EXHIBIT 10.5
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AMENDED AND RESTATED CREDIT AGREEMENT
among
RENT-A-CENTER, INC.,
as Borrower,
The Several Lenders from Time to Time Parties Hereto,
COMERICA BANK,
as Documentation Agent,
BANK OF AMERICA, N.A.,
as Syndication Agent,
and
JPMORGAN CHASE BANK,
as Administrative Agent
Dated as of August 5, 1998,
as Amended and Restated as of May 3, 2002
X.X. XXXXXX SECURITIES INC.,
as Sole Lead Arranger and Sole Bookrunner
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS..........................................................................................1
1.1. Defined Terms...................................................................................1
1.2. Other Definitional Provisions..................................................................22
SECTION 2. AMOUNT AND TERMS OF FACILITIES......................................................................23
2.1. Tranche B Term Loans, Tranche C Term Loans and Tranche D Term Commitments......................23
2.2. Revolving Commitments..........................................................................23
2.3. Swingline Commitment...........................................................................24
2.4. [RESERVED].....................................................................................24
2.5. Procedure for Revolving Loan Borrowing.........................................................24
2.6. Procedure for Swingline Borrowing; Refunding of Swingline Loans................................24
2.7. Repayment of Loans.............................................................................26
2.8. Commitment Fees, etc...........................................................................27
2.9. Termination or Reduction of Revolving Commitments..............................................28
2.10. Optional Prepayments...........................................................................28
2.11. Mandatory Prepayments..........................................................................28
2.12. Conversion and Continuation Options............................................................29
2.13. Limitations on Eurodollar Tranches.............................................................30
2.14. Interest Rates and Payment Dates...............................................................30
2.15. Computation of Interest and Fees...............................................................30
2.16. Inability to Determine Interest Rate...........................................................31
2.17. Pro Rata Treatment and Payments................................................................31
2.18. Requirements of Law............................................................................33
2.19. Taxes..........................................................................................34
2.20. Indemnity......................................................................................35
2.21. Change of Lending Office.......................................................................36
2.22. Replacement of Lenders.........................................................................36
SECTION 3. LETTERS OF CREDIT...................................................................................36
3.1. LC Commitments.................................................................................36
3.2. Procedure for Issuance of Letter of Credit.....................................................37
3.3. Fees and Other Charges.........................................................................37
3.4. RC LC Participations...........................................................................38
3.5. Tranche D LC Participations....................................................................39
3.6. Reimbursement Obligation of the Borrower.......................................................40
3.7. Obligations Absolute...........................................................................41
3.8. Letter of Credit Payments......................................................................41
3.9. Applications...................................................................................41
SECTION 4. REPRESENTATIONS AND WARRANTIES......................................................................41
4.1. Financial Condition............................................................................41
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4.2. No Change......................................................................................42
4.3. Corporate Existence; Compliance with Law.......................................................42
4.4. Corporate Power; Authorization; Enforceable Obligations........................................42
4.5. No Legal Bar...................................................................................42
4.6. Litigation.....................................................................................42
4.7. No Default.....................................................................................42
4.8. Ownership of Property; Liens...................................................................43
4.9. Intellectual Property..........................................................................43
4.10. Taxes..........................................................................................43
4.11. Federal Regulations............................................................................43
4.12. Labor Matters..................................................................................43
4.13. ERISA..........................................................................................43
4.14. Investment Company Act; Other Regulations......................................................44
4.15. Subsidiaries...................................................................................44
4.16. Use of Proceeds................................................................................44
4.17. Environmental Matters..........................................................................44
4.18. Accuracy of Information, etc...................................................................45
4.19. Security Documents.............................................................................45
4.20. Solvency.......................................................................................46
4.21. Senior Indebtedness............................................................................46
4.22. Regulation H...................................................................................46
SECTION 5. CONDITIONS PRECEDENT................................................................................46
5.1. Conditions to Effectiveness....................................................................46
5.2. Conditions to Each Extension of Credit.........................................................46
SECTION 6. AFFIRMATIVE COVENANTS...............................................................................47
6.1. Financial Statements...........................................................................47
6.2. Certificates; Other Information................................................................47
6.3. Payment of Obligations.........................................................................48
6.4. Maintenance of Existence; Compliance...........................................................49
6.5. Maintenance of Property; Insurance.............................................................49
6.6. Inspection of Property; Books and Records; Discussions.........................................49
6.7. Notices........................................................................................49
6.8. Environmental Laws.............................................................................50
6.9. Interest Rate Protection.......................................................................50
6.10. Additional Collateral, etc.....................................................................50
6.11. Permitted Acquisitions.........................................................................51
SECTION 7. NEGATIVE COVENANTS..................................................................................52
7.1. Financial Condition Covenants..................................................................52
7.2. Indebtedness...................................................................................52
7.3. Liens..........................................................................................53
7.4. Fundamental Changes............................................................................54
7.5. Disposition of Property........................................................................55
7.6. Restricted Payments............................................................................55
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7.7. Capital Expenditures...........................................................................56
7.8. Investments....................................................................................56
7.9. Payments and Modifications of Certain Debt Instruments and Preferred Stock.....................57
7.10. Transactions with Affiliates...................................................................57
7.11. Sales/Leaseback Transactions...................................................................57
7.12. Changes in Fiscal Periods......................................................................57
7.13. Negative Pledge Clauses........................................................................57
7.14. Clauses Restricting Subsidiary Distributions...................................................57
7.15. Lines of Business..............................................................................58
SECTION 8. EVENTS OF DEFAULT...................................................................................58
SECTION 9. THE AGENTS..........................................................................................61
9.1. Appointment....................................................................................61
9.2. Delegation of Duties...........................................................................61
9.3. Exculpatory Provisions.........................................................................61
9.4. Reliance by Administrative Agent...............................................................62
9.5. Notice of Default..............................................................................62
9.6. Non-Reliance on Agents and Other Lenders.......................................................62
9.7. Indemnification................................................................................63
9.8. Agent in Its Individual Capacity...............................................................63
9.9. Successor Administrative Agent.................................................................63
9.10. Authorization to Release Guarantees and Liens..................................................64
9.11. Documentation Agent and Syndication Agent......................................................64
SECTION 10. MISCELLANEOUS......................................................................................64
10.1. Amendments and Waivers.........................................................................64
10.2. Notices........................................................................................65
10.3. No Waiver; Cumulative Remedies.................................................................65
10.4. Survival of Representations and Warranties.....................................................66
10.5. Payment of Expenses and Taxes..................................................................66
10.6. Successors and Assigns; Participations and Assignments.........................................67
10.7. Adjustments; Setoff............................................................................68
10.8. Counterparts...................................................................................69
10.9. Severability...................................................................................69
10.10. Integration....................................................................................69
10.11. GOVERNING LAW..................................................................................69
10.12. Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and unconditionally:.....69
10.13. Acknowledgements...............................................................................70
10.14. Confidentiality................................................................................70
10.15. WAIVERS OF JURY TRIAL..........................................................................72
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ANNEX:
A Pricing Grid
SCHEDULES:
1.1A Tranche D Credit-Linked Deposits on Restatement Effective Date
4.4 Consents, Authorizations, Filings and Notices
4.6 Litigation
4.15 Subsidiaries
4.19(a) UCC and Other Filings / Jurisdictions and Offices
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.14 Existing Restrictions
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 Form of Legal Opinion of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
G Form of Addendum
H Form of Exemption Certificate
I-1 Form of New Revolving Lender Supplement
I-2 Form of Increased Revolving Facility Activation Notice
I-3 Form of New Tranche D LC Lender Supplement
I-4 Form of Increased Tranche D LC Facility Activation Notice
CREDIT AGREEMENT, dated as of August 5, 1998, as amended and
restated as of May 3, 2002, among RENT-A-CENTER, 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"), COMERICA BANK, as
documentation agent (in such capacity, the "Documentation Agent"), BANK OF
AMERICA, N.A., as syndication agent (in such capacity, the "Syndication Agent"),
and JPMORGAN CHASE BANK, as administrative agent.
WHEREAS, the Borrower entered into a
Credit Agreement, dated
as of August 5, 1998, as amended and restated as of June 29, 2000, as further
amended prior to the date hereof (the "Existing
Credit Agreement"), with
JPMorgan Chase Bank, as administrative agent, the banks, financial institutions
or other entities parties thereto as lenders and certain other parties;
WHEREAS, the parties hereto have agreed to amend and restate
the Existing
Credit Agreement as provided in this Agreement, which Agreement
shall become effective upon the satisfaction of the conditions precedent set
forth in Section 5.1 hereof; and
WHEREAS, it is the intent of the parties hereto that this
Agreement not constitute a novation of the obligations and liabilities existing
under the Existing
Credit Agreement or evidence repayment of any of such
obligations and liabilities and that this Agreement amend and restate in its
entirety the Existing
Credit Agreement and re-evidence the obligations of the
Borrower outstanding thereunder;
NOW, THEREFORE, in consideration of the above premises, the
parties hereto hereby agree that on the Restatement Effective Date (as defined
below) the Existing
Credit Agreement shall be amended and restated in its
entirety as follows:
SECTION 1. DEFINITIONS
1.1. Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof: "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Reference Lender as its prime rate in effect
at its principal office in
New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by the Reference Lender in connection
with extensions of credit to debtors); "Base CD Rate" shall mean the sum of (a)
the product of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the C/D
Reserve Percentage and (b) the C/D Assessment Rate; and "Three-Month Secondary
CD Rate" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if such day
shall not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve Bank of
New
York (which rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in
New York City
received at approximately 10:00 A.M.,
New York City time, on such day (or, if
such day shall not be a Business Day, on the next preceding Business Day) by the
Reference Lender from three
New York City
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negotiable certificate of deposit dealers of recognized standing selected by it.
Any change in the ABR due to a change in the Prime Rate, the Three-Month
Secondary CD 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,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Addendum": an Addendum, substantially in the form of Exhibit
G, pursuant to which a Lender consents to the amendment and restatement of the
Existing
Credit Agreement pursuant to this Agreement and (in the case of any
Tranche D LC Lender that is not already a Lender) becomes a party to this
Agreement effective as of the Restatement Effective Date.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": JPMorgan Chase Bank, together with its
affiliates, as the arranger of the Facilities and as the administrative agent
for the Lenders under this Agreement and the other Loan Documents, together with
any of its successors.
"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent,
the Documentation Agent and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to the sum of (a) the aggregate then unpaid principal amount of
such Lender's Term Loans, (b) the amount of such Lender's Revolving Commitment
then in effect or, if the Revolving Commitments have been terminated, the amount
of such Lender's Revolving Extensions of Credit then outstanding and (c) without
duplication, the amount of such Lender's Tranche D Credit-Linked Deposit and
unreimbursed Tranche D LC Reimbursement Amount then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": this
Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": (a) for each Type of Loan (other than
Tranche D Term Loans and Tranche D LC Equivalent Loans), the rate per annum set
forth under the relevant column heading in the Pricing Grid, (b) for each
Tranche D Term Loan that is a Eurodollar Loan, 3.00%, (c) for each Tranche D
Term Loan that is an ABR Loan, 2.00%, (d) for each Tranche D LC Equivalent Loan
that is a Eurodollar Loan, 2.75%, and (e) for each Tranche D LC Equivalent Loan
that is an ABR Loan, 1.75%.
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to open a
Letter of Credit.
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"Approved Fund": with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"Asset Sale": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clause
(a), (b), (c), (d) or (f) of Section 7.5 and any Disposition of Cash
Equivalents) that yields gross proceeds to 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 $500,000.
"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": an Assignment and Acceptance,
substantially in the form of Exhibit E.
"Assignor": as defined in Section 10.6(c).
"Assumed Indebtedness": Indebtedness assumed in connection
with a Permitted Acquisition, provided that (a) such Indebtedness is outstanding
at the time of such acquisition and was not incurred in connection therewith or
in contemplation thereof and (b) in the event that such Permitted Acquisition
constitutes an acquisition of property other than Capital Stock, such
Indebtedness was incurred in order to acquire or improve such property.
"Available Revolving Commitment": as to any Revolving Lender
at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Commitment then in effect over (b) such Lender's Revolving Extensions
of Credit then outstanding; provided, that in calculating any Lender's Revolving
Extensions of Credit for the purpose of determining such Lender's Available
Revolving Commitment pursuant to Section 2.8(a), the aggregate principal amount
of Swingline Loans then outstanding shall be deemed to be zero.
"Benchmark LIBOR Rate": as defined in Section 3.5(c).
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrower Deposit Payment": as defined in Section 3.5(a).
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Business": as defined in Section 4.17(b).
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in
New York City are authorized or required by law
to close, provided, that with respect to notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
such day is also a day for trading by and between banks in Dollar deposits in
the interbank eurodollar market.
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"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures (other than those made pursuant to
Permitted Acquisitions) by such Person and its Subsidiaries 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 but excluding merchandise inventory acquired during such
period) that should be capitalized under GAAP on a consolidated balance sheet of
such Person and its Subsidiaries.
"Capital Expenditures (Expansion)": for any period, with
respect to any Person, any Capital Expenditures made by such Person in
connection with the opening of new stores to be operated by such Person.
"Capital Expenditures (Maintenance)": for any period, with
respect to any Person, any Capital Expenditures which do not constitute Capital
Expenditures (Expansion) of such Person.
"Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash/Debt Consideration": with respect to any Permitted
Acquisition, the portion of the Purchase Price with respect thereto that is
payable in the forms referred to in clauses (a) and (d) of the definition of
"Purchase Price" set forth in Section 1.1.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-2 by Standard & Poor's Ratings Services ("S&P") or P-2 by Xxxxx'x
Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) short term investments (not exceeding 30 days) in loans made to
obligors having an investment grade rating from each of S&P and Xxxxx'x; or (h)
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shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (g) of this
definition.
"C/D Assessment Rate": for any day as applied to any ABR Loan,
the annual assessment rate in effect on such day that is payable by a member of
the Bank Insurance Fund maintained by the Federal Deposit Insurance Corporation
(the "FDIC") classified as well-capitalized and within supervisory subgroup "B"
(or a comparable successor assessment risk classification) within the meaning of
12 C.F.R. Section 327.4 (or any successor provision) to the FDIC (or any
successor) for the FDIC's (or such successor's) insuring time deposits at
offices of such institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on such day,
as prescribed by the Board, for determining the maximum reserve requirement for
a Depositary Institution (as defined in Regulation D of the Board as in effect
from time to time) in respect of new non-personal time deposits in Dollars
having a maturity of 30 days or more.
"Closing Date": August 5, 1998.
"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 Fee Rate": the rate per annum set forth under the
relevant column heading in the Pricing Grid.
"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 regarding the Borrower dated April 2002 and furnished to
certain Lenders.
