency translation, (e) any decrease in net income (determined on a
pre-tax basis) caused by the increase in the book value of assets as a result of
the Acquisition as reflected on the Borrower's balance sheet solely as a result
of the application of SFAS Xx. 000, (x) costs related to the closing of stores
in connection with the Acquisition as described in Section 4.16 and (g) costs
incurred by the Borrower in respect of the election made under Section
338(h)(10) of the Code (and any corresponding election under state, local, and
foreign income tax laws), as set forth in the Acquisition Agreement, in an
amount not to exceed $10,000,000; provided that for purposes of Section
7.6(d)(z), Consolidated Net Income may be determined in the manner set forth in
the Senior Subordinated Note Indenture as of the date hereof if the Borrower
provides the Lenders with a certificate reasonably satisfactory to the
Administrative Agent demonstrating such calculation of Consolidated Net Income
in reasonable detail; and provided further that the costs referred to in clauses
(f) and (g) shall be calculated without giving effect to any tax benefit
realized directly from such costs.
9
"Consolidated Secured Leverage Ratio": as at the last day of
any period of four consecutive fiscal quarters, the ratio of (a) Consolidated
Secured Total Debt on such day to (b) Consolidated EBITDA of the Borrower and
its Subsidiaries for such period.
"Consolidated Secured Total Debt": at any date, the sum of (i)
the aggregate principal amount of all Term Loans then outstanding, (ii) the
Total Revolving Extensions of Credit and (iii) any other secured Consolidated
Total Debt.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness of the Borrower and its Subsidiaries at
such date that would be classified as a liability on the consolidated balance
sheet of the Borrower, in accordance with GAAP, except Non-Recourse Debt of
Income Restricted Subsidiaries and, if defeased pursuant to the terms of Article
8 of the Senior Subordinated Note Indenture or irrevocably called for redemption
pursuant to the terms of Article 3 thereof, the Senior Subordinated Notes.
"Consolidated Working Capital": at any date, the difference of
(a) Consolidated Current Assets of the Borrower on such date less (b)
Consolidated Current Liabilities of the Borrower on such date.
"Continuing Directors": the directors of Holdings on the
Closing Date, after giving effect to the Acquisition and the other transactions
contemplated hereby, and each other director of Holdings, if, in each case, such
other director's nomination for election to the board of directors of Holdings
is recommended by at least 50% of the then Continuing Directors or such other
director receives the vote of the Permitted Investors in his or her election by
the shareholders of Holdings.
"Contractual Obligation": with respect 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.
"Control Investment Affiliate": with respect to any Person,
any other Person that (a) directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person and (b) is organized
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"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.
"Derivatives Counterparty": as defined in Section 7.9.
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof (excluding Liens); and the terms "Dispose" and "Disposed of" shall have
correlative meanings.
"Dollars" and "$": lawful currency of the United States of
America.
10
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States of
America.
"ECF Percentage": with respect to any fiscal year of the
Borrower, 75%; provided, that, (i) the ECF Percentage shall be 50% if the
Consolidated Leverage Ratio as of the last day of such fiscal year is less than
or equal to 3.00 to 1.00 and greater than 2.5 to 1.0 and (ii) the ECF Percentage
shall be 25% if the Consolidated Leverage Ratio as of the last day of such
fiscal year is less than or equal to 2.5 to 1.0.
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, enforceable guidelines, codes, decrees, or
other legally enforceable requirements of any international authority, foreign
government, the United States, or any state, local, municipal or other
governmental authority, regulating, relating to or imposing liability or
standards of conduct for protection of the environment or of human health, or
employee health and safety (insofar as it relates to environmental exposure), as
has been, is now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and other authorizations
required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day, the
aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, 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, 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 British Banking
Association 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 British Banking Association Telerate screen (or
otherwise on such screen), the "Eurodollar Base Rate" for purposes of this
definition shall be determined by reference to such other comparable publicly
available service for displaying eurodollar rates as may be selected by the
Administrative Agent.
"Eurodollar Loans": Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period, a rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
11
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans 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 of the Borrower and its Subsidiaries 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) the amount of the
net decrease, if any, 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 fiscal year (other than sales of
inventory in the ordinary course of business), to the extent deducted in
arriving at such Consolidated Net Income minus (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 (minus the principal amount of Indebtedness (other than the Loans)
incurred in connection with such expenditures and minus the amount of any such
expenditures financed with the proceeds of any Reinvestment Deferred Amount or
Available Cash), (iii) the aggregate amount of all prepayments of Revolving
Credit Loans and Swing Line Loans during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Credit Commitments
and all optional prepayments of the Term Loans during such fiscal year, (iv) the
aggregate amount of all regularly scheduled principal payments of Funded Debt
(including, without limitation, the Term Loans) of the Borrower and its
Subsidiaries 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) the amount of the net increase, if
any, in Consolidated Working Capital for such fiscal year, (vi) the aggregate
net amount of non-cash gain on the Disposition of Property by Holdings, 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) cash payments made during such
period in satisfaction of non-current liabilities of the Borrower and its
Subsidiaries to the extent such amounts were included as non-cash charges and
added back in a previous period pursuant to clause (a)(ii) above, (viii) the
aggregate amount actually paid by the Borrower and its Subsidiaries in cash
during such fiscal year on account of Investments permitted by Sections 7.8(h)
and (i) (minus the principal amount of Indebtedness (other than the Loans) used
to finance such Investments and minus the amount of such Investments made with
the proceeds of any Reinvestment Deferred Amount or Available Cash), (ix) an
amount equal to the increase in Consolidated Net Income of the Borrower and its
Subsidiaries pursuant to the application of clauses (e), (f) and (g) of the
definition thereof, (x) the aggregate amount of all mandatory prepayments made
pursuant to subsection 2.12(b) with the proceeds of Asset Sales during such year
to the extent such proceeds are included in the calculation of such Consolidated
Net Income for such fiscal year, (xi) cash purchase price adjustments paid by
the Borrower (including costs incurred (and paid) in the
12
determination thereof) in accordance with the Acquisition Agreement to the
extent not previously deducted in arriving at such Consolidated Net Income,
(xii) to the extent resulting in a gain to Consolidated Net Income, amounts
received in settlement of pending anti-trust litigation which the Borrower has
paid to Numico pursuant to the terms of the Acquisition Agreement, (xiii) to the
extent resulting in a gain to Consolidated Net Income, any amounts received from
Numico with respect to payments under Schedule 2.17(f)(i)-(v) of the Acquisition
Agreement that have been paid by the Borrower and (xiv) to the extent paid by
the Borrower and not previously deducted in arriving at such Consolidated Net
Income, fees and expenses payable in connection with the issuance of the
Preferred Stock or the resale following the Closing Date of the Preferred Stock
issued to the Initial Investors on or about the Closing Date.
"Excess Cash Flow Application Date": as defined in Section
2.12(c).
"Exchange Act": the Securities Exchange Act of 1934, as
amended.
"Excluded Debt": all Indebtedness permitted by (a) Section
7.2, except Section 7.2(i) and (b) to the extent the proceeds of such
Indebtedness are used to consummate a Permitted Acquisition within 90 days of
the incurrence thereof, Section 7.2(i).
"Excluded Equity": all Capital Stock (other than the Preferred
Stock) issued after the Closing Date (a) to the Initial Investors, (b) to
directors, officers or employees of Holdings, the Borrower or its Subsidiaries
(i) pursuant to any management stock option plan or (ii) in connection with the
exercise of options granted to such directors, officers or employees in the
ordinary course of business or (c) in a transaction not constituting a public
offering, so long as, in each case, if the net proceeds thereof are contributed
to the Borrower, such net proceeds are contributed as common equity capital to
the Borrower and used for general corporate purposes permitted by this
Agreement.
"Excluded Foreign Subsidiaries": any Foreign Subsidiary that
is (or is treated for United States federal tax purposes as) either (i) a
corporation or (ii) any entity owned directly or indirectly by another Foreign
Subsidiary that is (or is treated as) a corporation.
"Facility": each of (a) the Tranche B Term Loan Commitments
and the Tranche B Term Loans made thereunder (the "Tranche B Term Loan
Facility") and (b) the Revolving Credit Commitments and the extensions of credit
made thereunder (the "Revolving Credit 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 which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
13
"FQ1", "FQ2", "FQ3", and "FQ4": when used with a numerical
year designation, means the first, second, third or fourth fiscal quarters,
respectively, of such fiscal year of the Borrower. (e.g., FQ1 2003 means the
first fiscal quarter of the Borrower's 2003 fiscal year, which ends March 31,
2003).
"Funded Debt": with respect to any Person, all Indebtedness of
such Person of the types described in clauses (a) through (e) of the definition
of "Indebtedness" in this Section.
"Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the Borrower and the
Lenders.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time.
"GNC": General Nutrition Companies, Inc., a Delaware
corporation, prior to the Restructuring.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"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, as the same
may be amended, supplemented, replaced or otherwise modified from time to time.
"Guarantee Obligation": with respect to any Person (the
"guaranteeing person"), any obligation of (a) the guaranteeing person or (b)
another Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing 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,
without limitation, 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
14
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.
"Gustine Associates": Gustine Sixth Avenue Associates, Ltd, a
Pennsylvania limited partnership.
"Hedge Agreements": all interest rate or currency swaps, caps
or collar agreements, foreign exchange agreements, commodity contracts or
similar arrangements entered into by Holdings, the Borrower or its Subsidiaries
providing for protection against fluctuations in interest rates, currency
exchange rates, commodity prices or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"Immaterial Subsidiary": on any date of determination, (a) any
Subsidiary with (i) total assets with a book value equal to or less than
$2,000,000 or (ii) total revenue equal to or less than $2,000,000 and (b) any
Subsidiary that if aggregated with all other Domestic Subsidiaries which are not
Guarantors, as of the last day of the most recently completed fiscal quarter of
the Borrower would have, either (i) total assets with a book value equal to or
less than $10,000,000 of the Borrower and its Subsidiaries, on a consolidated
basis or (ii) total revenue equal to or less than $10,000,000 of the Borrower
and its Subsidiaries, on a consolidated basis, in each case as determined in
accordance with GAAP, and with respect to revenue, for the immediately preceding
twelve-month period for which financial statements are available.
"Income Restricted Subsidiary": any Subsidiary of the Borrower
whose undistributed earnings are excluded from the calculation of Consolidated
Net Income pursuant to clause (c) of the definition thereof.
"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 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 default are limited
to repossession or sale of such Property), (e) all Capital Lease Obligations or
Synthetic Lease Obligation of such Person, (f) all obligations of such Person,
contingent or otherwise, as an account party or applicant under acceptance,
letter of credit, surety bonds (except unsecured and unmatured reimbursement
obligations in respect of surety bonds obtained in the ordinary course of
business to secure the performance of obligations that are not Indebtedness
pursuant to another clause of this definition) or similar facilities, (g) the
liquidation value of all redeemable preferred Capital Stock of such Person, to
the extent mandatorily redeemable in cash on or prior to the date which is one
year after the final maturity date of the Loans (other than in connection with
change of control events and asset sales to the extent that the terms of such
Capital Stock provide that such Person may not repurchase or redeem any such
15
Capital Stock in connection with such change of control or asset sale unless
such repurchase or redemption complies with the provisions of this Agreement),
(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, without limitation, 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 8(e) only, all obligations of such Person in respect of Hedge
Agreements.
"Indemnified Liabilities": as defined in Section 10.5.
"Indemnitee": as defined in Section 10.5.
"Initial Investors": the collective reference to the Permitted
Investors and any other investor identified to the Administrative Agent who
beneficially owns (as defined in Rule 13(d)3 and 13(d)5 of the Exchange Act) the
Capital Stock of Holdings on the Closing Date and each such Person's Control
Investment Affiliates.
"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, state, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents, patent
licenses, trademarks, trademark licenses, service-marks, technology, know-how
and processes, recipes, formulas, trade secrets, 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.
"Interest Payment Date": (a) as to any Base Rate 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 and (d) as to any Loan (other than any Revolving Credit Loan that is a
Base Rate Loan (unless all Revolving Credit Loans are being repaid in full and
the Revolving Credit Commitments terminated) and any Swing Line Loan), the date
of any repayment or prepayment made in respect thereof.
"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 or, with
the consent of all Lenders holding loans under the affected Facility, nine or
twelve months thereafter, as selected by the Borrower in its Borrowing Notice or
notice of conversion, as the case may be, given with respect thereto; and (b)
thereafter,
16
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 or, with
the consent of all Lenders holding loans under the affected Facility, nine or
twelve months thereafter, as selected by the Borrower by irrevocable notice to
the Administrative Agent not less than 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:
(a) 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;
(b) any Interest Period that would otherwise extend
beyond the Revolving Credit Termination Date (in the case of Revolving
Credit Loans) or beyond the date final payment is due on the Tranche B
Term Loans shall end on the Revolving Credit Termination Date or such
due date, as applicable; and
(c) 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 the calendar month at the
end of such Interest Period.
"Investments": as defined in Section 7.8.
"Issuing Lender": any Revolving Credit Lender from time to
time designated by the Borrower as an Issuing Lender with the consent of such
Revolving Credit Lender and the Administrative Agent.
"L/C Commitment": $50,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Credit Commitment
Period.
"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 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": with respect to any Letter of Credit, the
collective reference to all the Revolving Credit Lenders other than the Issuing
Lender that issued such Letter of Credit.
"Lender Addendum": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit I, to be executed and
delivered by such Lender on the Closing Date as provided in Section 10.17.
"Lenders": as defined in the preamble hereto.
17
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing). For the avoidance of doubt, precautionary UCC financing statement
filings regarding operating leases entered into by the Borrower or any of its
Subsidiaries as lessees shall not constitute Liens on Property of the Borrower
or such Subsidiary for purposes of the Loan Documents.
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents, the
Applications and the Notes.
"Loan Parties": Holdings, the Borrower and each Subsidiary of
the Borrower that is a party to a Loan Document.
"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 Credit
Facility, prior to any termination of the Revolving Credit Commitments, the
holders of more than 50% of the Total Revolving Credit Commitments).
"Majority Revolving Facility Lenders": the Majority Facility
Lenders in respect of the Revolving Credit Facility.
"Management Agreement": the Management Services Agreement,
dated as of December 5, 2003, among the Borrower, Holdings and the Sponsor, as
the same may be amended, supplemented, replaced or otherwise modified from time
to time in accordance with this Agreement.
"Material Adverse Effect": a material adverse effect on (a)
the Acquisition, (b) the condition (financial or otherwise), results of
operations, assets or liabilities of Holdings, the Borrower and its Subsidiaries
taken as a whole or (c) the validity or enforceability of this Agreement or any
of the other Loan Documents or the rights or remedies of the Agents or the
Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or forces of any kind,
whether or not any such substance or force is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or subject to
liability under any Environmental Law.
"Mortgaged Properties": the real properties and leasehold
estates listed on Schedule 1.1, as to which the Administrative Agent for the
benefit of the Secured Parties shall be
18
granted a Lien on the Closing Date pursuant to the Mortgages and such other real
properties and leasehold estates as to which the Administrative Agent for the
benefit of the Secured Parties shall be granted a Lien after the Closing Date
pursuant to Section 6.10(b).
"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 D (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), as the same may be
amended, supplemented, replaced or otherwise modified from time to time.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"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 (other than notes payable by franchisees in
connection with a Disposition permitted by Section 7.5(e)(ii)) or installment
receivable or purchase price adjustment receivable or otherwise, but only as and
when received) of such Asset Sale or Recovery Event, net of reasonable and
customary 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 which is the subject of such Asset
Sale or Recovery Event (other than any Lien pursuant to a Security Document) and
other reasonable and customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and, in connection with any Asset
Sale, net of any reserve established in accordance with GAAP; provided that such
reserved amounts shall be Net Cash Proceeds to the extent and at the time not
required to be so reserved and (b) in connection with any issuance or sale of
equity securities or debt securities or instruments or the incurrence of loans,
the cash proceeds received from such issuance or incurrence, net of attorneys'
fees, investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith. The Net Cash Proceeds received in connection with any
Asset Sale permitted by Section 7.5(e)(ii) shall be deemed to exclude scheduled
amortization payments on any Investments permitted by Section 7.8(o) received as
consideration for such Asset Sale.
"Non-Excluded Taxes": as defined in Section 2.20(a).
"Non-Recourse Indebtedness": Indebtedness incurred by a
Subsidiary of the Borrower as to which (a) neither the Borrower nor any of its
other Subsidiaries other than Specified Subsidiaries of the Subsidiary incurring
such Indebtedness: (i) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness), (ii)
is directly or indirectly liable as a guarantor or otherwise, or (iii)
constitutes the lender; and (b) the lenders do not have any recourse to the
stock or assets of the Borrower or any of its Subsidiaries other than the assets
of such Subsidiary and the assets of any Specified Subsidiary thereof, in each
case, which are permitted by the terms of this Agreement to be pledged to secure
such Indebtedness.
19
"Non-Surviving Subsidiaries": collectively, Newco 1 LLC, Newco
DGP1, Newco 2 LLC, Newco DGP2 and New GNC.
"Non-U.S. Lender": as defined in Section 2.20(d).
"Note": any promissory note evidencing any Loan.
"Numico": as defined in the recitals hereto.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization 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, the Reimbursement Obligations and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender or 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 Hedge Agreement or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and disbursements of
counsel to the Arrangers, to the Agents or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise; provided, that (i)
obligations of the Borrower or any Subsidiary under any Specified Hedge
Agreement shall be secured and guaranteed pursuant to the Security Documents
only to the extent that, and for so long as, the other Obligations are so
secured and guaranteed and (ii) any release of Collateral or Guarantors effected
in the manner permitted by this Agreement shall not require the consent of
holders of obligations under Specified Hedge Agreements.
"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(b).
"Payment Office": the office specified from time to time by
the Administrative Agent as its payment office by notice to the Borrower and the
Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permits": the collective reference to (i) Environmental
Permits, and (ii) any and all other franchises, licenses, leases, permits,
approvals, notifications, certifications, registrations, authorizations,
exemptions, qualifications, easements, and rights of way.
"Permitted Acquisitions": as defined in Section 7.8(i).
20
"Permitted Investors": the collective reference to the Sponsor
and its Control Investment Affiliates.
"Permitted Liens": the collective reference to (i) in the case
of Collateral other than Pledged Capital Stock, Liens permitted by Section 7.3
and (ii) in the case of Collateral consisting of Pledged Capital Stock,
non-consensual Liens permitted by Section 7.3 to the extent arising by operation
of law.
"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 Capital Stock": as defined in the Guarantee and
Collateral Agreement.
"Preferred Stock": the Cumulative Senior Exchangeable
Preferred Stock of Holdings issued on terms reasonably acceptable to the
Administrative Agent on or within 45 days of the Closing Date.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Purchase Agreement": the Purchase Agreement, dated November
25, 2003, among General Nutrition Centers, Inc., Xxxxxx Brothers Inc., X.X.
Xxxxxx Securities Inc. and UBS Securities LLC.
"Qualified Counterparty": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an affiliate of a Lender.
"Real Estate": as defined in Section 4.26.
"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 Holdings, the Borrower or any of its Subsidiaries.
"Refunded Swing Line Loans": as defined in Section 2.7(b).
21
"Refunding Date": as defined in Section 2.7(c).
"Register": as defined in Section 10.6(d).
"Registration Rights Agreement": the Registration Rights
Agreement, dated December 5, 2003, among the Borrower, Xxxxxx Brothers Inc.,
X.X. Xxxxxx Securities Inc., and UBS Securities LLC.
"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 each Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit issued by such Issuing Lender.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate amount of Net Cash Proceeds received by
Holdings, the Borrower or any of its Subsidiaries in connection therewith that
are not applied to prepay the Term Loans or reduce the Revolving Credit
Commitments pursuant to Section 2.12(b) 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 Default or Event of Default has occurred and
is continuing and that the Borrower (directly or indirectly through a Wholly
Owned Subsidiary Guarantor) intends and expects to use all or a specified
portion of the amount of Net Cash Proceeds of an Asset Sale or Recovery Event to
acquire assets useful in its or such Subsidiary's 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
assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring one year after such
Reinvestment Event and (b) the date on which the Borrower shall have determined
not to, or shall have otherwise ceased to, acquire assets useful in the
Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Related Fund": with respect to any Lender, any fund that (x)
invests in commercial loans and (y) is managed or advised by the same investment
advisor as such Lender, by such Lender or an Affiliate of such Lender.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
22
"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, the holders of more than 50%
of (a) until the Closing Date, the Commitments and (b) thereafter, the sum of
(i) the aggregate unpaid principal amount of the Term Loans then outstanding and
(ii) the Total Revolving Credit Commitments then in effect or, if the Revolving
Credit Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and 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": as to any Person, the chief executive
officer, president, chief financial officer or treasurer of such Person, but in
any event, with respect to financial matters, the chief financial officer or
treasurer of such Person. Unless otherwise qualified, all references to a
"Responsible Officer" shall refer to a Responsible Officer of the Borrower.
"Restricted Payments": as defined in Section 7.6.
"Restructuring": the restructuring of GNC and its Subsidiaries
prior to the consummation of the Acquisition, as contemplated by Section 4.05 of
the disclosure schedules to the Acquisition Agreement.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans and
participate in Swing Line Loans and Letters of Credit, in an aggregate principal
and/or face amount not to exceed the amount set forth under the heading
"Revolving Credit Commitment" opposite such Lender's name on Schedule 1 to the
Lender Addendum delivered by such Lender, or, as the case may be, in the
Assignment and Acceptance 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
original aggregate amount of the Total Revolving Credit Commitments is
$75,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Revolving Credit Lender": each Lender that has a Revolving
Credit Commitment or that is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
"Revolving Credit Note": as defined in Section 2.8(e).
