1998 TERM CREDIT AGREEMENT
1998 TERM CREDIT AGREEMENT dated as of August 10, 1998 among GENERAL
NUTRITION, INCORPORATED, a Pennsylvania corporation ("GNI"), GENERAL NUTRITION
CORPORATION, a Pennsylvania corporation ("GNC"), GENERAL NUTRITION COMPANIES,
INC., a Delaware corporation ("GNCI"), the banks and other lenders (the
"Lenders") listed on the signature pages hereof, BANQUE NATIONALE DE PARIS
("BNP"), as administrative agent (together with any successor appointed pursuant
to Article VII, the "Administrative Agent") and as documentation agent (the
"Documentation Agent"), for the Lenders hereunder, and PNC Bank, National
Association and ABN AMRO Bank N.V., as syndication agents (the "Syndication
Agents" and, together with the Administrative Agent and the Documentation Agent,
the "Agents").
PRELIMINARY STATEMENTS:
(1) The Lenders (as defined below) have agreed to make Advances to the
Borrowers in order to allow the Borrowers to finance purchases of GNCI capital
stock as permitted in Section 2.13 hereof and to provide funds for general
corporate purposes permitted by this Agreement.
(2) The Lenders have indicated their willingness to lend such amounts on
the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree,
subject to the satisfaction of the conditions set forth in Section 3.01, as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Advance" has the meaning specified in Section 2.01.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the Voting
Stock of such Person or to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by
contract or otherwise.
"Adjusted Maximum Leverage Ratio" means, with respect to any period, the
ratio of (a) Consolidated Total Adjusted Debt of GNCI and its Subsidiaries at
the end of such period to (b) Consolidated EBITDA of GNCI and its Subsidiaries
for such period (the computation of such ratio to include, in the case of
Indebtedness created, incurred or assumed in connection with any Investment
permitted by Sections 5.02(e)(i), (iv), (v), (vi), (vii) and (ix), the EBITDA of
each such Person in which such Investment was made for the 12-month period, or
such shorter period as appropriate, ended on or immediately prior to the end of
such period).
"Administrative Agent" has the meaning specified in the recital of parties
to this Agreement.
"Administrative Agent's Account" means the account of the Administrative
Agent maintained by the Administrative Agent at the Federal Reserve Bank of New
York, 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, ABA No. 000000000, for
further credit to Account No. 75042070103, or such other account maintained by
the Administrative Agent and designated by the Administrative Agent in a written
notice to the Lenders and the Borrowers.
"Agents" has the meaning specified in the recital of parties to this
Agreement.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, as of the Closing Date, a percentage per annum
determined by reference to the Performance Level applicable on such date as set
forth below:
-------------------- --------------------------- ========================
Applicable Margin for Applicable Margin for
Performance Base Rate Advances Eurodollar Rate
Level Advances
-------------------- --------------------------- ========================
-------------------- --------------------------- ========================
I 0.50% 1.50%
-------------------- --------------------------- ========================
-------------------- --------------------------- ========================
II 0.50% 1.75%
-------------------- --------------------------- ========================
-------------------- --------------------------- ========================
III 0.75% 2.00%
-------------------- --------------------------- ========================
and, (X) on each of November 10, 1998, February 10, 1999, May 10, 1999 and
August 10, 1999 the Applicable Margin for each Performance Level and each Type
of Advance shall increase by an additional 0.25%; provided, however, that (Y)
(a) the Applicable Margin shall be adjusted on each Business Day after the date
on which the Administrative Agent receives the certificate required by Section
3.02(b) and the financial statements pursuant to Section 5.03(b) or (c), as the
case may be, demonstrating that a new Performance Level is applicable; (b) for
the period commencing on August 10, 1998 until any such adjustment, the
Applicable Margin shall be as set forth opposite Performance Level I; (c) in the
event that the Restriction Termination Date does not occur on or before 120 days
following the Closing Date, the Applicable Margin for each Performance Level and
each Type of Advance shall be 4.00% and the provisions of the foregoing clause
(X) shall not apply further to increase the Applicable Margin and (d)
notwithstanding anything contained herein to the contrary (unless the provisions
of the foregoing clause (Y)(c) shall apply), the Applicable Margin shall be at
Performance Level III upon the occurrence and during the continuance of an Event
of Default.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative Agent,
in accordance with Section 8.07 and in substantially the form of Exhibit C
hereto.
"Base Rate" means a fluctuating interest rate per annum in effect from time
to time, which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest advised or designated by BNP in New York, New
York, from time to time, as its prime rate (and such term shall not be construed
to be its best or most favorable rate); and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided in
Section 2.06(a)(i).
"BNP" has the meaning specified in the recital of parties to this
Agreement.
"Board of Directors" means, with respect to any Person, the board of
directors of such Person or any duly authorized committee of such board.
"Borrower" means GNC or GNI, as designated in the applicable Notice of
Borrowing.
"Borrowing" means a borrowing consisting of simultaneous Advances of the
same Type made by the Lenders.
"Business Day" means a day of the year on which banks are not required or
authorized to close in New York City and, if the applicable Business Day relates
to any Eurodollar Rate Advances, on which dealings are carried on in the London
interbank market.
"Capitalized Leases" has the meaning specified in clause (e) of the
definition of "Indebtedness".
"Cash Equivalents" means any of the following, to the extent owned by the
Borrowers and their Subsidiaries free and clear of all Liens and having a
maturity of not greater than 90 days from the date of acquisition thereof: (a)
readily marketable direct obligations of the Government of the United States or
any agency or instrumentality thereof or obligations unconditionally guaranteed
by the full faith and credit of the Government of the United States; (b)
certificates of deposit of or time deposits with any commercial bank that is (i)
a Lender or (ii) a member of the Federal Reserve System that issues (or the
parent of which issues) commercial paper rated as described in clause (c), that
is organized under the laws of the United States or any State thereof and that
has combined capital and surplus of at least $500,000,000; (c) commercial paper
in an aggregate amount of no more than $250,000 per issuer outstanding at any
time, issued by any corporation organized under the laws of any State of the
United States, rated at least "Prime-1" (or the then equivalent grade) by
Xxxxx'x Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Rating Group, a division of the McGraw Hill Companies, Inc.;
or (d) money market mutual funds registered under the Investment Company Act of
1940, investing in obligations, or repurchase agreements secured by obligations,
of the type described in clause (a) or (b).
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.
"Claims" has the meaning specified in the definition of "Environmental
Action".
"Closing Date" means any date on or before August 10, 1998 on which the
conditions set forth in Article III applicable to the effectiveness of this
Agreement have been fulfilled or waived.
"Commitment" means, with respect to any Lender at any time, the amount set
forth opposite such Lender's name on Schedule I hereto under the caption
"Commitment" or, if such Lender has entered into one or more Assignments and
Acceptances, the amount set forth for such Lender in the Register maintained by
the Administrative Agent pursuant to Section 8.07(c) as such Lender's
"Commitment", as such amount may be reduced at or prior to such time pursuant to
Section 2.03.
"Confidential Information" means information that is furnished to any Agent
or any Lender by or on behalf of the Borrowers on a confidential basis, but does
not include any such information that is or becomes generally available to the
public other than as a result of a breach by such Agent or any Lender of its
obligations hereunder or that is or becomes available to such Agent or such
Lender from a source other than the Borrowers that is not, to the best of such
Agent's or such Lender's knowledge, acting in violation of a confidentiality
agreement with the Borrowers.
"Consolidated" refers to the consolidation of accounts in accordance with
GAAP.
"Conversion", "Convert" and "Converted" each refers to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.08 or
2.09.
"Default" means any Event of Default or any event that would constitute an
Event of Default but for the requirement that notice be given or time elapse or
both.
"Documentation Agent" has the meaning set forth in the recital of parties
to this Agreement.
"Dollars" and "$" sign each means lawful money of the United States.
"Domestic Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrowers and the Administrative Agent.
"EBITA" means, for any period, net income (or net loss) plus the sum of,
without duplication, (a) Interest Expense, (b) income tax expense, (c)
amortization expense, including amortization with respect to deferred financing
fees, (d) losses resulting from any sale of fixed assets, (e) noncash charges
relating to pensions, stock options, stock appreciation rights and other equity
based incentive plans, (f) extraordinary or unusual losses or expenses, in each
case, to the extent such amounts are deducted in calculating net income or loss
and (g) dividends, royalty payments or returns of capital actually received in
cash from any non-wholly-owned Subsidiary or Affiliate less the sum of, without
duplication, (i) gains resulting from any sale of fixed assets, (ii)
extraordinary or unusual gains and (iii) noncash credits relating to pensions,
stock options, stock appreciation rights and other equity based incentive plans,
in each case, to the extent such amounts are included in calculating net income
or loss, in each case determined in accordance with GAAP for such period;
provided, however, that for purposes of calculating Consolidated EBITA, (x)
other than as set forth in clause (g) above, no portion of any non-wholly-owned
Subsidiary's, or any Affiliate's, net income and any adjustments thereto that
under GAAP would be otherwise included in calculating Consolidated EBITA for any
period, shall be taken into account and (y) the net income and any adjustments
thereto of all Foreign Subsidiaries of GNCI shall not be recognized to the
extent such amount exceeds 10% of Consolidated EBITA.
"EBITDA" means, for any period, net income (or net loss) plus the sum of,
without duplication, (a) Interest Expense, (b) income tax expense, (c)
depreciation expense, (d) amortization expense, including amortization with
respect to deferred financing fees, (e) losses resulting from any sale of fixed
assets, (f) noncash charges relating to pensions, stock options, stock
appreciation rights and other equity based incentive plans and (g) extraordinary
or unusual losses or expenses, in each case, to the extent such amounts are
deducted in calculating net income or loss, less the sum of, without
duplication, (i) gains resulting from any sale of fixed assets, (ii)
extraordinary or unusual gains and (iii) noncash credits relating to pensions,
stock options, stock appreciation rights and other equity based incentive plans,
in each case, to the extent such amounts are included in calculating net income
or loss, in each case determined in accordance with GAAP for such period;
provided, however, that for purposes of calculating Consolidated EBITDA, (x) no
portion of any non-wholly-owned Subsidiary's, or any Affiliate's, net income and
any adjustments thereto that are attributable to interests not owned by GNCI and
its Subsidiaries and that under GAAP would be otherwise included in calculating
Consolidated EBITDA for any period, shall be taken into account and (y) the net
income and any adjustments thereto of all Foreign Subsidiaries of GNCI and any
other Subsidiary or Affiliate of GNCI that is organized and with substantially
all of its assets located outside of the United States, shall not be recognized
to the extent such aggregate amount exceeds 10% of Consolidated EBITDA.
"Eligible Assignee" means (a) a commercial bank organized under the laws of
the United States, or any State thereof, and having a combined capital and
surplus of at least $500,000,000, or any Affiliate thereof; (b) a savings and
loan association or savings bank organized under the laws of the United States,
or any State thereof, and having a combined capital and surplus of at least
$500,000,000; (c) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow, or a political subdivision of any such country, and
having a combined capital and surplus of at least $500,000,000, so long as such
bank is acting through a branch or agency located in the United States; (d) the
central bank of any country that is a member of the OECD; (e) a finance company,
insurance company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business
and having a combined capital and surplus of at least $500,000,000 or with
respect to a fund with total assets under its management in excess of
$500,000,000; and (f) any other Person (other than an Affiliate of any Borrower)
approved by the Administrative Agent and the Borrowers, such approval not to be
unreasonably withheld.
"Environmental Action" means any administrative, regulatory or judicial
action, suit, demand, demand letter, claim, notice of noncompliance or
violation, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law or any Environmental Permit
(collectively, "Claims") including, without limitation, (a) any Claim by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any Environmental Law
and (b) any Claim by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of injury to the
environment or, to the extent caused by pollution or other environmental
degradation, human health or safety.
"Environmental Law" means any federal, state or local law, statute, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
relating to Hazardous Materials, the environment, or, to the extent related to
pollution or other environmental degradation, human health or safety, including,
without limitation, CERCLA, the Resource Conservation and Recovery Act, the
Hazardous Materials Transportation Act, the Clean Water Act, the Toxic
Substances Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Atomic Energy Act, the Federal Insecticide, Fungicide and Rodenticide Act and
the Occupational Safety and Health Act.
"Environmental Permit" means any permit, approval, identification number,
license or other authorization required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.
"ERISA Affiliate" means, with respect to any Person, any other Person that
for purposes of Title IV of ERISA is a member of such Person's controlled group,
or under common control with such Person, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means, with respect to any Person:
(a) the occurrence of a reportable event, within the meaning of Section
4043 of ERISA, with respect to any Plan of such Person or any of its ERISA
Affiliates unless the 30-day notice requirement with respect to such event has
been waived by the PBGC;
(b) the provision by the administrator of any Plan of such Person or any of
its ERISA Affiliates of a notice of intent to terminate such Plan, pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA);
(c) the cessation of operations at a facility of such Person or any of its
ERISA Affiliates in the circumstances described in Section 4062(e) of ERISA;
(d) the withdrawal by such Person or any of its ERISA Affiliates from a
Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA;
(e) the failure by such Person or any of its ERISA Affiliates to make a
payment to a Plan required under Section 302(f)(1) of ERISA;
(f) the adoption of an amendment to a Plan of such Person or any of its
ERISA Affiliates requiring the provision of security to such Plan, pursuant to
Section 307 of ERISA; or
(g) the institution by the PBGC of proceedings to terminate a Plan of such
Person or any of its ERISA Affiliates, pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
could constitute grounds for the termination of, or the appointment of a trustee
to administer, such Plan.
"Eurodollar Liabilities" has the meaning specified in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.
"Eurodollar Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Eurodollar Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to GNC, GNI and the Administrative Agent.
"Eurodollar Rate" means for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing, an interest rate per annum equal
to the rate per annum obtained by dividing (a) the average of the respective
rates per annum posted by each of the principal London offices of banks posting
rates as displayed on the Telerate screen, page 3750, or such other page as may
replace such page on such service for the purpose of displaying the London
interbank offered rate of major banks for deposits in dollars, at approximately
11:00 A.M. (London time) two Business Days before the first day of such Interest
Period for deposits in amounts and durations comparable to such Borrowing and
such Interest Period (and rounded upward to the next whole multiple of 1/16 of
1%) by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Interest Period; provided that for purposes of calculating
the Eurodollar Rate with respect to any Interest Period of one week during the
first thirty days following the Fourth Restatement Date, the Reuters screen,
page LIBO should be used in lieu of the Telerate screen, page 3750 in clause (a)
hereof.
"Eurodollar Rate Advance" means an Advance that bears interest as provided
in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor thereto) for determining the
maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurodollar Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which the
interest rate on Eurodollar Rate Advances is determined) having a term equal to
such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Facility" means, at any time, the aggregate amount of the Lenders'
Commitments at such time.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period (i) to the rate published by the Dow
Xxxxx Markets service on page five of its daily report as the "New York Offered
Rate" as of 10:00 A.M. (New York City time) for such day (or, if such day is not
a Business Day, for the immediately preceding Business Day) or (ii) if the Dow
Xxxxx Markets service shall cease to publish or otherwise shall not publish such
rates for any day that is a Business Day, to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the immediately preceding 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 such day for such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.
"Fiscal Quarter" means a fiscal quarter of GNCI and its Subsidiaries ending
on or about April 27, July 20, October 12 or February 3 of each year.
"Fiscal Year" means the period commencing the day after the Saturday
closest to but not prior to the 31st day of January in any calendar year and
ending on the Saturday closest to but not preceding the 31st day of January in
the next succeeding calendar year, and when referred to from time to time herein
by reference to a calendar year, shall be the Fiscal Year beginning in the
calendar year to which reference is made.
"Fixed Charge Coverage Ratio" means, with respect to any period, the ratio
for GNCI and its Subsidiaries during such period of (a) the sum of (x)
Consolidated EBITA plus (y) Consolidated Store Operating Lease Expense to (b)
the sum of (i) Consolidated Interest Expense plus (ii) Consolidated income taxes
which were paid in cash plus (iii) Consolidated Store Operating Lease Expense
plus (iv) scheduled amortization of Consolidated Funded Indebtedness.