"Consolidated Current Assets": at any date, (a) all amounts
(other than cash and Cash Equivalents) that would, in conformity with GAAP, be
set forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date and
(b) without duplication of clause (a) above, the book value of all rental
merchandise inventory of the Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
the Borrower and its Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of the Borrower and its Subsidiaries and (b) without
duplication of clause (a) above, all Indebtedness consisting of Revolving Loans
or Swingline Loans to the extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income
for such period plus, without duplication and to the extent reflected as a
charge or reduction in the statement of such
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Consolidated Net Income for such period, the sum of (a) income tax expense, (b)
interest expense, amortization or writeoff of debt discount and debt issuance
costs and commissions and other fees and charges associated with Indebtedness
(including the Loans), (c) depreciation (excluding depreciation of rental
merchandise) and amortization expense, including, without limitation,
amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (d) any extraordinary, unusual or non-recurring non-cash
expenses or losses (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period, non-cash
losses on sales of assets outside of the ordinary course of business) and (e)
any other non-cash charges, and minus, to the extent included in the statement
of such Consolidated Net Income for such period, the sum of (a) interest income,
(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) and (c) any other non-cash income earned
outside the ordinary course of business, all as determined on a consolidated
basis. For the purposes of calculating Consolidated EBITDA for any Reference
Period pursuant to any determination of the Consolidated Leverage Ratio, if
during such Reference Period the Borrower or any Subsidiary shall have made a
Material Disposition or Material Acquisition, Consolidated EBITDA for such
Reference Period shall be calculated after giving pro forma effect thereto as if
such Material Disposition or Material Acquisition occurred on the first day of
such Reference Period. As used in this definition, "Material Acquisition" means
any acquisition of property or series of related acquisitions of property that
(a) constitutes assets comprising all or substantially all of an operating unit
of a business or constitutes all or substantially all of the common stock of a
Person and (b) involves the payment of consideration by the Borrower and its
Subsidiaries in excess of $15,000,000 (or such lesser amount as the Borrower may
determine in its discretion); and "Material Disposition" means any Disposition
of property or series of related Dispositions of property that yields gross
proceeds to the Borrower or any of its Subsidiaries in excess of $15,000,000 (or
such lesser amount as the Borrower may determine in its discretion).
"Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) the sum of Consolidated EBITDA for such period and, to the
extent reducing Consolidated Net Income for such period, Consolidated Lease
Expense for such period, less the aggregate amount actually paid by the Borrower
and its Subsidiaries during such period on account of Capital Expenditures
(Maintenance) to (b) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b)
Consolidated Lease Expense for such period, (c) regular, scheduled payments made
during such period on account of principal of Indebtedness of the Borrower or
any of its Subsidiaries (including scheduled principal payments in respect of
the Term Loans but excluding prepayments thereof) and (d) cash dividend payments
made during such period in respect of the Preferred Stock.
"Consolidated Funded Debt": at any date, the aggregate
principal amount of all Funded Debt (which, for purposes of the calculation of
Consolidated Funded Debt, shall be deemed to exclude any unfunded portion of the
Letters of Credit) of the Borrower and its Subsidiaries at such date, determined
on a consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense": for any period, total cash
interest expense (including that attributable to Capital Lease Obligations), net
of cash interest income, of the Borrower and its Subsidiaries for such period
with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries (including all commissions, discounts and other fees and charges
owed with respect to letters
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of credit and bankers' acceptance financing, commitment fees payable pursuant to
Section 2.8(a) or (b), amounts payable by the Borrower pursuant to Section
3.5(c) and net costs under Hedge Agreements in respect of such Indebtedness to
the extent such net costs are allocable to such period in accordance with GAAP).
"Consolidated Lease Expense": for any period, the aggregate
amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries for such period with respect to leases of real and personal
property, determined on a consolidated basis in accordance with GAAP.
"Consolidated Leverage Ratio": as at the last day of any
period, the ratio of (a) Consolidated Funded Debt on such day to (b)
Consolidated EBITDA for such period.
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Net Income Amount": at any date of
determination, an amount equal to cumulative Consolidated Net Income from
January 1, 2002 through the last day of the most recent fiscal quarter for which
financial statements have been delivered pursuant to Section 6.1.
"Consolidated Net Worth": at any date, all amounts that would,
in conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' equity at such date.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control Investment Affiliate": as 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 by such Person
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 (including, in any event, a "Default" under and as defined in the
Senior Subordinated Note Indenture).
8
"Disposition": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms "Dispose" and "Disposed of" shall have correlative meanings.
"Documentation Agent": as defined in the preamble hereto.
"Dollars" and "$": dollars in lawful currency of the United
States.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan (other than any Eurodollar Loan
having a seven-day 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 Telerate screen as of 11:00 A.M., London time, two Business Days prior to
the beginning of such Interest Period, provided that if such rate does not
appear on Page 3750 of the Telerate screen (or otherwise on such screen) the
"Eurodollar Base Rate" shall be determined by reference to such other comparable
publicly available service for displaying eurodollar rates as may be selected by
the Administrative Agent. If no such rate is available or if the Eurodollar Base
Rate is being determined in connection with any Eurodollar Loan having a
seven-day Interest Period, such rate shall be determined by reference to the
rate at which the Administrative Agent is offered Dollar deposits at or about
10:00 A.M.,
New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where its eurodollar and
foreign currency and exchange operations are then being conducted for delivery
on the first day of such Interest Period for the number of days comprised
therein.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
9
"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 (including, in any event, an "Event of Default" under
and as defined in the Senior Subordinated Note Indenture).
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) an amount equal to the amount of all non-cash
charges (including depreciation (other than depreciation of rental merchandise)
and amortization) deducted in arriving at such Consolidated Net Income, (iii)
decreases in Consolidated Working Capital for such fiscal year, and (iv) an
amount equal to the aggregate net non-cash loss on the Disposition of property
by the Borrower and its Subsidiaries during such fiscal year (other than
Dispositions of (x) rental merchandise otherwise included in changes in
Consolidated Working Capital and (y) inventory in the ordinary course of
business), to the extent deducted in arriving at such Consolidated Net Income,
over (b) the sum, without duplication, of (i) an amount equal to 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 (excluding the
principal amount of Indebtedness incurred in connection with such expenditures
and any such expenditures financed with the proceeds of any Reinvestment
Deferred Amount), (iii) the aggregate amount actually paid by the Borrower in
cash during such fiscal year on account of Permitted Acquisitions, (iv) the
aggregate amount of all prepayments of Revolving Loans and Swingline Loans
during such fiscal year to the extent accompanying permanent optional reductions
of the Revolving Commitments and all optional prepayments of the Term Loans
during such fiscal year (including prepayments of the Term Loans required by
Section 7.6(e) or clause (ii) of the proviso contained in Section 7.9(a)), (v)
the aggregate amount of all regularly scheduled principal payments of Funded
Debt (including the Term Loans) of the Borrower and its Subsidiaries made during
such fiscal year, (vi) increases in Consolidated Working Capital for such fiscal
year, and (vii) an amount equal to the aggregate net non-cash gain on the
Disposition of property by the Borrower and its Subsidiaries during such fiscal
year (other than sales of inventory in the ordinary course of business), to the
extent included in arriving at such Consolidated Net Income.
"Excess Cash Flow Application Date": as defined in Section
2.11(d).
"Excluded Foreign Subsidiary": any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the
Obligations, would, in the good faith judgment of the Borrower, result in
adverse tax consequences to the Borrower.
"Existing Credit Agreement": as defined in the recitals
hereto.
"Facility": the credit facility consisting of, as applicable,
(a) the Tranche B Term Loans (the "Tranche B Term Facility"), (b) the Tranche C
Term Loans (the "Tranche C Term Facility"), (c) the Tranche D Term Loans (the
"Tranche D Term Facility"), (d) the Revolving Commitments and the extensions of
credit made thereunder (the "Revolving Facility") and (e) the Tranche D Letters
of Credit, the Tranche D Credit-Linked Deposit and any Tranche D LC
Reimbursement Amount (the "Tranche D LC Facility").
10
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of
New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Funded Debt": as to any Person, on any date, (a) all
Indebtedness of such Person that matures more than one year from the date of its
creation or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year from such
date or arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year from
such date, including all current maturities and current sinking fund payments in
respect of such Indebtedness whether or not required to be paid within one year
from the date of its creation and, in the case of the Borrower, Indebtedness in
respect of the Loans and the Reimbursement Obligations (but excluding, in the
case of the Borrower, any Guarantee Obligations of the Borrower in respect of
Indebtedness of franchisees, to the extent permitted by Section 7.2(h)), minus
(b) the aggregate amount of cash and Cash Equivalents on the consolidated
balance sheet of the Borrower and its Subsidiaries on such date, but in no event
exceeding $30,000,000.
"Funding Office": the office of the Administrative Agent
specified in Section 10.2 or such other office as may be specified from time to
time by the Administrative Agent as its funding office by written notice to the
Borrower and the Lenders.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 7.1,
GAAP shall be determined on the basis of such principles in effect on the
Closing Date and consistent with those used in the preparation of the most
recent audited financial statements delivered pursuant to Section 4.1(b). In the
event that any "Accounting Change" (as defined below) shall occur and such
change results in a change in the method of calculation of financial covenants,
standards or terms in this Agreement, then the Borrower and the Administrative
Agent agree to enter into negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such Accounting Changes with the desired
result that the criteria for evaluating the Borrower's financial condition shall
be the same after such Accounting Changes as if such Accounting Changes had not
been made. Until such time as such an amendment shall have been executed and
delivered by the Borrower, the Administrative Agent and the Required Lenders,
all financial covenants, standards and terms in this Agreement shall continue to
be calculated or construed as if such Accounting Changes had not occurred.
"Accounting Changes" refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the SEC.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement executed and delivered by the Borrower and each Subsidiary
Guarantor, substantially in the form of Exhibit A, as the same may be amended,
supplemented or otherwise modified from time to time.
11
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including 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 any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Hedge Agreements": all swaps, caps, collars or similar
arrangements providing for protection against fluctuations in interest rates,
currency exchange rates or commodities prices or the exchange of nominal
interest obligations, either generally or under specific contingencies.
"Increased Revolving Facility Activation Notice": a notice
substantially in the form of Exhibit I-2.
"Increased Revolving Facility Closing Date": any Business Day
designated as such in an Increased Revolving Facility Activation Notice.
"Increased Tranche D LC Facility Activation Notice": a notice
substantially in the form of Exhibit I-4.
"Increased Tranche D LC Facility Closing Date": any Business
Day designated as such in an Increased Tranche D LC Facility Activation Notice.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
such Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar facilities, (g) the
liquidation value of all redeemable preferred Capital Stock of such Person
(other than any such preferred Capital Stock that is not redeemable until a date
that is no earlier than one year and one day after the final maturity of the
Loans and the Preferred Stock), (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g) above;
(i) all
12
obligations of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation; and (j) for the purposes of
Section 8(e) only, all obligations of such Person in respect of Hedge
Agreements.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, technology, know-how and processes, and all rights to xxx at
law or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR 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 Loan that is an ABR Loan
and any Swingline 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 seven days (in the case of
Revolving Loans only) or one, two, three or six months thereafter, as selected
by the Borrower in its notice of borrowing or notice of conversion, as the case
may be, given with respect thereto; and (b) thereafter, each period commencing
on the last day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending seven days (in the case of Revolving Loans only) or
one, two, three or six 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:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) the Borrower may not select an Interest Period for a
particular Facility that would extend beyond the final maturity date
applicable thereto;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
13
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
Notwithstanding the foregoing, clause (iii) above shall not apply to Eurodollar
Loans having a seven-day Interest Period.
"Investments": as defined in Section 7.8.
"Issuing Lender": JPMorgan Chase Bank (or any of its
Affiliates, including, without limitation, JPMorgan Chase Bank of Delaware), in
its capacity as issuer of any Letter of Credit.
"LC Fee Payment Date": the last day of each March, June,
September and December, the last day of the Revolving Commitment Period (in the
case of RC Letters of Credit) and the Tranche D LC Termination Date (in the case
of Tranche D Letters of Credit).
"Lenders": as defined in the preamble hereto.
"LC 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 (including any unreimbursed Tranche D
LC Reimbursement Amount).
"Letters of Credit": as defined in Section 3.1. Letters of
Credit shall be either (a) "Tranche D Letters of Credit" to the extent of
Letters of Credit having an aggregate face amount not exceeding the Tranche D LC
Amount or (b) "RC Letters of Credit" to the extent of Letters of Credit having
an aggregate face amount in excess of the Tranche D LC Amount.
"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 any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement, including any Tranche D LC Equivalent Loan.
"Loan Documents": this Agreement, the Security Documents and
the Notes.
"Loan Equivalent Notice": a notice delivered by the Borrower
to the Administrative Agent at any time on or after the date on which any
Tranche D Credit-Linked Deposit has been applied to reimburse the Issuing Lender
pursuant to Section 3.5(a), which notice shall specify that the Borrower wishes
to treat the relevant portion of the Tranche D LC Reimbursement Amount in a
manner equivalent, mutatis mutandis, to the treatment of "Loans" (and, as
applicable, subject to Section 2.12, "ABR Loans" or "Eurodollar Loans")
hereunder.
"Loan Parties": 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, the Total Revolving Extensions of Credit or (without duplication) the
Total Tranche D Credit-Linked Deposit and unreimbursed Tranche D LC
14
Reimbursement Amount, as the case may be, outstanding under such Facility (or in
the case of the Revolving Facility, prior to any termination of the Revolving
Commitments, the holders of more than 50% of the Total Revolving Commitments).
"Material Adverse Effect": a material adverse effect on (a)
the business, property, operations, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole or (b) the
validity or enforceability of this Agreement or any of the other Loan Documents
or the rights or remedies of the Administrative Agent or the Lenders hereunder
or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation.
"Mortgaged Property": any real property of any Loan Party as
to which the Administrative Agent for the benefit of the Lenders has been
granted a Lien pursuant to any Mortgage.
"Mortgage": any mortgage or deed of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders, 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 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 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 attorneys' fees, accountants' fees, investment
banking fees, amounts required to be applied to the repayment of Indebtedness
secured by a Lien expressly permitted hereunder on any asset that is the subject
of such Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable currently
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) 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.
"New Revolving Lender": as defined in Section 2.2(d).
"New Revolving Lender Supplement": as defined in Section
2.2(d).
"New Tranche D LC Lender": as defined in Section 3.1(e).
"New Tranche D LC Lender Supplement": as defined in Section
3.1(e).
"Non-Excluded Taxes": as defined in Section 2.19(a).
15
"Non-U.S. Lender": as defined in Section 2.19(d).
"Notes": the collective reference to any promissory note
evidencing Loans.