23
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the Total Revolving Credit Commitments (or, at
any time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate amount of such Lender's Revolving
Extensions of Credit then outstanding constitutes of the amount of the Total
Revolving Extensions of Credit then outstanding).
"Revolving Credit Termination Date": December 5, 2008.
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Credit Loans made by such Lender then outstanding, (b)
such Lender's Revolving Credit Percentage of the L/C Obligations then
outstanding and (c) such Lender's Revolving Credit Percentage of the aggregate
principal amount of Swing Line Loans then outstanding.
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"Secured Parties": as defined in the Guarantee and Collateral
Agreement.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages, any intellectual property
security agreements or control agreements required to be delivered pursuant to
the Guarantee and Collateral Agreement or any other Loan Document and all other
security documents hereafter delivered to the 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 Subordinated Note Documentation": the Senior
Subordinated Note Indenture, the Purchase Agreement and the Registration Rights
Agreement, together with any other instruments and agreements entered into by
the Borrower or its Subsidiaries in connection therewith, as the same may be
amended, supplemented, replaced or otherwise modified from time to time in
accordance with this Agreement.
"Senior Subordinated Note Indenture": the Indenture entered
into by the Borrower and certain of its Subsidiaries in connection with the
issuance of the Senior Subordinated Notes, together with all instruments and
other agreements entered into by the Borrower or such Subsidiaries in connection
therewith, as the same may be amended, supplemented, replaced or otherwise
modified from time to time in accordance with Section 7.9.
"Senior Subordinated Notes": the subordinated notes of the
Borrower due 2010 issued from time to time pursuant to the Senior Subordinated
Note Indenture.
"SFAS No. 141": Financing Accounting Statement No. 141 issued
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants.
"SFAS No. 142": Financial Accounting Statement No. 142 issued
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants.
24
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": with respect to any Person, 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, (d) such Person will be able to pay its debts as they mature and (e)
such Person is not insolvent within the meaning of any applicable Requirements
of Law. 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 Change of Control": a "Change of Control", or like
event, as defined in the Senior Subordinated Note Indenture.
"Specified Hedge Agreement": any Hedge Agreement entered into
by the Borrower or any Guarantor and any Qualified Counterparty.
"Specified Subsidiary": with respect to any Income Restricted
Subsidiary, any Subsidiary thereof which is either wholly owned by such Income
Restricted Subsidiary or if not so wholly owned, owned in part by a Person who
is not a Subsidiary of the Borrower.
"Sponsor": Apollo Management V, L.P.
"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
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. As of the Closing Date, the
ownership structure of Gustine Associates is such that it would not be
considered a Subsidiary of the Borrower under this definition.
"Subsidiary Guarantor": each Subsidiary of the Borrower
existing on the Closing Date (other than any Excluded Foreign Subsidiary) and
each Subsidiary of the Borrower created or acquired after the Closing Date other
than an Excluded Foreign Subsidiary or an Immaterial
25
Subsidiary that has elected not to guarantee the Obligations and does not,
directly or indirectly, guarantee or otherwise provide direct credit support for
any Indebtedness of the Borrower.
"Swing Line Commitment": the obligation of the Swing Line
Lender to make Swing Line Loans pursuant to Section 2.6 in an aggregate
principal amount at any one time outstanding not to exceed $10,000,000.
"Swing Line Lender": Xxxxxx Commercial Paper Inc., in its
capacity as the lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.6.
"Swing Line Note": as defined in Section 2.8(e).
"Swing Line Participation Amount": as defined in Section
2.7(c).
"Syndication Agent": as defined in the preamble hereto.
"Synthetic Lease Obligations": all monetary obligations of a
Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating
obligations which do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
Indebtedness of such Person (without regard to accounting treatment).
"Term Loan Facility": the Tranche B Term Loan Facility.
"Term Loan Lenders": the Tranche B Term Loan Lenders.
"Term Loans": the Tranche B Term Loans.
"Term Notes": as defined in Section 2.8(e).
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving Credit
Lenders outstanding at such time.
"Tranche B Term Loan": as defined in Section 2.1.
"Tranche B Term Loan Commitment": as to any Lender, the
obligation of such Lender, if any, to make a Tranche B Term Loan to the Borrower
hereunder in a principal amount not to exceed the amount set forth under the
heading "Tranche B Term Loan Commitment" opposite such Lender's name on Schedule
1 to the Lender Addendum delivered by such Lender, or, as the case may be, in
the Assignment and Acceptance 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 original aggregate amount of the Tranche B Term Loan Commitments is
$285,000,000.
26
"Tranche B Term Loan Facility": as defined in the definition
of "Facility" in this Section 1.1.
"Tranche B Term Loan Lender": each Lender that has a Tranche B
Term Loan Commitment or is the holder of a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Tranche B Term
Loan Lender at any time, the percentage which such Lender's Tranche B Term Loan
Commitment then constitutes of the aggregate Tranche B Term Loan Commitments
(or, at any time after the Closing Date, the percentage which the aggregate
principal amount of such Lender's Tranche B Term Loans then outstanding
constitutes of the aggregate principal amount of the Tranche B Term Loans then
outstanding).
"Transferee": as defined in Section 10.14.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"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.
"UCC": the Uniform Commercial Code, as in effect from time to
time in any jurisdiction.
1.2 Other Definitional Provisions.(a) (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the 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,
accounting terms relating to Holdings, the Borrower and its Subsidiaries 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.
(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.
(e) All calculations of financial ratios set forth in
Section 7.1 and the calculation of the Consolidated Leverage Ratio for purposes
of determining the Applicable Margin shall be calculated to the same number of
decimal places as the relevant ratios are
27
expressed in and shall be rounded upward if the number in the decimal place
immediately following the last calculated decimal place is five or greater. For
example, if the relevant ratio is to be calculated to the hundredth decimal
place and the calculation of the ratio is 5.126, the ratio will be rounded up to
5.13.
(f) The expressions "payment in full," "paid in full" and
any other similar terms or phrases when used herein with respect to the
Obligations shall mean the payment in full, in immediately available funds, of
all of the Obligations (excluding Obligations in respect of any Specified Hedge
Agreements and contingent reimbursement and indemnification obligations in each
case that are not due and payable at or prior to the time the Commitments have
expired or have been terminated, the Loans and Reimbursement Obligations have
been paid in full and all Letters of Credit have been discharged or cash
collateralized or backed with other letters of credit in accordance with Section
10.15(c)).
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and conditions
hereof the Tranche B Term Loan Lenders severally agree to make term loans (each,
a "Tranche B Term Loan") to the Borrower on the Closing Date in an amount for
each Tranche B Term Loan Lender not to exceed the amount of the Tranche B Term
Loan Commitment of such Lender. The Term Loans may from time to time be
Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.2 and 2.13.
2.2 Procedure for Term Loan Borrowing. The Borrower shall
deliver to the Administrative Agent a Borrowing Notice (which Borrowing 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 Loan 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 Base Rate Loans, and no Term Loan may be converted into or continued as a
Eurodollar Loan prior to the day which is 10 Business Days after the Closing
Date or such shorter period as the Administrative Agent may agree to in writing.
Upon receipt of such Borrowing Notice the Administrative Agent shall promptly
notify each Term Loan Lender thereof. Not later than 12:00 Noon, New York City
time, on the Closing Date each Term Loan 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 make available to the Borrower the aggregate of the
amounts made available to the Administrative Agent by the Term Loan Lenders, in
like funds as received by the Administrative Agent.
2.3 Repayment of Term Loans.
The Tranche B Term Loan of each Tranche B Term Loan Lender
shall mature in 24 consecutive quarterly installments, commencing on March 31,
2004, each of which shall be in an amount equal to such Lender's Tranche B Term
Loan Percentage multiplied by the amount set forth below opposite such
installment:
28
Installment Principal Amount
----------- ----------------
March 31, 2004 $ 712,500
June 30, 2004 $ 712,500
September 30, 2004 $ 712,500
December 31, 2004 $ 712,500
March 31, 2005 $ 712,500
June 30, 2005 $ 712,500
September 30, 2005 $ 712,500
December 31, 2005 $ 712,500
March 31, 2006 $ 712,500
June 30, 2006 $ 712,500
September 30, 2006 $ 712,500
December 31, 2006 $ 712,500
March 31, 2007 $ 712,500
June 30, 2007 $ 712,500
September 30, 2007 $ 712,500
December 31, 2007 $ 712,500
March 31, 2008 $ 712,500
June 30, 2008 $ 712,500
September 30, 2008 $ 712,500
December 31, 2008 $ 712,500
March 31, 2009 $67,687,500
June 30, 2009 $67,687,500
September 30, 2009 $67,687,500
December 5, 2009 $67,687,500
2.4 Revolving Credit Commitments(a) . (a) Subject to the terms
and conditions hereof, the Revolving Credit Lenders severally agree to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding for each Revolving Credit Lender which, when
added to such Lender's Revolving Credit Percentage of the sum of (i) the L/C
Obligations then outstanding and (ii) the aggregate principal amount of the
Swing Line Loans then outstanding, does not exceed the amount of such Lender's
Revolving Credit Commitment. During the Revolving Credit Commitment Period the
Borrower may use the Revolving Credit Commitments by borrowing, prepaying the
Revolving Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. The Revolving Credit Loans may from time
to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower
and notified to the Administrative Agent in accordance with Sections 2.5 and
2.13, provided that no Revolving Credit Loan shall be made as a Eurodollar Loan
after the day that is one month prior to the Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving
Credit Loans on the Revolving Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Commitments on any Business Day during the
Revolving Credit
29
Commitment Period, provided that the Borrower shall deliver to the
Administrative Agent an irrevocable Borrowing Notice (which Borrowing 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 Base Rate Loans). Any Revolving Credit Loans made on the
Closing Date shall initially be Base Rate Loans, and no Revolving Credit Loan
may be made as, converted into or continued as a Eurodollar Loan prior to the
day which is 10 Business Days after the Closing Date or such shorter period as
the Administrative Agent may agree to in writing. Each borrowing of Revolving
Credit Loans under the Revolving Credit Commitments shall be in an amount equal
to (x) in the case of Base Rate Loans, $1,000,000 or a whole multiple thereof
(or, if the then aggregate Available Revolving Credit Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof; provided, that
the Swing Line Lender may request, on behalf of the Borrower, borrowings of Base
Rate Loans under the Revolving Credit Commitments in other amounts pursuant to
Section 2.7. Upon receipt of any such Borrowing Notice from the Borrower, the
Administrative Agent shall promptly notify each Revolving Credit Lender thereof.
Each Revolving Credit Lender will make its Revolving Credit Percentage of the
amount of each borrowing of Revolving Credit Loans available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 12:00 Noon, 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 in like funds as received by the Administrative Agent.
2.6 Swing Line Commitment(a) . (a) Subject to the terms and
conditions hereof, the Swing Line Lender agrees that, during the Revolving
Credit Commitment Period, it will make available to the Borrower in the form of
swing line loans ("Swing Line Loans") a portion of the credit otherwise
available to the Borrower under the Revolving Credit Commitments; provided that
(i) the aggregate principal amount of Swing Line Loans outstanding at any time
shall not exceed the Swing Line Commitment then in effect (notwithstanding that
the Swing Line Loans outstanding at any time, when aggregated with the Swing
Line Lender's other outstanding Revolving Credit Loans hereunder, may exceed the
Swing Line Commitment then in effect or such Swing Line Lender's Revolving
Credit Commitment then in effect) and (ii) the Borrower shall not request, and
the Swing Line Lender shall not make, any Swing Line Loan if, after giving
effect to the making of such Swing Line Loan, the aggregate amount of the
Available Revolving Credit Commitments would be less than zero. During the
Revolving Credit Commitment Period, the Borrower may use the Swing Line
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swing Line Loans shall be Base Rate Loans only.
(b) The Borrower shall repay all outstanding Swing Line
Loans on the Revolving Credit Termination Date.
2.7 Procedure for Swing Line Borrowing; Refunding of Swing
Line Loans(a) . (a) The Borrower may borrow under the Swing Line Commitment on
any Business Day during the Revolving Credit Commitment Period, provided, the
Borrower shall give the Swing Line Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swing Line Lender not later than 1:00 P.M., New York City time, on the
30
proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the
requested Borrowing Date. Each borrowing under the Swing Line Commitment shall
be in an amount equal to $500,000 or a whole multiple of $100,000 in excess
thereof. Not later than 3:00 P.M., New York City time, on the Borrowing Date
specified in the borrowing notice in respect of any Swing Line Loan, the Swing
Line Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to the amount of such
Swing Line Loan. The Administrative Agent shall make the proceeds of such Swing
Line Loan available to the Borrower on such Borrowing Date in like funds as
received by the Administrative Agent.
(b) The Swing Line 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 Swing Line Lender to act on its behalf), on one
Business Day's notice given by the Swing Line Lender no later than 12:00 Noon,
New York City time, request each Revolving Credit Lender to make, and each
Revolving Credit Lender hereby agrees to make, a Revolving Credit Loan (which
shall initially be a Base Rate Loan), in an amount equal to such Revolving
Credit Lender's Revolving Credit Percentage of the aggregate amount of the Swing
Line Loans (the "Refunded Swing Line Loans") outstanding on the date of such
notice, to repay the Swing Line Lender. Each Revolving Credit Lender shall make
the amount of such Revolving Credit 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 Credit Loans shall be made immediately available by the
Administrative Agent to the Swing Line Lender for application by the Swing Line
Lender to the repayment of the Refunded Swing Line Loans. The Borrower
irrevocably authorizes the Swing Line 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 Swing Line Loans to the
extent amounts received from the Revolving Credit Lenders are not sufficient to
repay in full such Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would
have otherwise been made pursuant to Section 2.7(b), one of the events described
in Section 8(f) shall have occurred and be continuing with respect to the
Borrower, or if for any other reason, as determined by the Swing Line Lender in
its sole discretion, Revolving Credit Loans may not be made as contemplated by
Section 2.7(b), each Revolving Credit Lender shall, on the date such Revolving
Credit Loan was to have been made pursuant to the notice referred to in Section
2.7(b) (the "Refunding Date"), purchase for cash an undivided participating
interest in the then outstanding Swing Line Loans by paying to the Swing Line
Lender an amount (the "Swing Line Participation Amount") equal to (i) such
Revolving Credit Lender's Revolving Credit Percentage times (ii) the sum of the
aggregate principal amount of Swing Line Loans then outstanding which were to
have been repaid with such Revolving Credit Loans.
(d) Whenever, at any time after the Swing Line Lender has
received from any Revolving Credit Lender such Lender's Swing Line Participation
Amount, the Swing Line Lender receives any payment on account of the Swing Line
Loans, the Swing Line Lender will distribute to such Lender its Swing Line
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
31
such Lender's pro rata portion of such payment if such payment is not sufficient
to pay the principal of and interest on all Swing Line Loans then due);
provided, however, that in the event that such payment received by the Swing
Line Lender is required to be returned, such Revolving Credit Lender will return
to the Swing Line Lender any portion thereof previously distributed to it by the
Swing Line Lender.
(e) Each Revolving Credit 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, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line 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 Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.8 Repayment of Loans; Evidence of Debt(a) . (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Revolving Credit Lender or Term Loan Lender, as the
case may be, (i) the then unpaid principal amount of each Revolving Credit Loan
of such Revolving Credit Lender on the Revolving Credit Termination Date (or on
such earlier date on which the Loans become due and payable pursuant to Section
8), (ii) the then unpaid principal amount of each Swing Line Loan of such Swing
Line Lender on the Revolving Credit Termination Date (or on such earlier date on
which the Loans become due and payable pursuant to Section 8) and (iii) the
principal amount of each Term Loan of such Term Loan Lender in installments
according to the amortization schedule set forth in Section 2.3 (or on such
earlier date on which the Loans become due and payable pursuant to Section 8).
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 2.15.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from each Loan of such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower,
shall maintain the Register pursuant to Section 10.6(d), and a subaccount
therein for each Lender, in which shall be recorded (i) the amount of each Loan
made hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of
each Lender maintained pursuant to Section 2.8(b) shall, to the extent permitted
by applicable law, be prima
32
facie evidence of the existence and amounts of the obligations of the Borrower
therein recorded; provided, however, that the failure of any Lender or the
Administrative Agent to maintain the Register or any such account, or any error
therein, shall not in any manner affect the obligation of the Borrower to repay
(with applicable interest) the Loans made to the Borrower by such Lender in
accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will promptly execute and
deliver to such Lender a promissory note of the Borrower evidencing any Term
Loans, Revolving Credit Loans or Swing Line Loans, as the case may be, of such
Lender, substantially in the forms of Exhibit G-1, G-2 or G-3, respectively (a
"Term Note", "Revolving Credit Note" or "Swing Line Note", respectively), with
appropriate insertions as to date and principal amount; provided, that delivery
of Notes shall not be a condition precedent to the occurrence of the Closing
Date or the making of the Loans on the Closing Date.
2.9 Commitment Fees, etc(a) . (a) The Borrower agrees to pay
to the Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Revolving Credit Termination Date, commencing on the first of such dates to
occur after the date hereof.
(b) The Borrower agrees to pay to the Arrangers the fees
in the amounts and on the dates previously agreed to in writing by the Borrower
and the Arrangers.
(c) The Borrower agrees to pay to the Administrative
Agent the fees in the amounts and on the dates from time to time agreed to in
writing by the Borrower and the Administrative Agent.
2.10 Termination or Reduction of Revolving Credit
Commitments. The Borrower shall have the right, upon not less than three
Business Days' notice to the Administrative Agent, to terminate the Revolving
Credit Commitments or, from time to time, to reduce the aggregate amount of the
Revolving Credit Commitments; provided that no such termination or reduction of
Revolving Credit Commitments shall be permitted if, after giving effect thereto
and to any prepayments of the Revolving Credit Loans and Swing Line Loans made
on the effective date thereof, the Total Revolving Extensions of Credit would
exceed the Total Revolving Credit 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 Credit Commitments then in effect.
2.11 Optional Prepayments. The Borrower may at any time
and from time to time prepay the Loans, in whole or in part, without premium or
penalty (except as otherwise provided herein), upon irrevocable notice delivered
to the Administrative Agent at least three Business Days prior thereto in the
case of Eurodollar Loans and at least one Business Day prior thereto in the case
of Base Rate Loans, which notice shall specify the date and amount of such
33
prepayment, whether such prepayment is of Term Loans or Revolving Credit Loans,
and whether such prepayment is of Eurodollar Loans or Base Rate Loans; provided,
that (i) 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 2.21 and (ii) no prior notice is required for the
prepayment of Swing Line Loans. 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
Revolving Credit Loans that are Base Rate Loans and Swing Line Loans) accrued
interest to such date on the amount prepaid. Partial prepayments of Term Loans
and Revolving Credit Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof. Partial prepayments of Swing Line Loans
shall be in an aggregate principal amount of $100,000 or a whole multiple
thereof.
2.12 Mandatory Prepayments and Commitment Reductions(a) .
(a) Unless the Required Lenders shall otherwise agree, if (i) any Capital Stock
is issued (other than Excluded Equity and Capital Stock issued to any Loan Party
in the ordinary course of business), or (ii) Indebtedness is incurred, by
Holdings, the Borrower or any of its Subsidiaries (other than Excluded Debt),
then no later than one Business Day after the date of such issuance or
incurrence, an amount equal to, in the case of an issuance of Capital Stock, 50%
of the Net Cash Proceeds thereof or, in the case of the incurrence of
Indebtedness, 100% of the Net Cash Proceeds thereof, shall be applied to the
prepayment of the Term Loans (together with accrued interest thereon) and or the
permanent reduction of the Revolving Credit Commitments, in each case as set
forth in Section 2.12(d). The provisions of this Section do not constitute a
consent to the issuance of any equity securities by any entity whose equity
securities are pledged pursuant to the Guarantee and Collateral Agreement, or a
consent to the incurrence of any Indebtedness by Holdings, the Borrower or any
of its Subsidiaries.
(b) Unless the Required Lenders shall otherwise agree, if
on any date Holdings, the Borrower or any of its Subsidiaries shall receive Net
Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment
Notice shall be delivered in respect thereof, no later than three Business Days
(or, if a Default or Event of Default has occurred and is continuing, one
Business Day) after the date of receipt by Holdings, the Borrower or any of its
Subsidiaries of such Net Cash Proceeds, an amount equal to the amount of such
Net Cash Proceeds shall be applied to the prepayment of the Term Loans (together
with accrued interest thereon) and/or the permanent reduction of the Revolving
Credit Commitments, as set forth in Section 2.12(d); provided that,
notwithstanding the foregoing, (i) an aggregate amount of Net Cash Proceeds of
Asset Sales not to exceed $20,000,000 in any fiscal year of the Borrower may be
excluded from the foregoing requirement pursuant to a Reinvestment Notice and
(ii) on each Reinvestment Prepayment Date an amount equal to the Reinvestment
Prepayment Amount with respect to the relevant Reinvestment Event shall be
applied to the prepayment of the Term Loans (together with accrued interest
thereon) and/or the permanent reduction of the Revolving Credit Commitments, as
set forth in Section 2.12(d). The provisions of this Section do not constitute a
consent to the consummation of any Disposition not permitted by Section 7.5.