"Foreign Currency" means lawful currency other than Dollars which is freely
transferable and convertible into Dollars.
"Foreign Subsidiary" means a wholly-owned (except for any shares of capital
stock that are Qualifying Shares) Subsidiary that is organized, and with
substantially all of its assets located, outside of the United States.
"Fourth Amended and Restated Credit Agreement" means the credit agreement
dated as of March 31, 1997, as amended, supplemented or otherwise modified from
time to time, by and among GNI, GNC, GNCI, the banks and other lenders listed on
the signature pages thereof, BNP, as administrative agent and as documentation
agent, and PNC Bank, National Association and ABN AMRO Bank N.V., as syndication
agents.
"Franchisee Note" means a promissory note duly executed and delivered to a
Borrower or any Subsidiary by a Person that is a franchisee of a retail outlet
of such Borrower or such Subsidiary, including any amendment, modification,
renewal or replacement of such promissory note.
"Funded Indebtedness" of any Person means Indebtedness of such Person that
by its terms matures more than one year after the date of 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 after 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 after such date, including,
without limitation, all amounts of Funded Indebtedness of such Person required
to be paid or prepaid within one year after the date of determination.
"GAAP" has the meaning specified in Section 1.03.
"GNC" has the meaning set forth in the recitals of the parties to this
Agreement.
"GNCA" means GNC Amphora Company, a Delaware corporation.
"GNC Borrower Account" means the account of GNC maintained by GNC with BNP
at its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account
No. 20065800113, or such other account as is agreed upon between GNC and the
Administrative Agent.
"GNCC" means GNC (Canada) Holding Company, a Delaware corporation.
"GNCI" has the meaning set forth in the recitals of the parties to this
Agreement.
"GNCL" means GNC Limited, a Delaware corporation.
"GNCUK" means GNC (UK) Holding Company, a Delaware corporation.
"GND" means General Nutrition Distribution Company, a Delaware corporation.
"GNDLP" means General Nutrition Distribution LP, a Pennsylvania limited
partnership.
"GNF" means GNC Franchising, Inc., a Pennsylvania corporation.
"GNG" means General Nutrition Government Services, Inc., a Delaware
corporation.
"GN Investment" means GN Investment, Inc., a Delaware corporation.
"GNI" has the meaning set forth in the recitals of the parties to this
Agreement.
"GNI Borrower Account" means the account of GNI maintained by GNI with BNP
at its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No.
20065600196, or such other account as is agreed upon between GNI and the
Administrative Agent.
"GNIC" means General Nutrition Investment Company, a Delaware corporation
and a wholly-owned subsidiary of GNI.
"GNII" means General Nutrition International, Inc. a Delaware corporation
and a wholly-owned subsidiary of GNF.
"GNCIH" means GNC International Holdings, Inc., a Delaware corporation.
"GNP" means General Nutrition Products, Inc., a South Carolina corporation.
"GNSC" means General Nutrition Sales Corporation., an Arizonia corporation
and a wholly-owned subsidiary of GNI.
"Gustine" has the meaning set forth in Section 5.02(e)(x).
"Hazardous Materials" means (a) petroleum or petroleum products, natural or
synthetic gas, asbestos in any form that is or could become friable, urea
formaldehyde foam insulation and radon gas, (b) any substances defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants" or "pollutants,"
or words of similar import, under any Environmental Law and (c) any other
substance exposure to which is regulated under any Environmental Law.
"Health Care Business" means any business which is involved in providing
products, services or information in the self-care and personal health
enhancement markets.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
"Indebtedness" of any Person means, 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;
(c) all Obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments;
(d) all Obligations of such Person 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 Obligations of such Person as lessee under leases that have been or
should be, in accordance with GAAP, recorded as capital leases ("Capitalized
Leases");
(f) all Obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities;
(g) all Obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any capital stock (other than
Obligations, if any, (i) arising from the declaration of dividends on common
stock or (ii) to pay stated dividends on Preferred Stock) or other ownership or
profit interest in such Person or any other Person, or any warrants, rights or
options to acquire such capital stock, valued, in the case of Redeemable
Preferred Stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends;
(h) all Obligations in respect of Hedge Agreements;
(i) all Indebtedness of others referred to in clauses (a) through (h) above
guaranteed directly or indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (i) to pay
or purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (ii) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the holder
of such Indebtedness against loss, (iii) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss; and
(j) all Indebtedness referred to in clauses (a) through (h) above secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness.
"Indemnified Party" has the meaning specified in Section 8.04(b).
"INI" means Informed Nutrition, Inc., a Florida corporation and a
wholly-owned subsidiary of GNI..
"Insufficiency" means, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"Intercompany Subordinated Debt" means Indebtedness from time to time of
GNI to GNCI subordinated pursuant to the Intercompany Subordination Agreement.
"Intercompany Subordination Agreement" means an agreement substantially in
the form of Exhibit F hereto made by GNCI in favor of BNP, as Administrative
Agent for the Lenders, as of the date hereof.
"Interest Expense" means, with respect to any Person for any period
(without duplication), interest expense for such period on all Indebtedness of
such Person and its Subsidiaries, net of interest income (other than interest
income from Franchisee Notes) for such period, including, without limitation,
(a) interest in respect of Indebtedness resulting from Advances, (b)
commissions, discounts and other fees and charges payable in connection with
letters of credit, (c) the net payment paid in connection with Hedge Agreements
less any net credits received in connection with Hedge Agreements, (d) the
interest component of payments under Capitalized Leases, (e) amortization of
original issue discount and (f) all other noncash interest but excluding
amortization with respect to deferred financing fees.
"Interest Period" means, for all Eurodollar Rate Advances comprising part
of the same Borrowing, the period commencing on the date of such Eurodollar Rate
Advances or on the date of the Conversion of any Base Rate Advance into any such
Eurodollar Rate Advance, and ending on the last day of the period selected by
the Borrowers pursuant to the provisions below, and thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrowers pursuant to
the provisions below. The duration of each such Interest Period shall be (except
as provided for below) one, two, three or six months, as the Borrowers may, upon
notice received by the Administrative Agent not later than 12:00 P.M. (New York
City time) on the third Business Day prior to the first day of such Interest
Period, select; provided, however, that:
(a) no Borrower may select any Interest Period that ends after any
principal repayment installment date unless, after giving effect to such
selection, the aggregate principal amount of Base Rate Advances and of
Eurodollar Rate Advances having Interest Periods that end on or prior to such
principal repayment installment date shall be at least equal to the aggregate
principal amount of Advances due and payable on or prior to such date;
(b) Interest Periods commencing on the same date for Eurodollar Rate
Advances comprising part of the same Borrowing shall be of the same duration;
(c) whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day; provided, however, that,
if such extension would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such Interest Period shall
occur on the immediately preceding Business Day;
(d) whenever the first day of any Interest Period occurs on a day of an
initial calendar month for which there is no numerically corresponding day in
the calendar month that succeeds such initial calendar month by the number of
months equal to the number of months in such Interest Period, such Interest
Period shall end on the last Business Day of such succeeding calendar month; and
(e) during the first thirty days following the Fourth Restatement Date, the
Borrowers may, upon notice received by the Administrative Agent not later than
12:00 P.M. (New York City time) on the third Business Day prior to the first day
of the Interest Period, select an Interest Period of one week; provided,
however, that no Borrower may select an Interest Period with a one week duration
more than four times during such period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and the rulings issued
thereunder.
"Investment" in any Person means any loan or advance to such Person, any
purchase or other acquisition of any capital stock, warrants, rights, options,
obligations or other securities of such Person, any capital contribution to such
Person or any other investment in such Person, including, without limitation,
any arrangement pursuant to which the investor incurs Indebtedness of the types
referred to in clauses (h) and (i) of the definition of "Indebtedness" in
respect of such Person.
"Lenders" means the Lenders listed on the signature pages hereof and each
Eligible Assignee that shall become a party hereto pursuant to Section 8.07.
"Lien" means any lien, security interest or other charge or encumbrance of
any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"Loan Documents" means (a) for purposes of this Agreement and the Notes and
any amendment or modification hereof or thereof and for all other purposes other
than for purposes of the Parent Guaranty and the Subsidiary Guaranty (i) this
Agreement, (ii) the Notes, (iii) the Parent Guaranty, and (iv) the Subsidiary
Guaranty, (b) for purposes of the Parent Guaranty and the Subsidiary Guaranty,
(i) this Agreement, (ii) the Notes, (iii) the Parent Guaranty, (iv) the
Subsidiary Guaranty, and (v) each Hedge Agreement entered into with a Lender, in
each case as amended or otherwise modified from to time.
"Loan Parties" means the Borrowers, GNCI and each Subsidiary Guarantor.
"Margin Stock" has the meanings specified in Regulation U of the Board of
Governors of the Federal Reserve System.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Loan Parties and their Subsidiaries taken as a
whole.
"Material Adverse Effect" means any material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Loan Parties and their Subsidiaries taken as a
whole, (b) the rights and remedies of any Agent or any Lender under any Loan
Document or any Related Document or (c) the ability of any Loan Party to perform
its Obligations under any Loan Document or any Related Document to which it is
or is to be a party.
"Material Contract" means (a) the Amended and Restated Agreement dated
September 24, 1992 by and between Showa Denko America, Inc. and General
Nutrition, Inc. and (b) the Guaranty Agreement dated as of September 24, 1992 by
and between Showa Denko K.K. and General Nutrition, Inc., as in effect on March
31, 1997.
"Maximum Leverage Ratio" means, with respect to any period, the ratio of
(a) Consolidated Total Debt of GNCI and its Subsidiaries at the end of such
period to (b) Consolidated EBITDA of GNCI and its Subsidiaries for such period
(the computation of such ratio to include, in the case of Indebtedness created,
incurred or assumed in connection with any Investment permitted by Sections
5.02(e)(i), (iv), (v), (vi), (vii) and (ix), the EBITDA of each such Person in
which such Investment was made for the 12-month period, or such shorter period
as appropriate, ended on or immediately prior to the end of such period).
"Multiemployer Plan" means, with respect to any Person, a multiemployer
plan, as defined in Section 4001(a)(3) of ERISA, to which such Person or any of
its ERISA Affiliates is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an obligation
to make contributions.
"Multiple Employer Plan" means, with respect to any Person, a single
employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of such Person or any of its ERISA Affiliates and at
least one Person other than such Person and its ERISA Affiliates or (b) was so
maintained and in respect of which such Person or any of its ERISA Affiliates
could reasonably be expected to have liability under Section 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated.
"NFC" means Nature Food Centres, Inc., a Maryland Corporation.
"NFCI" means NFC, Inc., a Massachusetts corporation.
"NFN" means Nature's Fresh Northwest, Inc., a Delaware corporation.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset or the incurrence or issuance of any Indebtedness
or capital stock, any securities convertible into or exchangeable for capital
stock or any warrants, rights or options to acquire capital stock by any Person,
the aggregate amount of cash received from time to time by or on behalf of such
Person in connection with such transaction after deducting therefrom only (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions, (b) the amount
of taxes payable in connection with or as a result of such transaction, (c) the
amount of any Indebtedness secured by a Lien on such asset that, by the terms of
such transaction, is required to be repaid upon such disposition and (d) other
reasonable and customary costs and expenses ordinarily incurred and paid by a
seller, lessor, transferor or issuer, as the case may be, in each case to the
extent, but only to the extent, that the amounts so deducted are substantially
simultaneously paid to a Person that is not an Affiliate and are properly
attributable to such transaction or to the asset that is the subject thereof.
"Note" means a promissory note of a Borrower payable to the order of any
Lender, in substantially the form of Exhibit A hereto, evidencing the aggregate
indebtedness of such Borrower to such Lender resulting from Advances made by
such Lender.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Obligation" means, with respect to any Person, any obligation of such
Person of any kind, including, without limitation, any liability of such Person
on any claim, whether or not the right of any creditor to payment in respect of
such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 6.01(e). Without limiting the generality of
the foregoing, the Obligations of the Loan Parties under the Loan Documents
include (a) the obligation to pay principal, interest, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts payable by any
Loan Party under any Loan Document and (b) the obligation to reimburse any
amount in respect of any of the foregoing that any Lender, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and Development.
"Other Taxes" has the meaning specified in Section 2.11(b).
"Parent Guaranty" has the meaning specified in Section 3.01(e)(viii).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Performance Level" means, as of any date of determination, the level set
forth below as then applicable, as determined in accordance with the following
provisions of this definition:
I Maximum Leverage Ratio is less than or equal to 3.00 : 1.00.
II Maximum Leverage Ratio is greater than 3.00 : 1.00 but less than or
equal to 3.25 : 1.00.
III Maximum Leverage Ratio is greater than 3.25 : 1.00.
"Permitted Franchise Asset Sale" means the sale, in the ordinary course of
business, by the Borrowers and their Subsidiaries pursuant to a franchise
agreement of equipment, fixed assets and leasehold improvements, inventory and
intangible assets to a franchisee of either Borrower or any of its Subsidiaries.
"Permitted Liens" means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced:
(a) Liens for taxes, assessments and governmental charges or levies to the
extent not required to be paid under Section 5.01(b);
(b) Liens imposed by law, such as materialmen's, mechanics', carriers',
workmen's and repairmen's Liens and other similar Liens arising in the ordinary
course of business securing obligations that (i) are not overdue for a period of
more than 30 days and (ii) either individually or when aggregated with all other
Permitted Liens outstanding on any date of determination, do not adversely
affect the use or value of a material amount of the Borrowers' and their
Subsidiaries' properties that are being refurbished and constructed;
(c) pledges or deposits under workers' compensation laws, unemployment
insurance laws or similar legislation or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases,
or deposits to secure public or statutory obligations;
(d) Liens arising out of judgments or awards under appeal or other
proceedings for review to the extent such Liens do not constitute an Event of
Default; and
(e) easements, rights of way and other encumbrances on title to real
property that do not render title to the property encumbered thereby
unmarketable or materially adversely affect the use of such property for its
present purposes.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PIK Preferred Stock" means the Series A Preferred Stock of GNI.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Preferred Stock" means, with respect to any corporation, capital stock
issued by such corporation that is entitled to a preference or priority over any
other capital stock issued by such corporation upon any distribution of such
corporation's assets, whether by dividend or upon liquidation.
"Qualifying Shares" means, with respect to any Subsidiary organized outside
of the United States, any qualifying ownership shares or similar ownership
interests required by the applicable law of any such foreign jurisdiction to be
held by a resident of such foreign jurisdiction or by an officer, employee or
director of such Subsidiary.
"Redeemable" means, with respect to any capital stock, Indebtedness or
other right or Obligation, any such capital stock, Indebtedness, right or
Obligation that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or otherwise,
or upon the occurrence of a condition not solely within the control of the
issuer or (b) is redeemable at the option of the holder.
"Register" has the meaning specified in Section 8.07(c).
"Related Documents" means the Tax Sharing Agreement and the Intercompany
Subordination Agreement.
"Required Lenders" means, at any time, Lenders owed or holding in the
aggregate at least 51% of the sum of the then aggregate unpaid principal amount
of the Advances then outstanding.
"Restriction Termination Date" means the earlier to occur of (a) the date
on which the Fourth Amended and Restated Credit Agreement is repaid in full and
all commitments thereunder are terminated and (b) the lenders thereunder consent
to permitting the restrictions set forth in Section 5.02(a) and 5.02(m) of this
Agreement and Sections 7(b) and (l) of the Parent Guaranty.
"Rolling Period" means in respect of any Fiscal Quarter, such Fiscal
Quarter and the three preceding Fiscal Quarters.
"SEC" means the Securities and Exchange Commission.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Single Employer Plan" means, with respect to any Person, a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and no Person other than
such Person and its ERISA Affiliates or (b) was so maintained and in respect of
which such Person or any of its ERISA Affiliates could reasonably be expected to
have liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
saleable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature and (d) such Person is not
engaged in business or in a transaction, and is not about to engage in business
or in a transaction, for which such Person's property would constitute
unreasonably small capital.