"Obligations": the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or 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 and all other
obligations and liabilities of the Borrower to the Administrative Agent or to
any Lender (or, in the case of Hedge Agreements, any affiliate of any Lender),
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 Hedge
Agreement entered into with any Lender or any affiliate of any Lender in
connection with this 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 all
fees, charges and disbursements of counsel to the Administrative Agent or to any
Lender that are required to be paid by the Borrower pursuant hereto) or
otherwise.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": any acquisition, consisting of a
single transaction or a series of related transactions, by the Borrower or any
one or more of its Wholly Owned Subsidiary Guarantors of all of the Capital
Stock of, or all or a substantial part of the assets of, or of a business, unit
or division of, any Person organized under the laws of the United States or any
state thereof (such business, unit or division, the "Acquired Business"),
provided that (a) the consideration paid by the Borrower or such Subsidiary or
Subsidiaries pursuant to such acquisition shall be solely in a form referred to
in clause (a), (b), (c) or (d) of the definition of "Purchase Price" set forth
in Section 1.1 (or some combination thereof), (b) the requirements of Section
6.11 have been satisfied with respect to such acquisition, (c) the Borrower
shall be in compliance, on a pro forma basis after giving effect to such
acquisition, with the covenants contained in Section 7.1, in each case
recomputed as at the last day of the most recently ended fiscal quarter of the
Borrower as if such acquisition had occurred on the first day of each relevant
period for testing such compliance, (d) no Default or Event of Default shall
have occurred and be continuing, or would occur after giving effect to such
acquisition, (e) all actions required to be taken with respect to any acquired
or newly formed Subsidiary or otherwise with respect to the Acquired Business in
such acquisition under Section 6.10 shall have been taken, (f) the aggregate
Purchase Prices in respect of such acquisition and all other Permitted
Acquisitions consummated in accordance with this Agreement shall not exceed, in
any fiscal year of the Borrower, the sum of (i) $100,000,000 (or, if the
Consolidated Leverage Ratio as of the last day of any fiscal quarter during such
fiscal year is less than 3.50 to 1.0, $150,000,000) and (ii) an additional up to
$25,000,000 to the extent not expended as Capital Expenditures (Expansion)
during such fiscal year pursuant to 7.7(b), (g) the Cash/Debt Consideration in
respect of such acquisition and all other Permitted Acquisitions consummated in
accordance with this Agreement shall not exceed, in any fiscal year of the
Borrower, $150,000,000 (plus any amounts available pursuant to the foregoing
clause (f)(ii)), and (h) any such acquisition shall have been approved by the
Board of Directors
16
or such comparable governing body of the Person (or whose business, unit or
division is, as the case may be) being acquired.
"Permitted Investors": the collective reference to (a) the
Sponsor and (b) the Xxxxxx Persons.
"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.
"Preferred Stock": the Series A Preferred Stock, $0.01 par
value, of the Borrower.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Projections": as defined in Section 6.2(c).
"Properties": as defined in Section 4.17(a).
"Purchase Price": with respect to any Permitted Acquisition,
the sum (without duplication) of (a) the amount of cash paid by the Borrower and
its Subsidiaries in connection with such acquisition, (b) the value (as
determined for purposes of such acquisition in accordance with the applicable
acquisition agreement) of all Capital Stock of the Borrower issued or given as
consideration in connection with such acquisition, (c) the Qualified Net Cash
Equity Proceeds applied to finance such acquisition and (d) the principal amount
(or, if less, the accreted value) at the time of such acquisition of all Assumed
Indebtedness with respect thereto.
"Qualified Net Cash Equity Proceeds": the Net Cash Proceeds of
any offering of Capital Stock of the Borrower, provided that (a) such offering
was made in express contemplation of a Permitted Acquisition, (b) such Capital
Stock is not mandatorily redeemable and (c) such Permitted Acquisition is
consummated within 90 days after receipt by the Borrower of such Net Cash
Proceeds.
"RC LC Commitment": the amount of the Total Revolving
Commitments.
"RC LC Obligations": at any time, an amount equal to the sum
of (a) the aggregate then undrawn and unexpired amount of the then outstanding
RC Letters of Credit and (b) the aggregate amount of drawings under RC Letters
of Credit that have not then been reimbursed pursuant to Section 3.6.
"RC LC Participants": the collective reference to all
Revolving Lenders (including the Issuing Lender), as participants in each RC
Letter of Credit.
"RC Letter of Credit": as defined in the definition of
"Letters of Credit".
"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 the Borrower or any of its Subsidiaries.
17
"Reference Lender": JPMorgan Chase Bank.
"Reference Period": with respect to any date, the period of
four consecutive fiscal quarters of the Borrower immediately preceding such date
or, if such date is the last day of a fiscal quarter, ending on such date.
"Refunded Swingline Loans": as defined in Section 2.6(b).
"Refunding Date": as defined in Section 2.6(c).
"Register": as defined in Section 10.6(d).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse pursuant to Section 3.6 amounts paid under Letters of Credit
(including the obligation to reimburse any unreimbursed Tranche D LC
Reimbursement Amount).
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the Borrower or
any of its Subsidiaries in connection therewith that are not applied to prepay
the Term Loans pursuant to Section 2.11(c) as a result of the delivery of a
Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash Proceeds
of an Asset Sale or Recovery Event to acquire assets useful in its business.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire
assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring twelve months after
such Reinvestment Event and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, acquire assets useful in
the Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. Section 4043.
"Required Lenders": at any time, the holders of more than 50%
of the sum of (a) the aggregate unpaid principal amount of the Term Loans then
outstanding, (b) the Total Revolving Commitments then in effect or, if the
Revolving Commitments have been terminated, the Total Revolving
18
Extensions of Credit then outstanding and (c) without duplication, the Total
Tranche D Credit-Linked Deposit and unreimbursed Tranche D LC Reimbursement
Amount then outstanding.
"Required Prepayment Lenders": the Majority Facility Lenders
in respect of each of the Tranche B Term Facility, the Tranche C Term Facility,
the Tranche D Term Facility and the Revolving Facility.
"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": the chief executive officer, president,
chief financial officer or treasurer of the Borrower, but in any event, with
respect to financial matters, the chief financial officer or president of the
Borrower.
"Restatement Effective Date": the date on which the conditions
precedent set forth in Section 5.1 shall have been satisfied, which date is May
3, 2002.
"Restricted Payments": as defined in Section 7.6.
"Revolving Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Loans and participate in Swingline Loans
and RC Letters of Credit.
"Revolving Commitment Period": the period ending on the
Revolving Scheduled Commitment Termination Date.
"Revolving Extensions of Credit": as to any Revolving Lender
at any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Loans held by such Lender then outstanding, (b) such Lender's
Revolving Percentage of the RC LC Obligations then outstanding and (c) such
Lender's Revolving Percentage of the aggregate principal amount of Swingline
Loans then outstanding.
"Revolving Lender": each Lender that has a Revolving
Commitment or that holds Revolving Loans.
"Revolving Loans": as defined in Section 2.2.
"Revolving Percentage": as to any Revolving Lender at any
time, the percentage which such Lender's Revolving Commitment then constitutes
of the Total Revolving Commitments (or, at any time after the Revolving
Commitments shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Loans then outstanding constitutes
of the aggregate principal amount of the Revolving Loans then outstanding).
"Revolving Scheduled Commitment Termination Date": July 31,
2004.
"Sale/Leaseback Transaction": any arrangement providing for
the leasing to the Borrower or any Subsidiary of real or personal property that
has been or is to be (a) sold or transferred by the Borrower or any Subsidiary
or (b) constructed or acquired by a third party in anticipation of a program of
leasing to the Borrower or any Subsidiary.
19
"SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages 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 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 or otherwise modified from
time to time in accordance with Section 7.9.
"Senior Subordinated Notes": the subordinated notes of the
Borrower issued pursuant to the Senior Subordinated Note Indenture.
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control" as
defined in the Senior Subordinated Note Indenture.
"Xxxxxx Persons": the collective reference to Xxxx X. Xxxxxx,
any person having a relationship with Xxxx X. Xxxxxx by blood, marriage or
adoption not more remote than first cousin and any trust established for the
benefit of any such person.
"Sponsor": Apollo Management IV, L.P., Apollo Investment Fund
IV, L.P., Apollo Overseas Partners IV, L.P. and their Control Investment
Affiliates.
"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
20
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than any Excluded Foreign Subsidiary.
"Swingline Commitment": the obligation of the Swingline Lender
to make Swingline Loans pursuant to Section 2.6 in an aggregate principal amount
at any one time outstanding not to exceed $20,000,000.
"Swingline Lender": JPMorgan Chase Bank, in its capacity as
the lender of Swingline Loans.
"Swingline Loans": as defined in Section 2.3.
"Swingline Participation Amount": as defined in Section
2.6(c).
"Syndication Agent": as defined in the preamble hereto.
"Term Lenders": the collective reference to the Tranche B Term
Lenders, the Tranche C Term Lenders and the Tranche D Term Lenders.
"Term Loans": the collective reference to the Tranche B Term
Loans, the Tranche C Term Loans and the Tranche D Term Loans.
"Total Revolving Commitments": at any time, the aggregate
amount of the Revolving Commitments then in effect. The amount of the Total
Revolving Commitments as of the Restatement Effective Date is $120,000,000.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"Total Tranche D Credit-Linked Deposit": at any time, the
aggregate amount of the Tranche D Credit-Linked Deposit then outstanding. The
amount of the Total Tranche D Credit-Linked Deposit as of the Restatement
Effective Date is $80,000,000.
"Tranche B Term Lender": each Lender that holds a Tranche B
Term Loan.
"Tranche B Term Loan": as defined in Section 2.1(a).
"Tranche B Term Percentage": as to any Tranche B Term Lender
at any time, 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.
"Tranche C Term Lender": each Lender that holds a Tranche C
Term Loan.
"Tranche C Term Loan": as defined in Section 2.1(b).
"Tranche C Term Percentage": as to any Tranche C Term Lender
at any time, the percentage which the aggregate principal amount of such
Lender's Tranche C Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche C Term Loans then outstanding.
21
"Tranche D Credit-Linked Deposit": as defined in Section
3.5(a).
"Tranche D Credit-Linked Deposit Account": the account
established by the Administrative Agent under its sole and exclusive control and
designated as the "Rent-A-Center Tranche D Credit-Linked Deposit Account" that
shall be used solely for the purposes set forth in Section 3.5.
"Tranche D LC Amount": an aggregate amount equal to
$80,000,000 on the Restatement Effective Date, which amount (a) may be increased
from time to time (i) pursuant to Section 3.1(d) or (ii) by the amount of any
Borrower Deposit Payment and (b) shall be decreased by the amount of any
decrease in the Total Tranche D Credit-Linked Deposit.
"Tranche D LC Equivalent Loan": any portion of the Tranche D
LC Reimbursement Amount as to which a Loan Equivalent Notice has been given.
Tranche D LC Equivalent Loans shall be ABR Loans unless and until they are
converted into Eurodollar Loans pursuant to Section 2.12. It is understood that
Tranche D LC Equivalent Loans do not constitute "Term Loans".
"Tranche D LC Lender": each Lender that has an outstanding
Tranche D Credit-Linked Deposit or an unreimbursed Tranche D LC Reimbursement
Amount.
"Tranche D LC Percentage": as to any Tranche D LC Lender at
any time, the percentage which such Lender's Tranche D Credit-Linked Deposit
then outstanding constitutes of the Total Tranche D Credit-Linked Deposit then
outstanding or, if the Total Tranche D Credit-Linked Deposit shall have been
reduced to $0, such percentage in effect immediately prior to such reduction.
"Tranche D LC Reimbursement Amount": as defined in Section
3.5(a). The portion of the Tranche D LC Reimbursement Amount held by each
Tranche D LC Lender shall be deemed to equal its Tranche D LC Percentage
thereof. The Tranche D LC Reimbursement Amount shall include any portion thereof
that has been designated as a Tranche D LC Equivalent Loan in accordance with
the terms hereof.
"Tranche D LC Termination Date": December 31, 2007.
"Tranche D Letter of Credit": as defined in the definition of
"Letters of Credit".
"Tranche D Term Lender": each Lender holds a Tranche D Term
Loan.
"Tranche D Term Loan": as defined in Section 2.1(b).
"Tranche D Term Percentage": as to any Tranche D Term Lender
at any time, the percentage which the aggregate principal amount of such
Lender's Tranche D Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche D Term Loans then outstanding.
"Transferee": any Assignee or Participant.
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"United States": the United States of America.
22
"Voting Stock": with respect to any Person, any class or
series of Capital Stock of such Person that is ordinarily entitled to vote in
the election of directors thereof at a meeting of stockholders called for such
purpose, without the occurrence of any additional event or contingency.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2. Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto. Any defined term used in
the Existing Credit Agreement (or the "Existing Credit Agreement" referred to in
the Existing Credit Agreement) and deleted pursuant to this Agreement or the
Existing Credit Agreement, as the case may be, shall, to the extent such defined
term is still contained in any other Loan Document, continue to have the same
meaning as set forth in the Existing Credit Agreement or such "Existing Credit
Agreement", as the case may be, subject to any applicable modification of any
related term pursuant to this Agreement.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to 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, (ii)
the words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation" and (iii) the words "asset" and "property"
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, Capital
Stock, securities, revenues, accounts, leasehold interests and contract rights.
(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.
23
SECTION 2. AMOUNT AND TERMS OF FACILITIES
2.1. Tranche B Term Loans, Tranche C Term Loans and Tranche D
Term Commitments. (a) Subject to the terms and conditions hereof, (i) the
"Tranche B Term Loan" held by each Tranche B Term Lender under the Existing
Credit Agreement shall remain outstanding pursuant to this Agreement, (ii) the
"Tranche C Term Loan" held by each Tranche C Term Lender under the Existing
Credit Agreement shall remain outstanding pursuant to this Agreement and (iii)
the "Tranche D Term Loan" held by each Tranche D Term Lender under the Existing
Credit Agreement shall remain outstanding pursuant to this Agreement.
(b) The Term Loans may from time to time be Eurodollar Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.4, 2.5 and 2.12.
2.2. Revolving Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Lender severally agrees to make revolving
credit loans ("Revolving Loans") to the Borrower from time to time during the
Revolving Commitment Period in an aggregate principal amount at any one time
outstanding which, when added to such Lender's Revolving Percentage of the sum
of (i) the RC LC Obligations then outstanding and (ii) the aggregate principal
amount of the Swingline Loans then outstanding, does not exceed the amount of
such Lender's Revolving Commitment. During the Revolving Commitment Period the
Borrower may use the Revolving Commitments by borrowing, prepaying the Revolving
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.5 and 2.12.
(b) The Borrower and any one or more Revolving Lenders
(including New Revolving Lenders) may agree that each such Lender shall obtain a
Revolving Commitment or increase the amount of its existing Revolving
Commitment, as applicable, in each case by executing and delivering to the
Administrative Agent an Increased Revolving Facility Activation Notice
specifying (i) the amount of such increase and (ii) the Increased Revolving
Facility Closing Date. Notwithstanding the foregoing, without the consent of the
Required Lenders, (i) the aggregate amount of incremental Revolving Commitments
obtained pursuant to this paragraph shall not exceed $40,000,000 and (ii) no
more than one Increased Revolving Facility Closing Date may be selected by the
Borrower during the term of this Agreement. No Lender shall have any obligation
to participate in any increase described in this paragraph unless it agrees to
do so in its sole discretion.
(c) Any additional bank, financial institution or other entity
which, with the consent of the Borrower and the Administrative Agent (which
consent shall not be unreasonably withheld), elects to become a "Revolving
Lender" under this Agreement in connection with any transaction described in
Section 2.2(b) shall execute a New Revolving Lender Supplement (each, a "New
Revolving Lender Supplement"), substantially in the form of Exhibit I-1,
whereupon such bank, financial institution or other entity (a "New Revolving
Lender") shall become a Revolving Lender for all purposes and to the same extent
as if originally a party hereto and shall be bound by and entitled to the
benefits of this Agreement.