(c) Unless the Required Lenders shall otherwise agree,
if, for any fiscal year of the Borrower commencing with the fiscal year ending
December 31, 2004, there shall be Excess Cash Flow, then, on the relevant Excess
Cash Flow Application Date, the Borrower shall
34
apply an amount equal to the ECF Percentage of such Excess Cash Flow to the
prepayment of the Term Loans (together with accrued interest thereon) and/or the
permanent reduction of the Revolving Credit Commitments, as set forth in Section
2.12(d). Each such prepayment and commitment reduction shall be made on a date
(an "Excess Cash Flow Application Date") no later than ten 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.
(d) Amounts to be applied in connection with prepayments
and Commitment reductions made pursuant to this Section 2.12 shall be applied,
first, to the prepayment of the Term Loans and, second, to reduce permanently
the Revolving Credit Commitments. Any such reduction of the Revolving Credit
Commitments shall be accompanied by prepayment of the Revolving Credit Loans
and/or Swing Line Loans to the extent, if any, that the Total Revolving
Extensions of Credit exceed the amount of the Total Revolving Credit Commitments
as so reduced, provided that if the aggregate principal amount of Revolving
Credit Loans and Swing Line Loans then outstanding is less than the amount of
such excess (because L/C Obligations constitute a portion thereof), the Borrower
shall, to the extent of the balance of such excess, replace outstanding Letters
of Credit and/or deposit an amount in cash in a cash collateral account
established with the Administrative Agent for the benefit of the Secured Parties
on terms and conditions satisfactory to the Administrative Agent.
2.13 Conversion and Continuation Options(a) . (a) The
Borrower may elect from time to time to convert Eurodollar Loans to Base Rate
Loans by giving the Administrative Agent at least two Business Days' prior
irrevocable notice of such election, provided that any such conversion of
Eurodollar Loans may be made only on the last day of an Interest Period with
respect thereto. The Borrower may elect from time to time to convert Base Rate
Loans to Eurodollar Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election (which notice shall
specify the length of the initial Interest Period therefor), provided that no
Base Rate Loan under a particular Facility may be converted into a Eurodollar
Loan (i) 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
conversions or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
(b) The Borrower may elect to continue any Eurodollar
Loan as such upon the expiration of the then current Interest Period with
respect thereto by 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 (i) 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 or (ii) after the date that is one month prior to the
final scheduled termination or maturity date of such Facility, provided,
further, that if the Borrower shall fail to give any required notice as
described above in this paragraph, such Loans
35
shall be continued automatically as Eurodollar Loans with an Interest Period of
one month on the last day of such then expiring Interest Period, and provided,
further, that if such continuation is not permitted pursuant to the first
proviso in this Section 2.13, such Loans shall be converted automatically to
Base Rate 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.
2.14 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments 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 $5,000,000 or a whole multiple of $1,000,000 in excess
thereof and (b) no more than fifteen Eurodollar Tranches shall be outstanding at
any one time.
2.15 Interest Rates and Payment Dates(a). (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 in effect for such day.
(b) Each Base Rate Loan shall bear interest for each day
on which it is outstanding at a rate per annum equal to the Base Rate in effect
for such day plus the Applicable Margin in effect for such day.
(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) (to the extent legally
permitted) shall bear interest at a rate per annum that is 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 2.0% or (y) in the case of
Reimbursement Obligations, the rate applicable to Base Rate Loans under the
Revolving Credit Facility plus 2.0%, 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 Base Rate
Loans under the relevant Facility plus 2.0% (or, in the case of any such other
amounts that do not relate to a particular Facility, the rate then applicable to
Base Rate Loans under the Revolving Credit Facility plus 2.0%), 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.
2.16 Computation of Interest and Fees(a). (a) Interest,
fees and commissions payable pursuant hereto shall be calculated on the basis of
a 360-day year for the actual days elapsed, except that, with respect to Base
Rate Loans on which interest 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
36
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 Base Rate 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
2.16(a).
2.17 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 Base Rate
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 Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then current
Interest Period with respect thereto, to Base Rate 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.
2.18 Pro Rata Treatment and Payments(a) . (a) Each
borrowing by the Borrower from the Lenders hereunder, each payment by the
Borrower on account of any commitment fee or Letter of Credit fee, and any
reduction of the Commitments of the Lenders, shall be made pro rata according to
the respective Tranche B Term Loan Percentages or Revolving Credit Percentages,
as the case may be, of the relevant Lenders. Each payment (other than
prepayments) in respect of principal or interest in respect of the Loans and
each payment in respect of fees or expenses payable hereunder shall be applied
to the amounts of such obligations
37
owing to the Lenders pro rata according to the respective amounts then due and
owing to the Lenders.
(b) Each payment (including each prepayment) of the Term
Loans outstanding under the Term Loan Facility shall be allocated among the Term
Loan Lenders holding such Term Loans pro rata based on the principal amount of
such Term Loans held by such Term Loan Lenders. Each prepayment of the Term
Loans shall be applied to the installments of such Term Loans pro rata based on
the remaining outstanding principal amount of such installments. Amounts 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 Credit Loans
shall be made pro rata according to the respective outstanding principal amounts
of the Revolving Credit Loans then held by the Revolving Credit Lenders. Each
payment in respect of Reimbursement Obligations in respect of any Letter of
Credit shall be made to the Issuing Lender that issued such Letters of Credit.
(d) The application of any payment of Loans under any
Facility (including optional and mandatory prepayments) shall be made, first, to
Base Rate Loans under such Facility and, second, to Eurodollar Loans under such
Facility. Each payment of the Loans (except in the case of Swing Line Loans and
Revolving Credit Loans that are Base Rate Loans) shall be accompanied by accrued
interest to the date of such payment on the amount paid.
(e) 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 relevant Lenders, at the Payment Office, in
Dollars and in immediately available funds. Any payment made by the Borrower
after 12:00 Noon, New York City time, on any Business Day shall be deemed to
have been made on the next following Business Day. 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 any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.
(f) 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 daily average Federal
38
Funds Effective Rate 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 Base Rate Loans
under the relevant Facility, on demand, from the Borrower.
(g) 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 daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
2.19 Requirements of Law(a) . (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 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
hereunder; or
(ii) shall impose on such Lender any other
condition (excluding any condition relating to taxes);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar 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 Section, 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
39
thereof or compliance by such Lender or any corporation 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 corporation'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 corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation'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 corporation 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.
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.
(d) A Lender shall notify the Borrower within 180 days
after it becomes aware that it is entitled to amounts under this Section 2.19.
The Borrower shall not have any obligation to indemnify a Lender for interest
and penalties on amounts payable under this Section to the extent such interest
and penalties are attributable to such Lender's failure to comply with the
foregoing sentence.
2.20 Taxes(a) . (a) All payments made by or on behalf of
the Borrower under this Agreement or any other Loan Documents shall be made free
and clear of, and without deduction or withholding for or on account of, any
present or future income, stamp or other 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 (including branch profits taxes) and franchise taxes imposed on any
Arranger, any Agent or any Lender as a result of a present or former connection
between such Arranger, 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 Arranger's, such Agent's or such Lender's having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document). If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded
Taxes") or any Other Taxes are required to be withheld from any amounts payable
to any Arranger, any Agent or any Lender hereunder, the amounts so payable to
such Arranger, such Agent or such Lender shall be increased to the extent
necessary to yield to such Arranger, 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 Arranger, any Agent or any Lender with respect to any
Non-Excluded Taxes (i) that are attributable to such Arranger's, such Agent's or
such Lender's failure to comply with the requirements of paragraph (e) or (f) of
this Section or (ii) in the case of any Non-U.S. Lender, that are United States
withholding taxes imposed on amounts payable to such Arranger, such Agent or
such Lender at the time such Arranger, such Agent or such
40
Lender becomes a party to this Agreement, except to the extent that such
Arranger's, such Agent's or such Lender's assignor (if 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 (a). The Borrower or the
applicable Guarantor shall make any required withholding and pay the full amount
withheld to the relevant tax authority or other Governmental Authority in
accordance with applicable Requirements of Law.
(b) In addition, the Borrower shall pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent
and any Lender (or Transferee) for the full amount of Non-Excluded Taxes or
Other Taxes arising in connection with payments made under this Agreement
(including, without limitation, any Non-Excluded Taxes or other Taxes imposed by
any jurisdiction on amounts paid under this Section 2.20) paid by the
Administrative Agent or such Lender or any of their respective Affiliates and
any liability (including penalties, additions to tax, interest and expenses)
other than under those circumstances as to which no additional payment would
have been payable under subsection (a) above arising therefrom or with respect
thereto. Payment under this indemnification shall be made within 10 days from
the date the Administrative Agent, any Lender or any of their respective
Affiliates makes written demand therefor. If a Lender (or Transferee) or the
Administrative Agent shall become aware that it is entitled to receive a refund
in respect of Non-Excluded Taxes or Other Taxes as to which it has been
indemnified by the Borrower pursuant to this Section 2.20 or with respect to
which the Borrower has paid additional amounts pursuant to this Section 2.20, it
shall (i) promptly notify the Borrower of the availability of such refund and
(ii) within 30 Business Days after receipt of a request by the Borrower, apply
for such refund at the Borrower's expense unless to do so will unduly prejudice
or cause undue hardship to such Lender (or Transferee) or the Administrative
Agent (as determined in the reasonable discretion of such Lender (or Transferee)
or the Administrative Agent). If any Lender (or Transferee) or the
Administrative Agent receives a refund in respect of any Non-Excluded Taxes or
Other Taxes as to which it has been indemnified by the Borrower pursuant to this
Section 2.20 or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.20, it shall promptly notify the Borrower of such
refund and shall, within 30 Business Days after receipt of a request by the
Borrower (or promptly upon receipt, if the Borrower has requested application
for such refund pursuant hereto), repay such refund to the Borrower to the
extent attributable to amounts that have been paid by the Borrower under this
Section 2.20), net of all reasonable out-of-pocket expenses of such Lender (or
Transferee) or the Administrative Agent; provided that the Borrower, upon the
request of such Lender (or Transferee) or the Administrative Agent, shall
promptly return such refund (plus penalties, interest or other charges) to such
Lender (or Transferee) or the Administrative Agent in the event such Lender (or
Transferee) or the Administrative Agent is required to repay such refund.
Nothing contained in this subsection (c) shall require any Lender (or
Transferee) or the Administrative Agent to make available any of its tax returns
(or any other information relating to its taxes that it deems to be
confidential). The Lender (or Transferee) or the Administrative Agent, as the
case may be, shall have full control over computations (which shall be carried
out in a reasonable manner) relating to the amount of any refund of Non-Excluded
Taxes or Other Taxes and any payment to the Borrower relating to such refund as
described in this Section 2.20(c).
41
(d) Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as reasonably possible thereafter the
Borrower shall send to the Administrative Agent for the account of the relevant
Arranger, Agent or Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.
(e) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of America
(or any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (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 either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI, 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 I to the effect that such Lender is eligible for a complete exemption
from withholding of U.S. taxes under Section 871(h) or 881(c) of the Code 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 (and, 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.
(f) A Lender 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 or 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 reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.
(g) A Lender shall notify the Borrower within 180 days
after it becomes aware of the incurrence of Non-Excluded Taxes. The Borrower
shall not have any obligation to indemnify a Lender for any interest or
penalties to the extent that such interest or penalties are attributable to such
Lender's failure to comply with the foregoing sentence.
42
2.21 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 (a) 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, (b) default by the Borrower in making any
prepayment of Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment or conversion 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 (i) 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 (ii) 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 submitted to 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.
2.22 Illegality. Notwithstanding any other provision
herein, if the adoption after the date hereof of 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 Base Rate 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 Base Rate 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 2.21.
2.23 Change of Lending Office. Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section 2.19,
2.20(a) or 2.22 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 any Borrower or the rights of
any Lender pursuant to Section 2.19, 2.20(a) or 2.22.
2.24 Replacement of Lenders. The Borrower shall be
permitted to replace any Lender that (a) requests reimbursement for amounts
owing pursuant to Section 2.19 or 2.20(a), (b) defaults in its obligation to
make Loans hereunder or (c) does not consent to a proposed
43
amendment, modification or waiver of this Agreement requested by the Borrower
which requires the consent of all of the Lenders or all of the Lenders under any
Facility to become effective (and which is approved by at least the Required
Lenders), with a replacement financial institution or an investment fund which
invests in bank loans in the ordinary course of business; 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 2.23 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 2.19 or 2.20(a) (in the case of clause (a) hereof),
(iv) such replacement financial institution or investment fund shall purchase,
at par, all Loans and other amounts owing to such replaced Lender on or prior to
the date of replacement, (v) the Borrower shall be liable to such replaced
Lender under Section 2.21 if any Eurodollar Loan owing to such replaced Lender
shall be purchased other than on the last day of the Interest Period relating
thereto, (vi) solely with respect to replacements of Lenders pursuant to clause
(a) or (b) of this Section 2.24, such replacement financial institution or
investment fund, if not already a Lender, shall be reasonably satisfactory to
the Administrative Agent, (vii) the replaced Lender shall be obligated to make
such replacement in accordance with the provisions of Section 10.6 (provided
that the Borrower shall be obligated to pay the registration and processing fee
referred to therein), (viii) until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts (if any) required
pursuant to Section 2.19 or 2.20(a), as the case may be, and (ix) 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. In connection with any such replacement, if the replaced Lender does not
execute and deliver to the Administrative Agent a duly completed Assignment and
Acceptance reflecting such replacement within 5 Business Days of the date on
which the replacement Lender executes and delivers such Assignment and
Acceptance to the replaced Lender, then such replaced Lender shall be deemed to
have executed and delivered such Assignment and Acceptance. On the effective
date of such replacement, the replaced Lender shall be released from its
obligations under this Agreement and shall cease to be a party hereto, except as
to Section 2.19, 2.20, 2.21, 9.12 and 10.5 in respect of the period prior to
such effective date.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment(a) . (a) Subject to the terms and
conditions hereof, each Issuing Lender, in reliance on the agreements of the
other Revolving Credit 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 Credit 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 Credit 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 which is five Business Days prior to the Revolving
Credit 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).
44
(b) No Issuing Lender shall at any time be obligated to
issue any Letter of Credit hereunder 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. The Borrower
may from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender, with a copy to the Administrative Agent, at
their 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, an 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 shall
promptly issue the Letter of Credit requested thereby by issuing the original of
such Letter of Credit to the beneficiary thereof or as otherwise may be agreed
to by such Issuing Lender and the Borrower (but in no event shall any 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).
Promptly after issuance by an Issuing Lender of a Letter of Credit, such Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower and the
Administrative Agent. Each Issuing Lender shall promptly give notice to the
Administrative Agent of the issuance of each Letter of Credit issued by such
Issuing Lender (including the amount thereof).
3.3 Fees and Other Charges(a) . (a) The Borrower will pay a
fee on the aggregate drawable amount of 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 Credit Facility, shared ratably among the
Revolving Credit Lenders in accordance with their respective Revolving Credit
Percentages and payable quarterly in arrears on each L/C Fee Payment Date after
the issuance date of such Letter of Credit. In addition, the Borrower shall pay
to the relevant Issuing Lender for its own account a fronting fee on the
aggregate drawable amount of all outstanding Letters of Credit issued by it of
1/4 of 1% per annum, payable quarterly in arrears on each L/C Fee Payment Date
after the issuance date of such Letter of Credit.
(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 hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from each Issuing Lender, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk, an undivided interest
equal to such L/C Participant's Revolving Credit Percentage in each Issuing
Lender's obligations and rights under each Letter of Credit issued by such
Issuing Lender hereunder and the amount of each draft paid by such Issuing
Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees
with each Issuing Lender that, if a draft is paid under any Letter of Credit
issued by such Issuing Lender for which such Issuing Lender is not reimbursed in
full by the Borrower in accordance
45
with the terms of this Agreement, such L/C Participant shall pay to such Issuing
Lender, regardless of the occurrence or continuance of a Default or Event of
Default or the failure to satisfy any of the other conditions specified in
Section 5, upon demand at the Administrative Agent's address for notices
specified herein (and thereafter, the Administrative Agent shall promptly pay to
the Issuing Lender) an amount equal to such L/C Participant's Revolving Credit
Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed.
(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, the Issuing Lender shall so notify the Administrative
Agent, who shall promptly notify the L/C Participants and each such L/C
Participant shall pay to the Administrative Agent, for the account of the
Issuing Lender on demand (and thereafter the Administrative Agent shall promptly
pay to the Issuing Lender) 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 required 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 the
Administrative Agent, for the account of such Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Administrative Agent, on behalf of 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 Base Rate
Loans under the Revolving Credit Facility. A certificate of the Administrative
Agent on behalf of such Issuing Lender submitted to any L/C Participant with
respect to any such amounts owing under this Section shall be conclusive in the
absence of manifest error.
(c) Whenever, at any time after an Issuing Lender has
made payment under any Letter of Credit and has received from the Administrative
Agent any L/C Participant's 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 the
Administrative Agent for the account of such L/C Participant (and thereafter,
the Administrative Agent will promptly distribute to such L/C Participant) its
pro rata share thereof; provided, however, that in the event that any such
payment received by such Issuing Lender shall be required to be returned by such
Issuing Lender, such L/C Participant shall return to the Administrative Agent
for the account of such Issuing Lender the portion thereof previously
distributed by such Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse each Issuing Lender, within one Business Day of the date on
which such Issuing Lender notifies the Borrower of the date and amount of a
draft presented under any Letter of Credit and paid by such Issuing Lender, for
the amount of (a) such draft so paid and (b) any taxes, fees, charges or other
costs or expenses incurred by such Issuing Lender in connection with such
payment (the amounts described in the foregoing clauses (a) and (b) in respect
of any drawing, collectively, the "Payment Amount"). Each such payment shall be
made to such
46
Issuing Lender at its address for notices specified herein in lawful money of
the United States of America and in immediately available funds. Interest shall
be payable on each Payment Amount from the date of the applicable drawing until
payment in full at the rate set forth in (i) until the second Business Day
following the date of the applicable drawing, Section 2.15(b) and (ii)
thereafter, Section 2.15(c). Each drawing under any Letter of Credit shall
(unless an event of the type described in clause (i) or (ii) of Section 8(f)
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 Base Rate Loans (or, at the option of
the Administrative Agent and the Swing Line Lender in their sole discretion, a
borrowing pursuant to Section 2.7 of Swing Line 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 Credit Loans (or, if applicable, Swing
Line 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 relevant 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. The Borrower also agrees
with each Issuing Lender that such Issuing Lender shall not 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, actions
or omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Issuing Lender. The Borrower agrees that any action taken or omitted by an
Issuing Lender under or in connection with any Letter of Credit issued by it or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards or care specified in the
UCC of the State of New York, 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 relevant Issuing Lender shall
promptly notify the Administrative Agent and the Borrower of the date and amount
thereof. The responsibility of the relevant Issuing Lender to the Borrower in
connection with any draft presented for payment under any Letter of Credit, in
addition to any payment obligation expressly provided for in such Letter of
Credit issued by such Issuing Lender, shall be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment appear on their face to be in conformity with
such Letter of Credit.
47
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 Arrangers, the Agents and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, Holdings and the Borrower hereby jointly and severally
represent and warrant to each Arranger, each Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at September 30, 2003 (including the notes thereto) (the "Pro Forma Balance
Sheet"), copies of which have heretofore been furnished to each Lender, has been
prepared giving effect (as if such events had occurred on such date) to (i) the
consummation of the Acquisition, (ii) the Loans to be made and the Senior
Subordinated Notes to be issued on the Closing Date and the use of proceeds
thereof and (iii) the payment of fees and expenses in connection with the
foregoing. The Pro Forma Balance Sheet has been prepared based on the best
information available to the Borrower as of the date of delivery thereof, and
presents fairly on a pro forma basis the estimated financial position of
Borrower and its consolidated Subsidiaries as at September 30, 2003, assuming
that the events specified in the preceding sentence had actually occurred at
such date.
(b) The audited consolidated balance sheets of GNC as at
December 31, 2000, December 31, 2001 and December 31, 2002, and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from
PricewaterhouseCoopers, present fairly the consolidated financial condition of
GNC as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of GNC as at September 30, 2003, and the
related unaudited consolidated statements of income and cash flows for the
9-month period ended on such date, present fairly the consolidated financial
condition of GNC as at such date, and the consolidated results of its operations
and its consolidated cash flows for the 9-month period then ended (subject to
normal year-end audit adjustments and the absence of footnotes). 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). As of the Closing Date, Holdings, the Borrower and its
Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any material long-term leases or
unusual forward or long-term commitments, including, without limitation, 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 and the footnotes to the most
recent audited financial statements referred to in this paragraph (other than
the Obligations under the Loan Documents and the obligations of the Borrower and
the Guarantors under the Senior Subordinated Note Documentation). During the
period from December 31, 2002 to and including the date hereof there has been no
Disposition by GNC of any material part of its
48
business or Property other than to the Loan Parties and their Subsidiaries as
contemplated by the Restructuring.