"Store Operating Lease Expense" means all operating lease expenses and
rents in connection with retail stores of GNCI and its Subsidiaries, including
base rents and percentage rents.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, trust or estate of which (or in which) more than 50% of (a) the issued
and outstanding capital stock having ordinary voting power to elect a majority
of the Board of Directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency), (b) the
interest in the capital or profits of such partnership or joint venture or (c)
the beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person's other Subsidiaries.
"Subsidiary Guarantors" means GNC, GNP, GNIC, GNF, GNII, GNCIH, GNG, GNCL,
GNCC, GNCUK, GND, NFC, NFCI, NFN, GNDLP, GNSC, GN Investment, GNCA, INI and any
other Subsidiary of either GNC or GNI that enters into a guaranty pursuant to
Section 5.01(m).
"Subsidiary Guaranty" has the meaning specified in Section 3.01(e)(viii)
and shall include any subsidiary guaranty entered into by any Loan Party
pursuant to Section 5.01(m).
"Tax Sharing Agreement" means the Tax Sharing Agreement among GNCI, the
Borrowers and each of the Borrowers' Subsidiaries executed prior to the initial
Borrowing hereunder, as in effect on the Closing Date.
"Taxes" has the meaning specified in Section 2.11(a).
"Termination Date" means the earlier of July 1, 2002 and the date of
termination in whole of the Commitments pursuant to Section 2.04 or 6.01.
"Total Adjusted Debt" means, at any date of determination, the aggregate
amount of all outstanding and other undrawn commitments to provide Indebtedness
to the Borrowers or its Foreign Subsidiaries pursuant to Sections 5.02(b)(i)(A)
and 5.02(b)(iv)(B), respectively, and all other Indebtedness of the type
permitted by Section 5.02(b) outstanding at such time, other than the
Indebtedness referred to in Sections 5.02(b)(i)(D), 5.02(b)(ii), 5.02(b)(iii),
5.02(b)(v)(A) and 5.02(b)(vii).
"Total Debt" means, at any date of determination, Indebtedness of the type
permitted by Section 5.02(b) outstanding at such time, other than the
Indebtedness referred to in Sections 5.02(b)(i)(D), 5.02(b)(ii), 5.02(b)(iii),
5.02(b)(v)(A) and 5.02(b)(vii).
"Type" refers to the distinction between Advances bearing interest at the
Base Rate and Advances bearing interest at the Eurodollar Rate.
"Voting Stock" means capital stock issued by a corporation, or equivalent
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even though the right so
to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means, with respect to any Person, a welfare plan, as
defined in Section 3(1) of ERISA (other than a multiemployer plan, as defined in
Section 3(37) of ERISA), maintained for employees of such Person.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle E of
Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" both
mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles in the United States consistent with those applied in the
preparation of the financial statements referred to in Section 4.01(f) ("GAAP").
SECTION 1.04. Currency Equivalents Generally. The equivalent in any Foreign
Currency of an amount in Dollars shall be determined at the rate of exchange
quoted by BNP in New York City, at 9:00 A.M. (New York City time) on the date of
determination, to prime banks in New York City for the spot purchase in the New
York foreign exchange market of such amount of Dollars with such Foreign
Currency.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (the "Advances") to the
Borrowers from time to time on any Business Day during the period from the
Closing Date until September 10, 1998 in an amount for each such Advance not to
exceed such Lender's unused Commitment on such Business Day. Each Borrowing
shall be in an aggregate amount of $3,000,000 or an integral multiple of
$100,000 in excess thereof and shall consist of Advances made by the Lenders
ratably according to their Commitments. Within the limits of each Lender's
unused Commitment in effect from time to time, the Borrowers may borrow under
this Section 2.01 and prepay pursuant to Section 2.05. Amounts borrowed under
this Section 2.01 and repaid or prepaid may not be reborrowed.
SECTION 2.02. Making the Advances. (a) Each Borrowing shall be made on
notice, given not later than (A) 12:00 noon (New York City time) on the first
Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Base Rate Advances, (B) 12:00 noon (New York City time)
on the third Business Day prior to the date of the proposed Borrowing in the
case of a Borrowing consisting of Eurodollar Rate Advances by the relevant
Borrower to the Administrative Agent, which shall give to each Lender prompt
notice thereof by telex, telecopier or cable. Each such notice of a Borrowing (a
"Notice of Borrowing") shall be by telex, telecopier or cable, in substantially
the form of Exhibit B hereto, specifying therein the requested (i) date of such
Borrowing (which shall be a Business Day), (ii) Type of Advances comprising such
Borrowing, (iii) aggregate amount of such Borrowing and (iv) in the case of a
Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for
each such Advance. In the case of a proposed Borrowing comprised of Eurodollar
Rate Advances, the Administrative Agent shall promptly notify each Lender of the
applicable interest rate under Section 2.06(a)(ii). Each Lender shall, before
12:00 noon (New York City time) on the date of such Borrowing, make available
for the account of its Applicable Lending Office to the Administrative Agent at
the Administrative Agent's Account, in same day funds, such Lender's pro rata
share of such Borrowing. After the Administrative Agent's receipt of such funds
and upon fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower giving the
Notice of Borrowing by crediting the GNI Borrower Account or the GNC Borrower
Account, as appropriate.
(b) Anything in subsection (a) to the contrary notwithstanding, (i) no
Borrower may select Eurodollar Rate Advances (1) for the initial Borrowing
hereunder, (2) for any Borrowing if the aggregate amount of such Borrowing is
less than $5,000,000 or (3) if the obligation of the Lenders to make Eurodollar
Rate Advances shall then be suspended pursuant to Section 2.09 and (ii) the
Eurodollar Advances may not be outstanding as part of more than three separate
Borrowings.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
relevant Borrower. In the case of any Borrowing that the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the
Borrowers jointly and severally hereby agree to indemnify each Lender against
any loss, cost or expense incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss (including loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund the Advance to be made by such Lender as part of such
Borrowing when such Advance, as a result of such failure, is not made on such
date.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the relevant Borrower
on such date a corresponding amount. If and to the extent that such Lender shall
not have so made such ratable portion available to the Administrative Agent,
such Lender and the Borrowers severally agree to repay or pay to the
Administrative Agent forthwith on demand such corresponding amount and to pay
interest thereon, for each day from the date such amount is made available to
the relevant Borrower until the date such amount is repaid or paid to the
Administrative Agent, at (i) in the case of the Borrowers, the interest rate
applicable at such time under Section 2.06 to Advances comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender
shall pay to the Administrative Agent such corresponding amount, such amount so
paid in respect of principal shall constitute such Lender's Advance as part of
such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
SECTION 2.03. Repayment. Each Borrower hereby agrees to repay to the
Administrative Agent for the ratable account of the Lenders on the Termination
Date the aggregate outstanding principal amount of the Advances borrowed by it.
SECTION 2.04. Optional Reduction of the Commitments. The Borrowers may,
upon at least three Business Days' notice to the Administrative Agent, terminate
in whole or reduce ratably in part the unused portion of the Commitments of the
Lenders without premium or penalty; provided, however, that each partial
reduction shall be in an aggregate amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof.
SECTION 2.05. Prepayments. (a) Optional. Each Borrower may, upon at least
one Business Day's notice to the Administrative Agent stating the proposed date
and the aggregate principal amount of the prepayment, and if such notice is
given such Borrower agrees to, prepay, without premium or penalty, the aggregate
principal amount of the Advances comprising part of the same Borrowings in whole
or ratably in part on the aggregate principal amount prepaid; provided, however,
that (i) each partial prepayment shall be in an aggregate principal amount of
$3,000,000 or an integral multiple of $100,000 in excess thereof and (ii) no
such prepayment of a Eurodollar Rate Advance shall be made other than on the
last day of an Interest Period therefor.
(b) Mandatory. The Borrowers shall repay all Advances then outstanding on
the 30th day following the date on which the Fourth Amended and Restated Credit
Agreement is repaid in full and all commitments thereunder are terminated.
SECTION 2.06. Interest. (a) Scheduled Interest. The Borrowers jointly and
severally agree to pay interest on the unpaid principal amount of each Advance
owing to each Lender from the date of such Advance until such principal amount
shall be paid in full at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the sum of (i) the Base Rate in
effect from time to time plus (ii) the Applicable Margin in effect from time to
time, payable quarterly in arrears from the Closing Date on the last Business
Day of each March, June, September and December during such periods, commencing
on September 30, 1998, and on the Termination Date.
(ii) Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (i) the Eurodollar Rate for such
Interest Period for such Advance plus (ii) the Applicable Margin in effect from
time to time, payable in arrears on the last day of such Interest Period and, if
such Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day of such
Interest Period.
(b) Default Interest. Upon the occurrence and during the continuance of a
Default under Section 6.01(e) or of an Event of Default and upon the request of
the Administrative Agent or the Required Lenders, the Borrowers jointly and
severally agree to pay interest on (i) the unpaid principal amount of each
Advance owing to each Lender, payable in arrears on the dates referred to in
clause (a)(i) or (a)(ii) above and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid on such
Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) the amount of any
interest, fee or other amount payable hereunder that is not paid when due, from
the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on demand,
at a rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on Base Rate Advances pursuant to clause (a)(i) above.
SECTION 2.07. Fees. (a) Commitment Fee. The Borrowers jointly and severally
hereby agree to pay to the Administrative Agent for the account of the Lenders a
commitment fee on each Lender's average daily unused Commitment from the Closing
Date in the case of each initial Lender and from the effective date specified in
the Assignment and Acceptance pursuant to which it became a Lender in the case
of each other Lender until September 10, 1998, payable on September 30, 1998 at
a rate per annum equal to 0.25%.
(b) Agents' Fees. The Borrowers jointly and severally agree to pay to each
Agent for its own account such fees as may from time to time be agreed upon
between the Borrowers and such Agent.
SECTION 2.08. Conversion of Advances. (a) Optional. Any Borrower may on any
Business Day, upon notice given to the Administrative Agent not later than 12:00
noon (New York City time) on the third Business Day prior to the date of the
proposed Conversion and subject to the provisions of Section 2.09, Convert all
or any portion of the Advances owing by such Borrower of one Type comprising the
same Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made on,
and only on, the last day of an Interest Period for such Eurodollar Rate
Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances
shall be in an amount not less than the minimum amount specified in
Section 2.02(b) and no Conversion of any Advances shall result in more separate
Borrowings than permitted under Section 2.02(b). Each such notice of Conversion
shall, within the restrictions specified above, specify (i) the date of such
Conversion (which shall be a Business Day), (ii) the Advances to be Converted
and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of
the initial Interest Period for such Advances. Each notice of Conversion shall
be irrevocable and binding on the relevant Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $5,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(ii) If any Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in Section 2.02, the Administrative Agent will forthwith so notify
such Borrower and the Lenders, whereupon each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor
Convert into a Base Rate Advance.
SECTION 2.09. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation after the date hereof or (ii) the compliance after the date hereof
with any guideline or request from any central bank or other governmental
authority (whether or not having the force of law), there shall be any increase
in the cost to any Lender of agreeing to make or of making, funding or
maintaining Eurodollar Rate Advances, then, upon demand by such Lender (with a
copy of such demand to the Administrative Agent), the Borrowers jointly and
severally hereby agree to pay to the Administrative Agent for the account of
such Lender additional amounts sufficient to compensate such Lender for such
increased cost; provided, however, that the Borrowers shall jointly and
severally be obligated to make such payment only if such Lender has given, or
has caused the Administrative Agent to give, notice to the Borrowers of the
facts or circumstances giving rise to such increased cost within ninety (90)
days after such Lender shall have itself received actual knowledge thereof. A
certificate as to the amount of such increased cost, submitted to the Borrowers
by such Lender, shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by the
existence of such Lender's commitment to lend hereunder and other commitments of
such type, then, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), the Borrowers jointly and severally hereby agree to pay
to the Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder; provided that such additional
amounts shall not include compensation for any additional amounts arising from
circumstances occurring more than 180 days prior to the date of such demand. A
certificate as to such amounts, submitted to the Borrowers by such Lender, shall
be conclusive and binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances, Lenders owed at least
51% of the then aggregate unpaid principal amount thereof notify the
Administrative Agent that the Eurodollar Rate for any Interest Period for such
Advances will not adequately reflect the cost to such Lenders of making, funding
or maintaining their Eurodollar Rate Advances for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrowers and the Lenders,
whereupon (i) each such Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (ii) the obligation of such Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative Agent
shall notify the Borrowers that such Lenders have determined that the
circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrowers
through the Administrative Agent, (i) each Eurodollar Rate Advance will
automatically, upon such demand, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrowers that such Lender has determined that the circumstances causing such
suspension no longer exist.
(e) Upon the occurrence and during the continuance of any Event of Default
or a Default under Section 6.01(e), (i) each Eurodollar Rate Advance will
automatically Convert into a Base Rate Advance and (ii) the obligation of the
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended.
SECTION 2.10. Payments and Computations. (a) The Borrowers shall make each
payment hereunder and under the Notes, not later than 12:00 noon (New York City
time) on the day when due in U.S. dollars to the Administrative Agent at the
Administrative Agent's Account in same day funds. The Administrative Agent will
promptly thereafter cause like funds to be distributed (i) if such payment is in
respect of principal, interest, commitment fees or any other Obligation then due
and payable hereunder or under any of the Notes to more than one Lender, to such
Lenders for the account of their respective Applicable Lending Offices ratably
in accordance with the amounts of such respective Obligations then payable to
such Lenders and (ii) if such payment is in respect of any Obligation then due
and payable hereunder or under any of the Notes to one Lender, to such Lender
for the account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(c), from and after the effective date of
such Assignment and Acceptance, the Administrative Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) Each Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under the Note or
Notes held by such Lender, to charge from time to time against any or all of
such Borrower's accounts with such Lender any amount so due.
(c) All computations of interest and fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest and fees are payable. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the immediately
preceding Business Day.
(e) Unless the Administrative Agent shall have received notice from any
Borrower prior to the date on which any payment is due to any Lender hereunder
or under the Notes that such Borrower will not make such payment in full, the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent any Borrower shall not have so made such payment in full to the
Administrative Agent, each such Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
SECTION 2.11. Taxes. (a) Any and all payments by the Borrowers hereunder or
under the Notes shall be made, in accordance with Section 2.10, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Administrative Agent,
overall net income taxes that are imposed by the United States on such Lender or
the Administrative Agent and overall net income taxes (or franchise taxes in
lieu thereof) that are imposed on such Lender or the Administrative Agent by the
state or foreign jurisdiction under the laws of which such Lender or the
Administrative Agent, as the case may be, is organized or any political
subdivision thereof and, in the case of each Lender, overall net income taxes
(or franchise taxes in lieu thereof) that are imposed on such Lender by the
state or foreign jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrowers shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender or
the Administrative Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.11) such Lender and
the Administrative Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrowers
shall make such deductions and (iii) the Borrowers shall pay the full amount
deducted to the relevant taxation authority or other governmental authority in
accordance with applicable law.
(b) In addition, the Borrowers jointly and severally hereby agree to pay
any present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or
under the Notes or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or the Notes (hereinafter referred to as "Other
Taxes").