(d) For the purpose of providing that the respective amounts
of Revolving Loans (and Eurodollar Tranches in respect thereof) held by the
Revolving Lenders are held pro rata according to their respective Revolving
Commitments, unless otherwise agreed by the Administrative Agent, on the
Increased Revolving Facility Closing Date, the Borrower shall borrow a Revolving
Loan from each relevant Lender in an amount determined by reference to the
amount of each Type of Loan (and, in the case of Eurodollar Loans, of each
Eurodollar Tranche) which would then have been outstanding from
24
such Lender if (i) each such Type or Eurodollar Tranche had been borrowed or
effected on the Increased Revolving Facility Closing Date and (ii) the aggregate
amount of each such Type or Eurodollar Tranche requested to be so borrowed or
effected had been proportionately increased. The Eurodollar Base Rate applicable
to any Eurodollar Loan borrowed pursuant to the preceding sentence shall equal
the Eurodollar Base Rate then applicable to the Eurodollar Loans of the other
Lenders in the same Eurodollar Tranche (or, until the expiration of the
then-current Interest Period, such other rate as shall be agreed upon between
the Borrower and the relevant Lender).
2.3. Swingline Commitment. Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Commitments from time to time
during the Revolving Commitment Period by making swing line loans ("Swingline
Loans") to the Borrower; provided that (a) the aggregate principal amount of
Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender's other outstanding
Revolving Loans hereunder, may exceed the Swingline Commitment then in effect)
and (b) the Borrower shall not request, and the Swingline Lender shall not make,
any Swingline Loan if, after giving effect to the making of such Swingline Loan,
the aggregate amount of the Available Revolving Commitments would be less than
zero. During the Revolving Commitment Period, the Borrower may use the Swingline
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swingline Loans shall be ABR Loans only.
2.4. [RESERVED].
2.5. Procedure for Revolving Loan Borrowing. The Borrower may
borrow under the Revolving Commitments during the Revolving Commitment Period on
any Business Day, provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 Noon,
New York City time, (a) three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business
Day prior to the requested Borrowing Date, in the case of ABR Loans), specifying
(i) the amount and Type of Loans to be borrowed, (ii) the requested Borrowing
Date and (iii) in the case of Eurodollar Loans, the respective amounts of each
such Type of Loan and the respective lengths of the initial Interest Period
therefor. Each borrowing under the Revolving Commitments shall be in an amount
equal to (x) in the case of ABR Loans, $2,000,000 or a whole multiple of
$500,000 in excess thereof (or, if the then aggregate Available Revolving
Commitments are less than $2,000,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $3,000,000 or a whole multiple of $1,000,000 in excess
thereof; provided, that the Swingline Lender may request, on behalf of the
Borrower, borrowings under the Revolving Commitments that are ABR Loans in other
amounts pursuant to Section 2.6. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each relevant Lender
thereof. Each relevant Lender will make the amount of its pro rata share of each
borrowing available to the Administrative Agent for the account of the Borrower
at the Funding Office prior to 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 crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made available to the
Administrative Agent by the relevant Lenders and in like funds as received by
the Administrative Agent.
2.6. Procedure for Swingline Borrowing; Refunding of Swingline
Loans. (a) Whenever the Borrower desires that the Swingline Lender make
Swingline Loans it shall give the Swingline Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swingline Lender not later than 1:00 P.M., New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date (which
25
shall be a Business Day during the Revolving Commitment Period). Each borrowing
under the Swingline 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 a notice in respect of Swingline
Loans, the Swingline Lender shall make available to the Administrative Agent at
the Funding Office an amount in immediately available funds equal to the amount
of the Swingline Loan to be made by the Swingline Lender. The Administrative
Agent shall make the proceeds of such Swingline Loan available to the Borrower
on such Borrowing Date by depositing such proceeds in the account of the
Borrower with the Administrative Agent on such Borrowing Date in immediately
available funds.
(b) The Swingline Lender, at any time and from time to time in
its sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swingline Lender to act on its behalf), on one Business
Day's notice given by the Swingline Lender no later than 12:00 Noon, New York
City time (with a copy of such notice being provided to the Borrower), request
each Revolving Lender to make, and each Revolving Lender hereby agrees to make,
a Revolving Loan, in an amount equal to such Revolving Lender's Revolving
Percentage of the aggregate amount of the Swingline Loans (the "Refunded
Swingline Loans") outstanding on the date of such notice, to repay the Swingline
Lender. Each Revolving Lender shall make the amount of such Revolving Loan
available to the Administrative Agent at the Funding Office in immediately
available funds, not later than 10:00 A.M., New York City time, one Business Day
after the date of such notice. The proceeds of such Revolving Loans shall be
immediately made available by the Administrative Agent to the Swingline Lender
for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to
charge the Borrower's accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swingline Loans to the extent amounts received from the Revolving
Lenders are not sufficient to repay in full such Refunded Swingline Loans (with
notice of such charge being provided to the Borrower, provided that the failure
to give such notice shall not affect the validity of such charge).
(c) If prior to the time a Revolving Loan would have otherwise
been made pursuant to Section 2.6(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 Swingline Lender in its sole
discretion, Revolving Loans may not be made as contemplated by Section 2.6(b),
each Revolving Lender shall, on the date such Revolving Loan was to have been
made pursuant to the notice referred to in Section 2.6(b) (the "Refunding
Date"), purchase for cash an undivided participating interest in the then
outstanding Swingline Loans by paying to the Swingline Lender an amount (the
"Swingline Participation Amount") equal to (i) such Revolving Lender's Revolving
Percentage times (ii) the sum of the aggregate principal amount of Swingline
Loans then outstanding that were to have been repaid with such Revolving Loans.
(d) Whenever, at any time after the Swingline Lender has
received from any Revolving Lender such Lender's Swingline Participation Amount,
the Swingline Lender receives any payment on account of the Swingline Loans, the
Swingline Lender will distribute to such Lender its Swingline Participation
Amount (appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's participating interest was outstanding
and funded and, in the case of principal and interest payments, to reflect such
Lender's pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.
(e) Each Revolving Lender's obligation to make the Loans
referred to in Section 2.6(b) and to purchase participating interests pursuant
to Section 2.6(c) shall be absolute and
26
unconditional and shall not be affected by any circumstance, including (i) any
setoff, counterclaim, recoupment, defense or other right that such Revolving
Lender or the Borrower may have against the Swingline Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
2.7. Repayment of Loans. (a) The Tranche B Term Loan of each
Tranche B Term Lender shall mature in 9 remaining installments, each of which
shall be in an amount equal to such Lender's Tranche B Term Percentage
multiplied by the amount set forth below opposite such installment (provided
that the aggregate amount of the final installment shall in any event equal the
aggregate then outstanding principal amount of the Tranche B Term Loans):
Installment Principal Amount
----------- ----------------
September 30, 2002 $ 557,490.79
September 30, 2003 557,490.79
September 30, 2004 557,490.79
December 31, 2004 24,529,595.37
March 31, 2005 24,529,595.37
June 30, 2005 24,529,595.37
September 30, 2005 24,529,595.37
December 31, 2005 24,529,595.37
January 31, 2006 24,529,595.38
The remaining installments set forth above have been adjusted to reflect
scheduled payments and optional and mandatory prepayments of the Tranche B Term
Loans made prior to the Restatement Effective Date.
(b) The Tranche C Term Loan of each Tranche C Term Lender
shall mature in 10 remaining installments, each of which shall be in an amount
equal to such Lender's Tranche C Term Percentage multiplied by the amount set
forth below opposite such installment (provided that the aggregate amount of the
final installment shall in any event equal the aggregate then outstanding
principal amount of the Tranche C Term Loans):
27
Installment Principal Amount
----------- ----------------
September 30, 2002 $ 589,462.98
September 30, 2003 589,462.98
September 30, 2004 589,462.98
September 30, 2005 589,462.98
December 31, 2005 589,462.98
March 31, 2006 37,961,416.08
June 30, 2006 37,961,416.08
September 30, 2006 37,961,416.08
December 31, 2006 37,961,416.08
January 31, 2007 37,961,416.08
The remaining installments set forth above have been adjusted to reflect
scheduled payments and optional and mandatory prepayments of the Tranche C Term
Loans made prior to the Restatement Effective Date.
(c) The Tranche D Term Loan of each Tranche D Term Lender
shall mature in 9 remaining installments, each of which shall be in an amount
equal to such Lender's Tranche D Term Percentage multiplied by the amount set
forth below opposite such installment (provided that the aggregate amount of the
final installment shall in any event equal the aggregate then outstanding
principal amount of the Tranche D Term Loans):
Installment Principal Amount
----------- ----------------
September 30, 2002 $ 702,402.93
September 30, 2003 702,402.93
September 30, 2004 702,402.93
September 30, 2005 702,402.93
September 30, 2006 702,402.93
March 31, 2007 20,720,886.36
June 30, 2007 20,720,886.36
September 30, 2007 20,720,886.36
December 31, 2007 20,720,886.36
The remaining installments set forth above have been adjusted to reflect
scheduled payments and optional and mandatory prepayments of the Tranche D Term
Loans made prior to the Restatement Effective Date.
(d) The Borrower shall repay all outstanding Revolving Loans
and Swingline Loans on the Revolving Scheduled Commitment Termination Date.
(e) The Borrower shall repay all outstanding Tranche D LC
Equivalent Loans on the Tranche D LC Termination Date.
2.8. Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Lender a commitment
fee accruing during the Revolving Commitment Period, computed at a per annum
rate equal to the Commitment Fee Rate on the average daily amount of the
Available Revolving Commitment of such Lender during the period for which
28
payment is made, payable quarterly in arrears on the last day of each March,
June, September and December and on the Revolving Scheduled Commitment
Termination Date.
(b) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Administrative Agent.
2.9. Termination or Reduction of Revolving Commitments. The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Commitments or, from time
to time, to reduce the amount of the Revolving Commitments; provided that no
such termination or reduction of Revolving Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit would exceed the Total Revolving Commitments. Any such
partial reduction shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall reduce permanently the relevant Commitments then in effect.
2.10. Optional Prepayments. Subject to Section 2.17, the
Borrower may at any time and from time to time prepay the Loans (including
Tranche D LC Equivalent Loans) or reduce the Tranche D Credit-Linked Deposit, in
whole or in part, without premium or penalty, upon irrevocable notice delivered
to the Administrative Agent at least three Business Days prior thereto in the
case of Eurodollar Loans and the Tranche D Credit-Linked Deposit and at least
one Business Day prior thereto in the case of ABR Loans, which notice shall
specify the date and amount of prepayment and, if applicable, whether the
prepayment is of Eurodollar Loans or ABR Loans; provided, that if a Eurodollar
Loan is prepaid on any day other than the last day of the Interest Period
applicable thereto, the Borrower shall also pay any amounts owing pursuant to
Section 2.20. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein, together with (except in the case of Revolving Loans that are ABR Loans
and Swingline Loans) accrued interest to such date on the amount prepaid.
Partial prepayments of Loans (other than Swingline Loans) and partial reductions
of the Tranche D Credit-Linked Deposit shall be in an aggregate principal amount
of $1,000,000 or a whole multiple thereof. Partial prepayments of Swingline
Loans shall be in an aggregate principal amount of $100,000 or a whole multiple
thereof. Upon any such reduction of the Tranche D Credit-Linked Deposit, the
Administrative Agent shall promptly remit to each Tranche D LC Lender its pro
rata share thereof based on its Tranche D LC Percentage.
2.11. Mandatory Prepayments. (a) Unless the Required
Prepayment Lenders shall otherwise agree, if any Capital Stock (other than any
Capital Stock issued by the Borrower to finance any Permitted Acquisition) shall
be issued by the Borrower or any of its Subsidiaries, an amount equal to 75%
(the "Equity Percentage") of the Net Cash Proceeds thereof shall be applied
within two Business Days following the date of such issuance toward the
prepayment of the Term Loans; provided that the Equity Percentage shall instead
equal 25% if the Consolidated Leverage Ratio, determined as at the end of the
most recent period of four consecutive fiscal quarters ended prior to the
required date of prepayment for which the relevant financial information is
available on a pro forma basis as if such issuance had occurred on the first day
of such period, is less than 3.50 to 1.0.
(b) Unless the Required Prepayment Lenders shall otherwise
agree, if any Indebtedness shall be incurred by the Borrower or any of its
Subsidiaries (excluding any Indebtedness incurred in accordance with Section 7.2
as in effect on the date of this Agreement), an amount equal to 100% (or, in the
case of Indebtedness incurred pursuant to Section 7.2(f) after November 26,
2001, 30% (a "30% Application Transaction")) of the Net Cash Proceeds thereof
shall be applied on the date of such incurrence toward the prepayment of the
Term Loans.
29
(c) Unless the Required Prepayment Lenders shall otherwise
agree, if on any date 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, an amount equal to 75% of such Net
Cash Proceeds shall be applied within two Business Days following such date
toward the prepayment of the Term Loans; provided, that, notwithstanding the
foregoing, (i) the aggregate Net Cash Proceeds of Asset Sales that may be
excluded from the foregoing requirement pursuant to a Reinvestment Notice shall
not exceed (x) during the period from the Closing Date to the second anniversary
of the Closing Date, $45,000,000, and (y) thereafter, $15,000,000 in any fiscal
year of the Borrower (or, in the case of the period commencing on the second
anniversary of the Closing Date, the remaining portion of the fiscal year in
which such second anniversary falls), 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 toward the prepayment of the Term
Loans; provided, further, that, notwithstanding the foregoing, the Borrower and
its Subsidiaries shall not be required to prepay the Term Loans in accordance
with this paragraph (c) except to the extent that the Net Cash Proceeds from all
Asset Sales which have not been so applied equals or exceeds $5,000,000 in the
aggregate.
(d) Unless the Required Prepayment Lenders shall otherwise
agree, if, for any fiscal year of the Borrower commencing with the fiscal year
ending December 31, 2000, there shall be Excess Cash Flow, the Borrower shall,
on the relevant Excess Cash Flow Application Date, apply 75% (or, if the
Consolidated Leverage Ratio as of the last day of such fiscal year is not
greater than 3.50 to 1.0, 50%) of such Excess Cash Flow toward the prepayment of
the Term Loans. Each such prepayment and commitment reduction shall be made on a
date (an "Excess Cash Flow Application Date") no later than five Business Days
after the earlier of (i) the date on which the financial statements of the
Borrower referred to in Section 6.1(a), for the fiscal year with respect to
which such prepayment is made, are required to be delivered to the Lenders and
(ii) the date such financial statements are actually delivered.
(e) During the period from April 18, 2002 through May 31,
2002, the Borrower shall prepay Term Loans with cash on hand in an aggregate
principal amount of at least $54,000,000.
(f) The application of any prepayment under a Facility
pursuant to Section 2.11 shall be made, first, to ABR Loans and, second, to
Eurodollar Loans. Each prepayment of the Loans under Section 2.11 (except in the
case of Revolving Loans that are ABR Loans and Swingline Loans) shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid.
2.12. Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent 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 ABR Loan under a particular Facility may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such conversions. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan under a particular Facility may be
continued as such when any Event of Default has
30
occurred and is continuing and the Administrative Agent has or the Majority
Facility Lenders in respect of such Facility have determined in its or their
sole discretion not to permit such continuations, and provided, further, that if
the Borrower shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the preceding
proviso such Loans shall be automatically converted to ABR Loans on the last day
of such then expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.