4.2 No Change. Since December 31, 2002 there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Except as set
forth on Schedule 4.3, each of Holdings, the Borrower and its Subsidiaries (a)
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate power and authority, and
the legal right, to own and operate its Property, to lease the Property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign corporation 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 the foregoing clauses (c)
and (d), to the extent that the failure to be so qualified or to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents and Acquisition Documentation to
which it is a party and, in the case of the Borrower, to borrow hereunder. Each
Loan Party has taken all necessary corporate or other action to authorize the
execution, delivery and performance of the Loan Documents and Acquisition
Documentation to which it is a party and, in the case of the Borrower, to
authorize the borrowings 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 or any other Person is required in
connection with the borrowings hereunder or the execution, delivery,
performance, validity or enforceability of this Agreement or any of the other
Loan Documents, except (i) consents, authorizations, filings and notices that
have been obtained or made and are in full force and effect, (ii) the consents,
authorizations, filings and notices described in Schedule 4.4 and (iii) the
filings referred to in Section 4.19. No material consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the Acquisition or
the Acquisition Documentation, except (i) consents, authorizations, filings and
notices that have been obtained or made and are in full force and effect and
(ii) consents, authorizations, filings or notices of which the failure to obtain
or make could not reasonably be expected to have a Material Adverse Effect. Each
Loan Document and each item of Acquisition Documentation has been duly executed
and delivered on behalf of each Loan Party that is a party thereto. This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party that is a
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, the other Loan Documents, the Senior Subordinated Note
Documentation, the issuance of Letters of Credit, the borrowings hereunder and
the use of the proceeds thereof will not violate any
49
Requirement of Law or any material Contractual Obligation of Holdings, the
Borrower or any of its Subsidiaries 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 Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Security Documents). The execution,
delivery and performance of the Acquisition Documentation will not violate any
Requirement of Law or Contractual Obligation of Holdings, the Borrower or its
Subsidiaries, except for such violations of Contractual Obligations which could
not reasonably be expected to have a Material Adverse Effect, 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 Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).
No Requirement of Law or Contractual Obligation applicable to Holdings, the
Borrower or any of its Subsidiaries could reasonably be expected to have a
Material Adverse Effect.
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of Holdings or the Borrower, threatened by or against Holdings,
the Borrower or any of its Subsidiaries or against any of their respective
properties or revenues (a) with respect to any of the Loan Documents, the
Acquisition Documentation or any of the transactions contemplated hereby or
thereby, or (b) that could reasonably be expected to have a Material Adverse
Effect (after giving effect to indemnification from certain manufacturers, the
provisions of the Acquisition Documentation and applicable insurance).
4.7 No Default. Neither Holdings, the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could 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 of Holdings, the
Borrower and its Subsidiaries is the sole owner of, legally and beneficially,
and has good marketable and insurable title in fee simple to, or a valid
leasehold interest in, all its material real property the loss of which could
not reasonably be expected to have a Material Adverse Effect, and good title to,
or a valid leasehold interest in, all its other material Property, and none of
such Property is subject to any Lien except for Permitted Liens. None of the
Pledged Capital Stock is subject to any Lien except for Permitted Liens.
4.9 Intellectual Property. Except as could not reasonably be
expected to result in a Material Adverse Effect, (i) Holdings, the Borrower and
each of its Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted; (ii) no claim
has been asserted and is pending by any Person challenging or questioning the
use of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does Holdings or the Borrower know of any valid basis
for any such claim; and (iii) the use of Intellectual Property by Holdings, the
Borrower and its Subsidiaries does not infringe on the rights of any Person.
4.10 Taxes. Each of Holdings, the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal income and all material
state and other tax returns that are required to be filed and has paid all taxes
shown to be due and payable on said returns and all
50
amounts shown to be due and payable on any material assessments made 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 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 Holdings, the Borrower or its
Subsidiaries, as the case may be); and no material tax Lien has been filed with
respect to any such tax, fee or other charge (other than any 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 Holdings, the Borrower or its Subsidiaries, as the case
may be), and, to the knowledge of Holdings and the Borrower, no material claim
is being asserted, with respect to any such tax, fee or other charge (other than
any 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 Holdings, the Borrower or its
Subsidiaries, as the case may be). No Loan Party and no Subsidiary thereof (i)
intends to treat the Loans as being a "reportable transaction" (within the
meaning of Treasury Regulation 1.6011-4) or (ii) is aware of any facts or events
that would result in such treatment.
4.11 Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" 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 referred to in Regulation U.
4.12 Labor Matters. There are no strikes, stoppages or
slowdowns or other labor disputes against Holdings, the Borrower or any of its
Subsidiaries pending or, to the knowledge of Holdings or the Borrower,
threatened that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect. Hours worked by and payment made to employees
of Holdings, the Borrower and its Subsidiaries have not been in violation of the
Fair Labor Standards Act or any other applicable Requirement of Law dealing with
such matters that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect. All payments due from Holdings, the
Borrower or any of its Subsidiaries on account of employee health and welfare
insurance that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect if not paid have been paid or accrued as a
liability on the books of Holdings, the Borrower or the relevant Subsidiary.
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 Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. 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. 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
51
allocable to such accrued benefits by a material amount. 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 under ERISA, and neither the Borrower nor any
Commonly Controlled Entity would become subject to any material liability under
ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made. No such
Multiemployer Plan is in Reorganization or Insolvent.
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) which limits or conditions its ability to incur
Indebtedness.
4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule
4.15(a) constitute all the Subsidiaries of Holdings as of the Closing Date.
Schedule 4.15(a) sets forth as of the Closing Date and after giving effect to
the Acquisition, the exact legal name (as reflected on the certificate of
incorporation (or formation) and jurisdiction of incorporation (or formation) of
each Subsidiary of Holdings and, as to each such Subsidiary, the percentage and
number of each class of Capital Stock owned by each Loan Party and its
Subsidiaries.
(b) As of the Closing Date, except as set forth on
Schedule 4.15(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 Holdings, the Borrower or any
Subsidiary.
4.16 Use of Proceeds. The proceeds of the Term Loans and
up to $600,000 of Revolving Credit Loans shall be used on the Closing Date to
finance a portion of the Acquisition, to pay related fees and expenses and to
fund up to $12,200,000 of expenses incurred as a result of the store closings
listed on Schedule 4.16 which are planned in connection with the Acquisition.
The proceeds of all other Revolving Credit Loans and the Swing Line Loans, and
the Letters of Credit, shall be used for general corporate purposes of the
Borrower and its Subsidiaries.
4.17 Environmental Matters. Other than exceptions to any
of the following that could not, in the aggregate, reasonably be expected to
have a Material Adverse Effect:
(a) Holdings, the Borrower and its Subsidiaries: (i) are
in compliance with all applicable Environmental Laws; (ii) hold all
Environmental Permits required for any of their current operations or for any
property owned, leased, or otherwise operated by any of them; (iii) are in
compliance with all of their Environmental Permits; and (iv) reasonably believe
that: each of their Environmental Permits will be timely renewed and complied
with, without material expense; any additional Environmental Permits that may be
required of any of them will be timely obtained and complied with, without
material expense; and compliance with any Environmental Law that is or is
expected to become applicable to any of them will be timely attained and
maintained, without material expense;
52
(b) Materials of Environmental Concern are not present
at, on, under or in any real property now or formerly owned, leased or operated
by Holdings, the Borrower or any of its Subsidiaries, or at any other location
(including, without limitation, any location to which Materials of Environmental
Concern have been sent by Holdings, the Borrower or any of its Subsidiaries for
re-use or recycling or for treatment, storage, or disposal) which could
reasonably be expected to (i) give rise to liability of Holdings, the Borrower
or any of its Subsidiaries under any applicable Environmental Law or otherwise
result in material costs to Holdings, the Borrower or any of its Subsidiaries,
or (ii) materially interfere with Holdings', the Borrower's or any of its
Subsidiaries' continued operations, or (iii) materially impair the fair saleable
value of any real property owned or leased by Holdings, the Borrower or any of
its Subsidiaries;
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation) pursuant to
any Environmental Law to which Holdings, the Borrower or any of its Subsidiaries
is named as a party that is pending or, to the knowledge of Holdings, the
Borrower or any of its Subsidiaries, threatened;
(d) Neither Holdings, the Borrower nor any of its
Subsidiaries has received any written request for information, or been notified
that it is a potentially responsible party under or relating to the federal
Comprehensive Environmental Response, Compensation, and Liability Act or any
similar Environmental Law, or with respect to any Materials of Environmental
Concern;
(e) Neither Holdings, the Borrower nor any of its
Subsidiaries has entered into or agreed to any consent decree, order, or
settlement or other agreement, or is subject to any judgment, decree, or order
or other agreement, in any judicial, administrative, arbitral, or other forum
for dispute resolution, relating to compliance with or liability under any
Environmental Law; and
(f) Neither Holdings, the Borrower nor any of its
Subsidiaries has assumed or retained by contract any liabilities under any
Environmental Law or with respect to any Materials of Environmental Concern.
4.18 Accuracy of Information, etc. No statement or
information (other than projections) contained in this Agreement, any other Loan
Document, the Confidential Information Memorandum or any other document,
certificate or statement furnished to the Arrangers, the Agents or the Lenders
or any of them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished (or, in the case of the Confidential Information Memorandum, as
of the date of this Agreement), any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
contained herein or therein not misleading. 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 Holdings and 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 Closing Date, the representations and
warranties of the
53
Borrower and, to the best knowledge of Holdings or the Borrower of Royal Numico
N.V. and Numico USA, Inc., contained in the Acquisition Documentation are true
and correct in all material respects (except as set forth on Schedule 4.3). As
of the Closing Date, there is no fact known to any Loan Party that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Confidential
Information Memorandum or in any other documents, certificates and statements
furnished to the Arrangers, the Agents and the Lenders for use in connection
with the transactions contemplated hereby and by the other Loan Documents.
4.19 Security Documents(a) . (a) The Guarantee and
Collateral Agreement is effective to create in favor of the Administrative
Agent, for the benefit of the Secured Parties, a legal, valid, binding and
enforceable security interest in the Collateral described therein and proceeds
and products thereof. In the case of the Pledged Capital Stock described in the
Guarantee and Collateral Agreement, when any stock certificates representing
such Pledged Capital Stock are delivered to the Administrative Agent, in the
case of any deposit accounts, when control agreements have been executed with
respect to such deposit accounts, and in the case of the other Collateral
described in the Guarantee and Collateral Agreement, when financing statements
in appropriate form are filed in the offices specified on Schedule 4.19(a)-1
(which financing statements may be filed by the Administrative Agent at any
time) and such other filings as are specified on Schedule 3 to the Guarantee and
Collateral Agreement have been completed (all of which filings may be filed by
the Administrative Agent at any time), the Guarantee and Collateral Agreement
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 and
products thereof, as security for the Obligations (as defined in the Guarantee
and Collateral Agreement), in each case prior and superior in right to any other
Person (except Permitted Liens). Schedule 7.3(f) lists each UCC Financing
Statement evidencing a Lien that (i) names any Loan Party as debtor and (ii)
will remain on file after the Closing Date. Schedule 4.19(a)-2 lists each UCC
Financing Statement that (i) names any Loan Party as debtor and (ii) will be
terminated on or prior to the Closing Date; and on or prior to the Closing Date,
the Borrower will have delivered to the Administrative Agent, or caused to be
filed, duly completed UCC termination statements, authenticated by the relevant
secured party, in respect of each such UCC Financing Statement.
(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, binding and enforceable Lien on the Mortgaged Properties described
therein and proceeds and products thereof; and when the Mortgages are filed or
recorded in the offices specified on Schedule 4.19(b) (in the case of Mortgages
to be executed and delivered on the Closing Date) or in the office designated by
the Borrower (in the case of any Mortgage to be executed and delivered pursuant
to Section 6.10 (b)), each 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 described therein and the proceeds and products
thereof, as security for the Obligations (as defined in the relevant Mortgage),
in each case prior and superior in right to any other Person (other than Persons
holding Liens or other encumbrances or rights permitted by the relevant Mortgage
or the Loan Documents).
54
4.20 Solvency. Each Loan Party is, and after giving effect
to the Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith, and after giving effect to
Sections 2.1(b) and 2.2 of the Guarantee and Collateral Agreement, will be and
will continue to be, Solvent.
4.21 Senior Indebtedness. The Obligations constitute
"Senior Indebtedness" of the Borrower under and as defined in the Senior
Subordinated Note Indenture. The obligations of each Subsidiary Guarantor under
the Guarantee and Collateral Agreement constitute "Guarantor Senior
Indebtedness" of such Subsidiary Guarantor under and as defined in the Senior
Subordinated Note Indenture.
4.22 Regulation H. No Mortgage encumbers improved real
property which 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).
4.23 Insurance. Each of Holdings, the Borrower and its
Subsidiaries is insured, in accordance with Section 5.3 of the Guarantee and
Collateral Agreement, by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the
businesses in which it is engaged, including, without limitation, at least
$100,000,000 of product liability insurance, to the extent available on
commercially reasonable terms (provided that such product liability insurance is
not required to insure against ephedra product liability or other product
liability for which insurance is not available or is not available on
commercially reasonable terms (it being understood that commercially reasonable
terms shall mean a cost not to exceed $20,000,000 per year); provided further
that the Loan Parties and their Subsidiaries may self insure their inventory and
equipment located at the retail store level), and none of Holdings, the Borrower
or any of its Subsidiaries (i) has received notice from any insurer or agent of
such insurer that substantial capital improvements or other material
expenditures will have to be made in order to continue such insurance or (ii)
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers at a cost that could not reasonably be expected
to have a Material Adverse Effect. Third party insurance policies that as of the
Closing Date but prior to the Restructuring and Acquisition covered certain
claims against GNC, continue to cover such claims, after giving effect to the
Restructuring and the Acquisition.
4.24 Lease Payments. (a) Each of Holdings, the Borrower
and its Subsidiaries has paid all payments required to be made by it within any
specified grace periods under leases of real property where any of the
Collateral is or may be located from time to time (other than any 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 Holdings, the Borrower or such Subsidiary, as the case
may be), except as could not reasonably be expected to have a Material Adverse
Effect;
(b) To the knowledge of the Borrower, no landlord Lien
has been filed, and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any such payments,
55
in each case that could, when taken together with any other such liens or
claims, reasonably be expected to have a Material Adverse Effect.
4.25 Acquisition Documentation. The Acquisition
Documentation listed on Schedule 4.25 attached hereto constitute all of the
material agreements, instruments and undertakings to which Holdings, the
Borrower or any of its Subsidiaries is bound or by which such Person or any of
its property or assets is bound or affected relating to, or arising out of, the
Acquisition (including, without limitation, any agreements, instruments or
undertakings assumed pursuant to the Acquisition Agreement). None of such
material agreements, instruments or undertakings have been amended, supplemented
or otherwise modified in any material respect except after the Closing Date as
permitted by Section 7.16, and all such material agreements, instruments and
undertakings are in full force and effect in accordance with their terms except
after the Closing Date as permitted by Section 7.16. No party to any Acquisition
Documentation is currently in material default thereunder and no party thereto,
or any other Person, has the right to terminate any Acquisition Documentation.
4.26 Real Estate. As of the Closing Date, Schedule 4.26
sets forth a true, complete and correct list of all real property (i) owned by
any Loan Party or its Subsidiaries in fee simple or (ii) leased by any Loan
Party or its Subsidiaries and used as a distribution or manufacturing facility
(collectively, the "Real Estate").
4.27 New GNC. New GNC (a) does not conduct, transact or
otherwise engage in any business or operations other than those incidental to
its ownership of the Capital Stock of General Nutrition Incorporated, (b) has no
material Indebtedness or other liabilities or financial obligations, except (i)
nonconsensual obligations imposed by operation of law and (ii) pursuant to the
Loan Documents to which it is a party and the Senior Subordinated Note
Indenture.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial extension of credit requested to be made by
it hereunder is subject to the satisfaction, prior to or concurrently with the
making of such extension of credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly authorized officer
of Holdings and the Borrower, (ii) the Guarantee and Collateral Agreement,
executed and delivered by a duly authorized officer of Holdings, the Borrower
and each Subsidiary Guarantor, (iii) a Mortgage covering each of the Mortgaged
Properties, executed and delivered by a duly authorized officer of each party
thereto and (iv) a Lender Addendum executed and delivered by each Lender and
accepted by the Borrower.
(b) Acquisition, etc. The following transactions shall
have been consummated, in each case on terms and conditions reasonably
satisfactory to the Lenders:
(i) the Borrower shall have acquired all of the
limited liability company interests of Newco 1 LLC and all of the
general partnership interests of Newco DGP1 pursuant to the terms of
the Acquisition Agreement and the Mergers shall have
56
become effective by the filing of Certificates of Merger with respect
to Newco 1 LLC, Newco DGP1, Newco 2 LLC, and Newco DGP2 with the
Secretary of State of the State of Delaware and no material provision
of the Acquisition Documentation shall have been waived, amended,
supplemented or otherwise modified without the prior written consent of
the Arrangers (the "Acquisition");
(ii) Holdings shall have received at least
$274,700,000 from the proceeds of equity issued by Holdings to funds
managed by the Sponsor and to the other Initial Investors, and all of
such proceeds shall have been contributed to the Borrower as common
equity;
(iii) the Borrower shall have received at least
$215,000,000 in gross cash proceeds from the issuance of the Senior
Subordinated Notes on terms and pursuant to documentation reasonably
satisfactory to the Arrangers and no provision thereof shall have been
waived, amended, supplemented or otherwise modified without prior
written consent of the Arrangers; and
(iv) the capital structure of each Loan Party
after the Acquisition shall be as described in Schedule 4.15.
(c) Pro Forma Balance Sheet; Financial Statements. The
Lenders shall have received (i) the Pro Forma Balance Sheet, (ii) audited
consolidated financial statements of GNC for the 2000, 2001 and 2002 fiscal
years and (iii) unaudited interim consolidated financial statements of GNC for
each fiscal month and quarterly period ended subsequent to the date of the
latest applicable financial statements delivered pursuant to clause (ii) of this
paragraph as to which such financial statements are available; and such
financial statements (x) shall be reasonably satisfactory in form and substance
to the Arrangers and (y) shall not, in the reasonable judgment of the Lenders,
reflect any material adverse change in the consolidated financial condition of
GNC, as reflected in the financial statements or projections contained in the
Confidential Information Memorandum.
(d) Approvals. All governmental and material third party
approvals (i) required under the Acquisition Documentation, or (ii) necessary
for the continuing operations of Holdings, the Borrower and its Subsidiaries
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
adverse conditions on the Acquisition or the financing contemplated hereby or by
the Senior Subordinated Note Documentation.
(e) Related Agreements. The Administrative Agent shall
have received (in a form reasonably satisfactory to the Administrative Agent),
true and correct copies, certified as to authenticity by the Borrower, of (i)
the Senior Subordinated Note Documentation, (ii) the Acquisition Documentation
and (iii) such other documents or instruments as may be reasonably requested by
the Administrative Agent, including, without limitation, a copy of any debt
instrument, security agreement or other material contract to which the Loan
Parties may be a party.
57
(f) Fees. The Lenders, the Arrangers and the Agents shall
have received all fees required to be paid, and all expenses for which invoices
have been presented (including reasonable fees, disbursements and other charges
of counsel to the Agents), 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) Business Plan. The Administrative Agent shall have
received a business plan for fiscal years 2004-2009 and a satisfactory written
analysis of the business and prospects of Holdings, the Borrower and its
Subsidiaries for the period from the Closing Date through the final maturity of
the Facilities, all in form and substance reasonably satisfactory to the
Administrative Agent.
(h) Solvency Analysis. The Lenders shall have received a
reasonably satisfactory solvency certificate by the chief financial officer of
Holdings and the Borrower which shall document the solvency of each of the Loan
Parties after giving effect to the transactions contemplated hereby.
(i) Lien Searches. The Administrative Agent shall have
received the results of a recent lien, tax lien, judgment and litigation search
in each of the jurisdictions or offices (including, without limitation, in the
United States Patent and Trademark Office and the United States Copyright
Office) in which UCC financing statement or other filings or recordations should
be made to evidence or perfect (with the priority required under the Loan
Documents) security interests in all assets of the Loan Parties (or would have
been made at any time during the five years immediately preceding the Closing
Date to perfect Liens on any assets of the Borrower or its subsidiaries), and
such search shall reveal no liens on any of the assets of the Loan Party, except
for Permitted Liens or Liens set forth on Schedule 4.19(a)-2.
(j) Environmental Matters. The Administrative Agent shall
have received, with a copy for each Lender, all existing written environmental
assessments pertaining to manufacturing facilities owned or leased by the
Borrower and its Subsidiaries, in form, scope, and substance satisfactory to the
Administrative Agent.
(k) Expenses. The Administrative Agent shall have
received satisfactory evidence that the fees and expenses to be incurred in
connection with the Acquisition and the financing thereof shall not exceed
$28,000,000.
(l) Closing Certificate. The Administrative Agent shall
have received a certificate of each Loan Party, dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments.