(c) The Borrowers jointly and severally indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes, and for the
full amount of taxes of any kind imposed by any jurisdiction on amounts payable
under this Section 2.11, paid by such Lender or the Administrative Agent, as the
case may be, and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto. This indemnification
shall be made within 30 days from the date such Lender or the Administrative
Agent, as the case may be, makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrowers
will furnish to the Administrative Agent, at its address referred to in Section
8.02, appropriate evidence of payment thereof. If no Taxes are payable in
respect of any payment hereunder or under the Notes by the Borrowers through an
account or branch outside the United States or on behalf of the Borrowers by a
payor that is not a United States person, the Borrowers will furnish, or will
cause such payor to furnish, to the Administrative Agent, at such address, a
certificate from the appropriate taxing authority or authorities, or an opinion
of counsel acceptable to the Administrative Agent, in either case stating that
such payment is exempt from or not subject to Taxes. For purposes of this
subsection (d) and subsection (e), the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Agreement in the case of each Lender, and on the date of the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the
Borrowers or the Administrative Agent (but only so long thereafter as such
Lender remains lawfully able to do so), provide the Administrative Agent and the
Borrowers with Internal Revenue Service form 1001 or 4224, as appropriate (or
any successor form prescribed by the Internal Revenue Service), certifying that
such Lender is exempt from or is entitled to a reduced rate of United States
withholding tax on payments under this Agreement or the Notes, or certifying
that the income receivable by such Lender under this Agreement or the Notes is
effectively connected with the conduct of a trade or business of such Lender in
the United States. To the extent a Lender fails to provide to the Borrowers at
the time such Lender first becomes a party to this Agreement Internal Revenue
Service forms that establish a United States withholding tax rate of zero,
withholding tax at the initially required rate shall be considered excluded from
Taxes unless and until such Lender provides the appropriate form certifying that
a lesser rate applies, whereupon withholding tax at such lesser rate only shall
be considered excluded from Taxes for periods governed by such form. If after
the date of an Assignment and Acceptance pursuant to which a Lender assignee
becomes a party to this Agreement, the Borrowers shall become obligated to
gross-up payments to or to indemnify the assignee pursuant to this Section 2.11,
such gross-up or indemnity obligation to such assignee shall be no greater than
the corresponding obligation the Borrowers would have had absent such Assignment
and Acceptance. If any form or document referred to in this subsection (e)
requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by Internal
Revenue Service form 1001 or 4224, that the Lender reasonably considers to be
confidential, the Lender shall give notice thereof to the Borrowers and shall
not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Lender has failed to provide the
Borrowers with the appropriate form described in subsection (e) above (other
than if such failure is due to a change in law occurring after the date on which
a form originally was required to be provided or if such form otherwise is not
required under subsection (e) above), such Lender shall not be entitled to
gross-up or indemnification under subsection (a) or (c) above with respect to
Taxes imposed by the United States; provided, however, that should a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrowers shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such Taxes.
(g) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in this Section 2.11 shall survive the payment in full of principal and interest
hereunder and under the Notes.
SECTION 2.12. Sharing of Payments, Etc. If any Lender shall obtain at any
time any payment (whether voluntary, involuntary, through the exercise of any
right of setoff, or otherwise) on account of the Obligations of the Borrowers to
such Lender hereunder and under the Notes in excess of (a) its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
Obligations of the Borrowers due and payable to all Lenders hereunder and under
the Notes at such time) of payments on account of the Obligations due and
payable to all Lenders hereunder and under the Notes at such time obtained by
all the Lenders at such time or (b) if no such Obligations are due and payable
at such time, its ratable share (according to the proportion of (A) the amount
of such Obligations of the Borrowers to such Lender at such time to (B) the
aggregate amount of the Obligations of the Borrowers to all Lenders hereunder
and under the Notes at such time) of payments on account of the Obligations of
the Borrowers to all Lenders hereunder and under the Notes at such time obtained
by all Lenders at such time, such Lender shall forthwith purchase from the other
Lenders such participations in the Obligations of the Borrowers hereunder and
under the Notes owing to them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each other Lender shall be rescinded
and such other Lender shall repay to the purchasing Lender the purchase price to
the extent of such other Lender's ratable share (according to the proportion of
(1) the purchase price paid to such Lender to (2) the aggregate purchase price
paid to all Lenders) of such recovery together with an amount equal to such
Lender's ratable share (according to the proportion of (x) the amount of such
other Lender's required repayment to (y) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrowers
agree that any Lender so purchasing a participation from another Lender pursuant
to this Section 2.12 may, to the fullest extent permitted by law, exercise all
its rights of payment (including the right of setoff) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation.
SECTION 2.13. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrowers agree that they shall use such proceeds) in order
to (i) finance purchases of GNCI capital stock as permitted in Section
5.02(f)(i) hereof and (ii) provide funds for general corporate purposes
permitted by this Agreement.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Closing Date. This Agreement shall
become effective on and as of the date (the "Closing Date"), on which each of
the following conditions precedent shall have been satisfied:
(a) No Material Adverse Change shall have occurred since January 31, 1998.
(b) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of their properties, including any
Environmental Action, pending or to the best of the Borrowers' knowledge,
threatened before any court, governmental agency or arbitrator that (i) could
reasonably be expected to have a Material Adverse Effect, or (ii) purports to
affect the legality, validity or enforceability of this Agreement, any Note, any
other Loan Document, any Related Document or the consummation of the
transactions contemplated hereby.
(c) The Borrowers shall have paid to the Administrative Agent all
reasonable accrued fees of the Agents and the Lenders (including the upfront fee
to be paid with respect to this Agreement and the accrued fees and expenses of
counsel to the Administrative Agent).
(d) All governmental and third party consents and approvals necessary in
connection with this Agreement shall have been obtained (without the imposition
of any conditions other than those that are reasonably acceptable to the
Administrative Agent) and shall remain in effect, and all applicable waiting
periods shall have expired without any action being taken by any competent
authority and no law or regulation shall be applicable, in the reasonable
judgment of the Administrative Agent, that restrains, prevents or imposes
adverse conditions upon this Agreement or any related transactions.
(e) The Administrative Agent shall have received on or before the Closing
Date the following, each dated the Closing Date (unless otherwise specified), in
form and substance reasonably satisfactory to the Administrative Agent (unless
otherwise specified) and (except for the Notes) in sufficient copies for each
Lender:
(i) The Notes to the order of the Lenders.
(ii) Certified copies of the resolutions of the Board of Directors of each
Borrower and of each other Loan Party approving this Agreement, the Notes, each
other Loan Document and each Related Document to which it is or is to be a
party, and of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement, the Notes, each
other Loan Document and each Related Document.
(iii) A copy of the charter of each Borrower and of each other Loan Party
and each amendment thereto, certified (as of a date reasonably near the date of
the initial Borrowing) by the Secretary of State of the State of their
respective states of incorporation or organization as being a true and correct
copy thereof.
(iv) A copy of a certificate of the Secretary of State of the State of
their respective states of incorporation or organization, dated reasonably near
the Closing Date, listing the charter or other organizational documents of each
Borrower and of each other Loan Party and each amendment thereto on file in his
office and certifying that (A) such amendments are the only amendments to the
Borrowers' or such other Loan Party's charter or other organizational documents
on file in his office, (B) each Borrower and each other Loan Party have paid all
franchise taxes to the date of such certificate and (C) each Borrower and each
other Loan Party are duly incorporated or organized and in good standing under
the laws of the State of their respective states of incorporation or
organization.
(v) A copy of a certificate of the Secretary of State of the Commonwealth
of Pennsylvania, dated reasonably near the Closing Date, stating that GNCI is
duly qualified and in good standing as a foreign corporation in such State and
has filed all annual reports required to be filed to the date of such
certificate.
(vi) A certificate of each of the Borrowers and each other Loan Party,
signed on behalf of each Borrower or such other Loan Party by its President or a
Vice President and its Secretary or any Assistant Secretary, dated the Closing
Date (the statements made in such certificate shall be true on and as of the
Closing Date), certifying as to (A) the absence of any amendments to the charter
or other organizational documents of such Borrower or such other Loan Party
since the date of the Secretary of State's certificate referred to in Section
3.01(e)(iv), (B) the truth and accuracy of the bylaws of such Borrower or such
other Loan Party as in effect on the Closing Date (a copy of which shall be
attached to such certificate), (C) the due incorporation or organization and
good standing of such Borrower or such other Loan Party as a corporation or
limited partnership organized under the laws of the State of its respective
state of incorporation or organization, and the absence of any proceeding for
the dissolution or liquidation of such Borrower or such other Loan Party, (D)
the truth and accuracy of the representations and warranties contained in the
Loan Documents as though made on and as of the Closing Date and (E) the absence
of any event occurring and continuing, or resulting from the initial Borrowing,
that constitutes a Default.
(vii) A certificate of the Secretary or an Assistant Secretary of each
Borrower and of each other Loan Party certifying the names and true signatures
of the officers of such Borrower and of such other Loan Party authorized to sign
this Agreement, the Notes, each other Loan Document and each Related Document to
which it is or is to be parties and the other documents to be delivered
hereunder and thereunder.
(viii) A guaranty in substantially the form of Exhibit D hereto (as
amended, supplemented or otherwise modified from time to time in accordance with
its terms, the "Parent Guaranty"), duly executed by GNCI and GNI and a guaranty
in substantially the form of Exhibit E hereto (as amended, supplemented or
otherwise modified from time to time in accordance with its terms, the
"Subsidiary Guaranty"), duly executed by each Subsidiary Guarantor.
(ix) Certified copies of each of the Related Documents, duly executed by
the parties thereto and in form and substance reasonably satisfactory to the
Administrative Agent, together with all agreements, instruments and other
documents delivered in connection therewith.
(x) Such financial, business and other information regarding the Borrowers
and each other Loan Party as the Administrative Agent shall have reasonably
requested, including, without limitation, (A) information as to possible
contingent liabilities, tax matters, environmental matters, obligations under
ERISA and under Plans, Multiemployer Plans, Welfare Plans and collective
bargaining agreements, (B) annual audited financial statements for the Fiscal
Year ended January 31, 1998 of GNCI, (C) interim financial statements dated the
end of the most recent Fiscal Quarter for which financial statements of GNCI are
available and (D) forecasts prepared by management of GNCI, in form and
substance satisfactory to the Administrative Agent, of balance sheets, income
statements and cash flow statements on an annual basis through Fiscal Year 2002.
(xi) Certificates from the chief financial officer of GNCI, in form and
substance satisfactory to the Administrative Agent, attesting to the Solvency of
GNCI and its Subsidiaries, taken as a whole, immediately after giving effect to
the transactions contemplated hereby.
(xii) A letter, in form and substance reasonably satisfactory to the
Administrative Agent, from GNCI and the Borrowers to Deloitte & Touche, its
independent certified public accountants, advising such accountants that the
Administrative Agent and the Lenders have been authorized to exercise all rights
of GNCI and each Borrower to require such accountants to disclose any and all
financial statements and any other information of any kind that they may have
with respect to GNCI and each Borrower and its Subsidiaries and directing such
accountants to comply with any reasonable request of the Administrative Agent or
any Lender for such information.
(xiii) A favorable opinion of Xxxxxxxx, Xxxxxxx & Xxxxxxx, A Professional
Corporation, counsel for GNCI and each Borrower, in form and substance
satisfactory to the Administrative Agent, and addressing such other matters as
any Lender through the Administrative Agent may reasonably request.
(xiv) A favorable opinion of in-house counsel of the Loan Parties
addressing issues under the laws of the Commonwealth of Pennsylvania, in form
and substance satisfactory to the Administrative Agent, and addressing such
other matters as any Lender through the Administrative Agent may reasonably
request.
SECTION 3.02. Conditions Precedent to Each Borrowing. The obligation of
each Lender to make an Advance on the occasion of each Borrowing (including the
initial Borrowing) shall be subject to the further conditions precedent that on
the date of such Borrowing (a) the following statements shall be true (and each
of the giving of the applicable Notice of Borrowing and the acceptance by the
relevant Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by such Borrower that on the date of such Borrowing
such statements are true):
(i) the representations and warranties contained in each Loan Document are
correct on and as of the date of such Borrowing, before and after giving effect
to such Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date (other than any such representations or warranties
that, by their terms, are made as of a date other than the date of such
Borrowing); and
(ii) no event has occurred and is continuing, or would result from such
Borrowing or from the application of the proceeds therefrom, that constitutes a
Default;
(b) the Administrative Agent shall have received a certificate from GNCI
setting forth, on a pro forma basis, the computation of the Maximum Leverage
Ratio as of the end of the immediately preceding fiscal quarter, but giving
effect to the Total Debt outstanding on the date of such Borrowing and after
giving effect to the Advances requested thereby; and (c) the Administrative
Agent shall have received such other approvals, opinions or documents as any
Lender through the Administrative Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the initial
Borrowing specifying its objection thereto and such Lender shall not have made
available to the Administrative Agent such Lender's ratable portion of such
Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrowers. Each
Borrower represents and warrants as follows:
(a) Each Loan Party other than GNDLP (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed,
except where the failure to so qualify or be licensed would not have a Material
Adverse Effect and (iii) has all requisite corporate power and authority to own
or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted. All of the outstanding capital stock
of GNCI has been validly issued, is fully paid and nonassessable. All of the
outstanding capital stock of GNI has been validly issued, is fully paid and
nonassessable and is owned (other than the PIK Preferred Stock), by GNCI, free
and clear of all Liens. All of the outstanding capital stock of GNC has been
validly issued, is fully paid and nonassessable and is owned by GNI, free and
clear of all Liens. GNDLP (i) is a limited partnership duly formed and validly
existing under the laws of the Commonwealth of Pennsylvania, (ii) is duly
qualified as a limited partnership in each other jurisdiction in which it owns
or leases property or in which the conduct of its business requires it to so
qualify or be licensed, except where the failure to so qualify or be licensed
would not have a Material Adverse Effect and (iii) has all requisite power and
authority to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate list as
of the Closing Date of all Subsidiaries of each Loan Party, showing as of the
Closing Date (as applicable and as to each such Subsidiary) the jurisdiction of
its incorporation or organization, the number of shares of each class of capital
stock authorized or the number of certificates of beneficial ownership
authorized, and the number outstanding, on the Closing Date and the percentage
of the outstanding shares of each such class or certificates of beneficial
ownership owned (directly or indirectly) by such Loan Party and the number of
shares covered by all outstanding options, warrants, rights of conversion or
purchase and similar rights at the Closing Date. All of the outstanding capital
stock or outstanding certificates of beneficial ownership of each such
Subsidiary have been validly issued, is fully paid and nonassessable, as
applicable, and is owned by such Loan Party or one or more of its Subsidiaries
free and clear of all Liens. Each such Subsidiary (i) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (ii) is duly qualified and in good standing in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed, except where the failure to
so qualify or be licensed would not have a Material Adverse Effect and (iii) has
all requisite power and authority to own or lease and operate its properties and
to carry on its business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by each Loan Party other than
GNDLP of this Agreement, the Notes, each other Loan Document and each Related
Document to which it is or is to be a party, and the consummation of the
transactions contemplated hereby, are within such Loan Party's corporate powers,
have been duly authorized by all necessary corporate action, and do not (i)
contravene such Loan Party's charter or bylaws, (ii) violate any law (including,
without limitation, the Securities Exchange Act and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulations T, U and X of the Board
of Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting such
Loan Party, any of its Subsidiaries or any of their properties or (iv) result in
or require the creation or imposition of any Lien upon or with respect to any of
the properties of such Loan Party or any of its Subsidiaries. The execution,
delivery and performance by GNDLP of each Loan Document and each Related
Document to which it is or is to be a party, and the consummation of the
transactions contemplated hereby, are within the powers of GNDLP, have been duly
authorized by all necessary action and consent, and do not (i) contravene
GNDLP's organizational documents, (ii) violate any law (including, without
limitation, the Securities Exchange Act and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulations T, U and X of the Board
of Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting such
Loan Party, any of its Subsidiaries or any of their properties or (iv) result in
or require the creation or imposition of any Lien upon or with respect to any of
the properties of such Loan Party or any of its Subsidiaries. No Loan Party or
any of its Subsidiaries is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or in breach
of any such contract, loan agreement, indenture, mortgage, deed of trust, lease
or other instrument, the violation or breach of which could have a Material
Adverse Effect.
(d) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other third
party is required for (i) the due execution, delivery, recordation, filing or
performance by any Loan Party of this Agreement, the Notes or any other Loan
Document or any Related Document to which it is or is to be a party, or for the
consummation of the transactions contemplated hereby, or (ii) the exercise by
any Agent or any Lender of its rights under the Loan Documents.
(e) This Agreement has been, and each of the Notes, each other Loan
Document and each Related Document when delivered hereunder will have been, duly
executed and delivered by each Loan Party thereto. This Agreement is, and each
of the Notes, each other Loan Document and each Related Document when delivered
hereunder will be, the legal, valid and binding obligation of each Loan Party
party thereto, enforceable against such Loan Party in accordance with its terms.