2.13. Limitations on Eurodollar Tranches. Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions and
continuations of Eurodollar Loans hereunder and all selections of Interest
Periods hereunder 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 $3,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no
more than 15 Eurodollar Tranches shall be outstanding at any one time.
2.14. Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at a rate
per annum equal to (x) in the case of the Loans, the rate that would otherwise
be applicable thereto pursuant to the foregoing provisions of this Section plus
2%, (y) in the case of Reimbursement Obligations under the Revolving Facility,
the rate applicable to ABR Loans under the Revolving Facility plus 2%, or (z) in
the case of Reimbursement Obligations under the Tranche D LC Facility that are
not classified as Tranche D LC Equivalent Loans (which shall be governed by
clause (x) above), the ABR plus 3.75%, and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any commitment fee,
Letter of Credit fee or other amount payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate then applicable
to ABR Loans under the relevant Facility plus 2% (or, (x) in the case of the
Tranche D LC Facility, the ABR plus 3.75% and (y) in the case of any such other
amounts that do not relate to a particular Facility, the rate then applicable to
ABR Loans under the Revolving Facility plus 2%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.
2.15. Computation of Interest and Fees. (a) Interest and fees
payable pursuant hereto shall be calculated on the basis of a 360-day year for
the actual days elapsed, except that, with respect to ABR Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
31
(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
2.15(a).
2.16. Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility
shall be converted, on the last day of the then-current Interest Period, to ABR
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans under the relevant Facility shall be made or continued
as such, nor shall the Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.
2.17. Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on account
of any commitment fee and any reduction of the Revolving Commitments of the
Lenders shall be made pro rata according to the respective Tranche B Term
Percentages, Tranche C Term Percentages, Tranche D Term Percentages or Revolving
Percentages, as the case may be, of the relevant Lenders.
(b) Except for payments made pursuant to Section 2.7, each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Term Loans shall be made pro rata according to the
respective outstanding principal amounts of the Term Loans then held by the Term
Lenders (except as otherwise provided in Section 2.17(c)). The amount of each
principal prepayment of the Term Loans shall be applied to reduce the then
remaining installments of the Tranche B Term Loans, Tranche C Term Loans or
Tranche D Term Loans, as the case may be, pro rata based upon the then remaining
principal amount thereof. Amounts prepaid on account of the Term Loans may not
be reborrowed.
(c) Notwithstanding anything to the contrary in this
Agreement, with respect to any mandatory prepayment pursuant to Section 2.11(b)
in connection with any 30% Application Transaction (as defined in said Section)
and any prepayment pursuant to Section 2.11(e), each Term Lender shall have the
right to reallocate any prepayment allocated to any of its Term Loans to any of
its other Term Loans, as designated by such Lender to the Administrative Agent.
Accordingly, in the case of prepayments pursuant to Section 2.11(b), the date on
which any such prepayment is required to be made may be
32
extended by the Administrative Agent to the extent necessary to determine the
manner in which the Term Lenders wish to have such prepayment allocated.
(d) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Loans shall be made pro
rata to the Revolving Lenders according to the respective outstanding principal
amounts of the Revolving Loans then held by the Revolving Lenders. Each payment
(including each prepayment) by the Borrower to the Tranche D LC Lenders on
account of the Tranche D LC Reimbursement Amount and interest thereon and
payments of interest or earnings in respect of the Tranche D Credit-Linked
Deposit shall be made pro rata to the Tranche D LC Lenders according to their
respective Tranche D LC Percentages.
(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 Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of 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 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
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans under the relevant Facility, on demand, from the Borrower.
(g) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment being made 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 of such required 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
33
herein shall be deemed to limit the rights of the Administrative Agent or any
Lender against the Borrower.
2.18. Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the Closing Date:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 2.19 and changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender that is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, issuing or participating in Letters
of Credit or maintaining a Tranche D Credit-Linked Deposit, or to reduce any
amount receivable hereunder in respect thereof, then, in any such case, the
Borrower shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this paragraph, it shall promptly notify (no more frequently than
quarterly) the Borrower (with a copy to the Administrative Agent) of the event
by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
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 Closing Date 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 (which may be submitted no more frequently
than quarterly), the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction; provided that the
Borrower shall not be required to compensate a Lender pursuant to this paragraph
for any amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender's intention to claim compensation therefor;
and provided further that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect.
34
(c) In determining any additional amounts payable pursuant to
this Section 2.18, each Lender will act reasonably and in good faith and will
use averaging and attribution methods which are reasonable, provided that such
Lender's determination of compensation owing under this Section 2.18 shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Lender, upon determining that any additional amounts will be
payable pursuant to this Section 2.18, shall give prompt written notice of such
determination to the Borrower, which notice shall show the basis for calculation
of such additional amounts. The obligations of the Borrower pursuant to this
Section 2.18 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
2.19. Taxes. (a) Subject to the last proviso of this paragraph
(a), all payments made by the Borrower under this Agreement shall be made free
and clear of, and without deduction or withholding for or on account of, any
present or future 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 and franchise taxes imposed on the Administrative Agent or any
Lender as a result of a present or former connection between the Administrative
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 the Administrative Agent or
such Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
the Lender becomes a party to this Agreement, except to the extent that 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.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) 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 state 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 8-BEN
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or Form 8-ECI, 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 H and a Form 8-BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
request of the Borrower as a result of the obsolescence, inaccuracy 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 qualified to provide or capable of providing 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.
(e) 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 judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(f) If any Lender receives a refund of any Non-Excluded Taxes
or Other Taxes paid or indemnified by the Borrower under this Section 2.19, such
Lender shall pay the amount of such refund to the Borrower within 15 days of the
date it received such refund.
(g) The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.20. Indemnity. The Borrower agrees to indemnify each Lender
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 or conversion from 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 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
36
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
2.21. Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.18 or
2.19(a) with respect to such Lender, it will 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 2.18
or 2.19(a).
2.22. Replacement of Lenders. The Borrower shall be permitted
to replace any Lender that (a) requests reimbursement for amounts owing pursuant
to Section 2.18 or 2.19(a) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) prior to any such replacement, such Lender shall have taken no action
under Section 2.21 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 2.18 or 2.19(a), (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender (and, if applicable, its Tranche D Credit-Linked Deposit) on or
prior to the date of replacement, (v) the Borrower shall be liable to such
replaced Lender under Section 2.20 if any Eurodollar Loan owing to such replaced
Lender shall be purchased other than on the last day of the Interest Period
relating thereto, (vi) the replacement financial institution, 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 2.18 or 2.19(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.
SECTION 3. LETTERS OF CREDIT
3.1. LC Commitments. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the RC LC
Participants or the Tranche D LC Lenders, as the case may be, set forth in this
Section 3, agrees to issue, on any Business Day, letters of credit ("Letters of
Credit") for the account of the Borrower (including the account of the Borrower
acting on behalf of any of its Subsidiaries) and in such form as may be approved
from time to time by the Issuing Lender; provided that (i) the Issuing Lender
shall have no obligation to issue any RC Letter of Credit if, after giving
effect to such issuance, (x) the RC LC Obligations would exceed the RC LC
Commitment or (y) the aggregate amount of the Available Revolving Commitments
would be less than zero and (ii) the Issuing Lender shall have no obligation to
issue any Letter of Credit if, after giving effect to such issuance, the LC
Obligations would exceed $150,000,000. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date that is five Business
Days prior to (1) in the case of RC Letters of Credit, the Revolving Scheduled
Commitment Termination Date, or (2) in the case of Tranche D Letters of Credit,
the Tranche D LC 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).
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(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any LC Participant to exceed any limits imposed by,
any applicable Requirement of Law.
(d) After the Restatement Effective Date, the Borrower and any
one or more Tranche D LC Lenders (including New Tranche D LC Lenders) may agree
that each such Lender shall make a Tranche D Credit-Linked Deposit or increase
the amount of its existing Tranche D Credit-Linked Deposit, as applicable, in
each case by executing and delivering to the Administrative Agent an Increased
Tranche D LC Facility Activation Notice specifying (i) the amount of such
increase and (ii) the Increased Tranche D LC Facility Closing Date. The Tranche
D LC Amount shall be correspondingly increased by the amount of any such
increase. Notwithstanding the foregoing, without the consent of the Required
Lenders, the aggregate amount of incremental Tranche D Credit-Linked Deposits
made pursuant to this paragraph shall not exceed $70,000,000. No Lender shall
have any obligation to participate in any increase described in this paragraph
unless it agrees to do so in its sole discretion.
(e) Any additional bank, financial institution or other entity
which, with the consent of the Borrower and the Administrative Agent (which
consent shall not be unreasonably withheld), elects to become a "Tranche D LC
Lender" under this Agreement in connection with any transaction described in
Section 3.1(d) shall execute a New Tranche D LC Lender Supplement (each, a "New
Tranche D LC Lender Supplement"), substantially in the form of Exhibit I-3,
whereupon such bank, financial institution or other entity (a "New Tranche D LC
Lender") shall become a Tranche D LC Lender for all purposes and to the same
extent as if originally a party hereto and shall be bound by and entitled to the
benefits of this Agreement.
3.2. Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at its address for notices specified herein
an Application therefor, completed to the satisfaction of the Issuing Lender,
and such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the 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 (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof. The
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance of each Letter
of Credit (including the amount thereof).
3.3. Fees and Other Charges. (a) The Borrower will pay a
Letter of Credit fee (i) in the case of RC Letters of Credit, calculated at a
per annum rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans under the Revolving Facility and payable on the face amount of
all outstanding RC Letters of Credit, or (ii) in the case of Tranche D Letters
of Credit, calculated at a per annum rate equal to 2.75% and payable on the
Total Tranche D Credit-Linked Deposit, in each case shared ratably among the
Lenders under the relevant Facility and payable quarterly in arrears on each LC
Fee Payment Date. In addition, the Borrower shall pay to the Issuing Lender for
its own account a
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fronting fee of 0.25% per annum on the undrawn and unexpired amount of each
Letter of Credit, payable quarterly in arrears on each LC Fee Payment Date.
(b) In addition to the foregoing fees, the Borrower shall pay
or reimburse the Issuing Lender for such normal and customary costs and expenses
as are incurred or charged by the Issuing Lender in issuing, negotiating,
effecting payment under, amending or otherwise administering any Letter of
Credit.
3.4. RC LC Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each RC LC Participant, and, to induce the
Issuing Lender to issue RC Letters of Credit hereunder, each RC LC Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such RC
LC Participant's own account and risk an undivided interest equal to such RC LC
Participant's Revolving Percentage in the Issuing Lender's obligations and
rights under each RC Letter of Credit issued hereunder and the amount of each
draft paid by the Issuing Lender thereunder. Each RC LC Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any RC Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such RC LC Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender's address for notices specified herein an amount equal to
such RC LC Participant's Revolving 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 RC LC Participant
to the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any RC Letter of Credit
is paid to the Issuing Lender within three Business Days after the date such
payment is due, such RC LC Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the 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 RC LC Participant pursuant to
Section 3.4(a) is not made available to the Issuing Lender by such RC LC
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such RC LC Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to ABR Loans under the Revolving Facility. A
certificate of the Issuing Lender submitted to any RC LC Participant with
respect to any amounts owing under this Section shall be conclusive in the
absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any RC Letter of Credit and has received from any RC LC
Participant its pro rata share of such payment in accordance with Section
3.4(a), the Issuing Lender receives any payment related to such RC Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by the Issuing Lender), or any payment of interest on
account thereof, the Issuing Lender will distribute to such RC LC Participant
its pro rata share thereof; provided, however, that in the event that any such
payment received by the Issuing Lender shall be required to be returned by the
Issuing Lender, such RC LC Participant shall return to the Issuing Lender the
portion thereof previously distributed by the Issuing Lender to it.
(d) Each RC LC Participant's obligation to purchase
participating interests pursuant to Section 3.4(a) shall be absolute and
unconditional and shall not be affected by any circumstance, including (i) any
setoff, counterclaim, recoupment, defense or other right that such RC LC
Participant or the Borrower may have against the Issuing Lender, the Borrower or
any other Person for any reason
39
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 Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
3.5. Tranche D LC Participations. (a) The Issuing Lender
irrevocably agrees to grant and hereby grants to each Tranche D LC Lender, and
each Tranche D LC Lender irrevocably agrees to accept and purchase and hereby
accepts and purchases from the Issuing Lender, on the terms and conditions
hereinafter stated, for such Tranche D LC Lender's own account and risk an
undivided interest equal to its Tranche D LC Percentage in the Issuing Lender's
obligations and rights with respect to the Tranche D Letters of Credit (as to
each Tranche D LC Lender, its "Tranche D LC Participation"). The purchase price
for the Tranche D LC Participation of each Tranche D LC Lender (each, a "Tranche
D Credit-Linked Deposit") shall equal the amount set forth opposite such Tranche
D LC Lender's name in Schedule 1.1A or the amount agreed upon pursuant to
Section 3.1(d), as applicable. Each Tranche D LC Lender shall pay to the
Administrative Agent its Tranche D Credit-Linked Deposit in full on the
Restatement Effective Date or the relevant Increased Tranche D LC Facility
Closing Date, as applicable. Each Tranche D LC Lender unconditionally and
irrevocably agrees with the Administrative Agent and the Issuing Lender that, if
a draft is paid under any Tranche D Letter of Credit that is not reimbursed in
full by the Borrower in cash (the amount of the reimbursement by the Borrower
required in respect thereof, the "Tranche D LC Reimbursement Amount"), the
Administrative Agent is hereby authorized to reimburse to the Issuing Lender for
such draft solely from such Tranche D LC Lender's Tranche D Credit-Linked
Deposit. If the Tranche D Credit-Linked Deposit Account is charged by the
Administrative Agent to reimburse the Issuing Lender for a draft paid under a
Tranche D Letter of Credit that has not been reimbursed by the Borrower in cash,
the Borrower shall have the right but not the obligation, prior to the Tranche D
LC Termination Date, to pay over to the Administrative Agent an amount equal to
the amount so charged for deposit in the Tranche D Credit-Linked Deposit Account
(a "Borrower Deposit Payment"), which payment shall, to the extent relating to a
Tranche D LC Equivalent Loan, constitute a prepayment of such Loan (subject to
the applicable requirements of this Agreement). It is understood that
application of the Tranche D Credit-Linked Deposit to reimburse the Issuing
Lender shall not reduce the Tranche D LC Reimbursement Amount or satisfy the
Borrower's reimbursement obligation under Section 3.6. Each Tranche D LC
Lender's obligations under this Section 3.5 shall be absolute and unconditional
and shall not be affected by any circumstance, including (i) any setoff,
counterclaim, recoupment, defense or other right that such Tranche D LC Lender
or the Borrower may have against the Issuing Lender, the Borrower or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Lender; or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.
(b) The Tranche D Credit-Linked Deposits shall be held by the
Administrative Agent in the Tranche D Credit-Linked Deposit Account and invested
by the Administrative Agent as set forth in this Section 3.5 and no party other
than the Administrative Agent shall have a right of withdrawal from the Tranche
D Credit-Linked Deposit Account nor any other right or power with respect to the
Tranche D Credit-Linked Deposits, except as expressly provided in Section 2.10
or this Section 3.5. Notwithstanding anything in this Agreement to the contrary,
the sole funding obligation of each Tranche D LC Lender in respect of its
Tranche D LC Participation shall be satisfied upon funding of its Tranche D
Credit-Linked Deposit.
