EXHIBIT 10.1
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AMENDED AND RESTATED
CREDIT AGREEMENT
among
XXXX VISION CORPORATION,
THINGS REMEMBERED, INC.
and
PEARLE, INC.,
The Several Lenders
from Time to Time Parties Hereto,
XXXXXX COMMERCIAL PAPER INC.,
as Syndication Agent,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Documentation Agent,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
Dated as of May 23, 2002
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CIBC WORLD MARKETS, INC.,
as Advisor, Co-Lead Arranger and Co-Book Runner
XXXXXX COMMERCIAL PAPER INC.
as Co-Lead Arranger and Co-Book Runner
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS......................................................................................1
1.1. Defined Terms...............................................................................1
1.2. Other Definitional Provisions..............................................................25
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS................................................25
2.1. Revolving Credit Commitments...............................................................25
2.2. Revolving Credit Notes.....................................................................26
2.3. Procedure for Revolving Credit Borrowing...................................................26
2.4. Commitment Fees............................................................................26
2.5. Termination or Reduction of Revolving Credit Commitments...................................27
2.6. Repayment of Revolving Credit Loans........................................................27
SECTION 3. LETTERS OF CREDIT...............................................................................28
3.1. L/C Commitment.............................................................................28
3.2. Procedure for Issuance of Letters of Credit................................................28
3.3. Fees, Commissions and Other Charges........................................................29
3.4. L/C Participations.........................................................................29
3.5. Reimbursement Obligation of the Borrowers..................................................30
3.6. Obligations Absolute.......................................................................31
3.7. Letter of Credit Payments..................................................................31
3.8. Application................................................................................31
SECTION 4. GENERAL PROVISIONS..............................................................................32
4.1. Interest Rates and Payment Dates...........................................................32
4.2. Optional Prepayments.......................................................................32
4.3. Mandatory Prepayments and Reduction of Revolving Credit Commitments........................32
4.4. Conversion and Continuation Options........................................................34
4.5. Minimum Amounts and Maximum Number of Tranches.............................................34
4.6. Computation of Interest and Fees...........................................................34
4.7. Inability to Determine Interest Rate.......................................................35
4.8. Pro Rata Treatment and Payments............................................................35
4.9. Illegality.................................................................................36
4.10. Requirements of Law........................................................................36
4.11. Taxes......................................................................................38
4.12. Indemnity..................................................................................40
4.13. Change of Lending Office; Replacement of Lenders...........................................40
SECTION 5. REPRESENTATIONS AND WARRANTIES..................................................................41
5.1. Financial Condition........................................................................41
5.2. No Change; Solvency........................................................................42
5.3. Corporate Existence; Compliance with Law...................................................42
5.4. Corporate Power; Authorization; Enforceable Obligations....................................42
5.5. No Legal Bar...............................................................................43
5.6. No Material Litigation.....................................................................43
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5.7. No Default.................................................................................43
5.8. Ownership of Property; Liens...............................................................43
5.9. Intellectual Property......................................................................43
5.10. No Burdensome Restrictions.................................................................43
5.11. Taxes......................................................................................44
5.12. Federal Reserve Regulations................................................................44
5.13. ERISA......................................................................................44
5.14. Collateral.................................................................................44
5.15. Investment Company Act; Other Regulations..................................................45
5.16. Subsidiaries and Joint Ventures............................................................45
5.17. Purpose of Revolving Credit Loans..........................................................45
5.18. Environmental Matters......................................................................45
5.19. Regulation H...............................................................................46
5.20. No Material Misstatements..................................................................46