(m) Other Certifications. The Administrative Agent shall
have received the following:
(i) a copy of the charter of Holdings, the
Borrower and each of the Subsidiary Guarantors and each amendment
thereto, certified (as of a date reasonably near the date of the
initial extension of credit) as being a true and correct copy thereof
by
58
the Secretary of State or other applicable Governmental Authority of
the jurisdiction in which each such Loan Party is organized;
(ii) a copy of a certificate of the Secretary of
State or other applicable Governmental Authority of the jurisdiction in
which each such Loan Party is organized, dated reasonably near the date
of the initial extension of credit, listing the charter of such Loan
Party and each amendment thereto on file in such office and, if
available, certifying that (A) such amendments are the only amendments
to such Person's charter on file in such office, (B) such Person has
paid all franchise taxes to the date of such certificate and (C) such
Person is duly organized and in good standing under the laws of such
jurisdiction;
(iii) an electronic or facsimile written
confirmation, prepared by, or on behalf of, a filing service acceptable
to the Administrative Agent, stating that each Secretary of State or
other applicable Governmental Authority of each jurisdiction in which a
Loan Party is organized has certified that such Loan Party is duly
organized and in good standing under the laws of such jurisdiction on
the date of the initial extension of credit; and
(iv) a copy of a certificate of the Secretary of
State or other applicable Governmental Authority of each state where
any Loan Party is required to be qualified as a foreign corporation or
entity, other than any state where the failure to be so qualified could
not reasonably be expected to have a Material Adverse Effect, dated
reasonably near the date of the initial extension of credit, stating
that such Loan Party is duly qualified and in good standing as a
foreign corporation or entity in each such jurisdiction and has filed
all annual reports required to be filed to the date of such
certificate; and an electronic or facsimile written confirmation,
prepared by or on behalf of, a filing service acceptable to the
Administrative Agent, stating that the Secretary of State or other
applicable Governmental Authority of each such jurisdiction on the date
of the initial extension of credit has confirmed the due qualification
and continued good standing of each such Person as a foreign
corporation or entity in each such jurisdiction on or about such date.
(n) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, counsel to Holdings, the Borrower and its
Subsidiaries, substantially in the form of Exhibit F-1;
(ii) the legal opinion of Xxxxx Xxxxxx, general
counsel of the Borrower and its Subsidiaries, substantially in the form
of Exhibit F-2;
(iii) the legal opinion of Kennedy, Covington,
Xxxxxxx & Xxxxxxx LLP, as South Carolina local counsel;
(iv) the legal opinion of Xxxxx & Roca LLP, as
Arizona local counsel;
59
(v) each legal opinion, if any, delivered in
connection with the Acquisition Agreement, accompanied by a reliance
letter in favor of the Agents and the Lenders; and
(vi) the legal opinion of such other special and
local counsel as may be required by the Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(o) Pledged Capital Stock; Stock Powers; Acknowledgment
and Consent; Pledged Notes. The Administrative Agent shall have received (i) the
certificates representing the shares of Capital Stock pledged pursuant to the
Guarantee and Collateral Agreement (if such shares are certificated), together
with an undated stock power for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof, (ii) an Acknowledgment and
Consent, substantially in the form of Annex II to the Guarantee and Collateral
Agreement, duly executed by any issuer of Capital Stock pledged pursuant to the
Guarantee and Collateral Agreement that is not itself a party to the Guarantee
and Collateral Agreement and (iii) each promissory note pledged pursuant to the
Guarantee and Collateral Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank satisfactory to the
Administrative Agent) by the pledgor thereof.
(p) Filings, Registrations and Recordings. Each document
(including, without limitation, any UCC financing statement) required by the
Security Documents or under law or reasonably requested by the Administrative
Agent 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), shall have been filed,
registered or recorded or shall have been delivered to the Administrative Agent
in proper form for filing, registration or recordation.
(q) Title Insurance. The Administrative Agent shall have
received the following:
(i) in respect of each Mortgaged Property an
extended (to the extent available without surveys) coverage 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, and security interest in, such Mortgaged Property free
and clear of all defects and encumbrances, except for Permitted Liens
disclosed therein; (D) name the Administrative Agent for the benefit of
the Secured Parties as the insured thereunder; (E) be in the form of an
extended (to the extent available without surveys) coverage leasehold
loan policy - 1970 form B (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 in form and
substance acceptable to the Administrative Agent, including, without
limitation (to the extent applicable with respect to such Mortgaged
Property and available in the jurisdiction in which such Mortgaged
Property is located), the following: variable
60
rate endorsement; comprehensive endorsement; zoning (ALTA 3.1 with
parking added) endorsement; first loss, last dollar and tie-in
endorsement; access coverage (if available without survey); separate
tax parcel coverage; contiguity coverage (if available without a
survey); usury; doing business; subdivision; environmental protection
lien (if reasonably available); CLTA 119.2 and CLTA 119.3 (for leased
Real Estate, only);and such other endorsements as the Administrative
Agent shall reasonably require in order to provide insurance against
specific risks identified by the Administrative Agent in connection
with such Mortgaged Property, and (G) be issued by title companies
satisfactory to 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; and
(ii) a copy of all recorded documents referred
to, or listed as exceptions to title in, the title policy or policies
referred to in clause (i) above and a copy of all other material
documents affecting the Mortgaged Properties to the extent in the
Borrower's possession or available from the title companies.
(r) Flood Insurance. 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 and lies within a Federal Emergency Management Agency
flood zone such that a prudent lender would require such insurance, (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 or that may be extended to such maturity
date and (B) confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
(s) Insurance. The Administrative Agent (x) shall be
satisfied that (i) with respect to the Borrower's operations after the Closing
Date, the Borrower has obtained insurance which meets the requirements set forth
in Section 5.3 of the Guarantee and Collateral Agreement and which is otherwise
customary in scope and amount for similarly situated businesses, including,
without limitation, at least $100,000,000 of product liability insurance
(provided that such product liability insurance is not required to insure
against ephedra product liability and provided further that the Loan Parties and
their Subsidiaries may self insure their inventory and equipment located at the
retail store level); provided that such insurance shall not be required to cover
ephedra products and (ii) with respect to past operations of GNC, the
Administrative Agent shall be satisfied that third party insurance policies that
as of the Closing Date but prior to the consummation of the Restructuring or the
Acquisition covered certain claims against GNC will continue to do so after the
Closing Date and after giving effect to the Restructuring and the Acquisition
for occurrences prior to the Closing Date and (y) shall have received insurance
certificates satisfying the requirements of Section 5.3 of the Guarantee and
Collateral Agreement.
(t) Miscellaneous. The Administrative Agent shall have
received such other documents, agreements, certificates and information as it
shall reasonably request.
61
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 hereunder
on any date (including, without limitation, 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 for representations and
warranties expressly stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.
(c) Senior Debt. A Responsible Officer of the Borrower
shall certify in writing, to the Administrative Agent that the incurrence of
Indebtedness represented by the requested extension of credit is permitted under
the Senior Subordinated Notes.
Each borrowing by and issuance of a Letter of Credit on behalf
of the Borrower hereunder shall constitute a representation and warranty by
Holdings and 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, any Letter of Credit remains
outstanding (unless such Letter of Credit has been cash collateralized or
otherwise backed by another letter of credit in accordance with Section
10.15(c)) or any Loan or other amount is owing to any Lender, any Agent or any
Arranger hereunder, each of Holdings and the Borrower shall and shall cause each
of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Agent and each
Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the audited
consolidated and consolidating balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such year and of Holdings and its
consolidated Subsidiaries as at the end of such fiscal year and the related
audited consolidated and consolidating statements of income and of cash flows
for such year, setting forth in each case in comparative form the figures as of
the end of and 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 PricewaterhouseCoopers 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
62
consolidated and consolidating balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such quarter and of Holdings and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated and consolidating 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 as of the
end of and for the corresponding period in the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments); and
(c) when distributed to management, copies of monthly
sales and revenue reports and such other reports as may be reasonably requested
by the Administrative Agent, in each case as prepared for the management of
Holdings or the Borrower on a monthly basis;
all such financial statements set forth in Sections 6.1(a) and (b) to be
complete and correct in all material respects and to be prepared in reasonable
detail and in accordance with GAAP applied consistently throughout the periods
reflected therein and with prior periods (except as approved by such accountants
or officer, as the case may be, and disclosed therein).
6.2 Certificates; Other Information. Furnish to each
Agent and each Lender, or, in the case of clause (i), to 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, except as specified in such certificate (it being
understood that such certificate shall be limited to the items that independent
certified public accountants are permitted to cover in such certificates
pursuant to their professional standards and customs of the profession);
(b) concurrently with the delivery of any financial
statements pursuant to Sections 6.1(a) and (b), (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 and other agreements, and satisfied every 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 Holdings, the Borrower and
its Subsidiaries 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, (y) to the extent not previously disclosed to the Administrative Agent
in writing, a listing of (A) any store openings or closings since the last such
certificate (or, since the Closing Date, in the case of the first such
certificate delivered after the Closing Date) delivered and any new warehouse or
distribution locations within the United States or otherwise where any Loan
Party keeps material inventory or equipment and of (B) any registered
Intellectual Property acquired, created or developed by any Loan Party since the
date of the most recent list delivered pursuant to this clause (y) (or, in the
case of the first such list so delivered, since the Closing Date) and (z) any
UCC financing statements or other filings specified in such Compliance
Certificate as being required to be delivered therewith;
63
(c) as soon as available, and in any event no later than
60 days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a projected
consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
the following fiscal year, and the related consolidated statements of projected
cash flow, projected changes in financial position and projected income), and,
as soon as available, significant revisions, if any, of 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 reasonable
estimates, information and assumptions at the time made (it being understood
that the Projections are based upon good faith estimates and assumptions
believed by management of Holdings and 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);
(d) within 45 days after the end of each of the first
three fiscal quarters of the Borrower in each fiscal year, or within 90 days
after the fourth fiscal quarter of the Borrower in each fiscal year, 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 5 Business Days prior to the
effectiveness thereof or such later date as may be reasonably agreed to by the
Administrative Agent, copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to the Senior
Subordinated Note Indenture or the Acquisition Agreement, or the governing
documents of any Loan Party;
(f) within five days after the same are sent, copies of
all financial statements and reports that Holdings or the Borrower or any of its
Subsidiaries 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 Holdings or the Borrower or any of its
Subsidiaries may make to, or file with, the SEC;
(g) as soon as possible and in any event within five days
of obtaining knowledge thereof: any notice that any Governmental Authority may
deny any application for an Environmental Permit sought by, or revoke or refuse
to renew any Environmental Permit or any other material Permit held by, the
Borrower or condition approval of any such material Permit on terms and
conditions that are materially burdensome to Holdings, the Borrower or any of
its Subsidiaries, or to the operation of any of its businesses (both before and
after giving effect to the Acquisition) or any property owned, leased or
otherwise operated by such Person;
(h) on the date of the occurrence thereof, notice that
(i) any or all of the obligations under the Senior Subordinated Note Indenture
have been accelerated, or (ii) the trustee or the required holders of Senior
Subordinated Notes has given notice that any or all such obligations are to be
accelerated; and
64
(i) promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material tax, license, lease and accounts payable obligations,
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 Holdings, the Borrower or its
Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence,
etc(a) . (a) (i) Preserve, renew and keep in full force and effect its corporate
or other existence and (ii) take all reasonable action to maintain all rights,
privileges, franchises, Permits and licenses 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 could not reasonably be expected to have a Material Adverse
Effect; and (b) to the extent not in conflict with this Agreement or the other
Loan Documents, comply with all Contractual Obligations and Requirements of Law,
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance(a) . (a) Keep all
material Property and systems useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted and (b) (i)
maintain with financially sound and reputable insurance companies insurance (or,
with respect to inventory and equipment at the retail store level, a program of
self-insurance) on all its Property meeting the requirements of Section 5.3 of
the Guarantee and Collateral Agreement and in at least such amounts and against
at least such risks (but including in any event public 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, including,
without limitation, $100,000,000 of product liability insurance, to the extent
available on commercially reasonable terms; provided that such insurance shall
not be required to cover ephedra products or other products for which insurance
is not available or is not available on commercially reasonable terms (it being
understood that commercially reasonable terms shall mean a cost not to exceed
$20,000,000 per year) and (ii) with respect to operations of GNC prior to the
Closing Date, ensure that third party insurance policies that, as of the Closing
Date but prior to the Restructuring or the Acquisition covered certain claims
against GNC will continue to do so after the Closing Date and after giving
effect to the Restructuring and the Acquisition.
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 with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and activities
and (b) permit representatives of any Lender, upon reasonable prior notice, to
visit and inspect any of its properties and examine and, at the Borrower's
expense, 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 Holdings, the
Borrower and its Subsidiaries with officers and employees of Holdings, the
Borrower and its Subsidiaries and with their respective independent certified
public accountants. Notwithstanding the foregoing, so long as no Default or
Event of Default
65
has occurred and is continuing, such visits, inspections and examinations of the
Lenders (but not the Administrative Agent) shall be limited to two per fiscal
year plus any additional visits in connection with Lender meetings.
6.7 Notices. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default (or alleged
default) under any Contractual Obligation of Holdings, the Borrower or any of
its Subsidiaries or (ii) litigation, investigation or proceeding which may exist
at any time between Holdings, the Borrower or any of its Subsidiaries and any
Governmental Authority, that in either case, if not cured or if reasonably
likely to be adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting Holdings, the
Borrower or any of its Subsidiaries in which the amount involved is $5,000,000
or more and not covered by insurance or in which injunctive or similar relief is
sought;
(d) the following events, as soon as possible and in any
event within 30 days after Holdings or the Borrower knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency 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, Reorganization or Insolvency of, any Plan;
(e) any notice of default given to Holdings, the Borrower
or any of its Subsidiaries from a landlord in connection with any leased
property where inventory of the Borrower or its Subsidiaries is located, if such
notice relates to a payment default under the applicable leases and the
aggregate amount of all payment defaults claimed under such notices exceeds
$10,000,000 at any one time outstanding; and
(f) any development or event that has had or could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply in all respects with, and
ensure compliance in all respects by all tenants and subtenants, if any, with,
all applicable Environmental Laws and Environmental Permits, and obtain,
maintain and comply in all material respects with and maintain, and ensure that
all tenants and subtenants obtain, maintain and comply in all material respects
with and maintain, any and all licenses, approvals, notifications, registrations
or permits
66
required by applicable Environmental Laws, except to the extent the failure to
so obtain, maintain or comply could not 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 respects with all lawful orders
and directives of all Governmental Authorities regarding Environmental Laws,
except, in each case, to the extent the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
6.9 Interest Rate Protection. In the case of the Borrower,
within 120 days after the Closing Date enter into Hedge Agreements to the extent
necessary to provide that at least 40% of the aggregate principal amount of the
Senior Subordinated Notes and the Term Loans is subject to either a fixed
interest rate or interest rate protection for a period of not less than three
years, which Hedge Agreements shall have terms and conditions reasonably
satisfactory to the Administrative Agent.
6.10 Additional Collateral, etc. (a) With respect to
any Property acquired, created or developed (including, without limitation, the
filing of any applications for the registration or issuance of any Intellectual
Property) after the Closing Date by Holdings, the Borrower or any of its
Subsidiaries (other than (i) Property acquired by a non-Guarantor Immaterial
Subsidiary to the extent, after giving effect to such acquisition, such
Subsidiary still qualifies as an Immaterial Subsidiary, (ii) any leasehold
estate in a retail store, (iii) any Property described in paragraph (b) or
paragraph (c) of this Section (without regard to the value threshold set forth
therein), (iv) any Property subject to a Lien expressly permitted by Section
7.3(g), (v) Property acquired by an Excluded Foreign Subsidiary or that portion
of the Capital Stock of such Excluded Foreign Subsidiary excluded from the
Collateral pursuant to the terms of the Guarantee and Collateral Agreement and
(vi) Property consisting of deposit accounts which are not required by the terms
of the Guarantee and Collateral Agreement to be subject to control agreements)
as to which the Administrative Agent, for the benefit of the Secured Parties,
does not have a perfected Lien, promptly (x) 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 to grant to
the Administrative Agent, for the benefit of the Secured Parties, a security
interest in such Property and (y) take all actions reasonably necessary to grant
to the Administrative Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in such Property, including without limitation,
the filing of UCC 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 (or leasehold
interest, to the extent such leasehold is created under a triple net ground
lease or similar arrangement) in any real property having a value (together with
improvements thereof) of at least $2,000,000 acquired after the Closing Date and
which is not primarily used as a retail store location (other than any such real
property owned or leased by an 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 Lenders with (x) title and
extended (to the extent available without surveys) coverage insurance, complying
with the provisions of Section 5.1(q), covering such real property in an amount
at
67
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, if
reasonably requested by the Administrative Agent, a current ALTA survey (in form
and substance reasonably satisfactory to the Administrative Agent) and (y) any
consents or estoppels reasonably deemed necessary by the Administrative Agent in
connection with such Mortgage, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent 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.
(c) With respect to (x) any new Subsidiary (other than an
Excluded Foreign Subsidiary or a non-Guarantor Immaterial Subsidiary) created or
acquired after the Closing Date (which, for the purposes of this paragraph,
shall include any existing Subsidiary that ceases to be an Excluded Foreign
Subsidiary or non-Guarantor Immaterial Subsidiary), by Holdings, the Borrower or
any of its Subsidiaries or (y) any of the Non-Surviving Subsidiaries not
liquidated by merger with and into the Borrower on the Closing Date as
contemplated by the recitals hereto, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
as the Administrative Agent deems necessary 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
Holdings, the Borrower or any of its Subsidiaries or such Non-Surviving
Subsidiary, as the case may be, (ii) deliver to the Administrative Agent the
certificates, if any, representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a duly authorized officer of
Holdings, the Borrower or such Subsidiary, as the case may be, (iii) cause such
new Subsidiary or such Non-Surviving Subsidiary, as the case may be (A) to
become a party to the Guarantee and Collateral Agreement and (B) to take such
actions necessary 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
Subsidiary, including, without limitation, the recording of instruments in the
United States Patent and Trademark Office and the United States Copyright
Offices, the execution and delivery by all necessary persons of control
agreements, and the filing of UCC 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 (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 Holdings, the Borrower or any of
its Subsidiaries (other than any Excluded Foreign Subsidiaries), 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 in order 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 Holdings, the Borrower or
any of its Subsidiaries (other than any Excluded Foreign Subsidiaries),
(provided that in no event shall more than 65% of the total outstanding Capital
Stock of any such new Excluded Foreign Subsidiary be required to be so pledged),
(ii) deliver to the Administrative Agent the certificates, if any, representing
such
68
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of Holdings, the Borrower or such
Subsidiary, as the case may be, and take such other action as may be necessary
to perfect the Lien of the Administrative Agent thereon, 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.
(e) Notwithstanding anything to the contrary in this
Section 6.10, paragraphs (a), (b), (c) and (d) of this Section 6.10 shall not
apply to any Property, new Subsidiary or new Excluded Foreign Subsidiary created
or acquired after the Closing Date, as applicable, (i) as to which the
Administrative Agent has determined in its reasonable discretion that the
collateral value thereof is insufficient to justify the difficulty, time and/or
expense of obtaining a perfected security interest therein or (ii) with respect
to leases of real property described in paragraph (b) of this Section 6.10, as
to which the consent of the landlord is required to grant a security interest to
the Administrative Agent and the Borrower has not been able to obtain such
consent after having used commercially reasonably efforts to do so.
6.11 Use of Proceeds. Use the proceeds of the Loans only
for the purposes specified in Section 4.16.
6.12 ERISA Documents. The Borrower will cause to be
delivered to the Administrative Agent, promptly upon the Administrative Agent's
request, any or all of the following: (i) a copy of each Plan sponsored by the
Borrower or any Subsidiary thereof (or, where any such Plan is not in writing, a
complete description thereof) and, if applicable, related trust agreements or
other funding instruments and all amendments thereto; (ii) the most recent
determination letter issued by the Internal Revenue Service with respect to each
Plan sponsored by the Borrower or any Subsidiary thereof; (iii) for the three
most recent plan years preceding the Administrative Agent's request, Annual
Reports on Form 5500 Series required to be filed with any governmental agency
for each Plan sponsored by the Borrower or any Subsidiary thereof; (iv) a
listing of all Multiemployer Plans, with the aggregate amount of the most recent
annual contributions required to be made by the Borrower or any Commonly
Controlled Entity to each such Plan and copies of the collective bargaining
agreements requiring such contributions; (v) any information that has been
provided in writing to the Borrower or any Commonly Controlled Entity regarding
withdrawal liability under any Multiemployer Plan within the 12 months
immediately preceding any such request by the Administrative Agent; provided
that the Borrower shall use its reasonable best efforts to ensure that it is
provided with such withdrawal liability information at least once per year; (vi)
the aggregate amount of payments made under any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) to any retired employees of the Borrower
or any of its Subsidiaries (or any dependents thereof) during the most recently
completed fiscal year; and (vii) documents reflecting any agreements between the
PBGC and the Borrower or any Commonly Controlled Entity with respect to any
Plan.
6.13 Further Assurances. (a) 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 Lenders
with
69
respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds or products thereof or with respect to any other
property or assets hereafter acquired by Holdings, 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 Lender 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 Lender may be required to obtain from the Borrower
or any of its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.
(b) Preserve and protect the Lien status of each
respective Mortgage and, if any Lien (other than unrecorded Liens permitted
under Section 7.3 that arise by operation of law and other Liens permitted under
Section 7.3(f)) is asserted against a Mortgaged Property, promptly and at its
expense, give the Administrative Agent a detailed written notice of such Lien
and pay the underlying claim in full or take such other action so as to cause it
to be released or bonded over in a manner satisfactory to the Administrative
Agent.
6.14 Post Closing Obligations. Comply with all of the
obligations set forth in Schedule 6.14.