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(c) The Borrower hereby acknowledges and agrees that each
Tranche D LC Lender is funding its Tranche D Credit-Linked Deposit to the
Administrative Agent for application in the manner contemplated by this Section
3.5 and that the Administrative Agent has agreed to invest the Tranche D
Credit-Linked Deposits so as to earn a return (until such time as such Tranche D
Credit-Linked Deposits are used to cover drawings under any Tranche D Letter of
Credit) for the Tranche D LC Lenders at a rate per annum, reset daily on each
Business Day for the period until the next following Business Day, equal to (i)
the rate for one month LIBOR deposits (the "Benchmark LIBOR Rate") minus (ii)
0.05%. Such interest will be paid to the Tranche D LC Lenders by the
Administrative Agent quarterly in arrears on each LC Fee Payment Date. In
addition to the foregoing payments by the Administrative Agent, the Borrower
agrees to make payments to the Administrative Agent for the account of the
Tranche D LC Lenders quarterly in arrears on each LC Fee Payment Date in an
amount equal to the difference between the rate of return earned by the Tranche
D LC Lenders on the Tranche D Credit-Linked Deposits and the rate of return that
would have been earned by the Tranche D LC Lenders thereon had the interest rate
applicable thereto been equal to the Benchmark LIBOR Rate. The Administrative
Agent shall compute all amounts due under this paragraph (c) and shall notify
the Borrower and such Tranche D LC Lender of each such amount due.
(d) The Administrative Agent shall return any remaining
Tranche D Credit-Linked Deposits to the Tranche D LC Lenders following the
occurrence of the Tranche D LC Termination Date.
3.6. Reimbursement Obligation of the Borrower. Drafts drawn
under each Letter of Credit shall be deemed to be drafts drawn under Tranche D
Letters of Credit for so long as there are any undrawn Tranche D Letters of
Credit and thereafter shall be deemed to be drafts drawn under RC Letters of
Credit. The Borrower agrees to reimburse the Issuing Lender in accordance with
this Section upon notification of the Borrower of the date and amount of a draft
presented under any Letter of Credit and paid by the Issuing Lender for the
amount of (a) such draft so paid and (b) any taxes, fees, charges or other costs
or expenses incurred by the Issuing Lender in connection with such payment. In
the case of RC Letters of Credit, if the Borrower is notified as provided in the
immediately preceding sentence by 2:00 P.M., New York City time, on any day,
then the Borrower shall so reimburse the Issuing Lender by 12:00 Noon, New York
City time, on the next succeeding Business Day, and, if so notified after 2:00
P.M., New York City time, on any day, the Borrower shall so reimburse the
Issuing Lender by 12:00 Noon, New York City time, on the second succeeding
Business Day. In the case of Tranche D Letters of Credit, the Tranche D LC
Reimbursement Amount shall be reimbursed by the Borrower no later than the
Tranche D LC Termination Date, provided that any taxes, fees, charges or other
costs or expenses incurred by the Issuing Lender in connection with the relevant
draft shall be payable to the Issuing Lender on demand. Each such payment shall
be made to the Issuing Lender at its address for notices specified herein in
lawful money of the United States and in immediately available funds. Interest
shall be payable on any and all amounts remaining unpaid by the Borrower under
this Section from the date such amounts become payable (whether at stated
maturity, by acceleration or otherwise) until payment in full (i) in the case of
RC Letters of Credit, at the rate set forth in (x) until the second Business Day
following the date of payment of the applicable drawing, Section 2.14(b) and (y)
thereafter, Section 2.14(c), in each case payable on demand, and (ii) in the
case of Tranche D Letters of Credit, (x) until the Borrower has given a Loan
Equivalent Notice with respect to the relevant portion of the Tranche D LC
Reimbursement Amount, the ABR plus 1.75%, payable quarterly in arrears on each
LC Fee Payment Date, and (y) thereafter, with respect to any such portion, at
the applicable rate set forth in Section 2.14. Payment by the Borrower of any
Tranche D LC Reimbursement Amount and interest thereon shall be made (a)
directly to the Issuing Lender for its own account to the extent the Tranche D
Credit-Linked Deposit has not been applied to reimburse the Issuing Lender for
the relevant drawing or (b) ratably to the Tranche D LC Lenders, otherwise.
41
3.7. 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 the Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with the Issuing Lender that the Issuing Lender shall not be responsible for,
and the Borrower's Reimbursement Obligations under Section 3.6 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. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions constituting gross negligence or willful misconduct of the Issuing
Lender. The Borrower agrees that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Customs and,
to the extent not inconsistent therewith, the Uniform Commercial Code of the
State of New York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender to the Borrower.
3.8. Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Borrower of the date and amount thereof. The responsibility
of the Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
3.9. 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 Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and each Lender that:
4.1. Financial Condition. (a) The audited consolidated balance
sheet of the Borrower as at December 31, 2001, and the related consolidated
statements of operations, stockholder's equity and cash flows for the fiscal
year ended on such date, reported on by and accompanied by an unqualified report
from Xxxxx Xxxxxxxx, present fairly the consolidated financial condition of the
Borrower as at such date, and the consolidated results of its operations and its
consolidated cash flows for the fiscal year then ended. Such financial
statements 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). The Borrower and its Subsidiaries do not
have any material Guarantee Obligations, contingent liabilities and liabilities
for taxes, or any long-term leases or unusual forward or long-term commitments,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, that are not reflected in the
financial statements referred to in this paragraph.
42
4.2. No Change. Since December 31, 2001 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. Each of 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, except to the extent that the failure to be so
qualified and in good standing could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, and (d) is in compliance with all
Requirements of Law except to the extent that the failure 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 to which it is a party and, in the
case of the Borrower, to borrow hereunder. Each Loan Party has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Loan Documents to which it is a party and, in the case of the Borrower,
to authorize the borrowings on the terms and conditions of this Agreement. No
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 with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the Loan
Documents, except (i) consents, authorizations, filings and notices described in
Schedule 4.4, which consents, authorizations, filings and notices have been
obtained or made and are in full force and effect and (ii) the filings referred
to in Section 4.19. Each Loan Document has been duly executed and delivered on
behalf of each Loan Party party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
4.5. No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or any material Contractual Obligation of 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). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
4.6. Litigation. Except as set forth on Schedule 4.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against 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 or any of the transactions contemplated hereby or thereby, or (b) that
could reasonably be expected to have a Material Adverse Effect.
4.7. No Default. Neither 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.
43
4.8. Ownership of Property; Liens. Each of the Borrower and
its Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all its material real property, 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 as permitted by Section 7.3.
4.9. Intellectual Property. 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. No material 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 the Borrower know of any valid basis for any such claim. The
use of Intellectual Property by the Borrower and its Subsidiaries does not
infringe on the rights of any Person in any material respect.
4.10. Taxes. Each of the Borrower and each of its Subsidiaries
has filed or caused to be filed all Federal, state and other material tax
returns that are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority to the extent due and payable (other than
any the amount or validity of that are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Borrower or its Subsidiaries, as the
case may be); no material tax Lien has been filed, and, to the knowledge of the
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge.
4.11. Federal Regulations. No part of the proceeds of any
Loans will be used for "buying" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.
4.12. Labor Matters. Except as set forth on Schedule 4.6 and
as, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect: (a) there are no strikes or other labor disputes against the
Borrower or any of its Subsidiaries pending or, to the knowledge of the
Borrower, threatened; (b) hours worked by and payment made to employees of 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; and (c) all payments due from the Borrower or any of its Subsidiaries
on account of employee health and welfare insurance have been paid or accrued as
a liability on the books of 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 against the Borrower or any Commonly Controlled Entity and 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 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
44
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) that limits its ability to incur Indebtedness.
4.15. Subsidiaries. Except as disclosed to the Administrative
Agent by the Borrower in writing from time to time after the Restatement
Effective Date, (a) Schedule 4.15 sets forth the name and jurisdiction of
incorporation of each Subsidiary and, as to each such Subsidiary, the percentage
of each class of Capital Stock owned by any Loan Party and (b) there are no
outstanding subscriptions, options, warrants, calls, rights or other agreements
or commitments (other than stock options granted to employees or directors and
directors' qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Subsidiary, except as created by the Loan Documents.
4.16. Use of Proceeds. The proceeds of the Revolving Loans and
the Swingline Loans, and the Letters of Credit, shall be used for general
corporate purposes.
4.17. Environmental Matters. Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by
the Borrower or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could
give rise to liability under, any Environmental Law;
(b) neither the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard
to any of the Properties or the business operated by the Borrower or
any of its Subsidiaries (the "Business"), nor does the Borrower have
knowledge or reason to believe that any such notice will be received or
is being threatened;
(c) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a
manner or to a location that could give rise to liability under, any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which the Borrower or any Subsidiary is
or will be named as a party with respect to the Properties or the
Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business;
(e) there has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Borrower or
45
any Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with
all applicable Environmental Laws, and there is no contamination at,
under or about the Properties or violation of any Environmental Law
with respect to the Properties or the Business; and
(g) neither the Borrower nor any of its Subsidiaries has
assumed any liability of any other Person under Environmental Laws.
4.18. Accuracy of Information, etc. No statement or
information contained in this Agreement, any other Loan Document, the
Confidential Information Memorandum or any other document, certificate or
statement furnished by or on behalf of any Loan Party to the Administrative
Agent or the Lenders, or any of them, for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
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 Closing Date or the Restatement Effective Date, as the case may be), any
untrue statement of a material fact or omitted to state a material fact
necessary 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 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. 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 Administrative Agent and the
Lenders for use in connection with the transactions contemplated hereby and by
the other Loan Documents.
4.19. Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral described in paragraphs (a) through (k), inclusive, (m) and (n) of
Section 3 thereof and proceeds of such Collateral. In the case of the Pledged
Stock described in the Guarantee and Collateral Agreement, when stock
certificates representing such Pledged Stock are delivered to the Administrative
Agent, and in the case of the other Collateral described in the Guarantee and
Collateral Agreement, when financing statements and other filings specified on
Schedule 4.19(a) (or otherwise notified to the Administrative Agent) in
appropriate form are filed in the offices specified on Schedule 4.19(a) (or
otherwise notified to the Administrative Agent), 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 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, in the case of Collateral other than Pledged Stock, Liens
permitted by Section 7.3).
(b) Each of the Mortgages is effective to create in favor of
the Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof and constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in such Mortgaged Properties and
the proceeds thereof, as security for the Obligations (as defined in the
relevant Mortgage), in each case prior and superior in right to any other Person
except Liens permitted by Section 7.3.
46
4.20. Solvency. Each Loan Party is on the Restatement
Effective Date (after giving effect to the effectiveness of the Tranche D LC
Facility), 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 that is located in an area that has been identified by the Secretary of
Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968.
SECTION 5. CONDITIONS PRECEDENT
5.1. Conditions to Effectiveness. The effectiveness of this
Agreement is subject to the satisfaction of the following conditions precedent:
(a) Credit Agreement; Addenda; Security Documents. The
Administrative Agent shall have received (i) this Agreement, executed
and delivered by the Agents and the Borrower, (ii) an Addendum,
executed and delivered by the Required Lenders and each Tranche D Term
Lender and (iii) a confirmation of the Security Documents, executed and
delivered by the Borrower and each Subsidiary Guarantor.
(b) Fees. The Lenders and the Administrative Agent shall have
received all fees required to be paid by the Borrower, and all expenses
for which invoices have been presented (including the reasonable fees
and expenses of legal counsel to the Administrative Agent only), on or
before the Restatement Effective Date. All such amounts may be paid
with proceeds of Loans made on the Restatement Effective Date and, to
the extent paid in such manner, will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or
before the Restatement Effective Date.
(c) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Restatement Effective Date, substantially in the
form of Exhibit C, with appropriate insertions and attachments.
(d) Legal Opinion. The Administrative Agent shall have
received the executed legal opinion of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.,
counsel to the Borrower, substantially in the form of Exhibit F.
5.2. Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including its initial extension of credit) is subject to the satisfaction
of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date (unless such
47
representations expressly relate to an earlier date, in which case they
shall be true and correct in all material respects on and 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.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any Revolving
Commitment remains in effect, any Letter of Credit remains outstanding or any
Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall and shall cause each of its Subsidiaries to:
6.1. Financial Statements. Furnish to the Administrative Agent
with sufficient copies for 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 balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by Xxxxx Xxxxxxxx LLP or other independent certified
public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments and the absence of notes
thereto).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied 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 the
Administrative Agent with sufficient copies for each Lender (or, in the case of
clause (g), 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;
48
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that, to the best of each 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 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,
and (y) to the extent not previously disclosed to the Administrative
Agent, a report describing each new Subsidiary of any Loan Party, any
change in the name or jurisdiction of organization of any Loan Party
and any new fee owned real property or material Intellectual Property
acquired by any Loan Party since the date of the most recent report
delivered pursuant to this clause (y);
(c) as soon as available, and in any event no later than 45
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, the related
consolidated statements of projected cash flow, projected changes in
financial position and projected income and a description of the
underlying assumptions applicable thereto), and, as soon as available,
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 and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, a narrative
discussion and analysis of the financial condition and results of
operations of the Borrower and its Subsidiaries for such fiscal quarter
and for the period from the beginning of the then current fiscal year
to the end of such fiscal quarter, as compared to the portion of the
Projections covering such periods and to the comparable periods of the
previous year; provided that delivery of the Report on Form 10-Q filed
with the SEC with respect to such fiscal quarter shall be deemed to
satisfy the foregoing requirement;
(e) no later than five Business Days prior to the
effectiveness thereof, copies of substantially final drafts of any
proposed amendment, supplement, waiver or other modification with
respect to the Senior Subordinated Note Indenture if the effectiveness
thereof requires the approval of any percentage of the holders of
Indebtedness thereunder;
(f) within five Business Days after the same are sent, copies
of all financial statements and reports that the Borrower sends to the
holders of any class of its debt securities or public equity securities
and, within five Business Days after the same are filed, copies of all
financial statements and reports that the Borrower may make to, or file
with, the SEC; and
(g) 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 obligations of whatever nature,
49
except where the amount or validity thereof is currently being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Borrower or its
Subsidiaries, as the case may be.
6.4. Maintenance of Existence; Compliance. (a) (i) Preserve,
renew and keep in full force and effect its corporate existence and (ii) take
all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 7.4 and except, in the case of clause
(ii) above, to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect; and (b) 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) Keep all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (b) maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption expense coverage) as are
usually insured against in the same general area by companies engaged in the
same or a similar business.
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)
subject to the provisions of Section 10.14, permit representatives of any
Lender, upon reasonable prior notice, to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
6.7. Notices. Promptly give notice to the Administrative Agent
with sufficient copies for each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding that may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, that in either case, if not cured or if reasonably expected
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 the Borrower or any
of its Subsidiaries in which the amount claimed is $5,000,000 or more
and not covered by insurance or in which injunctive or similar relief
is sought which could reasonably be expected to be granted and which,
if granted, could reasonably be expected to have a Material Adverse
Effect;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any 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
50
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Single Employer Plan
or Multiemployer Plan; and
(e) any development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.