SECTION 6. CONDITIONS PRECEDENT............................................................................47
6.1. Conditions to Effectiveness................................................................47
6.2. Conditions to Each Extension of Credit.....................................................49
SECTION 7. AFFIRMATIVE COVENANTS...........................................................................50
7.1. Financial Statements.......................................................................50
7.2. Certificates; Other Information............................................................51
7.3. Payment of Obligations.....................................................................52
7.4. Conduct of Business and Maintenance of Existence...........................................52
7.5. Maintenance of Property; Insurance.........................................................52
7.6. Inspection of Property; Books and Records; Discussions.....................................52
7.7. Notices....................................................................................53
7.8. Environmental Laws.........................................................................54
7.9. Further Assurances.........................................................................55
7.10. Additional Collateral, etc.................................................................55
SECTION 8. NEGATIVE COVENANTS..............................................................................57
8.1. Financial Condition Covenants..............................................................57
8.2. Limitation on Indebtedness.................................................................59
8.3. Limitation on Liens........................................................................60
8.4. Limitation on Guarantee Obligations........................................................62
8.5. Limitation on Fundamental Changes..........................................................62
8.6. Limitation on Sale of Assets...............................................................63
8.7. Limitation on Dividends....................................................................63
8.8. Limitation on Capital Expenditures.........................................................64
8.9. Limitation on Investments, Loans and Advances..............................................64
8.10. Limitation on Transactions with Affiliates.................................................65
8.11. Limitation on Changes in Fiscal Year.......................................................65
8.12. Limitation on Negative Pledge Clauses......................................................65
8.13. Limitation on Lines of Business............................................................66
8.14. Limitations on Currency and Commodity Hedging Transactions.................................66
8.15. Limitation on Sale Leasebacks..............................................................66
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8.16. Changes to Cash Management Collection System...............................................66
SECTION 9. EVENTS OF DEFAULT...............................................................................66
SECTION 10. THE ADMINISTRATIVE AGENT.......................................................................70
10.1. Appointment................................................................................70
10.2. Delegation of Duties.......................................................................70
10.3. Exculpatory Provisions.....................................................................71
10.4. Reliance by Administrative Agent...........................................................71
10.5. Notice of Default..........................................................................71
10.6. Non-Reliance on Administrative Agent and Other Lenders.....................................72
10.7. Indemnification............................................................................72
10.8. Administrative Agent in Its Individual Capacity............................................73
10.9. Successor Administrative Agent.............................................................73
10.10. Issuing Lender.............................................................................73
10.11. Releases of Guarantees and Collateral......................................................73
SECTION 11. MISCELLANEOUS..................................................................................73
11.1. Amendments and Waivers.....................................................................73
11.2. Notices....................................................................................74
11.3. No Waiver; Cumulative Remedies.............................................................75
11.4. Survival of Representations and Warranties.................................................75
11.5. Payment of Expenses and Taxes..............................................................75
11.6. Successors and Assigns; Participations and Assignments.....................................76
11.7. Adjustments; Set-off.......................................................................79
11.8. Counterparts...............................................................................79
11.9. Severability...............................................................................79
11.10. Integration................................................................................80
11.11. GOVERNING LAW..............................................................................80
11.12. Submission To Jurisdiction; Waivers........................................................80
11.13. Acknowledgements...........................................................................80
11.14. WAIVERS OF JURY TRIAL......................................................................81
11.15. Confidentiality............................................................................81