(f) The audited Consolidated balance sheet of GNCI and its Subsidiaries as
at January 31, 1998, and the related statements of income and cash flow of GNCI
and its Subsidiaries for the Fiscal Year then ended, accompanied by an opinion
of Deloitte & Touche, independent public accountants, and the unaudited
Consolidated balance sheet of GNCI and its Subsidiaries as at its most recent
ended Fiscal Quarter, and the related statements of income and cash flow of GNCI
and its Subsidiaries for the period covering January 31, 1998 to the end of its
most recently ended Fiscal Quarter for which financial statements are available,
copies of which have been furnished to each Lender, fairly present, subject, in
the case of such balance sheet as at its most recent ended Fiscal Quarter, and
such statement of income and cash flow for the period covering January 31, 1998
to the end of its most recently ended Fiscal Quarter, to year-end audit
adjustments and to the absence of footnote disclosure, the financial condition
of GNCI and its Subsidiaries as at such dates and the Consolidated results of
the operations of GNCI and its Subsidiaries for the periods ended on such dates,
all in accordance with generally accepted accounting principles applied on a
consistent basis and on a basis consistent with the current practice of GNCI and
its Subsidiaries; and since January 31, 1998, there has been no Material Adverse
Change.
(g) The Consolidated forecasted balance sheets, income statements and cash
flow statements of GNCI and its Subsidiaries delivered to the Lenders pursuant
to Section 3.01(e)(x) were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were believed to be reasonable in
the light of conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, GNCI's current estimate of its future
financial performance, it being recognized that such forecasts do not constitute
a warranty as to the future performance of GNCI and its Subsidiaries and that
actual results may vary from forecasted results.
(h) No information, exhibit or report (including, without limitation, any
financial information, but excluding any forecasts referred to in clause (g)
above) furnished by or on behalf of any Loan Party to any Agent or any Lender in
connection with the negotiation of the Loan Documents or pursuant to the terms
of the Loan Documents contained any untrue statement of a material fact or,
taken as a whole, omitted to state a material fact necessary to make the
statements made therein not misleading, in each case, as of the Closing Date.
(i) There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party, any of their Subsidiaries or any of their properties,
including any Environmental Action, pending or, to the best of the Borrowers'
knowledge, threatened before any court, governmental agency or arbitrator that
(i) would be reasonably likely to have a Material Adverse Effect or (ii)
purports to affect the legality, validity or enforceability of this Agreement,
any Note, any other Loan Document or any Related Document or the consummation of
the transactions contemplated hereby.
(j) Following application of the proceeds of each Advance, not more than
25% of the value of the assets (either of each Borrower only or of each Borrower
and its Subsidiaries on a Consolidated basis) subject to the provisions of
Section 5.02(a) or 5.02(d) or subject to any restriction contained in any other
agreement or instrument between such Borrower and any Lender or any Affiliate of
any Lender relating to Indebtedness and within the scope of Section 6.01(d) will
be Margin Stock.
(k) Set forth on Schedule 4.01(k) is a complete and accurate list of all
Plans, Multiemployer Plans and Welfare Plans with respect to any employees of
any Loan Party or any of their Subsidiaries. Neither any Loan Party nor any of
its ERISA Affiliates maintains or has any obligation to contribute to any Plan
or Multiemployer Plan.
(l) No ERISA Event has occurred or is reasonably expected to occur with
respect to any Plan of any Loan Party or any of its ERISA Affiliates.
(m) Schedule B (Actuarial Information) to the most recent annual report
(Form 5500 Series) required to be filed with the Internal Revenue Service for
each Plan has been filed and a copy thereof has been furnished to the
Administrative Agent. Each such Schedule B is substantially complete and
accurate and fairly presents the funding status of such Plan, and since the date
of such Schedule B there has been no material adverse change in such funding
status.
(n) Neither any Loan Party nor any of its ERISA Affiliates has incurred or
is reasonably expected to incur any Withdrawal Liability to any Multiemployer
Plan exceeding $500,000 or requiring payments exceeding $250,000 per annum.
(o) Neither any Loan Party nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan of any Loan Party or any of its
ERISA Affiliates that such Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and no such Multiemployer
Plan is reasonably expected to be in reorganization or to be terminated, within
the meaning of Title IV of ERISA.
(p) The aggregate annualized cost (including, without limitation, the cost
of insurance premiums), if any, with respect to post-retirement benefits under
Welfare Plans for which the Loan Parties and their Subsidiaries are liable does
not exceed $250,000.
(q) Neither the business nor the properties of any Loan Party or any of its
Subsidiaries are affected by any fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy or other casualty (whether or not covered by insurance) that
would be reasonably likely to have a Material Adverse Effect.
(r) Except as set forth on Schedule 4.01(r), the operations and properties
of each Loan Party and each of its Subsidiaries comply in all material respects
with all Environmental Laws; all material Environmental Permits have been
obtained and are in effect for the operations and properties of each Loan Party
and its Subsidiaries; each Loan Party and its Subsidiaries are in compliance in
all material respects with all such Environmental Permits; and no circumstances
exist that could (i) form the basis of an Environmental Action against any Loan
Party or any of its Subsidiaries or any of their properties that would be
reasonably likely to have a Material Adverse Effect or (ii) cause any such
property to be subject to any material restrictions on ownership, occupancy, use
or transferability under any Environmental Law.
(s) Except as set forth on Schedule 4.01(s), none of the properties of any
Loan Party or any of its Subsidiaries is listed or to the knowledge of any Loan
Party proposed for listing on the National Priorities List under CERCLA or on
the Comprehensive Environmental Response, Compensation and Liability Information
System maintained by the Environmental Protection Agency or any analogous state
list of sites requiring investigation or cleanup, or is adjacent to any such
property; and no underground storage tanks, as such term is defined in 42
U.S.C. 6991, are located on any property of any Loan Party or any of its
Subsidiaries or, to the best of its knowledge, on any adjoining property.
(t) Except as set forth on Schedule 4.01(t), neither any Loan Party nor any
of its Subsidiaries has transported or arranged for the transportation of any
Hazardous Materials to any location that is listed or proposed for listing on
the National Priorities List under CERCLA or on the Comprehensive Environmental
Response, Compensation and Liability Information System maintained by the
Environmental Protection Agency or any analogous state list; Hazardous Materials
have not been generated, used, treated, handled, stored or disposed of on, or
released or transported to or from, any property of any Loan Party or any of its
Subsidiaries or, to the best of its knowledge, any adjoining property, except in
material compliance with all Environmental Laws and Environmental Permits; and
all other wastes generated at any such properties have been disposed of in
compliance with all Environmental Laws and Environmental Permits.
(u) Each Loan Party and each of its Subsidiaries have filed, have caused to
be filed or have been included in all tax returns (federal, state, local and
foreign) required to be filed or, in the case of income taxes, required to be
filed and where the failure to do so would cause the imposition of a penalty or
interest, and in each case have paid all taxes shown thereon to be due, together
with applicable interest and penalties.
(v) Neither any Loan Party nor any of its Subsidiaries is an "investment
company," an "affiliated person" of an "investment company", or a "promoter" or
"principal underwriter" for an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended. Neither the making of any
Advances nor the application of the proceeds therefrom or repayment thereof by
the Borrowers, nor the consummation of the transactions contemplated hereby,
will violate any provision of such Act or any rule, regulation or order of the
SEC thereunder.
(w) Each Loan Party is Solvent after giving effect to the transactions
contemplated hereby.
(x) Each Material Contract (i) has been duly authorized, executed and
delivered by each Loan Party party thereto and, to the best of the Borrowers'
knowledge, by all other parties thereto, is in full force and effect and is
binding upon and enforceable against all Loan Parties party thereto and to the
best of the Borrowers' knowledge, all other parties thereto in accordance with
its terms, (ii) has not been otherwise amended or modified in such a manner that
could be reasonably expected to materially adversely affect the interest or
rights of the Agents or the Lenders and (iii) there exists no default under any
Material Contract by any Loan Party or, to the best of the Borrowers' knowledge,
any other party thereto that could be reasonably expected to materially
adversely affect the interest or rights of the Agents or the Lenders in any
manner.
(y) Each Loan Party has reviewed the areas within its business and
operations which could be adversely affected by, and has developed or is in the
process of developing a program to address on a timely basis, "Year 2000 Issues"
(i.e., the risk that computer applications used by such Loan Party may be unable
to recognize or perform properly date sensitive functions involving certain
dates prior to, and any date after, December 31, 1999) and, based on such
review, such Loan Party reasonably believes that the "Year 2000 Issues" (and the
cost of remedying the same) will not have a Material Adverse Effect.
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. Affirmative Covenants. So long as any Advance shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender shall have any
Commitment hereunder, each Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries
to comply, in all material respects, with all applicable laws (including,
without limitation, Environmental Laws), rules, regulations and orders, such
compliance to include, without limitation, compliance with ERISA and the
Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i)
all taxes, assessments and governmental charges or levies imposed upon it or
upon its property and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property, which in any case exceed in the aggregate
$750,000; provided, however, that neither the Borrowers nor any of their
respective Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge, levy or claim that is being contested in good faith and by
proper proceedings, diligently pursued, and as to which appropriate reserves are
being maintained, unless and until any Lien resulting therefrom securing
Indebtedness in excess of $750,000 in the aggregate attaches to its property and
becomes enforceable against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of its
Subsidiaries and all lessees and other Persons occupying its properties to
comply, in all material respects, with all Environmental Laws and Environmental
Permits applicable to its operations and properties; obtain and renew all
Environmental Permits necessary for its operations and properties; and conduct,
and cause each of its Subsidiaries to conduct, any investigation, study,
sampling and testing, and undertake any cleanup, removal, remedial or other
action necessary to remove and clean up all Hazardous Materials from any of its
properties, in accordance with the requirements of all Environmental Laws;
provided, however, that neither Borrower nor any of its Subsidiaries shall be
required to undertake any such cleanup, removal, remedial or other action to the
extent that its obligation to do so is being contested in good faith and by
proper proceedings, diligently pursued, and as to which appropriate reserves are
being maintained with respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries
to maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which such Borrower or such Subsidiary operates.
(e) Preservation of Corporate or Partnership Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain, as
applicable, its corporate or partnership existence, rights (charter and
statutory) and franchises; provided, however, that the Subsidiaries of each such
Borrower may consummate any merger or consolidation permitted under Section
5.02(c).
(f) Visitation Rights. At any reasonable time and from time to time upon
reasonable notice to a Borrower, permit the Administrative Agent or any of the
Lenders, or any agents or representatives thereof, to examine and make copies of
and abstracts from the records and books of account of, and visit the properties
of, such Borrower and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of such Borrower and any of its Subsidiaries with any of
their officers, directors or trustees and with their independent certified
public accountants; provided that such Borrower and any such Subsidiary shall
have the right to have a representative of such Borrower and such Subsidiary
present during any discussions with their independent public accountants.
(g) Keeping of Books. Keep, and cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of such Borrower
and each such Subsidiary in accordance with GAAP.
(h) Maintenance of Properties, Etc. Maintain and preserve, and cause each
of its Subsidiaries to maintain and preserve, all of its properties that are
used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(i) Compliance with Terms of Leaseholds. Make all payments and otherwise
perform in all material respects all obligations in respect of all leases of
real property, in each case except to the extent that the failure to so act
could not reasonably be expected to have a Material Adverse Effect.
(j) Performance of Related Documents. (i) Perform and observe in all
material respects all the terms and provisions of each Related Document to be
performed or observed by it, maintain each such Related Document in full force
and effect and enforce in all material respects each such Related Document in
accordance with its terms, in each case except to the extent that the failure to
so act could not reasonably be expected to materially adversely affect the
interest or rights of the Administrative Agent or the Lenders in any manner and
take all such action to such end as may be from time to time reasonably
requested by the Administrative Agent and (ii) upon the reasonable request of
the Administrative Agent, make to each other party to each such Related Document
such demands and requests for information and reports or for action as such
Borrower is entitled to make under such Related Document, and cause each of its
Subsidiaries to do so.
(k) Performance of Material Contracts. (i) Perform and observe in all
material respects all the terms and provisions of each Material Contract to be
performed or observed by it, maintain each such Material Contract in full force
and effect and enforce in all material respects each such Material Contract in
accordance with its terms, in each case except to the extent that the failure to
so act could not reasonably be expected to materially adversely affect the
interest or rights of the Administrative Agent or the Lenders in any manner and
take all such action to such end as may be from time to time reasonably
requested by the Administrative Agent and (ii) upon the reasonable request of
the Administrative Agent, make to each other party to each such Material
Contract such demands and requests for information and reports or for action as
such Borrower is entitled to make under such Material Contract, and cause each
of its Subsidiaries to do so.
(l) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates on terms that are fair and reasonable and
no less favorable to such Borrower or such Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate; provided,
however, that the Borrowers and their respective Subsidiaries may make payments
required under the Tax Sharing Agreement and the foregoing limitations shall not
apply to transactions between or among Loan Parties.
(m) Additional Loan Parties. Cause any Subsidiary (other than a Foreign
Subsidiary) of either GNC or GNI that has, either as at the end of any Rolling
Period or, in connection with any Investments permitted by Section 5.02(e)(i),
after giving effect to such Investment on a pro forma basis as at the end of the
immediately prior Rolling Period, EBITDA equal to or greater than 5% of the
Consolidated EBITDA of GNCI and its Subsidiaries, to execute and deliver to the
Administrative Agent as promptly as practicable (A) a guaranty substantially in
the form of Exhibit E hereto, and (B) such other documents, certificates or
instruments in connection with this Agreement as the Administrative Agent may
reasonably request, in each case in form and substance reasonably satisfactory
to the Administrative Agent, and to take all such other actions that may be
necessary or that the Administrative Agent may deem reasonably desirable to
enable the Administrative Agent to exercise and enforce its rights and remedies
thereunder; provided, however, that with respect to any Person that becomes a
Subsidiary (other than a Foreign Subsidiary) in connection with a tender offer
which is followed by a back-end merger pursuant to a signed merger agreement,
the Borrowers shall cause such Subsidiary to comply with this Section 5.01(m) on
the date that the back-end merger becomes effective.
SECTION 5.02. Negative Covenants. So long as any Advance shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender shall have any
Commitment hereunder, neither Borrower will:
(a) Liens, Etc. On and after the Restriction Termination Date, create,
incur, assume or suffer to exist, or permit any of its Subsidiaries to create,
incur, assume or suffer to exist, any Lien on or with respect to any of its
properties of any character (including, without limitation, accounts) whether
now owned or hereafter acquired, or sign or file, or permit any of its
Subsidiaries to sign or file, under the Uniform Commercial Code of any
jurisdiction, a financing statement that names such Borrower or any of its
Subsidiaries as debtor, or sign, or permit any of its Subsidiaries to sign, any
security agreement authorizing any secured party thereunder to file such
financing statement, or assign, or permit any of its Subsidiaries to assign, any
accounts or other right to receive income, excluding, however, from the
operation of the foregoing restrictions the following:
(i) Permitted Liens;
(ii) purchase money Liens upon or in one or more items of personal or real
property acquired or held by such Borrower or any of its Subsidiaries in the
ordinary course of business to secure the purchase price of such property or to
secure Indebtedness incurred solely for the purpose of financing the acquisition
of any such property to be subject to such Liens, or Liens existing on any such
property at the time of acquisition, or extensions, renewals or replacements of
any of the foregoing for the same or a lesser amount; provided, however, that no
such Lien shall extend to or cover any property other than the property being
acquired, and no such extension, renewal or replacement shall extend to or cover
any property not theretofore subject to the Lien being extended, renewed or
replaced; and provided further that any such Indebtedness shall not otherwise be
prohibited by the terms of the Loan Documents;
(iii) Liens arising under Capitalized Leases;
(iv) Liens on property of a Foreign Subsidiary, which Liens secure
Indebtedness permitted by Section 5.02(b)(iv)(A);
(v) Liens on the Borrowers' Franchisee Notes to secure Indebtedness
permitted by Section 5.02(b)(i)(C) or in connection with sales permitted by
Section 5.02(d)(iii); and
(vi) Liens securing Indebtedness permitted by Section 5.02(b)(vi).