6.8. Environmental Laws. Except as could not reasonably be
expected to have a Material Adverse Effect:
(a) Comply with, and contractually require compliance by all
tenants and subtenants, if any, with, all applicable Environmental Laws, and
obtain and comply with and maintain, and contractually require that all tenants
and subtenants obtain and comply with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws.
6.9. Interest Rate Protection. In the case of the Borrower,
maintain, through the third anniversary of the Closing Date, Hedge Agreements to
the extent necessary to provide that at least 50% of the aggregate principal
amount of the Term Loans is subject to either a fixed interest rate or interest
rate protection, 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 after the Closing Date by the Borrower or any of its
Subsidiaries (other than (w) any vehicles and any immaterial inventory and
equipment, (x) any property described in paragraph (b), (c) or (d) below, (y)
any property subject to a Lien expressly permitted by Section 7.3(g) or (j) and
(z) property acquired by any Excluded Foreign Subsidiary) as to which the
Administrative Agent, for the benefit of the Lenders, does not have a perfected
Lien, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
such property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in such property, including the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.
(b) With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least $750,000
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than (x) any such real property subject to a Lien expressly permitted by
Section 7.3(g) or (j) and (z) real property acquired by any Excluded Foreign
Subsidiary), promptly (i) execute and deliver a first priority Mortgage, in
favor of the Administrative Agent, for the benefit of the Lenders, covering such
real property, (ii) if requested by the Administrative Agent, provide the
Lenders with (x) title and extended coverage insurance covering such real
property in an amount at least equal to the purchase price of such real property
(or such other amount as shall be reasonably specified by the Administrative
Agent) as well as a current ALTA survey thereof, together with a surveyor's
certificate and (y) any consents or estoppels reasonably deemed necessary or
advisable by the Administrative Agent
51
in connection with such mortgage or deed of trust, 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 any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date by the Borrower
(which, for the purposes of this paragraph (c), shall include any existing
Subsidiary that ceases to be an Excluded Foreign Subsidiary), the Borrower or
any of its Subsidiaries, promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement as the
Administrative Agent deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority security
interest in the Capital Stock of such new Subsidiary that is owned by the
Borrower or any of its Subsidiaries, (ii) deliver to the Administrative Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Borrower or such Subsidiary, as the case may be, and (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement, (B)
to take such actions necessary or advisable to grant to the Administrative Agent
for the benefit of the Lenders a perfected first priority security interest in
the Collateral described in the Guarantee and Collateral Agreement with respect
to such new Subsidiary, including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be requested by the Administrative
Agent and (C) to deliver to the Administrative Agent a certificate of such
Subsidiary, substantially in the form of Exhibit C, with appropriate insertions
and attachments.
(d) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), and (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be, and take such other action as may be necessary
or, in the opinion of the Administrative Agent, desirable to perfect the
Administrative Agent's security interest therein.
6.11. Permitted Acquisitions. (a) Deliver to the Lenders,
within ten Business Days following the closing date of any Permitted Acquisition
involving a Purchase Price less than $20,000,000 (other than any such
acquisition that, together with any related acquisition, involves less than
fifteen stores), each of the following: (i) a description of the property,
assets and/or equity interest being purchased, in reasonable detail; and (ii) a
copy of the purchase agreement pursuant to which such acquisition is to be
consummated or a term sheet or other description setting forth the essential
terms and the basic structure of such acquisition.
(b) Deliver to the Lenders, (i) within ten Business Days
following the closing date of any Permitted Acquisition involving a Purchase
Price greater than or equal to $20,000,000 but less than $30,000,000 and (ii)
not less than five Business Days prior to the closing date of any Permitted
Acquisition involving a Purchase Price greater than or equal to $30,000,000,
each of the following: (A) a description of the property, assets and/or equity
interest being purchased, in reasonable detail; (B) a copy of the purchase
agreement pursuant to which such acquisition is to be consummated or a term
sheet or other description setting forth the essential terms and the basic
structure of such acquisition; (C) projected statements of income for the entity
that is being acquired (or the assets, if an acquisition of assets) for at
52
least a two-year period following such acquisition (including a summary of
assumptions or pro forma adjustments for such projections); (D) to the extent
made available to the Borrower, historical financial statements for the entity
that is being acquired (or the assets, if an acquisition of assets) (including
balance sheets and statements of income, retained earnings and cash flows for at
least a two-year period prior to such acquisition); and (E) confirmation,
supported by detailed calculations, that the Borrower and its Subsidiaries would
have been in compliance with all the covenants in Section 7.1 for the fiscal
quarter ending immediately prior to the consummation of such acquisition, with
such compliance determined on a pro forma basis as if such acquisition had been
consummated on the first day of the Reference Period ending on the last day of
such fiscal quarter.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Revolving
Commitments remain in effect, any Letter of Credit remains outstanding or any
Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, 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 any fiscal quarter during any period set
forth below to exceed the ratio set forth below opposite such period:
Consolidated
Period Leverage Ratio
------ --------------
Fiscal quarter ending 12/31/01 4.25 to 1.00
Fiscal year 2002 3.75 to 1.00
Fiscal year 2003 and thereafter 3.00 to 1.00
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter during any period set
forth below to be less than the ratio set forth below opposite such period:
Consolidated
Period Interest Coverage Ratio
------ -----------------------
Fiscal quarter ending 12/31/01 2.50 to 1.00
Fiscal year 2002 3.00 to 1.00
Fiscal year 2003 3.50 to 1.00
Fiscal year 2004 and thereafter 4.00 to 1.00
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ending on or after December 31, 2001 to be less
than 1.30 to 1.00.
7.2. Indebtedness. Create, issue, incur, assume, become liable
in respect of or suffer to exist any Indebtedness, except:
53
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary;
(c) Guarantee Obligations incurred in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of
any Wholly Owned Subsidiary Guarantor;
(d) Indebtedness outstanding on the Restatement Effective Date
and listed on Schedule 7.2(d) and any refinancings, refundings,
renewals or extensions thereof (without increasing, or shortening the
maturity of, the principal amount thereof);
(e) 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;
(f) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$275,000,000 and (ii) Guarantee Obligations of any Subsidiary Guarantor
in respect of such Indebtedness, provided that such Guarantee
Obligations are subordinated to the same extent as the obligations of
the Borrower in respect of the Senior Subordinated Notes;
(g) Assumed Indebtedness incurred pursuant to Permitted
Acquisitions;
(h) Guarantee Obligations of the Borrower in respect of
Indebtedness of franchisees not to exceed $75,000,000 at any one time
outstanding; and
(i) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $25,000,000 at any one time outstanding.
7.3. Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or that are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 30 days or that
are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do
54
not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;
(f) Liens in existence on the Restatement Effective Date
listed on Schedule 7.3(f), securing Indebtedness permitted by Section
7.2(d), provided that no such Lien is spread to cover any additional
property after the Restatement Effective Date (other than "products"
and "proceeds" thereof, as each such term is defined in the Uniform
Commercial Code of the State of New York) and that the amount of
Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(e) to finance the
acquisition of fixed or capital assets, provided that (i) such Liens
shall be created substantially simultaneously with the acquisition 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 (including the "products" and "proceeds" thereof, as each
such term is defined in the Uniform Commercial Code of the State of New
York) and (iii) the amount of Indebtedness secured thereby is not
increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course of
its business and covering only the assets so leased;
(j) Liens securing Assumed Indebtedness, provided that such
Liens (i) were not incurred in contemplation of the Permitted
Acquisition consummated in conjunction with the assumption of such
Assumed Indebtedness and (ii) do not encumber any property other than
the property acquired pursuant to such acquisition; and
(k) Liens not otherwise permitted by this Section so long as
neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined 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. Fundamental Changes. Enter into any merger, consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Wholly Owned Subsidiary Guarantor (provided that the Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving corporation);
(b) any Subsidiary of the Borrower may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower
or any Wholly Owned Subsidiary Guarantor; and
(c) any Permitted Acquisition may be structured as a merger
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 such Wholly Owned Subsidiary
Guarantor shall be the continuing or surviving corporation).
55
7.5. Disposition of Property. Dispose of any of its property,
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Wholly Owned Subsidiary Guarantor;
(e) the Disposition of other property having a fair market
value not to exceed $20,000,000 for any fiscal year of the Borrower;
provided, that the requirements of Section 2.11(c) are complied with in
connection therewith; and
(f) Dispositions referred to in Section 7.8(f).
7.6. Restricted Payments. Declare or pay any dividend (other
than dividends payable solely in (i) common stock of the Person making such
dividend or (ii) the same class of Capital Stock of the Person making such
dividend on which such dividend is being declared or paid) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any Capital Stock of the Borrower or any Subsidiary, 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 the Borrower or
any Subsidiary (collectively, "Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the
Borrower or any Wholly Owned Subsidiary Guarantor;
(b) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may purchase the Borrower's
common stock or common stock options, provided, that the aggregate
amount of payments under this paragraph (b) after the Restatement
Effective Date shall not exceed $1,000,000;
(c) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may declare and pay dividends
on the Preferred Stock on and after August 5, 2003; and
(d) in addition, so long as no Default or Event of Default
shall have occurred and be continuing, the Borrower may repurchase its
common stock or redeem fractional shares of its preferred stock for
cash upon conversion thereof to shares of its common stock in
accordance with the Certificate of Designations with respect to such
preferred stock so long as (i) the aggregate amount expended in
connection therewith pursuant to this paragraph (d), when added to the
aggregate amount expended to repurchase Senior Subordinated Notes
pursuant to clause (ii) of the proviso contained in Section 7.9(a),
does not exceed 25% of the Consolidated Net Income Amount, (ii) within
three Business Days after the date of such repurchase, the Borrower
shall prepay the Term Loans pursuant to Section 2.10 in an amount equal
to 100% of the amount
56
being expended to make such repurchase, and (iii) the aggregate amount
expended in cash for the redemption of fractional shares of preferred
stock shall not exceed $100,000.
7.7. Capital Expenditures. (a) Make or commit to make any
Capital Expenditure (Maintenance), except (i) Capital Expenditures (Maintenance)
of the Borrower and its Subsidiaries not exceeding $50,000,000 in the aggregate
during each fiscal year; provided, that (A) up to $10,000,000 of any such
amount, 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 (B) Capital
Expenditures (Maintenance) made pursuant to this clause (i) during any fiscal
year shall be deemed made, first, in respect of amounts permitted for such
fiscal year as provided in clauses (x) and (y) above and, second, in respect of
amounts carried over from the prior fiscal year pursuant to subclause (A) above
and (ii) Capital Expenditures (Maintenance) made with the proceeds of any
Reinvestment Deferred Amount.
(b) Make or commit to make any Capital Expenditure
(Expansion), except (i) Capital Expenditures (Expansion) of the Borrower and its
Subsidiaries not exceeding in the aggregate for any fiscal year $25,000,000;
provided, that (A) up to $10,000,000 of such amount, 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 (B) Capital Expenditures (Expansion) made
pursuant to this clause (i) during any fiscal year shall be deemed made, first,
in respect of the $25,000,000 initially permitted for such fiscal year as
provided above and, second, in respect of amounts carried over from the prior
fiscal year pursuant to subclause (A) above and (ii) Capital Expenditures
(Expansion) made with the proceeds of any Reinvestment Deferred Amount.
7.8. Investments. Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
other Person (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of the Borrower or any
Subsidiary of the Borrower in the ordinary course of business
(including for travel, entertainment and relocation expenses) in an
aggregate amount for the Borrower and its Subsidiaries not to exceed
$5,000,000 at any one time outstanding;
(e) intercompany Investments in the ordinary course of
business by the Borrower or any of its Subsidiaries in the Borrower or
any Person that, prior to such investment, is a Wholly Owned Subsidiary
Guarantor;
(f) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Borrower or any of its Subsidiaries
in an aggregate amount (valued at cost) not to exceed $10,000,000 (net
of the amount of any Net Cash Proceeds received by the Borrower and its
Subsidiaries in respect of a Disposition of any such Investment;
provided, that such amount shall not exceed the original amount of such
Investment) during the term of this Agreement; and
(g) additional Investments constituting Permitted
Acquisitions.
57
7.9. Payments and Modifications of Certain Debt Instruments
and Preferred Stock. (a) Make or offer to make any payment, prepayment,
repurchase or redemption of or otherwise defease or segregate funds with respect
to the Senior Subordinated Notes, other than interest payments expressly
required by the terms thereof, provided, that, so long as no Default or Event of
Default shall have occurred and be continuing, (i) the Borrower may repurchase
Senior Subordinated Notes so long as the aggregate amount so expended pursuant
to this clause (i) does not exceed $54,000,000, and (ii) in addition, the
Borrower may repurchase Senior Subordinated Notes so long as (x) such repurchase
is made after the basket set forth in clause (i) above has been fully utilized,
(y) the aggregate amount so expended pursuant to this clause (ii), when added to
the aggregate amount expended to repurchase common stock of the Borrower
pursuant to Section 7.6(d), does not exceed 25% of the Consolidated Net Income
Amount and (z) within three Business Days after the date of such repurchase, the
Borrower shall prepay the Term Loans pursuant to Section 2.10 in an amount equal
to 100% of the amount being expended to make such repurchase, (b) amend, modify,
waive 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 that (i)
would extend the maturity or reduce the amount of any payment of principal
thereof or reduce the rate or extend any date for payment of interest thereon
and (ii) does not involve the payment of a consent fee) (it being understood
that amendments designed to permit an additional issuance of Senior Subordinated
Notes incurred in accordance with Section 7.2(f) shall not be restricted by this
clause (b)), (c) amend, modify, waive or otherwise change, or consent or agree
to any amendment, modification, waiver or other change to, any of the terms of
the Preferred Stock if the effect thereof is to bring forward the scheduled
redemption date or increase the amount of any scheduled redemption payment or
increase the rate or bring forward any date for payment of dividends thereon or
(d) designate any Indebtedness (other than obligations of the Loan Parties
pursuant to the Loan Documents) as "Designated Senior Indebtedness" for the
purposes of the Senior Subordinated Note Indenture.
7.10. Transactions with Affiliates. Enter into any
transaction, including any purchase, sale, lease or exchange of property, the
rendering of any service or the payment of any management, advisory or similar
fees, with any Affiliate (other than the Borrower or any Wholly Owned Subsidiary
Guarantor) unless such transaction is (a) otherwise permitted under this
Agreement, (b) in the ordinary course of business of the Borrower or such
Subsidiary, as the case may be, and (c) upon fair and reasonable terms no less
favorable to 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.
7.11. Sales/Leaseback Transactions. Enter into any
Sale/Leaseback Transaction, except for any Sale/Leaseback Transaction with
respect to the Acquired Vehicles pursuant to which such Acquired Vehicles are
leased under an operating lease.
7.12. Changes in Fiscal Periods. Permit the fiscal year of the
Borrower to end on a day other than December 31 or change the Borrower's method
of determining fiscal quarters.
7.13. Negative Pledge Clauses. Enter into or suffer to exist
or become effective any agreement that prohibits or limits the ability of 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, other than (a) this Agreement and the other Loan Documents and (b) 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).