SECTION 7. NEGATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree
that, so long as the Commitments remain in effect, any Letter of Credit remains
outstanding (unless such Letter of Credit has been cash collateralized or backed
with another letter of credit in accordance with Section 10.15(c)) or any Loan
or other amount is owing to any Lender, any Agent or any Arranger hereunder,
each of Holdings and the Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
7.1 Financial Condition 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 the last day of any fiscal quarter set
forth below to exceed the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
FQ1 2004 4.70:1.00
FQ2 2004 4.70:1.00
FQ3 2004 4.70:1.00
FQ4 2004 4.70:1.00
FQ1 2005 4.45:1.00
FQ2 2005 4.45:1.00
FQ3 2005 4.25:1.00
FQ4 2005 4.25:1.00
70
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
FQ1 2006 4.00:1.00
FQ2 2006 4.00:1.00
FQ3 2006 3.75:1.00
FQ4 2006 3.75:1.00
FQ1 2007 3.50:1.00
FQ2 2007 3.50:1.00
FQ3 2007 3.50:1.00
FQ4 2007 3.25:1.00
FQ1 2008 3.25:1.00
FQ2 2008, and thereafter 3.00:1.00
(b) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ending with the last day of any fiscal quarter
commencing with the fiscal quarter ending March 31, 2004 to be less than
1.25:1.00.
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to any Subsidiary and of
any Subsidiary Guarantor to the Borrower or any other Subsidiary;
(c) Indebtedness (including, without limitation, Capital
Lease Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $15,000,000 at any one time outstanding;
(d) Indebtedness (other than the Indebtedness referred to
in Section 7.2(f)) outstanding on the date hereof and listed on Schedule 7.2(d)
and any refinancings, refundings, renewals or extensions thereof (without any
increase in the principal amount thereof or any shortening of the maturity of
any principal amount thereof);
(e) Guarantee Obligations made in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of the
Borrower or any Wholly Owned Subsidiary Guarantor;
(f) (i) Indebtedness of the Borrower in respect of the
Senior Subordinated Notes in an aggregate principal amount not to exceed
$215,000,000 and any Indebtedness that refinances the Senior Subordinated Notes
(including pursuant to a defeasance, discharge or redemption mechanism);
provided that (x) such Indebtedness does not increase the principal amount
thereof (other than by the amount of call premiums or accrued and unpaid
interest payable on the Senior Subordinated Notes in connection with such
refinancing and fees in connection therewith), (y) such indebtedness is issued
on customary market terms and conditions
71
(including subordination terms) reasonably satisfactory to the Administrative
Agent and (z) no Default or Event of Default exists and is continuing at the
time of issuance thereof; and (ii) Guarantee Obligations of any Subsidiary
Guarantor in respect of such Indebtedness; provided that such Guarantee
Obligations are subordinated to the obligations of such Subsidiary Guarantor
under the Guarantee and Collateral Agreement to the same extent as the
obligations of the Borrower in respect of the Senior Subordinated Notes are
subordinated to the Obligations or any notes issued pursuant to a refinancing
permitted pursuant to clause (i) of this Section 7.2(f);
(g) (i) Indebtedness of the Borrower or any Subsidiary
acquired pursuant to, or assumed in connection with, any Permitted Acquisition
under Sections 7.8(i); provided that such Indebtedness was not incurred (x) to
provide all or a portion of the funds utilized to consummate the transaction or
series of related transactions constituting such Permitted Acquisition or (y)
otherwise in connection with, or in contemplation of, such Permitted
Acquisition; and provided, further, that the aggregate amount of such
Indebtedness shall not exceed $15,000,000 at any time outstanding; and (ii) any
refinancings, refundings, renewals or extensions thereof (without any increase
in the principal amount thereof and on terms no less favorable to the Borrower
or the applicable Subsidiary);
(h) Indebtedness of Excluded Foreign Subsidiaries;
provided that the aggregate amount of such Indebtedness shall not exceed
$20,000,000;
(i) Unsecured subordinated Indebtedness of the Borrower
in an aggregate amount not exceeding $150,000,000 at any one time outstanding
and the unsecured guarantee by any Guarantor hereunder of the Borrower's
obligations thereunder; provided that (i) the proceeds thereof are used either
(x) to repay the Obligations hereunder or (y) to consummate Permitted
Acquisitions and (ii) (w) no part of the principal part of such Indebtedness
shall have a maturity date earlier than the final maturity of the Loans
hereunder, (x) after giving effect to the incurrence of any such Indebtedness
(and any substantially concurrent repayment of Obligations or consummation of a
Permitted Acquisition) on a pro forma basis, as if such incurrence of
Indebtedness (and any substantially concurrent repayment of Obligations or
consummation of a Permitted Acquisition) had occurred on the first day of the
twelve month period ending on the last day of the Borrower's then most recently
completed fiscal quarter for which financial statements are available, the
Borrower and its Subsidiaries would have been in compliance with all the
financial covenants set forth in Section 7.1 and the Borrower shall have
delivered to the Administrative Agent a certificate of a Responsible Officer of
the Borrower to such effect setting forth in reasonable detail the computations
necessary to determine such compliance, (y) at the time of the incurrence of
such Indebtedness and after giving effect thereto, no Default or Event of
Default shall exist or be continuing and (z) the documentation governing such
Indebtedness contains customary market terms (including subordination terms
reasonably acceptable to the Administrative Agent);
(j) to the extent constituting Indebtedness, customary
overdraft and similar protections in connection with deposit accounts in the
ordinary course of business, provided that such Indebtedness is extinguished
within five Business Days of its incurrence;
(k) to the extent constituting Indebtedness of the
Borrower or Holdings, customary indemnification, deferred purchase price
adjustments, earn-outs or similar obligations,
72
in each case, incurred or assumed in connection with the acquisition of any
business or assets permitted to be acquired hereunder provided that the maximum
aggregate liability in respect of all such Indebtedness permitted by this clause
(k) shall not exceed 30% of the aggregate purchase price for such acquisitions;
(l) Indebtedness of an Excluded Foreign Subsidiary which
would be permitted as an Investment pursuant to Sections 7.8(m) and (n);
(m) Indebtedness issued to insurance companies to finance
insurance premiums payable to such insurance companies in connection with
insurance policies purchased by a Loan Party in the ordinary course of business
in an aggregate amount not to exceed $10,000,000; and
(n) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $15,000,000 at any one time outstanding.
7.3 Limitation on Liens. Create, incur, assume or suffer
to exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which 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;
(b) (i) carriers', warehousemen's, landlord's,
mechanics', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which are not overdue for a period of more than 45
days or that are being contested in good faith by appropriate proceedings;
provided that adequate reserves with respect thereto are maintained in the books
of the applicable Loan Party, in conformity with GAAP and (ii) Liens of customs
and revenue authorities to secure payment of customs duties in connection with
the importation of goods;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(d) deposits by or on behalf of the Borrower or any of
its Subsidiaries 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, so long as the aggregate amount of deposits at any
one time securing appeal bonds does not exceed $10,000,000;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the Property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower and its Subsidiaries
taken as a whole;
(f) Liens in existence on the date hereof and either (i)
listed on Schedule 7.3(f) securing Indebtedness permitted by Section 7.2(d) or
(ii) disclosed on any title
73
insurance policies obtained in connection with the Mortgages, and replacement
Liens on the same assets securing permitted refinancings thereof provided that
no such Lien is spread to cover any additional Property (other than proceeds
thereof) after the Closing Date and that the amount of Indebtedness secured
thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any of
its Subsidiaries incurred pursuant to Section 7.2(c) to finance the acquisition
of fixed or capital assets or the refinancing thereof, provided that (i) such
Liens shall be created within 90 days of the acquisition or refinancing of such
fixed or capital assets, (ii) such Liens do not at any time encumber any
Property other than the Property financed by such Indebtedness when such
Indebtedness was originally incurred, and the proceeds of such Property, (iii)
the amount of Indebtedness secured thereby is not increased (in the case of a
refinancing) and (iv) the principal amount of Indebtedness initially secured
thereby is not more than 100% of the purchase price of such fixed or capital
asset;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor or sublessor under
any lease or sublease entered into by the Borrower or any Subsidiary in the
ordinary course of its business and covering only the assets so leased or
subleased and any Liens on such lessor's or sublessor's interest or title;
(j) Liens in connection with attachments or judgments in
circumstances not constituting an Event of Default under Section 8(h);
(k) Liens on the property or assets of a Person which
becomes a Subsidiary of the Borrower after the date hereof, or is acquired by
such Person after the date hereof, securing Indebtedness permitted by Section
7.2(g); provided that (i) such Liens existed at the time such Person became a
Subsidiary of the Borrower, (ii) such Liens were not granted in connection with
or in contemplation of the applicable Permitted Acquisition and (iii) the amount
of Indebtedness secured thereby is not increased and such Liens are not expanded
to cover additional Property (other than proceeds therof);
(l) Liens on the assets of any Excluded Foreign
Subsidiary (other than intercompany notes payable to a Loan Party) which secure
Indebtedness permitted pursuant to Section 7.2(h);
(m) Liens consistent with those arising by operation of
law consisting of customary and ordinary course rights of setoff upon deposits
of cash in favor of banks or other depository institutions in the ordinary
course of business;
(n) Liens on unearned premiums in respect of insurance
policies securing insurance premium financing permitted under Section 7.2(m);
(o) Liens on cash proceeds of refinancing Indebtedness
permitted under Section 7.2(f) in favor of the holders of the Senior
Subordinated Notes or such refinancing Indebtedness to the extent such Lien is
required by the terms of the documentation governing
74
such refinancing Indebtedness or the Senior Subordinated Note Documentation in
connection with a defeasance, redemption or other repayment of the Senior
Subordinated Notes; and
(p) Liens not otherwise permitted by this Section 7.3 so
long as neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined, in the case of each such Lien, as of the date such Lien is
incurred) of the assets subject thereto exceeds (as to the Borrower and all
Subsidiaries) $10,000,000 at any one time.
7.4 Limitation on 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 Solvent Subsidiary of the Borrower may be merged
or consolidated with or into the Borrower (provided that the Borrower shall be
the continuing or surviving corporation) or with or into any Wholly Owned
Subsidiary Guarantor (provided that (i) such Subsidiary Guarantor shall be the
continuing or surviving corporation or (ii) simultaneously with such
transaction, the continuing or surviving corporation shall become a Subsidiary
Guarantor and the Borrower shall comply with Section 6.10 in connection
therewith);
(b) any Subsidiary of the Borrower may Dispose of any or
all of its assets (i) (upon voluntary liquidation, windup, dissolution or
otherwise) to the Borrower or any Wholly Owned Subsidiary Guarantor or (ii)
pursuant to a Disposition permitted by Section 7.5;
(c) any Excluded Foreign Subsidiary may (i) be merged or
consolidated with or into any other Excluded Foreign Subsidiary, or (ii) Dispose
of any or all of its assets to (upon voluntary liquidation, windup, dissolution
or otherwise) any other Excluded Foreign Subsidiary;
(d) a Foreign Subsidiary may merge with another Foreign
Subsidiary, incorporated or organized for the purpose of reincorporating or
reorganizing such Foreign Subsidiary in another jurisdiction to realize tax or
other benefits; provided that the Borrower notifies the Administrative Agent at
least 30 days (or such shorter period as is acceptable to the Administrative
Agent) prior to such merger and takes all actions necessary to maintain the
Administrative Agent's Liens on the Collateral; and
(e) any Permitted Acquisition made by the Borrower or a
Subsidiary Guarantor may be structured as a merger, consolidation or
amalgamation; provided that the surviving legal entity of such merger,
consolidation or amalgamation is the Borrower or such Subsidiary Guarantor.
7.5 Limitation on Disposition of Property. Dispose of any
of its Property (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary of Holdings, issue or sell any shares of such Subsidiary's Capital
Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in
the ordinary course of business;
75
(b) the sale of inventory in the ordinary course of
business;
(c) Dispositions permitted by Section 7.4(b)(i) and
7.4(c)(ii);
(d) the sale or issuance of any Subsidiary's Capital
Stock to the Borrower or any Wholly Owned Subsidiary Guarantor or the sale or
issuance of any Excluded Foreign Subsidiary's Capital Stock to another Excluded
Foreign Subsidiary, provided that any Guarantor's ownership interest therein is
not diluted;
(e) (i) the closure and Disposition of retail stores in
the ordinary course of business and (ii) the Disposition, other than pursuant to
Section 7.5(h), of stores to franchisees having a fair market value not to
exceed $7,500,000 in the aggregate for any fiscal year of the Borrower;
(f) the Disposition of cash or Cash Equivalents in the
ordinary course of business;
(g) the license or sub-license of Intellectual Property
in the ordinary course of business;
(h) the closure and Disposition of 117 stores in
connection with the Acquisition as contemplated by the Acquisition Agreement;
(i) a Disposition consisting of a sublease of real
property which is permitted by Section 7.3(i);
(j) the Disposition of surplus or other property no
longer used or useful in the business of the Borrower and its Subsidiaries in
the ordinary course of business;
(k) the Disposition of other assets having a fair market
value not to exceed $20,000,000 in the aggregate for any fiscal year of the
Borrower; and
(l) any Recovery Event.
7.6 Limitation on Restricted Payments. Declare or pay any
dividend on (other than dividends payable solely in common stock of the Person
making the dividend so long as the ownership interest of any Guarantor in such
Person is not diluted), 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 Holdings, the Borrower
or any of its Subsidiaries, 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 Holdings, the Borrower or any of its
Subsidiaries (collectively, "Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the
Borrower or any Subsidiary Guarantor;
76
(b) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may pay dividends to Holdings to permit
Holdings to (i) purchase Holdings' common stock or common stock options from
present or former officers or employees of Holdings, the Borrower or any
Subsidiary upon the death, disability or termination of employment of such
officer or employee, provided, that the aggregate amount of payments under this
clause (i) subsequent to the date hereof (net of any proceeds received by
Holdings and contributed to the Borrower subsequent to the date hereof in
connection with resales of any common stock or common stock options so
purchased) shall not exceed $5,000,000 and (ii) pay management fees and other
fees and reasonable expenses to the Sponsor and its Control Investment
Affiliates permitted by Section 7.10;
(c) the Borrower may pay dividends to Holdings to permit
Holdings to (i) pay corporate overhead expenses (including, without limitation,
directors' fees and expenses) incurred in the ordinary course of business not to
exceed $500,000 in any fiscal year and (ii) pay any taxes which are due and
payable by Holdings as the parent of a consolidated, combined, unitary or other
similar group that includes the Borrower; provided, that (x) the amount of such
dividends shall not exceed the lesser of (i) the amount of the relevant tax
(including any penalties and interest) that the Borrower would owe if the
Borrower and its Subsidiaries were filing a separate tax return (or a separate
consolidated or combined return with its Subsidiaries that are members of the
consolidated or combined group), taking into account any carryovers and
carrybacks of tax attributes (such as net operating losses) of the Borrower and
such Subsidiaries from other taxable years (as reduced by the use of such
carryovers and carrybacks by the group of which Holdings is a member) and (ii)
the amount of the relevant tax, taking into account any allowed tax credits,
that Holdings actually owes to the appropriate taxing authority and (y) such
dividends pursuant to this Section 7.6(c) are used by Holdings for such purpose
within 30 days of the receipt of such dividends;
(d) the Borrower may pay cash dividends to Holdings to
permit Holdings to pay cash dividends, and Holdings shall be permitted to pay
such dividends to the holders of Holding's Capital Stock, in each case so long
as (x) no Default or Event of Default shall have occurred and be continuing, (y)
both prior to and immediately after giving effect to such dividend (i) the
Consolidated Secured Leverage Ratio of the Borrower and its Subsidiaries is less
than 1.50:1.00 and (ii) the Consolidated Fixed Charge Coverage Ratio of the
Borrower and its Subsidiaries is greater than 1.25:1.00 (in each case, based on
the most recent twelve month period for which financial statements are
available) and (z) as of the date of such cash dividend, the aggregate amount of
all Restricted Payments made pursuant to this Section 7.6(d) through such date,
pro forma to include such cash dividend, does not exceed 50% of the aggregate
amount of Consolidated Net Income of the Borrower and its Subsidiaries from
January 1, 2004 through such date;
(e) any non-Wholly Owned Subsidiary of the Borrower may
declare and pay cash dividends to its equity holders generally so long as the
Borrower or its respective Subsidiary which owns the equity interests in the
Subsidiary paying such dividends receives at least its proportionate share
thereof (based upon the relative holding of the equity interests in the
Subsidiary paying such dividends);
77
(f) Holdings may make additional Restricted Payments with
Available Cash to the extent such cash has not been used to make Investments
pursuant to Sections 7.8(i), (l), (m) or (p), Capital Expenditures pursuant to
Section 7.7(c) or make Restricted Payments pursuant to Section 7.6(d), or to
pay, prepay, repurchase, redeem or defease the Senior Subordinated Notes
pursuant to Section 7.9(a);
(g) any non-Guarantor Wholly Owned Subsidiary of the
Borrower may declare and pay cash dividends to any Subsidiary of the Borrower
which owns the equity interests in such non-Guarantor Subsidiary;
(h) Holdings may pay cash dividends to the holders of its
Capital Stock in an amount equal to the fees and expenses payable by the Initial
Investors in connection with the issuance of the Preferred Stock or the resale
following the Closing Date of the Preferred Stock issued to the Initial
Investors on or about the Closing Date and, to the extent that the proceeds from
such issuance or resale of such Preferred Stock are less than the sum of such
fees and expenses plus the cumulative value of the Preferred Stock, the Borrower
may pay cash dividends to Holdings in an amount equal to the difference between
such sum and the amount of such proceeds; and
(i) Holdings may make Restricted Payments to its equity
holders in the form of Capital Stock of Holdings.
7.7 Limitation on Capital Expenditures. Make or commit to
make any Capital Expenditure, except (a) Capital Expenditures (excluding Capital
Expenditures referred to in clauses (b) and (c) of this Section 7.7) of the
Borrower and its Subsidiaries in the ordinary course of business not exceeding
$45,000,000 per fiscal year; provided, that (i) 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 (ii) Capital Expenditures made pursuant to this clause (a) 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 subclause (i) above, (b) Capital
Expenditures made with the proceeds of any Reinvestment Deferred Amount and (c)
Capital Expenditures made with Available Cash to the extent such Available Cash
has not been used to make Investments pursuant to Sections 7.8(i), (l), (m) or
(p) or Restricted Payments pursuant to Sections 7.6(d) or (f), or to pay,
prepay, repurchase, redeem or defease the Senior Subordinated Notes pursuant to
Section 7.9(a).
7.8 Limitation on 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 an ongoing business from, or make any
other investment in, any other Person (all of the foregoing, "Investments"),
except:
(a) extensions of trade credit or the holding of
receivables in the ordinary course of business;
(b) investments in Cash Equivalents;
78
(c) Investments arising in connection with the incurrence
of Indebtedness permitted by Section 7.2(b), (e) and (g);
(d) loans and advances to employees of Holdings, the
Borrower or any Subsidiaries of the Borrower in the ordinary course of business
(including, without limitation, for travel, entertainment and relocation
expenses) in an aggregate amount for Holdings, the Borrower and Subsidiaries of
the Borrower not to exceed $2,000,000 at any one time outstanding;
(e) the Acquisition;
(f) Investments in assets useful in the Borrower's or the
applicable Subsidiary Guarantor's business made by the Borrower or any of its
Subsidiaries with the proceeds of any Reinvestment Deferred Amount;
(g) Investments (other than those relating to the
incurrence of Indebtedness permitted by Section 7.8(c)) by Holdings, the
Borrower or any of its Subsidiaries in the Borrower or any Person that, prior to
such Investment, is a Subsidiary Guarantor;
(h) Investments consisting of notes payable by
franchisees to the Borrower or any Subsidiary Guarantor in an amount not to
exceed $75,000,000 in aggregate principal amount (including amounts outstanding
as of the Closing Date) at any one time outstanding;
(i) in addition to Investments otherwise expressly
permitted by this Section, Investments by the Borrower or any Subsidiary
Guarantors constituting acquisitions of franchisees, franchisee store locations
or other Persons in the same or similar line of business as the Borrower or its
Subsidiaries ("Permitted Acquisitions"); provided that
(i) immediately prior to and after giving effect
to any such Permitted Acquisition, (x) no Default or Event of Default
shall have occurred and be continuing and (y) the Borrower shall be in
pro forma compliance with the financial covenants set forth in Section
7.1 and the Borrower shall have certified each of the same to the
Administrative Agent in writing;
(ii) if such Permitted Acquisition is structured
as a stock acquisition, or a merger or consolidation, then either (A)
the Person so acquired becomes a Wholly Owned Subsidiary or (B) such
Person is merged with and into either the Borrower or a Wholly Owned
Subsidiary of the Borrower (with the Borrower or such Subsidiary being
the surviving corporation in such merger);
(iii) all of the provisions of Section 6.10 have
been or will be complied with in respect of such Permitted Acquisition;
and
(iv) (A) any cash consideration shall not exceed
$10,000,000 in the aggregate in any fiscal year plus up to $75,000,000
received as the proceeds from Indebtedness permitted under Section
7.2(i), in the aggregate in any fiscal year plus Available Cash to the
extent such cash has not been used to make Investments pursuant to
Sections 7.8(l), (m) or (p), Restricted Payments pursuant to Sections
7.6(d) or (f) or
79
Capital Expenditures pursuant to Section 7.7(c) and (B) Holdings may
also consummate such Permitted Acquisition in exchange for or with
Capital Stock of Holdings;
(j) Investments received in connection with the
bankruptcy or reorganization of, or settlement of delinquent accounts and
disputes with, franchisees, customers and suppliers;
(k) any Loan Party may make Investments consisting of
loans to employees, officers and directors of the Loan Parties not to exceed
$5,000,000, net of recoveries and distributions received in cash thereon by any
Loan Party, at any time outstanding;
(l) Investments by the Borrower or any of its
Subsidiaries in joint ventures with any Available Cash which has not been used
to make Restricted Payments pursuant to Sections 7.6(d) or (f), Capital
Expenditures pursuant to 7.7(c) or Investments pursuant to Sections 7.8(i), (m)
or (p), or to pay, prepay, repurchase, redeem or defease the Senior Subordinated
Notes pursuant to Section 7.9(a);
(m) intercompany Investments by the Borrower or any of
its Subsidiaries in any Person, that, prior to such Investment, is an Excluded
Foreign Subsidiary not to exceed $10,000,000 at any one time outstanding net of
recoveries and distributions thereon received in cash by any Loan Party, plus
the amount of any Available Cash which has not been used to make Restricted
Payments pursuant to Sections 7.6(d) or (f), Capital Expenditures pursuant to
Section 7.7(c) or Investments pursuant to Sections 7.8(i), (l) or (p), or to
pay, prepay, repurchase, redeem or defease the Senior Subordinated Notes
pursuant to Section 7.9(a);
(n) intercompany Investments among Excluded Foreign
Subsidiaries;
(o) Investments consisting of promissory notes and other
deferred payment obligations delivered as the purchase consideration for a
Disposition permitted by Section 7.5, so long as such notes and deferred payment
obligations (i) comprise less than 25% of the aggregate purchase consideration
for such Disposition and (ii) do not exceed $10,000,000 in the aggregate, net of
recoveries and distributions thereon received in cash by any Loan Party, at any
time outstanding;
(p) additional Investments (other than Permitted
Acquisitions) made (i) with any Available Cash which has not been used to make
Restricted Payments pursuant to Sections 7.6(d) or (f), Capital Expenditures
pursuant to Section 7.7(c) or Investments pursuant to Sections 7.8(i), (l) or
(m), or to pay, prepay, repurchase, redeem or defease the Senior Subordinated
Notes pursuant to Section 7.9(a) or (ii) in exchange for or with Capital Stock
of Holdings; and
(q) in addition to Investments otherwise expressly
permitted by this Section, Investments by the Borrower or any of its
Subsidiaries in an aggregate amount (initially valued at cost) not to exceed
$10,000,000 net of recoveries and distributions thereon received in cash by any
Loan Party during the term of this Agreement.