(b) Indebtedness. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any
Indebtedness other than:
(i) in the case of the Borrowers,
(A) unsecured Indebtedness, if before and immediately after giving effect
to the creation, incurrence or assumption of such Indebtedness:
(x) GNCI is in compliance, before and after giving effect to the incurrence
of such Indebtedness, on a pro forma basis, with the Adjusted Maximum Leverage
Ratio set forth in Section 5.04(b);
(y) the total amount of Indebtedness incurred pursuant to this Section
5.02(b)(i)(A), Section 5.02(b)(iv)(B) and Section 7(c) of the Parent Guaranty
shall not exceed 110% of an amount equal to $200,000,000 less Advances at any
one time outstanding (including, without limitation, the aggregate amount of all
outstanding and other undrawn commitments to provide Indebtedness to GNCI and
its Subsidiaries pursuant to this Section 5.02(b)(i)(A), Section 5.02(b)(iv)(B)
hereof and Section 7(c) of the Parent Guaranty); and
(z) no Default shall have occurred and be continuing at the time of such
incurrence of Indebtedness;
provided that prior to the creation, incurrence or assumption of any such
Indebtedness, the Administrative Agent shall have received a certificate of the
chief financial officer of GNCI showing, in sufficient detail as to permit
computation thereof, compliance with the Adjusted Maximum Leverage Ratio set
forth in Section 5.04(b) as at the end of the immediately preceding Rolling
Period and compliance with the limitation on Indebtedness set forth in Section
5.02(b)(i)(A)(y); and provided further that any such Indebtedness shall (1)
contain covenants that are no more restrictive than those covenants set forth in
this Agreement and the other Loan Documents and (2) not have any regularly
scheduled amortization payments due on or before September 30, 2002;
(B) Indebtedness in respect of Hedge Agreements designed to hedge against
fluctuations in interest rates or foreign exchange rates and not for speculative
purposes;
(C) Indebtedness to effect a securitization of the Borrowers' Franchisee
Notes, provided that as at the time of the incurrence of such Indebtedness, no
Default shall have occurred or be continuing;
(D) Indebtedness in satisfaction or substitution for premiums on insurance
policies maintained by the Borrowers and their Subsidiaries in the ordinary
course of business of the Borrowers and their Subsidiaries;
(ii) in the case of GNI,
(A) Indebtedness in respect of the PIK Preferred Stock; and
(B) Intercompany Subordinated Debt from time to time, and
(iii) in the case of any of its Subsidiaries referred to in Section
5.02(e)(i) or (ix) or any other Subsidiaries referred to in Sections 5.02(e)(iv)
or (v) or any Affiliate referred to in Section 5.02(e)(vi), in each case, to the
extent permitted by those Sections, Indebtedness owed to such Borrower or to a
wholly-owned United States Subsidiary of such Borrower;
(iv) in the case of Foreign Subsidiaries, any:
(A) Indebtedness without recourse to GNCI, any Borrower, any other
Subsidiary of any Borrower or any Affiliate thereof;
(B) any other unsecured Indebtedness if before and immediately after giving
effect to the creation, incurrence or assumption thereof:
(x) GNCI is in compliance, before and after giving effect to the incurrence
of such Indebtedness, on a pro forma basis, with the Adjusted Maximum Leverage
Ratio set forth in Section 5.04(b);
(y) the total amount of Indebtedness incurred pursuant to Section
5.02(b)(i)(A), this Section 5.02(b)(iv)(B) and Section 7(c) of the Parent
Guaranty shall not exceed 110% of an amount equal to $200,000,000 (or other
equivalent thereof in any Foreign Currency, determined as of the date of the
incurrence of such Indebtedness) less Advances at any one time outstanding
(including, without limitation, the aggregate amount of all outstanding and
other undrawn commitments to provide Indebtedness to GNCI and its Subsidiaries
pursuant to Section 5.02(b)(i)(A), Section 5.02(b)(iv)(B) hereof and Section
7(c) of the Parent Guaranty);
(z) no Default shall have occurred and be continuing at the time of such
incurrence of Indebtedness;
provided that prior to the creation, incurrence or assumption of any such
Indebtedness, the Administrative Agent shall have received a certificate of the
chief financial officer of GNCI showing, in sufficient detail as to permit
computation thereof, compliance with the Adjusted Maximum Leverage Ratio set
forth in Section 5.04(b) as at the end of the immediately preceding Rolling
Period and compliance with the limitation on Indebtedness set forth in Section
5.02(b)(iv)(B)(y);
(v) in the case of the Borrowers and any of their Subsidiaries,
(A) unsecured Indebtedness incurred in the ordinary course of business for
the deferred purchase price of property or services, maturing within one year
from the date created;
(B) Indebtedness secured by Liens permitted by Section 5.02(a)(ii) and
5.02(a)(iii) not to exceed in the aggregate $55,000,000 at any time outstanding;
(C) Indebtedness under the Fourth Amended and Restated Credit Agreement
dated as of March 31, 1997, as amended from time to time, among GNI and GNC, as
borrowers, GNCI and the Restatement Lenders and Agents named therein, in an
aggregate amount not to exceed $700,000,000 at any one time outstanding; and
(D) Indebtedness under the Loan Documents;
(vi) in the case of the Borrowers, any wholly-owned United States
Subsidiary of the Borrowers or Gustine, in each case, to purchase and renovate
the building located at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx, Indebtedness
in a principal amount, together with any Investments permitted under Section
5.02(e)(x), not to exceed in the aggregate $33,000,000 at any one time
outstanding; and
(vii) indorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business.
(c) Mergers, Etc. Merge with or into or consolidate with or into any Person
or permit any Person to merge with or into it, or transfer or dispose of all or
substantially all of its property and assets, or permit any of its Subsidiaries
to do any of the foregoing, except that (i) any wholly-owned United States
Subsidiary of such Borrower may merge with or into or consolidate with or into,
or transfer all or substantially all of its property and assets to, any other
wholly-owned United States Subsidiary of such Borrower or such Borrower,
(ii) GNI may merge with or into or consolidate with or into, or transfer all or
substantially all of its property and assets to GNCI and (iii) any Loan Party
may merge with or into a wholly-owned United States Subsidiary of such Loan
Party that (A) is incorporated under the laws of the State of Delaware and (B)
has no material assets or liabilities, for the sole purpose of changing the
state of incorporation of such Loan Party if the surviving corporation shall
expressly assume the liabilities of such Loan Party under the Loan Documents;
provided, however, that, in each case, immediately after giving effect thereto,
no event shall occur and be continuing that constitutes a Default.
(d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of,
or permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose
of, any assets, except:
(i) sales of inventory and equipment by the Borrowers and their
Subsidiaries in the ordinary course of its business;
(ii) dispositions of property and assets by wholly-owned United States
Subsidiaries in a transaction permitted by Section 5.02(c);
(iii) sales of Franchisee Notes;
(iv) other dispositions of property and assets by the Borrowers and their
Subsidiaries for cash and fair value that do not exceed an aggregate amount of
$22,000,000 in any single transaction or series of related transactions or,
since March 31, 1997, $82,500,000 in the aggregate;
(v) Permitted Franchise Asset Sales;
(vi) transfers of property and assets by the Borrowers and their
Subsidiaries to any other United States Loan Party (other than GNCI); provided
that as at the time of such transfers, no Default shall have occurred or be
continuing;
(vii) transfers of property and assets by any Subsidiary of the Borrowers
that is organized, and with substantially all of its assets located, outside of
the United States to any Foreign Subsidiary;
(viii) the sale or lease of the Borrowers' headquarters building located at
000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx.
(e) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than:
(i) Investments by the Borrowers and their wholly-owned United States
Subsidiaries in their wholly-owned United States Subsidiaries, so long as such
Investments are made in the Health Care Business and in incidental businesses
acquired in connection therewith;
(ii) Investments by the Borrowers and their Subsidiaries in (A) Cash
Equivalents and (B) Hedge Agreements;
(iii) Investments by the Borrowers and their Subsidiaries in Franchisee
Notes;
(iv) Investments by the Borrowers and their wholly-owned United States
Subsidiaries in Foreign Subsidiaries in an aggregate amount not to exceed
$330,000,000 (or the equivalent thereof in any Foreign Currency, determined as
of the date such Investment is made) outstanding at any one time (including the
aggregate amount of all outstanding and other undrawn commitments of
Indebtedness of such Foreign Subsidiaries permitted by Sections 5.02(b)(iii) and
5.02(b)(iv)(B)), so long as such Investments are made in the Health Care
Business and in incidental businesses acquired in connection therewith;
(v) Investments by the Borrowers in non-wholly-owned Subsidiaries in an
aggregate amount not to exceed $110,000,000 (or the equivalent thereof in any
Foreign Currency, determined as of the date such Investment is made) outstanding
at any one time (including the aggregate amount of all outstanding Indebtedness
of such non-wholly-owned Subsidiary permitted by Section 5.02(b)(iii)), so long
as such Investments are made in the Health Care Business and in incidental
businesses acquired in connection therewith;
(vi) Investments by the Borrowers in Affiliates in an aggregate amount not
to exceed $55,000,000 (or the equivalent thereof in any Foreign Currency,
determined as of the date such Investment is made) outstanding at any one time
(including the aggregate amount of all outstanding Indebtedness of such
Affiliate permitted by Section 5.02(b)(iii)), so long as such Investments are
made in the Health Care Business and in incidental businesses acquired in
connection therewith; provided, that if, at any time, the Borrowers make a
single or a series of related Investments in any Affiliate in an aggregate
amount equal to or greater than $33,000,000 (or the equivalent thereof in any
Foreign Currency, determined as of the date such Investment is made), such
Investment shall be for the acquisition of at least 20% of the Voting Stock of
such Affiliate;
(vii) other Investments in an aggregate amount invested and at any time
outstanding not to exceed $5,500,000 (or the equivalent thereof in any Foreign
Currency, determined as of the date such Investment is made), so long as such
Investments are made in the Health Care Business and in incidental businesses
acquired in connection therewith;
(viii) Investments as of March 31, 1997 in Gymee's, Inc., Nutri-Science,
Inc. and WLC Acquisition Corp.;
(ix) Investments by the Borrowers in any Person that becomes a
non-wholly-owned United States Subsidiary in connection with a tender offer
involving a back-end merger pursuant to a signed merger agreement, provided that
(A) pursuant to such tender offer, the Borrowers shall have purchased at least
90% of such Person's Voting Stock, (B) such merger shall have been approved by
such Person's board of directors and (C) such Person shall become a wholly-owned
United States Subsidiary within six months following the initial Investment; and
(x) Investments by the Borrowers (A) as a limited partner in Gustine Sixth
Avenue Associates Ltd. ("Gustine") and (B) in loans to such partnership in an
aggregate principal amount of such Investments described in clauses (A) and (B)
above not in excess of $30,000,000 in each case to purchase and renovate the
building located at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx;
provided that, in each case, before and immediately after giving effect to
any Investment otherwise permitted by Sections 5.02(e)(i), (iv), (v), (vi),
(vii), (ix) and (x), no Default shall have occurred and be continuing; and
(xi) Investments by the Borrowers and their Subsidiaries in loans or
advances to employees in the ordinary course of business of the Borrowers and
their Subsidiaries in an aggregate amount not to exceed $5,500,000 (or the
equivalent thereof in any Foreign Currency, determined as of the date such
Investment is made) at any time outstanding;
provided, however, that in each case no Investment made in a single
transaction or series of related transactions shall exceed $110,000,000 (or the
equivalent thereof in any Foreign Currency, determined as of the date such
Investment is made).
(f) Dividends, Etc. Declare or pay any dividends, purchase, redeem, retire,
defease or otherwise acquire for value any of its capital stock or any warrants,
rights or options to acquire such capital stock, now or hereafter outstanding,
return any capital to its stockholders as such, make any distribution of assets,
capital stock, warrants, rights, options, obligations or securities to its
stockholders as such, or issue or sell any capital stock or any warrants, rights
or options to acquire such capital stock, or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value any capital
stock of such Borrower or any warrants, rights or options to acquire such
capital stock or to issue or sell any capital stock or certificates of
beneficial ownership, as applicable, or any warrants, rights or options to
acquire such capital stock, except the Borrowers and their wholly-owned
Subsidiaries may:
(i) in the case of GNI, declare and pay dividends in cash to GNCI to (1)
discharge the obligations of GNI and its Subsidiaries under the Tax Sharing
Agreement, (2) pay administrative costs in the ordinary course of business of
GNCI, (3) provide GNCI with funds to repurchase its outstanding capital stock or
pay dividends to its shareholders in an aggregate amount since March 31, 1997
not to exceed $250,000,000, plus an amount equal to 50% of the cumulative
Consolidated net income of GNCI and its Subsidiaries from February 1, 1998 plus
amounts used by GNCI prior to April 30, 1998 to repurchase its outstanding
capital stock or to pay dividends to its shareholders;
(ii) purchase, redeem or defease the PIK Preferred Stock;
(iii) in the case of GNI, issue or sell any capital stock to GNCI;
(iv) in the case of any Subsidiary, declare and pay cash dividends to the
Borrowers or to a wholly-owned United States Subsidiary of GNI; and
(v) declare and pay dividends to GNCI to provide GNCI with funds to meet
its interest obligations under the unsecured Indebtedness, if any, incurred by
GNCI pursuant to Section 7(c) of the Parent Guaranty.
provided that in each case, immediately before and immediately after giving
effect thereto, no Default shall have occurred and be continuing.
(g) Change in Nature of Business. Engage, or permit any of its Subsidiaries
to engage, in a business other than the Health Care Business, except such
business as may be acquired by the Loan Parties in connection with an Investment
permitted by Section 5.02(e)(i), (iv), (v), (vi), (vii) or (ix) as shall be
incidental to any such Investment.
(h) Charter Amendments. Amend, or permit any of its Subsidiaries to amend
(i) its certificate of incorporation or certificate of partnership, as
applicable, or (ii) its bylaws if such amendment could reasonably be expected to
adversely affect the interest or rights of the Administrative Agent or the
Lenders in any manner.
(i) Accounting Changes. Make or permit, or permit any of its Subsidiaries
to make or permit, any change in accounting policies or reporting practices
(including, without limitation, any change in its Fiscal Year), except as
required or permitted by generally accepted accounting principles, securities
laws or the rules of any stock exchange upon which GNCI's capital stock may be
listed; provided that, if GNCI or any of its Subsidiaries makes any such change
in accounting policies or reporting requirements, the Borrowers shall provide
reconciliation reports to the Administrative Agent, in form and substance
satisfactory to the Administrative Agent and if such change would impact the
calculation of the financial covenants contained in Section 5.04, the Borrowers
shall provide to the Lenders a revised calculation of each of the financial
covenants impacted by such change for each Fiscal Quarter from the date of such
change.
(j) Prepayments, Etc. of Indebtedness. (i) Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Indebtedness, other than (1) the prepayment of the Advances in accordance with
the terms of this Agreement, (2) the prepayment of any Indebtedness payable to
any Borrower or to a wholly-owned United States Subsidiary of such Borrower,
(3) the prepayment of any Indebtedness permitted by Section 5.02(b)(iv)(A) or
5.02(b)(v)(B), or (4) the prepayment of any amounts under the Fourth Amended and
Restated Credit Agreement, (ii) amend, modify or change in any manner any term
or condition of any PIK Preferred Stock or any Indebtedness permitted by Section
5.02(b)(i)(A), or permit any of its Subsidiaries to do any of the foregoing, in
each case in any manner materially adverse to the Administrative Agent or the
Lenders; provided that if the Maximum Leverage Ratio as at the end of the
immediately preceding Rolling Period is less than 1.00 : 1.00, the Borrowers and
their Subsidiaries shall be permitted to prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof any other Indebtedness
permitted by Section 5.02(b) in an amount since March 31, 1997 not to exceed
$27,500,000.