7.14. Clauses Restricting Subsidiary Distributions. Enter into
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Subsidiary of the Borrower to (a) make Restricted Payments
in respect of any Capital Stock of such Subsidiary held by, or
58
pay any Indebtedness owed to, the Borrower or any other Subsidiary of the
Borrower, (b) make loans or advances to, or other Investments in, the Borrower
or any other Subsidiary of the Borrower or (c) transfer any of its assets to the
Borrower or any other Subsidiary of the Borrower, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents, (ii) restrictions in effect on the Restatement
Effective Date and listed on Schedule 7.14, (iii) in the case of clause (c)
above, customary non-assignment clauses in leases and other contracts entered
into in the ordinary course of business and (iv) 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.
7.15. Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the Restatement Effective Date or
that are reasonably related or incidental thereto.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within five days after any such interest
or other amount becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that is contained in
any certificate, document or financial or other statement furnished by
it at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made; or
(c) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to the Borrower only), Section 6.7(a) or Section 7
of this Agreement or Section 5.7(b) of the Guarantee and Collateral
Agreement; or
(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days after notice to the Borrower from the Administrative
Agent or the Required Lenders; or
(e) the Borrower or any of its Subsidiaries shall (i) default
in making any payment of any principal of any Indebtedness (including
any Guarantee Obligation, but excluding the Loans) on the scheduled or
original due date with respect thereto; or (ii) default in making any
payment of any interest on any such Indebtedness beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf
59
of such holder or beneficiary) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity
or (in the case of any such Indebtedness constituting a Guarantee
Obligation) to become payable; 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) the Borrower or any of its Subsidiaries 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 the Borrower or
any of its Subsidiaries shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries 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 the Borrower or any of its
Subsidiaries 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) the Borrower or any of its Subsidiaries 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) the Borrower or any of its
Subsidiaries 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 non-exempt "prohibited
transaction" (as defined in Section 406 and 408 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 under Title IV of ERISA to
have a trustee appointed, or a trustee shall be appointed under Title
IV of ERISA, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of
a trustee is, in the reasonable opinion of the Required Lenders, likely
to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate in a "distress
termination" or an "involuntary termination", as such terms are defined
in Title IV of ERISA, (v) the Borrower or any Commonly Controlled
Entity shall, or in the reasonable opinion of the Required Lenders is
likely to, incur any liability in connection with a withdrawal from, or
the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be
expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate 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
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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,
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, with
respect to the guarantee of a Subsidiary, (i) as a result of a merger
of such Subsidiary into the Borrower in accordance with the terms of
this Agreement or (ii) as a result of a release pursuant to Section
8.15(b) of the Guarantee and Collateral Agreement), to be in full force
and effect or any Loan Party or any Affiliate of any Loan Party shall
so assert; or
(k) (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), excluding the Permitted Investors, shall
at any time become, or obtain rights (whether by means of warrants,
options or otherwise) to become, the "beneficial owner" (as defined in
Rules 13(d) 3 and 13(d) 5 under the Exchange Act), directly or
indirectly, of a percentage (the "Third Party Stock Percentage") equal
to 33-1/3% or more of the Voting Stock of the Borrower unless at such
time (x) the percentage of outstanding Voting Stock of the Borrower
beneficially owned by the Permitted Investors (determined on a fully
diluted basis) is equal to or greater than the Third Party Stock
Percentage and (y) the Sponsor owns of record and beneficially at least
35% of the Voting Stock of the Borrower then owned by the Permitted
Investors; (ii) the Sponsor at any time shall cease to own of record
and beneficially an amount of Voting Stock of the Borrower equal to at
least 50% of the amount of Voting Stock of the Borrower owned by the
Sponsor of record and beneficially as of the Closing Date immediately
after giving effect to the Acquisition (as defined in the Existing
Credit Agreement); or (iii) a Specified 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 Revolving 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 all amounts of LC
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the
Revolving Commitments shall immediately terminate; and (ii) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of LC Obligations, whether or not the beneficiaries of the then
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outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit
(except, in the case of Tranche D Letters of Credit, to the extent of the
Tranche D Credit-Linked Deposit). 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). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind (other
than notices expressly required pursuant to this Agreement and any other Loan
Document) are hereby expressly waived by the Borrower.
SECTION 9. THE AGENTS
9.1. Appointment. Each Lender hereby irrevocably designates
and appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
9.2. Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
9.3. Exculpatory Provisions. Neither any Agent nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its
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obligations hereunder or thereunder. The Agents shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
9.4. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) 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. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
9.5. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender, the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall 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); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
9.6. Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its extensions of credit hereunder
and enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent
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hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party that may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
9.7. Indemnification. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of 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 Revolving Commitments shall have terminated and
the Loans shall have been paid in full, ratably in accordance with such
Aggregate Exposure Percentages immediately prior to such date), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time (whether before or after the payment of the Loans) be imposed
on, incurred by or asserted against such Agent in any way relating to or arising
out of, the Revolving Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by such Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from such Agent's gross
negligence or willful misconduct. The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder.
9.8. Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent was not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
9.9. Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(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. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
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9.10. Authorization to Release Guarantees and Liens.
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the Administrative Agent is hereby irrevocably authorized by each of
the Lenders (without requirement of notice to or consent of any Lender except as
expressly required by Section 10.1) to take any action requested by the Borrower
having the effect of releasing any Collateral or guarantee obligations to the
extent necessary to permit consummation of any transaction not prohibited by any
Loan Document or that has been consented to in accordance with Section 10.1.
9.11. Documentation Agent and Syndication Agent. Neither the
Documentation Agent nor the Syndication Agent shall have any duties or
responsibilities hereunder in its capacity as such.
SECTION 10. MISCELLANEOUS
10.1. Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) forgive the
principal amount or extend the final scheduled date of maturity of any Loan,
extend the scheduled date of any amortization payment in respect of any Term
Loan, reduce the stated rate of any interest or fee payable hereunder or extend
the scheduled date of any payment thereof, increase the amount or extend the
expiration date of any Lender's Revolving Commitment or increase any Lender's
obligation to make a Tranche D Credit-Linked Deposit, in each case without the
consent of each Lender directly affected thereby; (ii) amend, modify or waive
any provision of this Section 10.1 or reduce any percentage specified in the
definition of Required Lenders or Required Prepayment Lenders, consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or substantially
all of the Collateral or release all or substantially all of the Subsidiary
Guarantors from their obligations under the Guarantee and Collateral Agreement,
in each case without the written 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 without the written
consent of the Administrative Agent; (v) amend, modify or waive any provision of
Section 2.3 or 2.6 without the written consent of the Swingline Lender; or (vi)
amend, modify or waive any provision of Section 3 without the written consent of
the Issuing Lender. 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 Administrative Agent and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders
and the Administrative Agent 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.
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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 as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
The Borrower: Rent-A-Center, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
0000 Xxx Xxxxxx
0000 Xxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent: JPMorgan Chase Bank
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Agency Services, Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with copies (in the case of
matters relating to
Letters of Credit) to:
JPMorgan Chase Bank Delaware
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Letter of Credit Department,
Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000 / 000-0000
Telephone: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
10.3. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and
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privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
10.4. Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5. Payment of Expenses and Taxes. The Borrower agrees (a)
to pay or reimburse the Administrative Agent for all its out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees and disbursements
of counsel to the Administrative Agent and filing and recording fees and
expenses, with statements with respect to the foregoing to be submitted to the
Borrower prior to the Restatement Effective Date (in the case of amounts to be
paid on the Restatement Effective Date) and from time to time thereafter on a
quarterly basis or such other periodic basis as the Administrative Agent shall
deem appropriate, (b) to pay or reimburse each Lender and the Administrative
Agent (in the case of each Lender, after the occurrence and during the
continuance of an Event of Default) for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
fees and disbursements of counsel (including the allocated fees and expenses of
in-house counsel (but not both outside and in-house counsel)) to each Lender and
of counsel to the Administrative Agent, (c) to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other taxes, if any, that may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their respective officers, directors, trustees,
employees, affiliates, agents and controlling persons (each, an "Indemnitee")
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including any of the foregoing relating
to the use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Borrower any of its Subsidiaries or any of the Properties and the reasonable
fees and expenses of legal counsel in connection with claims, actions or
proceedings by any Indemnitee against any Loan Party under any Loan Document
(all the foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), provided, that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities arise from the gross negligence or willful misconduct of
such Indemnitee. Without limiting the foregoing, and to the extent permitted by
applicable law, the Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries to so
waive, all rights for contribution or any other rights of recovery with respect
to all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them might have by statute or otherwise against any
Indemnitee. All amounts due under this Section 10.5 shall be payable not later
than 10 Business Days after written demand therefor. Statements payable by the
Borrower pursuant to this Section 10.5 shall be submitted to Xxxxxx X. Xxxxx
(Telephone No. 000-000-0000) (Telecopy No. 972-943-0113), at 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 written notice to the
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Administrative Agent. The agreements in this Section 10.5 shall survive
repayment of the Loans and all other amounts payable hereunder.
10.6. Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, all future holders of the Loans
and their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Revolving Commitment of such Lender, any
Tranche D Credit-Linked Deposit 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 Administrative Agent 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 reduce the principal of, or interest on, the Loans or any fees payable
hereunder, or postpone the date of the final maturity of the Loans, in each case
to the extent subject to such participation. 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 it
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.18, 2.19 and 2.20 with respect to its
participation in the Revolving Commitments and the Loans outstanding from time
to time as if it was a Lender; provided that, in the case of Section 2.19, such
Participant shall have complied with the requirements of said Section 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, at any time and from time to time assign to any Lender, any
affiliate thereof or an Approved Fund with respect thereto or, with the consent
of the Borrower and the Administrative Agent (which, in each case, shall not be
unreasonably withheld or delayed), to an additional bank, financial institution
or other entity (an "Assignee") all or any part of its rights and obligations
under this Agreement pursuant to an Assignment and Acceptance, executed by such
Assignee, such Assignor and any other Person whose consent is required pursuant
to this paragraph, 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, any affiliate thereof or an Approved Fund with respect
thereto) shall be in an aggregate principal amount of less than $5,000,000 (or,
in the case of the Term Loans, any unreimbursed Tranche D LC Reimbursement
Amount or the Tranche D Credit-Linked Deposit, $1,000,000), in each case other
than in the case of an assignment of all of a Lender's interests under this
Agreement, unless otherwise agreed by the Borrower
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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 a Commitment 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, provided that such Assignor shall continue to be entitled to the
benefits of the indemnity provisions hereunder for the period prior to the
assignment). Notwithstanding any provision of this Section 10.6, the consent of
the Borrower shall not be required for any assignment that occurs when an Event
of Default pursuant to Section 8(f) shall have occurred and be continuing with
respect to the Borrower. Unless otherwise agreed by the Administrative Agent,
the Tranche D Credit-Linked Deposit funded by any Tranche D LC Lender shall not
be released in connection with any assignment of its Tranche D Credit-Linked
Deposit, but shall instead be purchased by the relevant Assignee and continue to
be held for application pursuant to Section 3.5 in respect of such Assignee's
obligations under the Tranche D Credit-Linked Deposit assigned to it.
(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 Revolving
Commitment of, the principal amount of the Loans owing to, and the Tranche D
Credit-Linked Deposit of, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, each other Loan Party, the Administrative 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 the 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).
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor, an Assignee and any other Person whose consent is required by
Section 10.6(c), together with payment to the Administrative Agent of a
registration and processing fee of $3,500, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) record the information
contained therein in the Register on the effective date determined pursuant
thereto; provided, however, that no such fee shall be payable in the case of an
assignment by a Lender to an affiliate of such Lender or an Approved Fund with
respect to such Lender; and provided, further, that, in the case of
contemporaneous assignments by a Lender to more than one fund managed by the
same investment advisor (which funds are not then Lenders hereunder), only a
single such fee shall be payable for all such contemporaneous assignments.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 10.6 concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law.
(g) The Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (f) above.
10.7. Adjustments; Setoff. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a "Benefitted
Lender") shall, at any time after the Loans and other amounts payable
69
hereunder shall immediately become due and payable pursuant to Section 8,
receive any payment of all or part of the Obligations owing to it, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
setoff, 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 the Obligations
owing to such other Lender, such Benefitted Lender shall purchase for cash from
the other Lenders a participating interest in such portion of the Obligations
owing to each such other Lender, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8. Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrower and the Administrative Agent.
10.9. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10. Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Administrative Agent and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to 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. The Borrower
hereby irrevocably and unconditionally:
70
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for
the Southern District of New York, and appellate courts from any
thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in Section 10.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
10.13. Acknowledgements. 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 the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, 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 Lenders or among the Borrower and the
Lenders.
10.14. Confidentiality. Each of the Administrative Agent and
each Lender 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 the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent, any other Lender or any affiliate or Approved Fund of
any Lender, (b) to any Transferee or prospective Transferee that agrees to
comply with the provisions of this Section, (c) to its employees, directors,
trustees, agents, attorneys, accountants, investment advisors and other
professional advisors or those of any of its affiliates, (d) upon the request or
demand of any Governmental Authority, (e) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, provided that in the case of any such request
or requirement, the Administrative Agent or Lender (as applicable) so requested
or required to make such disclosure shall as soon as practicable notify the
Borrower thereof, (g) that has been publicly disclosed, (h) to the National
71
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender, or (i) in connection with the exercise of any remedy hereunder or
under any other Loan Document.
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10.15. WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT 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.
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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.
RENT-A-CENTER, INC.
By: /s/ XXXXXX X. XXXXX
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President-Finance,
Chief Financial Officer and
Treasurer
JPMORGAN CHASE BANK, as Administrative Agent
By: /s/ XXXXX XXXX
--------------------------------------------
Name: Xxxxx Xxxx
Title: Vice President
Annex A
PRICING GRID
Applicable Margin for Applicable Margin for
Eurodollar Loans ABR Loans
Consolidated ----------------------------- ---------------------------- Commitment
Leverage Ratio RC B C RC B C Fee Rate
-------------- ---- ---- ---- ---- ---- ---- ----------
Greater than or 2.50% 2.75% 3.00% 1.50% 1.75% 2.00% 0.500%
equal to
4.00 to 1.0
Greater than or 2.25% 2.50% 2.75% 1.25% 1.50% 1.75% 0.375%
equal to
3.50 to 1.0
and less than
4.00 to 1.0
Greater than or 2.00% 2.50% 2.75% 1.00% 1.50% 1.75% 0.375%
equal to
3.00 to 1.0
and less than
3.50 to 1.0
Greater than or 1.75% 2.25% 2.50% 0.75% 1.25% 1.50% 0.300%
equal to
2.50 to 1.0
and less than
3.00 to 1.0
Less than 1.50% 2.00% 2.25% 0.50% 1.00% 1.25% 0.250%
2.50 to 1.0
As used above, "RC" refers to Revolving Credit Loans and Swing
Line Loans, "B" refers to Tranche B Term Loans and "C" refers to Tranche C Term
Loans.
Changes in the Applicable Margin 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 (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 4.00 to 1.0. In addition, at all times while an Event of Default
shall have occurred and be continuing, the Consolidated Leverage Ratio shall for
the purposes of this definition be deemed to be greater than 4.00 to 1.0. Each
determination of the Consolidated Leverage Ratio pursuant to this pricing grid
shall be made with respect to (or, in the case of Consolidated Funded Debt, as
at the end of) the period of four consecutive fiscal quarters of the Borrower
ending at the end of the period covered by the relevant financial statements.