7.9 Limitation on Optional Payments and Modifications of
Debt Instruments, etc(a) . (a) Make or offer to make any optional or voluntary
payment, prepayment, repurchase or redemption of, or otherwise voluntarily or
optionally defease, the Senior Subordinated Notes or segregate funds for any
such payment, prepayment, repurchase, redemption or defeasance (other
80
than, in each case, (i) by a refinancing permitted by Section 7.2(f) or (ii)
with Available Cash which has not been used to make Restricted Payments pursuant
to Sections 7.6(d) or (f), Capital Expenditures pursuant to Section 7.7(c) or
Investments pursuant to Sections 7.8(i), (l), (m) or (p)), or enter into any
derivative or other transaction with any financial institution, commodities or
stock exchange or clearinghouse (a "Derivatives Counterparty") obligating
Holdings, the Borrower or any Subsidiary to make payments to such Derivatives
Counterparty as a result of any change in market value of the Senior
Subordinated Notes, (b) amend, modify or otherwise change, or consent or agree
to any amendment, modification, waiver or other change to, any of the terms of
the Senior Subordinated Notes (other than any such amendment, modification,
waiver or other change which (x)(i) would extend the maturity or reduce the
amount of any payment of principal thereof, reduce the rate or extend the date
for payment of interest thereon or relax any covenant or other restriction
applicable to Holdings, the Borrower or any of its Subsidiaries or (ii) does not
otherwise adversely affect the Lenders and (y) does not involve the payment of a
consent fee, other than a consent fee not to exceed 2.0% of the principal amount
of Senior Subordinated Notes held by consenting holders in connection with
consents solicited in connection with the prepayment of such Senior Subordinated
Notes), (c) designate any Indebtedness (other than the Obligations) as
"Designated Senior Indebtedness" for the purposes of the Senior Subordinated
Note Indenture or (d) amend its certificate of incorporation, by-laws or other
governing documents in any manner determined by the Administrative Agent to be
adverse to the Lenders.
7.10 Limitation on Transactions with Affiliates. Enter
into any transaction, including, without limitation, any purchase, sale, lease
or exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than Holdings,
the Borrower or any Subsidiary Guarantor) unless (1) such transaction is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of business
of Holdings, the Borrower or such Subsidiary, as the case may be, and (c) upon
fair and reasonable terms no less favorable to Holdings, the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person that is not an Affiliate or (2) such
transaction is with a non-Guarantor Subsidiary and is otherwise permitted under
this agreement and in the ordinary course of business of Holdings, the Borrower
or such Subsidiary, as the case may be. Notwithstanding the foregoing, the
Borrower and its Subsidiaries may (a) pay to the Sponsor and its Control
Investment Affiliates the management fees pursuant to the Management Agreement
approved by the board of directors of the Borrower in an aggregate amount not to
exceed $1,500,000 in any fiscal year of the Borrower and (b) enter into and
consummate the transactions listed on Schedule 7.10.
7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by Holdings, the Borrower
or any of its Subsidiaries of real or personal property which has been or is to
be sold or transferred by Holdings, the Borrower or such Subsidiary 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 Holdings,
the Borrower or such Subsidiary.
7.12 Limitation on 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.
81
7.13 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement that prohibits or limits the
ability of Holdings, the Borrower or any of its Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its Property or revenues, whether
now owned or hereafter acquired, to secure the Obligations or, in the case of
any guarantor, its obligations under the Guarantee and Collateral Agreement,
other than (a) this Agreement and the other Loan Documents, (b) the Senior
Subordinated Note Indenture and any agreements governing Indebtedness permitted
by Sections 7.2(f) and (i), to the extent such agreements are no more
restrictive than the Senior Subordinated Note Indenture, (c) any agreements
governing any purchase money Liens or Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby), (d) any agreements governing
Indebtedness of any Excluded Foreign Subsidiary permitted by Section 7.2(h) (in
which case, any such prohibition or limitation shall only be effective against
the assets of such Excluded Foreign Subsidiary and its Subsidiaries), (e) any
agreements governing Indebtedness permitted by Section 7.2(g) (in which case any
such prohibition shall only be effective against the assets permitted to be
subject to Liens permitted by Section 7.3(k)), (f) customary provisions in joint
venture agreements and similar agreements that restrict transfer of assets of,
or equity interests in, joint ventures, (g) licenses or sublicenses by the
Borrower and its Subsidiaries of Intellectual Property in the ordinary course of
business (in which case any prohibition or limitation shall only be effective
against the Intellectual Property subject thereto), (h) prohibitions and
limitations in effect on the date hereof and listed on Schedule 7.13(h) and (i)
provisions in leases that restrict the transfer of such lease by the lessee.
7.14 Limitation on Restrictions on Subsidiary
Distributions. Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary to (a) make
Restricted Payments in respect of any Capital Stock of such Subsidiary held by,
or pay or subordinate any Indebtedness owed to, Holdings, the Borrower or any
other Subsidiary, (b) make Investments in the Borrower or any other Subsidiary
or (c) transfer any of its assets to the Borrower or any other Subsidiary,
except for such encumbrances or restrictions existing under or by reason of (i)
any restrictions existing under the Loan Documents, (ii) any restrictions
existing under the Senior Subordinated Note Indenture and any agreements
governing Indebtedness permitted by Sections 7.2(f) and (i), to the extent such
restrictions are no more restrictive than those in the Senior Subordinated Note
Indenture, (iii) 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, (iv)
customary net worth provisions contained in real property leases entered into by
any Loan Party so long as such net worth provisions could not reasonably be
expected to impair materially the ability of the Loan Parties to meet their
ongoing obligations under this Agreement or any of the other Loan Documents, (v)
any restriction with respect to Excluded Foreign Subsidiaries in connection with
Indebtedness permitted by Section 7.2(h) and (vi) with respect to clause (c)
only, (i) agreements described in clauses (c)-(i) of Section 7.13, to the extent
set forth in such clauses and (ii) restrictions with respect to the transfer of
any asset contained in an agreement that has been entered into in connection
with the disposition of such asset permitted hereunder.
7.15 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those businesses
in which the Borrower and its
82
Subsidiaries are engaged on the date of this Agreement (after giving affect to
the Acquisition) or that are reasonably related thereto.
7.16 Limitation on Amendments to Acquisition
Documentation(a). (a) Amend, supplement or otherwise modify (whether pursuant
to a waiver granted by or to such Person or otherwise) or fail to enforce
strictly the terms and conditions of the indemnities and licenses furnished to
the Borrower or any of its Subsidiaries pursuant to the Acquisition
Documentation 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 otherwise
modify or fail to enforce the terms and conditions of the Acquisition
Documentation except to the extent that any such amendment, supplement or
modification or failure to enforce could not reasonably be expected to have a
Material Adverse Effect.
7.17 Limitation on Activities of Holdings. In the case of
Holdings, notwithstanding anything to the contrary in this Agreement or any
other Loan Document, (a) conduct, transact or otherwise engage in, or commit to
conduct, transact or otherwise engage in, any business or operations other than
those incidental to its ownership of the Capital Stock of the Borrower, (b)
incur, create, assume or suffer to exist any Indebtedness or other liabilities
or financial obligations, except (i) nonconsensual obligations imposed by
operation of law, (ii) pursuant to the Loan Documents to which it is a party,
the Senior Subordinated Note Indenture, the Management Agreement and the
Acquisition Agreement, (iii) obligations with respect to its Capital Stock
(including obligations to underwriters and other professionals in connection
with the issuance of such Capital Stock), (iv) Indebtedness expressly permitted
by Section 7.2 and (v) Investments expressly permitted by Section 7.8, or (c)
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 pending application in the manner contemplated by
said Section) and Cash Equivalents) other than the ownership of shares of
Capital Stock of the Borrower.
7.18 Limitation on Hedge Agreements. Enter into any Hedge
Agreement other than Hedge Agreements entered into in the ordinary course of
business, and not for speculative purposes, to protect against changes in
interest rates, commodity prices or foreign exchange rates.
7.19 Limitation on Activities of New GNC With respect to
New GNC, notwithstanding anything to the contrary in this Agreement or any other
Loan Document, cause or permit New GNC to (a) conduct, transact or otherwise
engage in, or commit to conduct, transact or otherwise engage in, any business
or operations other than those incidental to its ownership of the Capital Stock
of General Nutrition Incorporated, (b) incur, create, assume or suffer to exist
any Indebtedness or other liabilities or financial obligations, except (i)
nonconsensual obligations imposed by operation of law or, (ii) pursuant to the
Loan Documents to which it is a party and the Senior Subordinated Note
Indenture.
7.20 Limitation on Indebtedness of Gustine Associates:
Except to the extent required by the terms of the limited partnership agreement
of Gustine Associates on the date hereof, and subject to any fiduciary
obligations under statutory or common law, consent to or otherwise permit
Gustine Associates to create, incur, assume or suffer to exist (i) any
83
Indebtedness other than the Indebtedness of Gustine Associates outstanding on
the Closing Date and (ii) any Lien other than the Liens in existence on the
Closing Date and Liens of the type described in Section 7.3(b) arising by
operation of law.
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 Loan Party shall fail to pay 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
thereof; 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 furnished; 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,
or in Section 5 of the Guarantee and Collateral Agreement; or
(d) Any Loan Party shall default in the observance or
performance of any covenant or 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 following the earlier of (x) actual knowledge by a Responsible Officer of
any Loan Party and (y) written notice thereof by the Administrative Agent or the
Required Lenders; or
(e) Holdings, the Borrower or any of its Subsidiaries
shall (i) default in making any payment of any principal of any Indebtedness
(including, without limitation, any Guarantee Obligation, but excluding the
Loans and Reimbursement Obligations) on the scheduled or original due date with
respect thereto beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created; 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 to become subject to a mandatory offer to
purchase by the obligor thereunder or (in the case of any such Indebtedness
84
constituting a Guarantee Obligation) to become payable; provided, that a
default, event or condition described in clause (i), (ii) or (iii) of this
paragraph (e) 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 (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal amount of
which exceeds in the aggregate $10,000,000; or
(f) (i) Holdings, the Borrower or any of its Subsidiaries
(other than a non-Guarantor Immaterial Subsidiary) 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
Holdings, the Borrower or any of its Subsidiaries (other than a non-Guarantor
Immaterial Subsidiary) shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Holdings, the Borrower or
any of its Subsidiaries (other than a non-Guarantor Immaterial Subsidiary) 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 Holdings, the Borrower or any
of its Subsidiaries (other than a non-Guarantor Immaterial Subsidiary) 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) Holdings, the Borrower or any of its
Subsidiaries (other than a non-Guarantor Immaterial Subsidiary) 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) Holdings, the Borrower or any of its Subsidiaries (other than a
non-Guarantor Immaterial Subsidiary) shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become due; or
(g) (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
the Borrower 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 reasonably 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) the Borrower or any Commonly
Controlled Entity shall be reasonably likely to incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan, or (vi) any other similar event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (vi)
85
above, such event or condition, together with all other such events or
conditions, if any, could reasonably be expected to have a Material Adverse
Effect; or
(h) One or more judgments or decrees shall be entered
against Holdings, the Borrower or any of its Subsidiaries involving for
Holdings, the Borrower and its Subsidiaries taken as a whole a liability (not
paid or fully covered by insurance as to which the relevant insurance company
has acknowledged coverage) of $10,000,000 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
(i) Any of the Security Documents shall cease, for any
reason (other than by reason of the express release thereof pursuant to Section
10.15), to be in full force and effect, or any Loan Party or any Affiliate of
any Loan Party shall so assert, or any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and priority
purported to be created thereby; or
(j) The guarantee contained in Section 2 of the Guarantee
and Collateral Agreement shall cease, for any reason (other than by reason of
the express release thereof pursuant to Section 10.15), to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so assert; or
(k) Any Change of Control shall occur; or
(l) The Senior Subordinated Notes or the guarantees
thereof shall cease, for any reason, to be validly subordinated to the
Obligations or the obligations of the Subsidiary Guarantors under the Guarantee
and Collateral Agreement, as the case may be, as provided in the Senior
Subordinated Note Indenture, or any Loan Party, any Affiliate of any Loan Party,
the trustee in respect of the Senior Subordinated Notes or the holders of at
least 25% in aggregate principal amount of the Senior Subordinated Notes shall
so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, 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 Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon the Revolving Credit 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 hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents
86
required thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. In the case of 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 in
immediately available funds equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit (and the Borrower hereby grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a
continuing security interest in all amounts at any time on deposit in such cash
collateral account to secure the undrawn and unexpired amount of such Letters of
Credit and all other Obligations). If at any time the Administrative Agent
determines that any funds held in such cash collateral account are subject to
any right or claim of any Person other than the Administrative Agent and the
Secured Parties or that the total amount of such funds is less than the
aggregate undrawn and unexpired amount of outstanding Letters of Credit, the
Borrower shall, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in such cash
collateral account, an amount equal to the excess of (a) such aggregate undrawn
and unexpired amount over (b) the total amount of funds, if any, then held in
such cash collateral account that the Administrative Agent determines to be free
and clear of any such right and claim. 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 such Letters of Credit shall have expired or
been fully drawn upon, all Reimbursement Obligations shall have been satisfied
and all other obligations of the Borrower hereunder and under the other Loan
Documents shall have been paid in full, 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).
SECTION 9. THE AGENTS; THE ARRANGERS
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each Lender irrevocably authorizes each 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 such 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, no Agent shall 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 any Agent.
9.2 Delegation of Duties. Each 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. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
87
9.3 Exculpatory Provisions. Neither any Arranger, any Agent
nor any of its 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 directly 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 any Arranger or 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 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 Agents. Each 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,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by such Agent. The Agents may deem and treat the payee of
any Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 10.6 and all actions required by such
Section in connection with such transfer shall have been taken. Each 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 any other instructing group of Lenders specified by this
Agreement) as it deems appropriate or 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.
Each 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 or any other instructing group of Lenders specified by this
Agreement), 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.
9.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent shall have 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 shall receive such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement); provided that unless and until the Administrative Agent shall
have received
88
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 Arrangers, Agents and Other Lenders. Each
Lender expressly acknowledges that neither any of the Arrangers, any of the
Agents nor any of their respective officers, directors, employees, agents,
attorneys and other advisors, partners, 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 Arranger or any Agent to any Lender. Each Lender represents to
the Agents and the Arrangers that it has, independently and without reliance
upon any Arranger, or 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 (and in the case of any Issuing Lender, to
issue its Letters of Credit) hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon any
Arranger, 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, no
Arranger and no Agent shall 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 such Arranger or Agent or any of its officers, directors,
employees, agents, attorneys and other advisors, partners, attorneys-in-fact or
affiliates.
9.7 Indemnification. The Lenders agree to indemnify each
Arranger and each Agent 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), for, and to save each Arranger and each Agent harmless 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 (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against such Arranger or such Agent in any way relating to or arising out of,
the Commitments, this Agreement, any of the other Loan Documents, the
Acquisition Documentation, 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 Arranger or such Agent under or in connection
with any of the foregoing; provided that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits,
89
costs, expenses or disbursements that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted solely and
proximately from such Arranger's or such Agent's gross negligence or willful
misconduct. The agreements in this Section shall survive the payment of the
Loans and all other amounts payable hereunder.
9.8 Arrangers and Agents in their Individual Capacities. Each
Arranger and 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 Arranger or such Agent were not an Arranger or 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 Arranger and 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 Arranger or an Agent,
and the terms "Lender" and "Lenders" shall include each Arranger and Agent in
their individual capacities.
9.9 Successor Agents. The Administrative Agent may resign as
Administrative Agent upon 30 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(f) 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 or issuers of Letters of Credit. If no successor agent has
accepted appointment as Administrative Agent by the date that is 30 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. The Syndication Agent may, at
any time, by notice to the Lenders and the Administrative Agent, resign as
Syndication Agent hereunder, whereupon the duties, rights, obligations and
responsibilities of the Syndication Agent hereunder shall automatically be
assumed by, and inure to the benefit of, the Administrative Agent, without any
further act by any Arranger, any Agent or any Lender. After any retiring Agent's
resignation as 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 Agent
under this Agreement and the other Loan Documents.
9.10 Authorization to Release Liens and Guarantees. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
effect any release of Liens or guarantee obligations contemplated by Section
10.15.
9.11 The Arrangers; the Syndication Agent. The Arrangers and
the Syndication Agent, in their respective capacities as such, shall have no
duties or responsibilities, and shall incur no liability, under this Agreement
and the other Loan Documents.
90
9.12 Withholding Tax. (a) 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
forms or other documentation required by Section 2.20(e) are not delivered to
the Administrative Agent, then the Administrative Agent may withhold from any
interest payment to any Lender not providing such forms or other documentation,
a maximum amount of the applicable withholding tax.
(b) If the Internal Revenue Service or any authority of
the United States or other jurisdiction 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, was not properly
executed, or because such Lender failed to notify the Administrative Agent of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective), such Lender shall indemnify the Administrative
Agent fully for all amounts paid, directly or indirectly, by the Administrative
Agent as tax or otherwise, including penalties and interest, together with all
expenses incurred, including legal expenses, allocated staff costs and any out
of pocket expenses; provided that no Lender shall be liable for the payment of
any portion of such amounts that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted solely and proximately
from such Arranger's or such Agent's gross negligence or willful misconduct.
Nothing in this Section 9.12 reduces or eliminates the Borrower's obligations
under Section 2.20.
(c) If any Lender sells, assigns, grants a participation
in, or otherwise transfers its rights under this Agreement, the purchaser,
assignee, participant or transferee, as applicable, shall comply and be bound by
the terms of Sections 2.20(e) and 9.12; provided that with respect to any
Participant, as set forth in Section 10.6(b), such Participant shall only be
required to comply with the requirements of Sections 2.20(e) and 9.12. if such
Participant seeks to obtain the benefits of Section 2.20.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor
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 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 (including amendments and
restatements hereof or thereof) 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 may be specified in the instrument of waiver, 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 or Reimbursement
Obligation, extend the scheduled date of any amortization payment in
respect of any Term Loan, reduce the stated rate of any interest
91
or fee payable hereunder or extend the scheduled date of any payment
thereof, increase the amount or extend the expiration date of any
Commitment of any Lender, or permit any Interest Period with a duration
longer than 6 months, in each case without the consent of each Lender
directly affected thereby;
(ii) amend, modify or waive any provision of this
Section or 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 guarantee obligations under the Guarantee and Collateral
Agreement, in each case without the consent of all Lenders;
(iii) 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;
(iv) amend, modify or waive any provision of
Section 9 or any other provision affecting the rights, duties and
obligations of any Arranger or any Agent without the consent of any
Arranger or Agent directly affected thereby;
(v) amend, modify or waive any provision of
Section 2.6 or 2.7 without the written consent of the Swing Line
Lender;
(vi) amend, modify or waive the pro rata
provisions of Section 2.18 without the consent of each Lender directly
affected thereby;
(vii) amend, modify or waive any provision of
Section 3 without the consent of the Issuing Lender;
(viii) impose restrictions on assignments and
participations that are more restrictive than, or additional to, those
set forth in Section 10.6 without the consent of all Lenders directly
affected thereby; or
(ix) amend, modify or waive the provisions of
Section 2.12(d) to provide that Additional Extensions of Credit have a
preference to the Term Loans with respect to mandatory prepayments or
provide that any Term Loans have a preference to any other Term Loans
with respect to mandatory prepayment, in each case, without the consent
of each Term Loan Lender directly affected thereby.