(k) Amendment, Etc. of Related Documents. Cancel or terminate any Related
Document or consent to or accept any cancellation or termination thereof, amend,
modify or change in any material respect any term or condition of any Related
Document or give any consent, waiver or approval thereunder (it being
acknowledged by such Borrower that the financial and payment terms of any such
Related Document are material terms and conditions thereof), waive any default
under or any breach of any term or condition of any Related Document, agree in
any manner to any other amendment, modification or change of any term or
condition of any Related Document or take any other action in connection with
any Related Document, in each case that could reasonably be expected to impair
the value of the interest or rights of such Borrower thereunder or that could
reasonably be expected to impair the interest or rights of the Agents or the
Lenders in any manner, or permit any of its Subsidiaries to do any of the
foregoing; provided that the Tax Sharing Agreement may be amended to add as
parties thereto any wholly-owned Subsidiaries of the Borrowers on terms that are
substantially identical to the terms applicable to the Borrowers.
(l) Amendment, Etc. of Material Contracts. Cancel or terminate any Material
Contract or consent to or accept any cancellation or termination thereof, amend,
modify or otherwise change in any material respect any term or condition of any
Material Contract or give any consent, waiver or approval thereunder, waive any
default under or any breach of any term or condition of any Material Contract,
agree in any manner to any other amendment, modification or change of any term
or condition of any Material Contract or take any other action in connection
with any Material Contract, in each case that could reasonably be expected to
materially impair the value of the interest or rights of such Borrower
thereunder or that could reasonably be expected to have a Material Adverse
Effect, or permit any of its Subsidiaries to do any of the foregoing.
(m) Negative Pledge. From and after the Restriction Termination Date, enter
into or suffer to exist, or permit any of its Subsidiaries to enter into or
suffer to exist, any agreement prohibiting or conditioning the creation or
assumption of any Lien upon any of its property or assets other than in favor of
the Administrative Agent and the Lenders or in connection with Indebtedness
permitted by Section 5.02(b)(iv)(A) to the extent such Lien extends solely to
the property or assets of the Foreign Subsidiary incurring such Indebtedness.
(n) Partnerships. Become a general partner in any general or limited
partnership, or permit any of its Subsidiaries to do so.
(o) Release of Subsidiary Guarantors. Release any Subsidiary Guarantor from
any of its Obligations, except in connection with a sale of the assets or
capital stock of such Subsidiary Guarantor in a transaction permitted under
Section 5.02(d).
SECTION 5.03. Reporting Requirements to Lenders. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
shall have any Commitment hereunder, GNCI (except as noted below) will furnish
to the Lenders:
(a) Default Notice. As soon as possible and in any event within two
Business Days after any Loan Party has knowledge of the occurrence of a Default
continuing on the date of such statement, a statement of the chief financial
officer of GNI setting forth the nature of such Default and the action that the
Borrowers have taken and proposes to take with respect thereto.
(b) Quarterly Financials. As soon as available and in any event within 45
days after the end of each of the first three Fiscal Quarters of each Fiscal
Year of GNCI, Consolidated balance sheets of GNCI and its Subsidiaries as of the
end of such Fiscal Quarter and Consolidated statements of income, cash flow of,
and changes in stockholders' equity of GNCI and its Subsidiaries for the period
commencing at the end of the previous Fiscal Quarter and ending with the end of
such Fiscal Quarter, setting forth in each case in comparative form the year to
date figures for such Fiscal Quarter, the corresponding Fiscal Quarter in the
preceding Fiscal Year and the year to date figures for the corresponding Fiscal
Quarter in the preceding Fiscal Year, all in reasonable detail and duly
certified (subject to year-end audit adjustments and to the absence of footnote
disclosure) by the chief financial officer of GNCI as having been prepared in
accordance with GAAP, together with (i) a certificate of the chief financial
officer of GNI stating that no Default has occurred and is continuing or, if a
Default has occurred and is continuing, a statement as to the nature thereof and
the action that GNI has taken and proposes to take with respect thereto, (ii) a
schedule in form satisfactory to the Administrative Agent of the computations
used by GNCI in determining compliance as of the end of such Fiscal Quarter with
the covenants contained in Sections 5.02 and 5.04 (other than 5.04(b)) and (iii)
a management and financial report, including a schedule of Funded Indebtedness,
a report of same store sales for such Fiscal Quarter, and a management
discussion of results from operations for such Fiscal Quarter.
(c) Annual Financials. As soon as available and in any event within 90 days
after the end of each Fiscal Year of GNCI, a copy of the annual audit report for
such Fiscal Year of GNCI and its Subsidiaries, including therein Consolidated
balance sheets of GNCI and its Subsidiaries as of the end of such Fiscal Year
and Consolidated statements of income, cash flow, and changes in stockholders'
equity of GNCI and its Subsidiaries for such Fiscal Year, in each case
accompanied by an opinion reasonably acceptable to the Required Lenders of
Deloitte & Touche or other independent public accountants of recognized standing
reasonably acceptable to the Required Lenders, together with (i) a certificate
of the chief financial officer of GNI stating that no Default has occurred and
is continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that GNI has taken and proposes to take with
respect thereto, (ii) a schedule in form and substance satisfactory to the
Administrative Agent of the computations used by GNCI in determining, as of the
end of such Fiscal Year, compliance with the covenants contained in Sections
5.02 and 5.04 (other than 5.04(b)) and (iii) a management and financial report,
including a schedule of Funded Indebtedness, a report of same store sales for
such Fiscal Year, and a management discussion of results from operations for
such Fiscal Year.
(d) Accountants' Reports. Promptly upon receipt thereof, copies of all
reports submitted to GNCI or any of its Subsidiaries by Deloitte & Touche or any
other independent public accountants of GNCI or any such Subsidiary in
connection with each annual, interim or special audit of its financial statement
made by such accountants, including the comment letter submitted by such
accountants to management of GNCI or any such Subsidiary in connection with
their annual audit.
(e) ERISA Events. Promptly and in any event within ten days after any Loan
Party or any of its ERISA Affiliates knows or has reason to know that any ERISA
Event with respect to any Loan Party or any of its ERISA Affiliates has
occurred, a statement of the chief financial officer of GNCI describing such
ERISA Event and the action, if any, that such Loan Party or such ERISA Affiliate
has taken and proposes to take with respect thereto.
(f) Plan Annual Reports. Promptly and in any event within 30 days after the
filing thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (form 5500 Series) with respect to
each Plan of each Loan Party or any of its ERISA Affiliates.
(g) Multiemployer Plan Notices. Promptly and in any event within 10 days
after receipt thereof by any Loan Party or any of its ERISA Affiliates from the
sponsor of a Multiemployer Plan of any Loan Party or any of its ERISA
Affiliates, copies of each notice concerning (i) the imposition of Withdrawal
Liability by any such Multiemployer Plan, (ii) the reorganization or
termination, within the meaning of Title IV of ERISA, of any such Multiemployer
Plan or (iii) the amount of liability incurred, or that may be incurred, by such
Loan Party or any of its ERISA Affiliates in connection with any event described
in clause (i) or (ii) above.
(h) Litigation. Promptly after the commencement thereof, notice of all
actions, suits, investigations (including, without limitation, any investigation
from any regulatory agency and any reports resulting from such investigation),
litigation and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan Party or any of its Subsidiaries of the type described in
Section 4.01(i).
(i) Securities Reports. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that any Loan
Party or any of its Subsidiaries sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration statements, that any
Loan Party or any of its Subsidiaries files with the SEC or any governmental
authority that may be substituted therefor, or with any national securities
exchange.
(j) Revenue Agent Reports. Within 30 days after receipt, copies or
summaries of all Revenue Agent Reports (Internal Revenue Service form 886), or
other written proposals of the Internal Revenue Service, that propose, determine
or otherwise set forth increases to the federal income tax liability of the
affiliated group (within the meaning of Section 1504(a)(1) of the Internal
Revenue Code) of which such Borrower is a member aggregating $3,000,000 or more.
(k) Agreement Notices. Upon request by the Administrative Agent, such other
information and reports regarding the Related Documents and the Material
Contracts as the Administrative Agent may reasonably request.
(l) Environmental Conditions. Promptly after the occurrence thereof, notice
of any condition or occurrence on any property of any Loan Party or any of its
Subsidiaries that results in a material noncompliance by any Loan Party or any
of its Subsidiaries with any Environmental Law or Environmental Permit or could
(i) form the basis of an Environmental Action against any Loan Party or any of
its Subsidiaries or such property that could reasonably be expected to have a
Material Adverse Effect or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(m) Plan Terminations. Promptly and in any event within two Business Days
after receipt thereof by any Loan Party or any of its ERISA Affiliates, copies
of each notice from the PBGC stating its intention to terminate any Plan of any
Loan Party or any of its ERISA Affiliates or to have a trustee appointed to
administer any such Plan.
(n) Environmental Reports. Promptly after the receipt thereof, copies of
all reports furnished to GNCI or any of its Subsidiaries (including, without
limitation, environmental site assessment reports) prepared by environmental
consulting firms in respect of any properties owned or leased by GNCI or any of
its Subsidiaries.
(o) Other Information. Such other information with respect to the business,
condition (financial or otherwise), operations, performance, properties or
prospects of any Loan Party or any of its Subsidiaries as any Lender through the
Administrative Agent may from time to time reasonably request.
SECTION 5.04. Financial Covenants. So long as any Advance shall remain
unpaid, any Letter of Credit is outstanding or any Lender shall have any
Commitment hereunder, GNCI will:
(a) Maximum Leverage Ratio. Maintain on a Consolidated basis for itself and
its Subsidiaries a Maximum Leverage Ratio for each Rolling Period of not more
than the amount set forth below for each Fiscal Year set forth below:
Maximum
Fiscal Year Leverage Ratio
Fiscal Year 1998 3.75 : 1.00
Fiscal Year 1999 3.50 : 1.00
Fiscal Year 2000 3.00 : 1.00
Fiscal Year 2001 2.50 : 1.00
Fiscal Year 2002 2.50 : 1.00
(b) Adjusted Maximum Leverage Ratio. Maintain on a Consolidated basis for
itself and its Subsidiaries an Adjusted Maximum Leverage Ratio for each Rolling
Period of not more than the amount set forth below for each Fiscal Year set
forth below:
Adjusted Maximum
Fiscal Year Leverage Ratio
Fiscal Year 1998 3.75 : 1.00
Fiscal Year 1999 3.50 : 1.00
Fiscal Year 2000 3.00 : 1.00
Fiscal Year 2001 2.50 : 1.00
Fiscal Year 2002 2.50 : 1.00
(c) Fixed Charge Coverage Ratio. Maintain on a Consolidated basis for
itself and its Subsidiaries a Fixed Charge Coverage Ratio for each Rolling
Period of not less than the amount set forth below for each Fiscal Year set
forth below:
Fixed Charge
Fiscal Year Coverage Ratio
Fiscal Year 1998 1.25 : 1.00
Fiscal Year 1999 1.25 : 1.00
Fiscal Year 2000 1.35 : 1.00
Fiscal Year 2001 1.35 : 1.00
Fiscal Year 2002 1.35 : 1.00
(d) Minimum Net Worth. Maintain at all times on a Consolidated basis for
itself and its Subsidiaries an excess of total assets less total liabilities
less (w) 25% of the total amount of Net Cash Proceeds received by GNCI from any
sale or issuance of any capital stock or any warrants, rights or options to
acquire capital stock other than Net Cash Proceeds received by GNCI since April
30, 1998 from the exercise of management stock options and/or from the sale of
common stock to management directors or employees pursuant to stock purchase
plans of GNCI or its Affiliates plus (x) an amount up to $250,000,000 of funds
used by GNCI since April 30, 1998 to repurchase its outstanding capital stock or
to pay dividends to its shareholders plus amounts used by GNCI prior to April
30, 1998 to repurchase its outstanding capital stock or to pay dividends to its
shareholders plus (y) the total amount of non-cash charges relating to (i)
pensions, (ii) stock options, (iii) stock appreciation rights, and (iv) other
equity-based incentive plans, plus or minus (z) foreign currency translations,
of not less than the amount set forth below for each Fiscal Year set forth
below:
Minimum
Fiscal Year Net Worth
Fiscal Year 1998 $270,000,000
Fiscal Year 1999 $336,000,000
Fiscal Year 2000 $405,000,000
Fiscal Year 2001 $477,000,000
Fiscal Year 2002 $477,000,000
SECTION 5.05. Restriction Termination Date. Effective on the earlier to
occur of the event described in clause (a) of the definition of Restriction
Termination Date and the date on which the lenders under the Fourth Amended and
Restated Credit Agreement consent to the modifications contemplated by this
Section 5.05 and Section 7(n) of the Parent Guaranty, Sections 5.01(b), 5.02(a),
5.02(b)(v)(B) and (vi), 5.02(e)(iv), (v), (vi), (vii) and (xi), 5.02(m) and
Section 5.04 of this Article V will be amended to conform to the comparable
provisions of the Fourth Amended and Restated Credit Agreement as in effect on
the Closing Date.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) (i) any Borrower shall fail to pay any principal of any Advance, when
the same becomes due and payable or (ii) any Loan Party shall fail to make
interest or any other payment under any Loan Document within five Business Days
after the same becomes due and payable; or
(b) any representation or warranty made, or deemed to be made, by any Loan
Party or any of its officers under or in connection with any Loan Document shall
prove to have been incorrect in any material respect when made (or deemed made);
or
(c) (i) any of GNC, GNI or GNCI shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(b), 5.01(e), 5.01(i) (to the
extent that such covenant relates to the chief executive office or chief place
of business of such Borrower), 5.01(j), 5.02, 5.03 (except with respect to
5.03(b) and (c)) or 5.04, (ii) either GNC, GNI or GNCI shall fail to perform or
observe any term, covenant or agreement contained in 5.03(b) and (c) and such
failure shall continue for 10 days, (iii) GNCI shall fail to perform or observe
any term, covenant or agreement contained in Section 7(a) of the Parent
Guaranty, or (iv) any Loan Party shall fail to perform any other term, covenant
or agreement contained in any Loan Document on its part to be performed or
observed and such failure shall remain unremedied for 20 days after written
notice thereof shall have been given to the Borrowers by the Administrative
Agent or any Lender; or
(d) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect of
any Indebtedness that is outstanding in a principal amount of at least
$5,000,000 in the aggregate (but excluding Indebtedness outstanding hereunder)
of such Loan Party or such Subsidiary, as the case may be, when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise); or any other event shall occur or condition
shall exist under any agreement or instrument relating to any such Indebtedness,
if the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness or otherwise to cause, or to
permit the holder thereof to cause, such Indebtedness to mature; or any such
Indebtedness shall be declared to be due and payable or required to be prepaid
or redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Indebtedness shall be required to be made, in each case prior to
the stated maturity thereof; or
(e) any Loan Party or any of its Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it)
that is being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 30 days or any of the
actions sought in such proceeding (including, without limitation, the entry of
an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Loan Party or any of its Subsidiaries shall take
any corporate action to authorize any of the actions set forth above in this
Section 6.01(e); or
(f) any judgment or order for the payment of money in excess of $5,000,000
shall be rendered against any Loan Party or any of its Subsidiaries and either
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(g) any nonmonetary judgment or order shall be rendered against any Loan
Party or any of its Subsidiaries that is reasonably likely to have a Material
Adverse Effect, and there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(h) any provision of any Loan Document after delivery thereof pursuant to
Section 3.01 shall for any reason cease to be valid and binding on or
enforceable against any Loan Party party to it that results in a materially
adverse effect on the rights and remedies of the Agents or any Lender, or any
such Loan Party shall so state in writing; or
(i) (i) Any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Stock of GNCI (or other securities convertible
into such Voting Stock) representing 20% or more of the combined voting power of
all Voting Stock of GNCI; or (ii) during any period of up to 24 consecutive
months, commencing before or after the Closing Date, individuals who at the
beginning of such 24-month period were directors of GNCI (together with any new
directors whose election or appointment by the board of directors of GNCI or
whose nomination for election by the shareholders of GNCI was approved by a vote
of 66?% of the directors of GNCI then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) shall cease for any reason to constitute a majority of
the board of directors of GNCI then in office; or
(j) any ERISA Event shall have occurred with respect to a Plan of any Loan
Party or any of its ERISA Affiliates and the sum (determined as of the date of
occurrence of such ERISA Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans of the Loan Parties and their ERISA
Affiliates with respect to which an ERISA Event shall have occurred and then
exist (or the liability of the Loan Parties and their ERISA Affiliates related
to such ERISA Event) exceeds $1,000,000; or
(k) any Loan Party or any of its ERISA Affiliates shall have been notified
by the sponsor of a Multiemployer Plan of any Loan Party or any of its ERISA
Affiliates that it has incurred Withdrawal Liability to such Multiemployer Plan
in an amount that, when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Loan Parties and their ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds $1,000,000
or requires payments exceeding $500,000 per annum; or
(l) any Loan Party or any of its ERISA Affiliates shall have been notified
by the sponsor of a Multiemployer Plan of any Loan Party or any of its ERISA
Affiliates that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions of the Loan
Parties and their ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $1,000,000;
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrowers, declare the obligation of each Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrowers, declare the Notes, all interest thereon and all other amounts payable
under this Agreement and the other Loan Documents to be forthwith due and
payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by each
Borrower; provided, however, that in the event of an actual or deemed entry of
an order for relief with respect to any Loan Party under the Federal Bankruptcy
Code, (x) the obligation of each Lender to make Advances shall automatically be
terminated and (y) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
each Borrower.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement and the other
Loan Documents as are delegated to the Administrative Agent by the terms hereof
and thereof, together with such powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of the
Notes), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding upon all Lenders and all holders of Notes; provided, however, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to this Agreement
or applicable law. The Administrative Agent agrees to give to each Lender prompt
notice of each notice given to it by the Borrowers pursuant to the terms of this
Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither any of the Agents nor any of
their directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Administrative Agent: (a)
may treat the payee of any Note as the holder thereof until the Administrative
Agent receives and accepts an Assignment and Acceptance entered into by the
Lender that is the payee of such Note, as assignor, and an Eligible Assignee, as
assignee, as provided in Section 8.07; (b) may consult with legal counsel
(including counsel for any Loan Party), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with the Loan Documents; (d) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or to inspect the property (including the books and records) of
any Loan Party; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument or document furnished pursuant
hereto; (f) shall incur no liability under or in respect of any Loan Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telegram, telecopy, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties; and (g) shall incur
no liability as a result of any determination whether the transactions
contemplated by the Loan Documents constitute a "highly leveraged transaction"
within the meaning of the interpretations issued by the Comptroller of the
Currency, the Federal Deposit Insurance Corporation and the Board of Governors
of the Federal Reserve System.