11.16. Reference to and Effect on the Existing Credit Agreement...................................81
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SCHEDULES
I Revolving Credit Commitments and Addresses
II Applicable Margin Calculation for Revolving Credit Loans
5.1 Certain Obligations and Liabilities
5.4 Consents
5.5 Material Contracts; Court Orders and Decrees
5.8 Owned Real Properties
5.13 ERISA Non-compliance
5.14 Equipment and Inventory of Borrowers and Subsidiaries
5.16 Subsidiaries and Joint Ventures
8.2(d) Permitted Indebtedness
8.3(h) Permitted Liens
8.4(a) Permitted Guarantee Obligations
EXHIBITS
A Form of Revolving Credit Note
B-1 Form of Guarantee and Collateral Agreement
B-2 Form of Copyright, Patent and Trademark Security Agreement
B-3 Form of CNG Guarantee and Cash Collateral Agreement
C Form of Borrowing Certificate
D Form of Opinion of Counsel to Borrowers
E Form of U.S. Tax Compliance Certificate
F Form of Assignment and Acceptance
G Form of Borrowing Base Certificate
H Form of Compliance Package
I Form of Borrowing Notice
J Form of Continuation/Conversion Notice
K Form of CNC Guarantee
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 23, 2002, among
XXXX VISION CORPORATION, a Delaware corporation ("XXXX VISION"), THINGS
REMEMBERED, INC., a Delaware corporation ("THINGS REMEMBERED") and PEARLE, INC.,
a Delaware corporation ("PEARLE"; Xxxx Vision, Things Remembered, and Pearle
each being referred to as a "BORROWER" and collectively as the "BORROWERS"), the
several banks and other financial institutions from time to time parties to this
Agreement (collectively, the "LENDERS"), XXXXXX COMMERCIAL PAPER INC., as
syndication agent (in such capacity, the "SYNDICATION AGENT"), WACHOVIA BANK,
NATIONAL ASSOCIATION, as documentation agent (in such capacity, the
"DOCUMENTATION AGENT"), and CANADIAN IMPERIAL BANK OF COMMERCE, a
Canadian-chartered bank acting through its New York Agency, as administrative
agent for the Lenders hereunder (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrowers, the Administrative Agent, and certain banks and
other financial institutions are parties to the Credit Agreement dated as of
November 15, 1996 (as previously amended or modified, the "EXISTING CREDIT
AGREEMENT"), and the parties thereto wish to make certain modifications thereto;
WHEREAS, the Borrowers have requested that the Existing Credit
Agreement be amended and restated to (i) extend the maturity of the revolving
credit facility provided for therein from January 31, 2003 to May 31, 2006 and
(ii) make certain additional modifications thereto; and
WHEREAS, the Lenders and the Administrative Agent are agreeable to the
Borrowers' request and to amending and restating the Existing Credit Agreement,
but only upon the terms and subject to the conditions set forth below;
NOW THEREFORE, in consideration of the promises and mutual agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each of the parties hereto, the
parties hereto hereby agree that on the Closing Date (as hereinafter defined)
the Existing Credit Agreement shall be amended and restated to read in its
entirety as follows:
SECTION 1. DEFINITIONS
1.1. DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings (such terms to be equally applicable to the
singular and plural forms thereof):
"ABR LOANS": Revolving Credit Loans the rate of interest applicable to
which is based upon the CIBC Alternate Base Rate.
"ACCOUNT": as defined in the Uniform Commercial Code as in effect in
the State of New York; and, with respect to the Borrowers and their
Subsidiaries, all such
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Accounts of such Persons, whether now existing or existing in the future,
including, without limitation (i) all accounts receivable of such Person
including, without limitation, all accounts created by or arising from all
of such Person's sales of goods or rendition of services made under any of
its trade names, or through any of its divisions, (ii) all unpaid rights of
such Person (including rescission, replevin, reclamation and stopping in
transit) relating to the foregoing or arising therefrom, (iii) all rights
to any goods represented by any of the foregoing, including returned or
repossessed goods and (iv) all reserves and credit balances held by such
Person with respect to any such accounts receivable or any Obligors.
"ADJUSTED INTEREST COVERAGE RATIO": as of the end of each fiscal
quarter of CNG, with respect to CNG and its Subsidiaries on a Consolidated
basis, the ratio of (a) EBITDAR for the twelve month period ending on such
date to (b) the sum of (i) the aggregate amount paid in cash during the
twelve month period ending on such date in respect of items of Interest
Expense and (ii) Rental Expense for the twelve month period ending on such
date.
"ADJUSTMENT DATE": each date on or after the date which is six months
following the Closing Date that is the second Business Day following
receipt by the Lenders of both (i) the financial statements required to be
delivered pursuant to subsection 7.1(a) or 7.1(b), as applicable, for the
most recently completed fiscal period and (ii) the related Compliance
Certificate required to be delivered pursuant to subsection 7.2(b) with
respect to such fiscal period.
"ADMINISTRATIVE AGENT": CIBC, together with its affiliates, as the
co-lead arranger of the Revolving Credit Commitments and as the
administrative agent for the Lenders under this Agreement and the other
Loan Documents.
"AFFILIATE": as to any Person, any other Person (other than a
Subsidiary Guarantor) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For purposes
of this definition, "control" of a Person means the power, directly or
indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person or (b)
direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
"AGGREGATE OUTSTANDING REVOLVING CREDIT": as to any Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Credit Loans made by such Lender then outstanding and (b)
such Lender's Revolving Credit Commitment Percentage of the L/C Obligations
then outstanding.