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 Arrangers, the Agents and all future holders of the Loans. In the
case of any waiver, the Loan Parties, the Lenders, the Arrangers 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. Any such waiver, amendment, supplement or modification shall be
effected by a written instrument signed by the parties required to sign pursuant
to the foregoing provisions of this Section;
92
provided, that delivery of an executed signature page of any such instrument by
facsimile transmission shall be effective as delivery of a manually executed
counterpart thereof.
Notwithstanding the foregoing clauses (ii), (iii), (vi) and
(ix), this Agreement and any other Loan Document may be amended (or amended and
restated) with the written consent of the Required Lenders, the Administrative
Agent and each Loan Party party to each relevant Loan Document (x) 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 (collectively, the "Additional Extensions of Credit") 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 any Additional Extensions of Credit which do
not constitute an increase in the Revolving Credit Facility may share ratably in
the application of mandatory prepayments with other Term Loans and with
preference to Revolving Extensions of Credit and (y) to include appropriately
the Lenders holding such credit facilities in any determination of the Required
Lenders, Majority Facility Lenders, Term Loan Lenders and Majority Revolving
Facility Lenders.
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 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 (a) in the case of Holdings, the Borrower, the Arrangers,
and the Agents, as follows and (b) in the case of the Lenders, as set forth in
an administrative questionnaire delivered to the Administrative Agent or on
Schedule I to the Lender Addendum to which such Lender is a party or, in the
case of a Lender which becomes a party to this Agreement pursuant to an
Assignment and Acceptance, in such Assignment and Acceptance or (c) in the case
of any party, to such other address as such party may hereafter notify to the
other parties hereto:
Holdings: General Nutrition Centers Holding Company
00000 Xxxxxxxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Borrower: General Nutrition Centers, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Chief Legal
Officer
Telecopy: (000) 000-0000
Telephone: (000) 000-0000,
in each case with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
93
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent:
Xxxxxx Commercial Paper Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Syndication Agent: JPMorgan Chase Bank
0000 Xxxxxx, 00xx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Arrangers: Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
00
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Issuing Lender: As notified by such Issuing Lender to the
Administrative Agent and the Borrower
provided that any notice, request or demand to or upon any Arranger, any Agent,
the Issuing Lender or any Lender shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of any Arranger, any 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 herein, 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.
10.5 Payment of Expenses. The Borrower agrees (a) to pay
or reimburse the Arrangers and the Agents for all their reasonable out-of-pocket
costs and expenses incurred in connection with the syndication of the Facilities
(other than fees payable to syndicate members) and 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, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements and other charges of counsel to the
Administrative Agent (which expenses shall be limited to one primary law firm
and any other local and specialist law firms) and the charges of Intralinks, (b)
if a Default or Event of Default has occurred and is continuing, to pay or
reimburse each Lender, the Arrangers and the Agents for all their costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any other documents
prepared in connection herewith or therewith, including, without limitation, the
fees and disbursements of counsel (including the allocated fees and
disbursements and other charges of in-house counsel) to each Lender and of
counsel to the Agents (which expenses shall be limited to one set of primary,
local and specialist counsel for
95
the Administrative Agent and one set of primary, local and specialist counsel
for the Lenders), (c) to pay, indemnify, or reimburse each Lender, the Arrangers
and the Agents for, and hold each Lender, the Arrangers and the Agents 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, which 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 or
reimburse each Lender, each Arranger, each Agent, their respective affiliates,
and their respective officers, directors, partners, trustees, employees,
affiliates, shareholders, attorneys and other advisors, agents and controlling
persons (each, an "Indemnitee") for, and hold each 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, without limitation, any of the foregoing
relating to the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
Holdings, the Borrower any of its Subsidiaries or any of the Properties or the
use by unauthorized persons of information or other materials sent through
electronic, telecommunications or other information transmission systems that
are intercepted by such persons and the fees and disbursements and other charges
of legal counsel in connection with claims, actions or proceedings by any
Indemnitee against the Borrower hereunder (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 are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
directly from the gross negligence or willful misconduct of such Indemnitee. No
Indemnitee shall be liable for any damages arising from the use by unauthorized
persons of information or other materials sent through electronic,
telecommunications or other information transmission systems that are
intercepted by such persons or for any special, indirect, consequential or
punitive damages in connection with the Facilities. 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 so 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, except to the extent such claim,
demand, penalty, fine, liability, settlement, damage, cost or expense is found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted directly from the gross negligence or willful misconduct of such
Indemnitee. All amounts due under this Section shall be payable not later than
30 days after written demand therefor. Statements payable by the Borrower
pursuant to this Section shall be submitted to the address of the Borrower set
forth in Section 10.2, or to such other Person or address as may be hereafter
designated by the Borrower in a notice to the Administrative Agent. The
agreements in this Section shall survive repayment of the Loans and all other
amounts payable hereunder.
96
10.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure to the benefit
of Holdings, the Borrower, the Lenders, the Arrangers, the Agents, all future
holders of the Loans and their respective successors and assigns, except that
neither Holdings nor the Borrower may assign or transfer any of their respective
rights or obligations under this Agreement without the prior written consent of
the Arrangers, the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower
or any other Person, in accordance with applicable law, at any time sell to one
or more banks, financial institutions, investment fund or other entities (each,
a "Participant") participating interests in any Loan owing to such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan for all purposes under this Agreement
and the other Loan Documents, and the Borrower and the Agents shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. In no
event shall any Participant under any such participation have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would require the consent of all Lenders
pursuant to Section 10.1. The Borrower agrees that if amounts outstanding under
this Agreement and the Loans are due or unpaid, or shall have been declared or
shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall, to the maximum extent permitted by applicable law, be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 10.7(a) as fully as if such Participant
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.19, 2.20 and 2.21 with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if such Participant were a Lender; provided that, in the case of Section 2.20,
such Participant shall have complied with the requirements of said Section and
Section 9.12, and provided, further, that no Participant shall be entitled to
receive any greater amount pursuant to any such Section than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law and upon written notice to the Administrative Agent, at any time
and from time to time assign (i) to any Lender or any affiliate, Related Fund or
Control Investment Affiliate thereof or (ii) with the consent of the Borrower
and the Administrative Agent and, in the case of any assignment of Revolving
Credit Commitments, the written consent of the Swing Line Lender (which
consents, in each case, shall not be unreasonably withheld or delayed) (provided
that no such consent need be obtained by the Administrative Agent and its
affiliates), to an additional bank, financial institution, investment fund or
other entity (an "Assignee") all or any part of its rights and
97
obligations under this Agreement pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit E (an "Assignment and Acceptance"),
executed by such Assignee and such Assignor (and, where the consent of the
Borrower, the Administrative Agent or the Swing Line Lender is required pursuant
to the foregoing provisions, by the Borrower and such other Persons) and
delivered to the Administrative Agent for its acceptance and recording in the
Register; provided that no such assignment to an Assignee (other than any Lender
or any affiliate thereof (including any Related Fund or Control Investment
Affiliate)) shall be in an aggregate principal amount of less than $1,000,000
(with respect to Term Loans (treating multiple, simultaneous assignments by or
to two or more related funds in a single assignment)) and $5,000,000 with
respect to the Revolving Credit Facility (other than, in each case, in the case
of an assignment of all of a Lender's interests under this Agreement), unless
otherwise agreed by the Borrower and the Administrative Agent. Any such
assignment need not be ratable as among the Facilities. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with Commitments and/or
Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of an Assignor's rights and obligations under this Agreement, such Assignor
shall cease to be a party hereto, except as to Section 2.19, 2.20, 2.21, 9.12
and 10.5 in respect of the period prior to such effective date). Notwithstanding
any provision of this Section, the consent of the Borrower shall not be required
for any assignment that occurs at any time when any Event of Default shall have
occurred and be continuing. For purposes of the minimum assignment amounts set
forth in this paragraph, multiple assignments by two or more Related Funds shall
be aggregated.
(d) The Administrative Agent shall, on behalf of the
Borrower, maintain at its address referred to in Section 10.2 a copy of each
Assignment and Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment of,
and principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each Agent and the Lenders shall treat each Person whose name
is recorded in the Register as the owner of the Loans and any Notes evidencing
such Loans recorded therein for all purposes of this Agreement. Any assignment
of any Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide). Any assignment or transfer of all or part of a
Loan evidenced by a Note shall be registered on the Register only upon surrender
for registration of assignment or transfer of the Note evidencing such Loan,
accompanied by a duly executed Assignment and Acceptance; thereupon one or more
new Notes in the same aggregate principal amount shall be issued to the
designated Assignee, and the old Notes shall be returned by the Administrative
Agent to the Borrower marked "canceled". The Register shall be available for
inspection by the Borrower or 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.
(e) Upon its receipt of an Assignment and Acceptance
executed by an Assignor and an Assignee (and, in any case where the consent of
any other Person is required by Section 10.6(c), by each such other Person)
together with payment to the Administrative Agent
98
of a registration and processing fee of $3,500 (treating multiple, simultaneous
assignments by or to two or more Related Funds as a single assignment) (except
that no such registration and processing fee shall be payable in the case of an
Assignee which is already a Lender or is an affiliate or Related Fund of a
Lender or a Person under common management with a Lender), the Administrative
Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Borrower. On or prior to such effective date, the Borrower, at its own
expense, upon request, shall execute and deliver to the Administrative Agent (in
exchange for the Revolving Credit Note and/or applicable Term Notes, as the case
may be, of the assigning Lender) a new Revolving Credit Note and/or applicable
Term Notes, as the case may be, to such Assignee in an amount equal to the
Revolving Credit Commitment and/or applicable Term Loans, as the case may be,
assumed or acquired by it pursuant to such Assignment and Acceptance and, if the
Assignor has retained a Revolving Credit Commitment and/or Term Loans, as the
case may be, upon request, a new Revolving Credit Note and/or Term Notes, as the
case may be, to the order of the Assignor in an amount equal to the Revolving
Credit Commitment and/or applicable Term Loans, as the case may be, retained by
it hereunder. Such new Note or Notes shall be dated the Closing Date and shall
otherwise be in the form of the Note or Notes replaced thereby.
(f) For the avoidance of doubt, the parties to this
Agreement acknowledge that the provisions of this Section concerning assignments
of Loans and Notes relate only to absolute assignments and that such provisions
do not prohibit assignments creating security interests in Loans and Notes,
including, without limitation, any pledge or assignment by a Lender of any Loan
or Note to any Federal Reserve Bank in accordance with applicable law and any
Lender that is a fund that invests in bank loans may pledge all or a portion of
its rights (but not its obligation to make Loans) hereunder to any trustee or
holders of obligations owed, or securities issued by such fund as security for
such obligations or securities or to any other representative of such holders.
(g) Notwithstanding anything to the contrary contained
herein, any Lender (a "Granting Lender") may grant to a special purpose funding
vehicle (an "SPC"), identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC to
make any Loan and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any state thereof. In
addition, notwithstanding anything to the contrary in this Section
99
10.6(g), any SPC may (A) with notice to, but without the prior written consent
of, the Borrower and the Administrative Agent and without paying any processing
fee therefor, assign all or a portion of its interests in any Loans to the
Granting Lender, or with the prior written consent of the Borrower and the
Administrative Agent (which consent shall not be unreasonably withheld) to any
financial institutions providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans, and (B)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC; provided that
non-public information with respect to the Borrower may be disclosed only with
the Borrower's consent which will not be unreasonably withheld. This paragraph
(g) may not be amended without the written consent of any SPC with Loans
outstanding at the time of such proposed amendment.
10.7 Adjustments; Set-off. (a) Except to the extent that
this Agreement provides for payments to be allocated to a particular Lender or
to the Lenders under a particular Facility, if any Lender (a "Benefited Lender")
shall at any time 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(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefited Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefited
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 Benefited 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, 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 Event of
Default under Section 8(a), 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 to notify promptly 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 or of a Lender Addendum by facsimile transmission shall be effective
as delivery of a manually executed counterpart hereof. A set of the copies of
100
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,
the Arrangers and the Lenders with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or warranties
by any Arranger, 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.
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 located in the county of New York, the courts of the United
States of America 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.
101
10.13 Acknowledgments. 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 Arranger, 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 Arrangers, the Agents and the Lenders, on one hand,
and Holdings and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; 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 Arrangers, the Agents and the Lenders or among Holdings, the
Borrower and the Lenders.
10.14 Confidentiality. Each of the Arrangers, the Agents
and the Lenders agrees to keep confidential all non-public information provided
to it by any Loan Party pursuant to this Agreement that is designated by such
Loan Party as confidential; provided that nothing herein shall prevent any
Arrangers, any Agent or any Lender from disclosing any such information (a) to
any Arranger, any Agent, any other Lender or any affiliate of any thereof that
agrees to comply with the provisions of this Section, (b) to any Participant or
Assignee (each, a "Transferee") or prospective Transferee that agrees to comply
with the provisions of this Section or substantially equivalent provisions, (c)
to any of its employees, directors, agents, attorneys, accountants and other
professional advisors, (d) to any financial institution that is a direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees to be bound by the
provisions of this Section), (e) upon the request or demand of any Governmental
Authority having jurisdiction over it, (f) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (g) if requested or required to do so in connection with any
litigation or similar proceeding, (h) that has been publicly disclosed other
than in breach of this Section, (i) 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 (j) in
connection with the exercise of any remedy hereunder or under any other Loan
Document. Notwithstanding anything to the contrary in the foregoing sentence or
any other express or implied agreement, arrangement or understanding, the
parties hereto hereby agree that, from the commencement of discussions with
respect to the financing provided hereunder, any party hereto (and each of its
employees, representatives, or agents) is permitted to disclose to any and all
persons, without limitation of any kind, the tax structure and tax treatment of
the transactions contemplated hereby, and any facts that may be relevant to the
tax treatment and tax structure of the transactions contemplated hereby;
provided, however, that no party (and no employee, representative, or other
agent thereof) shall disclose any other information that is not relevant to
understanding the tax treatment and tax structure of the transactions (including
the identity of any party and any information that could lead another to
determine the identity of any party, or
102
any other information to the extent that such disclosure could result in a
violation of any federal or state securities law.
10.15 Release of Collateral and Guarantee Obligations.
(a) Notwithstanding anything to the contrary contained
herein or in any other Loan Document, upon request of the Borrower in connection
with any Disposition of Property permitted by the Loan Documents, the
Administrative Agent shall (without notice to, or vote or consent of, any
Lender, or any affiliate of any Lender that is a party to any Specified Hedge
Agreement) take such actions as shall be required to release its security
interest in any Collateral being Disposed of in such Disposition, and to release
any guarantee obligations under any Loan Document of any Person being Disposed
of in such Disposition, to the extent necessary to permit consummation of such
Disposition in accordance with the Loan Documents; provided that the Borrower
shall have delivered to the Administrative Agent, at least ten Business Days
prior to the date of the proposed release (or such shorter period agreed to by
the Administrative Agent), a written request for release identifying the
relevant Collateral being Disposed of in such Disposition and the terms of such
Disposition in reasonable detail, including the date thereof, the price thereof
and any expenses in connection therewith, together with a certification by the
Borrower stating that such transaction is in compliance with this Agreement and
the other Loan Documents and that the proceeds of such Disposition will be
applied in accordance with this Agreement and the other Loan Documents.
(b) Notwithstanding anything to the contrary contained
herein or any other Loan Document, when all Obligations (other than obligations
in respect of any Specified Hedge Agreement) have been paid in full, all
Commitments have terminated or expired and no Letter of Credit shall be
outstanding, upon request of the Borrower, the Administrative Agent shall
(without notice to, or vote or consent of, any Lender, or any affiliate of any
Lender that is a party to any Specified Hedge Agreement) take such actions as
shall be required to release its security interest in all Collateral, and to
release all guarantee obligations provided for in any Loan Document, whether or
not on the date of such release there may be outstanding Obligations in respect
of Specified Hedge Agreements. Any such release of guarantee obligations shall
be deemed subject to the provision that such guarantee obligations shall be
reinstated if after such release any portion of any payment in respect of the
Obligations guaranteed thereby shall be rescinded or must otherwise be restored
or returned upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payment had not been made.
(c) For purposes of this Section 10.15, a Letter of
Credit shall not be deemed outstanding if (i) the Loans, the Reimbursement
Obligations and the other Obligations under the Loan Documents shall have been
paid in full and the Commitments have been terminated and (ii) (A) the Borrower
has (x) deposited with each Issuing Lender cash to be held by such Issuing
Lender as cash collateral in an amount equal to 105% of the face amount of each
Letter of Credit issued by such Issuing Lender to be available to such Issuing
Lender to reimburse payments of drafts drawn under such Letter of Credit and pay
any fees and expenses related thereto and (y) prepaid to each Issuing Lender the
entire fees payable under Sections 2.9(a) and 3.3 with respect
103
to any Letters of Credit issued by such Issuing Lender for the full remaining
term of such Letters of Credit or (B) the Borrower has backed such Letter of
Credit, on terms and conditions reasonably acceptable to the Issuing Lender,
with another letter of credit from a financial institution reasonably acceptable
to the Issuing Lender. Upon termination of a Letter of Credit which has been
cash collateralized as provided in this Section, the unearned portion of such
prepaid fee attributable to such Letter of Credit shall be refunded to the
Borrower, together with the deposit described in the preceding clause (x) with
respect to such Letter of Credit to the extent not previously applied by the
applicable Issuing Lender in the manner described herein. Each Issuing Lender
hereby acknowledges and agrees that if a Letter of Credit has been cash
collateralized as provided in this Section, all obligations of the Lenders with
respect to such Letters of Credit shall have terminated, including the
obligations of the Lenders to purchase L/C Participations pursuant to Section
3.4 and the obligations of the Lenders to make Revolving Loans pursuant to
Section 2.4.
10.16 Accounting Changes. 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 Holdings, the Borrower and the Administrative Agent agree to
enter into negotiations in order to amend such provisions of this Agreement so
as to equitably reflect such Accounting Change with the desired result that the
criteria for evaluating Holdings' and the Borrower's financial condition shall
be the same after such Accounting Change as if such Accounting Change had not
been made. Until such time as such an amendment shall have been executed and
delivered by Holdings and 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 Change had
not occurred. "Accounting Change" refers to any change 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.
10.17 Delivery of 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, Holdings, the Borrower and the
Administrative Agent.
10.18 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE
ARRANGERS, 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.
10.19 Subordination of Intercompany Indebtedness. Holdings
and the Borrower agree that they will not, and will not permit any Loan Party to
become obligated or otherwise liable for any intercompany Indebtedness (other
than intercompany accounts receivable and payable in the ordinary course of
business) that is owed to any Foreign Subsidiary of the Borrower, unless such
Foreign Subsidiary agrees that (a) such Indebtedness is completely subordinated
to the Obligations and subject in right of payment to the prior payment in full
of the Obligations, and (b) if an Event of Default has occurred and is
continuing, no payment on any such Indebtedness shall be made until the payment
in full in cash of the Obligations.
104
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.
GENERAL NUTRITION CENTERS
HOLDING COMPANY
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President and Treasurer
GENERAL NUTRITION CENTERS, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President and
Secretary
[signatures continued next page]
105
XXXXXX BROTHERS INC.,
as Arranger
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
X.X. XXXXXX SECURITIES INC.,
as Arranger
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
JPMORGAN CHASE BANK,
as Syndication Agent
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
106
Annex A
PRICING GRID FOR REVOLVING CREDIT LOANS AND SWING LINE LOANS
Consolidated Leverage Applicable Margin Applicable Margin for
Ratio Eurodollar Loans Base Rate Loans
-------------------------------------------------------------------------
> or = 3.00 to 1.00 3.00% 2.00%
-------------------------------------------------------------------------
<3.00 to 1.00 and > or = 2.25
to 1.00 2.75% 1.75%
-------------------------------------------------------------------------
<2.25 to 1.00 2.50% 1.50%
-------------------------------------------------------------------------
Changes in the Applicable Margin with respect to Revolving Credit Loans and
Swing Line Loans resulting from changes in the Consolidated Leverage Ratio shall
become effective on the date (the "Adjustment Date") on which financial
statements are delivered to the Lenders pursuant to Section 6.1(a) (but in any
event not later than the 45th day after the end of each of the first three
quarterly periods of each fiscal year or the 90th day after the end of each
fiscal year, as the case may be) and shall remain in effect until the next
change to be effected pursuant to this paragraph. If any financial statements
referred to above are not delivered within the time periods specified above,
then, until such financial statements are delivered, the Consolidated Leverage
Ratio as at the end of the fiscal period that would have been covered thereby
shall for the purposes of this definition be deemed to be greater than 3.00 to
1.00. Each determination of the Consolidated Leverage Ratio pursuant to this
Pricing Grid shall be made with respect to the period of four consecutive fiscal
quarters of the Borrower ending at the end of the period covered by the relevant
financial statements.
107