SECTION 7.03. Agents and Affiliates. With respect to its Commitments, the
Advances made by it and the Note or Notes issued to it, each Agent shall have
the same rights and powers under the Loan Documents as any other Lender and may
exercise the same as though it were not an Agent and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include each Agent in its
individual capacity. Each Agent and its affiliates may accept deposits from,
lend money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any Loan
Party, any of its Subsidiaries and any Person who may do business with or own
securities of any Loan Party or any such Subsidiary, all as if it were not an
Agent, and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender and based
on the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges 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 decisions in taking or not taking action
under this Agreement.
SECTION 7.05. Indemnification. Each Lender severally agrees to indemnify
the Agents (to the extent not promptly reimbursed by the Borrowers) from and
against such Lender's ratable share of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Agents in any way relating to or arising out of the
Loan Documents or any action taken or omitted to be taken by the Administrative
Agent under the Loan Documents; provided, however, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agents' gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for its ratable share of any costs and expenses payable by the
Borrowers under Section 8.04, to the extent that the Administrative Agent is not
promptly reimbursed for such costs and expenses by the Borrowers. For purposes
of this Section 7.05, the Lenders' respective ratable shares of any amount shall
be determined, at any time, according to the aggregate principal amount of the
Advances outstanding at such time and owing to the respective Lenders. The
failure of any Lender to reimburse the Administrative Agent promptly upon demand
for its ratable share of any amount required to be paid by the Lenders to the
Administrative Agent as provided herein shall not relieve any other Lender of
its obligation hereunder to reimburse the Administrative Agent for its ratable
share of such amount, but no Lender shall be responsible for the failure of any
other Lender to reimburse the Administrative Agent for such other Lender's
ratable share of such amount.
SECTION 7.06. Successor Administrative Agents. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrowers. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent; provided that such appointed
successor Administrative Agent is a Lender. If no successor Administrative Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Administrative Agent's
giving of notice of resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall be
(i) a commercial bank or (ii) a finance company, insurance company or other
financial institution that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and is
capable of performing the duties of the Administrative Agent hereunder. After
any retiring Administrative Agent's resignation hereunder as Administrative
Agent, the provisions of this Article VII 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. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Administrative
Agent, other than with respect to funds transfers and other similar aspects of
the administration of Borrowings and payments by the Borrowers in respect of the
Facility, and the retiring Administrative Agent shall be discharged from its
duties and obligations under this Agreement, other than as aforesaid.
SECTION 7.07. The Agents. Neither the Documentation Agent, nor either
Syndication Agent, in its capacity as such Agent, assumes any responsibility or
obligation hereunder for servicing, syndication, enforcement or collection of
the Indebtedness resulting from the Advances, nor any duties as agent hereunder
for the Lenders.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or the Notes, nor consent to any departure by the Borrowers
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that (a) no amendment, waiver or consent shall, unless
in writing and signed by all the Lenders, do any of the following at any time:
(i) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Lenders that shall be required
for the Lenders or any of them to take any action hereunder or change the
percentage contained in the definition of Required Lenders or (ii) amend this
Section 8.01 or Section 5.02(m), or release any guaranty of GNCI, GNI or GNC,
and (b) no amendment, waiver or consent shall, unless in writing and signed by
the Required Lenders and each Lender that is affected thereby, do any of the
following: (i) increase the Commitments of such Lender or subject such Lender to
any additional obligations, (ii) reduce the principal of, or interest on, the
Note or Notes held by such Lender or any fees or other amounts payable hereunder
to such Lender, or (iii) postpone any date fixed for any commitment reduction or
any payment of principal of, or interest on, the Note or Notes held by such
Lender or any fees or other amounts payable hereunder to such Lender; provided
further that no amendment, waiver or consent shall, unless in writing and signed
by the Administrative Agent in addition to the Lenders required above to take
such action, affect the rights or duties of the Administrative Agent under this
Agreement or any Note.
SECTION 8.02. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telecopy, telex or
cable communication) and mailed, telegraphed, telecopied, telexed, cabled or
delivered, if to GNI, at its address at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, XX 00000,
Attention: Chief Financial Officer, if to GNC, at its address at 000 Xxxxx
Xxxxxx, Xxxxxxxxxx, XX 00000, Attention: Chief Financial Officer, with a copy to
Xxxxxxxx, Xxxxxxx & Xxxxxxx, A Professional Corporation, at its address at 000
Xxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxxx X. Xxxx; if to any Lender,
at its Domestic Lending Office specified opposite its name on Schedule I hereto;
if to any other Lender, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender; and if to the
Administrative Agent, at its address at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Structured Finance Group, telecopier number (000) 000-0000;
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties. All such notices and communications
shall, when mailed, telegraphed, telecopied, telexed or cabled, be effective
when deposited in the mails, delivered to the telegraph company, transmitted by
telecopier, confirmed by telex answerback or delivered to the cable company,
respectively, except that notices and communications to the Administrative Agent
pursuant to Article II, III or VII shall not be effective until received by the
Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender or
any Agent to exercise, and no delay in exercising, any right hereunder or under
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) GNC and GNI jointly and severally
hereby agree to pay on demand (i) all reasonable out-of-pocket costs and
expenses of the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of the Loan
Documents (including, without limitation, (A) all due diligence, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and
expenses of counsel for the Administrative Agent with respect thereto, with
respect to advising the Administrative Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto), (ii) all
reasonable costs and expenses of the Agents and the Lenders in connection with
the enforcement of the Loan Documents, whether in any action, suit or
litigation, any bankruptcy, insolvency or other similar proceeding affecting
creditors' rights generally or otherwise (including, without limitation, the
reasonable fees and expenses of counsel for the Administrative Agent and each
Lender with respect thereto) and (iii) all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery
of the Loan Documents.
(b) The Borrowers jointly and severally hereby agree to indemnify and hold
harmless the Agents and each Lender and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims that may be asserted against, and
any and all damages, losses, liabilities and reasonable expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or awarded against, any Indemnified Party, in each case arising out
of or in connection with or by reason of, or in connection with the preparation
for a defense of, any investigation, litigation or proceeding arising out of,
related to or in connection with (i) the transactions contemplated hereby or
(ii) the actual or alleged presence of Hazardous Materials on any property of
any Loan Party or any of its Subsidiaries or any Environmental Action relating
in any way to any Loan Party or any of its Subsidiaries, in each case whether or
not such investigation, litigation or proceeding is brought by any Loan Party,
its directors, shareholders or creditors or an Indemnified Party or any
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated, except to the extent such
claim, damage, loss, liability or expense is found in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. No termination of
this Agreement shall affect the obligations of the Borrowers to indemnify each
Indemnified Party under the conditions and to the extent set forth in this
Section 8.04(b).
(c) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by any of the Borrowers to or for the account of a Lender other
than on the last day of the Interest Period for such Advance, as a result of a
payment or conversion pursuant to Section 2.08(b)(i), 2.09(d) or 2.09(e),
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, the Borrowers jointly and severally hereby agree to, upon demand
by such Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment, including, without limitation, any
loss (including loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance. A certificate as to the amount of such
required compensation, submitted to the Borrowers by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(d) If any Loan Party fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of such Loan Party by the Administrative Agent or any Lender, in its sole
discretion.
SECTION 8.05. Right of Setoff. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and otherwise apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender or such Affiliate to or for the credit or the
account of the Borrowers against any and all of the Obligations of the Borrowers
now or hereafter existing under this Agreement and the Note or Notes held by
such Lender, and irrespective of whether such Lender shall have made any demand
under this Agreement or such Note or Notes and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Borrowers after any such
setoff and application; provided, however, that the failure to give such notice
shall not affect the validity of such setoff and application. The rights of each
Lender and its Affiliates under this Section 8.05 are in addition to other
rights and remedies (including, without limitation, other rights of setoff) that
such Lender and its Affiliates may have. Each such setoff shall be subject to
Section 2.12.
SECTION 8.06. Binding Effect. This Agreement shall become effective when it
shall have been executed by each GNC and GNI, and the Agents and when the
Administrative Agent shall have been notified by each Lender that such Lender
has executed it and thereafter shall be binding upon and inure to the benefit of
the Borrowers, the Agents, and each Lender and their respective successors and
assigns, except that no Borrower shall have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may assign to
one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to it and the Note
or Notes held by it); provided, however, that (i) except in the case of an
assignment of all of a Lender's rights and obligations under this Agreement, the
amount of the Commitment of the assigning Lender being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 (or, in
the event that the assignment is to a Person that, immediately prior to such
assignment, was a Lender, $1,000,000), unless a lesser amount shall be approved
by the Administrative Agent and the Borrowers in their reasonable judgment, and
shall be an integral multiple of $1,000,000, (ii) except in the case of an
assignment of all of a Lender's rights and obligations under this Agreement, the
amount of the Commitment of the assigning Lender being retained after giving
effect to any such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
$5,000,000, (iii) each such assignment shall be to an Eligible Assignee and (iv)
the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject (except in
the case of an Affiliate of a Lender) to such assignment and a processing and
recordation fee of $3,000. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in such Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from such
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrowers or the performance or observance by the Borrowers of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon any Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee or an
Affiliate of the assignor; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Advances owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrowers, each Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrowers. Within five Business Days after its receipt of such notice, the
Borrowers, at their own expense, shall execute and deliver to the Administrative
Agent in exchange for the surrendered Note or Notes a new Note or Notes to the
order of such Eligible Assignee in an amount equal to the Commitment assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder, a new Note or Notes to the order of the
assigning Lender in an amount equal to the Commitment retained by it hereunder.
Such new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A hereto.
(e) Each Lender may sell participations in or to all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment or Commitments, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) such Lender's obligations
under this Agreement (including, without limitation, its Commitment or
Commitments) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note or Notes for all
purposes of this Agreement, (iv) the Borrowers, the Agents and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Note, or any consent to any
departure by any Borrower therefrom, except to the extent that such amendment,
waiver or consent would (A) reduce the principal of, or interest on, the Notes
or any fees or other amounts payable hereunder, in each case to the extent
subject to such participation or (B) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation. If the
Administrative Agent or such Lender shall request the written consent of such
participant to any of the actions set forth in this paragraph (e), and shall not
receive either the consent thereto or denial thereof in writing within five
Business Days of making such request, such participant shall be deemed to have
given its consent.
(f) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrowers furnished to such Lender by or on behalf of the
Borrowers; provided, however, that, prior to any such disclosure, the assignee
or participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information received by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time create a security interest in all or any portion of its
rights under this Agreement (including, without limitation, the Advances owing
to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
(h) The Borrowers and each Lender agree that, at the request of the
Administrative Agent, the Borrowers or such Lender will reexecute this Agreement
to reflect the assignments that have been effected in accordance with this
Section 8.07.
SECTION 8.08. Governing Law. This Agreement and the Notes shall be governed
by, and construed in accordance with, the laws of the State of New York.
SECTION 8.09. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 8.10. Confidentiality. Neither any Agent nor any Lender shall
disclose any Confidential Information to any Person without the consent in
writing of the Borrowers, other than (a) to the Agents' or such Lender's
Affiliates and their officers, directors, employees, agents and advisors and to
actual or prospective Eligible Assignees and participants, and then only on a
confidential basis, (b) as required by any law, rule or regulation or judicial
process provided that unless contrary to applicable law or court order, the
Agents and each Lender shall use reasonable efforts prior to the disclosure of
Confidential Information to notify the Borrowers of each request under this
clause (b) made by a government authority (other than in connection with an
examination of the Agents or such Lender) or pursuant to legal process and
(c) as requested or required by any state, federal or foreign authority or
examiner regulating banks or banking.
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each Borrower hereby further irrevocably consents to the
service of process in any action or proceeding in such courts by the mailing
thereof by any parties hereto by registered or certified mail, postage prepaid,
to such Borrower at its address specified pursuant to Section 8.02. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to serve legal process in any
other manner permitted by law or to bring any action or proceeding relating to
this Agreement or the Notes in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the Notes in any
New York State or federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
SECTION 8.12. Waiver of Jury Trial. Each of the Borrowers, the Agents and
the Lenders hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the Advances or the
actions of any Agent or any Lender in the negotiation, administration,
performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
GENERAL NUTRITION, INCORPORATED,
as Borrower
By
Title:
GENERAL NUTRITION CORPORATION,
as Borrower
By
Title:
GENERAL NUTRITION COMPANIES, INC.
By
Title:
BANQUE NATIONALE DE
PARIS,
as Administrative Agent, Documentation Agent
and Lender
By
Title:
By
Title:
PNC BANK, NATIONAL ASSOCIATION,
as Syndication Agent and Lender
By
Title:
ABN AMRO BANK N.V.,
as Syndication Agent and Lender
By
Title:
By
Title:
COPY AS EXECUTED TOGETHER WITH
EXHIBITS D, E, AND F AS SEPARATELY
EXECUTED AND OPINIONS DELIVERED
PURSUANT THERETO
U.S. $100,000,000
1998 TERM CREDIT AGREEMENT
Dated as of August 10, 1998
Among
GENERAL NUTRITION, INCORPORATED and
GENERAL NUTRITION CORPORATION,
as Borrowers,
and
GENERAL NUTRITION COMPANIES, INC.
and
THE LENDERS NAMED HEREIN,
as Lenders,
and
BANQUE NATIONALE DE PARIS,
as Administrative Agent and as Documentation Agent
and
PNC BANK, NATIONAL ASSOCIATION and ABN AMRO BANK N.V.
as Syndication Agents