"AGREEMENT": this Amended and Restated Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"APPLICABLE MARGIN": as applied to a given Type of Revolving Credit
Loan, the rate per annum, determined on each Adjustment Date, set forth
under the heading "ABR Loans Applicable Margin" or "Eurodollar Loans
Applicable Margin", as applicable, on
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Schedule II which corresponds to the Leverage Ratio determined from the
financial statements and Compliance Certificate relating to the end of the
fiscal quarter immediately preceding such Adjustment Date; PROVIDED,
FURTHER that in the event that the financial statements required to be
delivered pursuant to subsection 7.1(a) or 7.1(b), as applicable, and the
related Compliance Certificate required to be delivered pursuant to
subsection 7.2(b), are not delivered when due, then
(a) if such financial statements and Compliance Certificate are
delivered after the date such financial statements and Compliance
Certificate were required to be delivered (without giving effect to
any applicable cure period) and the Applicable Margin increases from
that previously in effect as a result of the delivery of such
financial statements and Compliance Certificate, then the Applicable
Margin in respect of Revolving Credit Loans during the period from the
date upon which such financial statements and Compliance Certificate
were required to be delivered (without giving effect to any applicable
cure period) until the date upon which they actually are delivered
shall, except as otherwise provided in clause (c) below, be the
Applicable Margin as so increased;
(b) if such financial statements and Compliance Certificate are
delivered after the date such financial statements and Compliance
Certificate were required to be delivered and the Applicable Margin
decreases from that previously in effect as a result of the delivery
of such financial statements and Compliance Certificate, then such
decrease in the Applicable Margin shall not become applicable until
the date upon which such financial statements and Compliance
Certificate actually are delivered; and
(c) if such financial statements and Compliance Certificate are
not delivered prior to the expiration of the applicable cure period,
then, effective upon such expiration, for the period from the date
upon which such financial statements and Compliance Certificate were
required to be delivered (after the expiration of the applicable cure
period) until two Business Days following the date upon which such
financial statements and Compliance Certificate actually are
delivered, the Applicable Margin in respect of Revolving Credit Loans
shall be 1.25% per annum, in the case of ABR Loans, and 2.25% per
annum, in the case of Eurodollar Loans.
"ASSIGNEE": as defined in subsection 11.6(c).
"AVAILABLE REVOLVING CREDIT COMMITMENT": as to any Lender at any time,
an amount equal to the excess, if any, of (a) the amount of such Lender's
Revolving Credit Commitment at such time OVER (b) the sum of (i) the
aggregate unpaid principal amount at such time of all Revolving Credit
Loans made by such Lender and (ii) an amount equal to such Lender's
Revolving Credit Commitment Percentage of the outstanding L/C Obligations
at such time; collectively, as to all the Lenders, the "AVAILABLE REVOLVING
CREDIT COMMITMENTS".
"BORROWER" and "BORROWERS": as defined in the preamble hereto.
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"BORROWING BASE CERTIFICATE": as defined in subsection 7.2(e).
"BORROWING BASE": an amount, calculated on a monthly basis based upon
the most recent Borrowing Base Certificate delivered pursuant to subsection
7.2(e), equal to the sum (without duplication) of (a) 80% of Eligible
Accounts, (b) 50% of Eligible Inventory and (c) 25% of Eligible Property.
All determinations in connection with the Borrowing Base shall be made by
the Borrowers and certified to the Administrative Agent by a Responsible
Officer; PROVIDED, HOWEVER, that the Administrative Agent shall have the
final right to review and adjust, in its reasonable judgment after
consultation with the Borrowers, any such determination to the extent such
determination is not in accordance with this Agreement. The Borrowing Base
determined on the basis of any Borrowing Base Certificate shall remain in
effect from and including the date on which such Borrowing Base Certificate
is delivered, to but excluding the date on which the next Borrowing Base
Certificate is delivered.
"BORROWING BASE DEFICIENCY": a condition wherein the sum of (a) the
aggregate principal amount of all Revolving Credit Loans outstanding at
such time and (b) the aggregate amount of L/C Obligations outstanding at
such time exceeds the Borrowing Base then in effect.
"BORROWING DATE": any Business Day specified in a notice pursuant to
subsection 2.3 or 3.2 as a date on which a Borrower requests the Lenders to
make Revolving Credit Loans hereunder or the Issuing Lender to issue
Letters of Credit hereunder.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close, except that, when used in connection with a Eurodollar Loan,
"Business Day" shall mean any Business Day on which dealings in Dollars
between banks may be carried on in London, England and New York, New York.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"CASH EQUIVALENTS": (i) marketable, direct obligations issued or
guaranteed by the United States of America, or of any governmental agency
or political subdivision thereof, maturing within 365 days of the date of
purchase, (ii) Dollar-denominated time deposits and Dollar-denominated
certificates of deposit (including eurodollar time deposits and
certificates of deposit) maturing within 365 days of the date of purchase
thereof issued by any United States or Canadian national, provincial or
state (including the District of Columbia) banking institution having
capital, surplus and undivided profits aggregating at least $250,000,000,
or by any British, French, German, Japanese or Swiss national banking
institution having capital, surplus and undivided profits aggregating at
least $1,000,000,000, in each case that is (a) rated at least "A" by
Standard & Poor's, a division of XxXxxx-Xxxx, Inc. ("S&P"), or at least
"A-2" by Xxxxx'x Investors Service Inc. ("MOODY'S"), or (b) that is a
Lender, (iii) commercial paper maturing within 270
5
days after the issuance thereof that has the highest credit rating of
either of S&P or Moody's, (iv) readily marketable direct obligations issued
by any state of the United States of America or any political subdivision
thereof having the highest rating obtainable from either of S&P or Moody's,
(v) tax exempted and tax advantaged instruments including, without
limitation, municipal bonds, commercial paper, auction rate preferred stock
and variable rate demand obligations with the highest short-term ratings by
either of S&P or Moody's or a long-term debt rating of AAA from S&P, as
applicable, (vi) repurchase agreements and reverse repurchase agreements
with institutions described in clause (ii) above that are fully secured by
obligations described in clause (i) above and (vii) investments not
exceeding 365 days in duration in money market funds that invest
substantially all of such funds' assets in the investments described in the
preceding clauses (i) through (v).
"C/D PUBLISHED MOVING RATE": on any particular date, the latest
three-week moving average of daily secondary market morning offering rates
in the United States for three-month certificates of deposit of major
United States money market lenders, such three-week moving average
(adjusted to the basis of a year of 360 days) being determined weekly for
the three-week period ending on the previous Friday by the Administrative
Agent on the basis of:
(a) such rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York (as adjusted for
reserves and assessments in the same manner as the C/D Quoted Rate);
or
(b) if such publication shall be suspended or terminated, the C/D
Quoted Rate determined by the Administrative Agent on the basis of
quotations for such rates by the Administrative Agent.
"C/D QUOTED RATE": relative to any determination of the C/D Published
Moving Rate in circumstances when publication of the rates referred to in
clause (a) of the definition thereof has been suspended or terminated, the
rate of interest per annum determined by the Administrative Agent to be the
sum (rounded upward to the nearest 1/16th of 1%) of:
(a) the rate obtained by dividing (i) the average (rounded upward
to the nearest 1/16th of 1%) of the bid rates quoted to the
Administrative Agent, in CIBC's secondary market at approximately
10:00 A.M., New York City time (or as soon thereafter as practicable),
by three certificate of deposit dealers of recognized standing
selected by the Administrative Agent in its reasonable discretion for
the purchase at face value of three-month certificates of deposit of
CIBC in an amount approximately equal or comparable to the amount of
CIBC's portion of the Revolving Credit Loans outstanding hereunder
with respect to which the C/D Quoted Rate is being determined by (ii)
a percentage equal to 100% MINUS the average of the daily percentages
specified during such period by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, but not limited to, any marginal
reserve requirement) for a member bank of the Federal Reserve System
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in respect of liabilities consisting of or including (among other
liabilities) three-month Dollar nonpersonal time deposits in the
United States; and
(b) the daily average during such period of the net annual
assessment rates estimated by the Administrative Agent for determining
the then current annual assessment payable by CIBC to the Federal
Deposit Insurance Corporation for insuring Dollar deposits of CIBC in
the United States.
"CHANGE OF CONTROL": (i) any Person (including such Person's
Affiliates and associates), other than a Permitted Holder, becomes the
beneficial owner (as defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of 50% or more of the total
voting or economic power of the Capital Stock of CNC and/or warrants or
options to acquire such Capital Stock on a fully diluted basis, (ii) CNC
consolidates with, or merges with or into, another Person or conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any Person, or any Person consolidates with, or merges with or
into, CNC, in any such event pursuant to a transaction in which the
outstanding Capital Stock of CNC is converted into or exchanged for cash,
securities or other property, other than any such transaction where (a) (1)
the outstanding common stock of CNC is not converted or exchanged at all
(except to the extent necessary to reflect a change in the jurisdiction of
incorporation) or is converted into or exchanged for Capital Stock of the
surviving or transferee corporation (the "SURVIVING ENTITY") and (2)
immediately after such transaction, no "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act) other than a
Permitted Holder is the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than a majority of the
total outstanding Capital Stock of the Surviving Entity, or (b) the holders
of the Capital Stock of CNC outstanding immediately prior to the
consolidation or merger hold, directly or indirectly, at least a majority
of the Capital Stock of the surviving corporation immediately after such
consolidation or merger, (iii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the board of
directors of CNC (together with any new directors whose election by such
board of directors or whose nomination for election by the shareholders of
CNC has been approved by 66 2/3% of the directors then still in office who
either were directors at the beginning of such period or whose election or
recommendation for election was previously so approved) cease to constitute
a majority of the board of directors of CNC, (iv) CNC shall cease to own
and control, beneficially, all of the issued and outstanding Capital Stock
of CNG, (v) CNG shall cease to own and control all of the issued and
outstanding Capital Stock of each Borrower or (vi) there shall occur a
"Change of Control" under the Senior Subordinated 1997 Notes Indenture or
the Senior Subordinated 2002 Notes Indenture.
"CIBC": Canadian Imperial Bank of Commerce, a Canadian-chartered bank,
acting through its New York Agency.
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"CIBC ALTERNATE BASE RATE": on any particular date, a rate of interest
per annum equal to the highest of:
(a) the rate of interest most recently announced by CIBC as its
base rate in effect at its principal office in New York City (the
"CIBC PRIME RATE");
(b) the Federal Funds Rate for such date plus 1/2 of 1%; and
(c) the CD Published Moving Rate most recently determined by CIBC
plus 1%.
The CIBC Alternate Base Rate is not necessarily intended to be the lowest
rate of interest charged by CIBC in connection with extensions of credit.
"CLEAN-DOWN AMOUNT": $10,000,000.
"CLOSING DATE": the date on which the conditions precedent set forth
in subsection 6.1 shall be satisfied.
"CNC": Xxxx National Corporation, a Delaware corporation.
"CNC GUARANTEE": the Amended and Restated Guarantee to be executed and
delivered by CNC in substantially the form attached hereto as Exhibit K, as
the same may be amended, supplemented or otherwise modified from time to
time.
"CNG": Xxxx National Group, Inc., a Delaware corporation.
"CNG GUARANTEE AND CASH COLLATERAL AGREEMENT": the Amended and
Restated CNG Guarantee and Cash Collateral Agreement to be executed and
delivered by CNG in substantially the form attached hereto as Exhibit B-3,
as the same may be amended, supplemented or otherwise modified from time to
time.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"XXXX VISION": as defined in the preamble hereto.
"COLLATERAL": all assets (including assets constituting shares of
Capital Stock) of the Loan Parties, now owned or hereinafter acquired, upon
which a Lien is purported to be created by any Security Document.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with any Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes any Borrower and
which is treated as a single employer under Section 414 of the Code.
"COMPLIANCE CERTIFICATE": as defined in subsection 7.2(b).
0
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"COMPLIANCE PACKAGE": the Xxxx National Group, Inc. and Subsidiaries
Consolidated Financial Statements and Supplementary Data, in substantially
the form of Exhibit H.
"CONSOLIDATED": when used in connection with any financial statements
required to be delivered pursuant to subsection 7.1 or 7.11 or computation
of the financial covenants set forth in subsections 8.1 and 8.8, means such
term as it applies to CNG and its Subsidiaries on a consolidated basis in
accordance with GAAP, after eliminating all intercompany items.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"COPYRIGHT, PATENT AND TRADEMARK SECURITY AGREEMENT": the Amended and
Restated Copyright, Patent and Trademark Security Agreement to be executed
and delivered by the Borrowers and certain Subsidiaries in substantially
the form attached hereto as Exhibit B-2, as the same may be amended,
supplemented or otherwise modified from time to time.
"DEFAULT": any of the events specified in Section 9, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"DEFAULTED ACCOUNT": any Account which has been or should have been
charged-off as not collectable in conformity with the accounting policies
of the Borrowers and their Subsidiaries as in effect from time to time.
"DEFAULTING LENDER": at any time, any Lender that has defaulted, and
at the time of determination continues to default, in its obligation to
make available its Revolving Credit Commitment Percentage of any Revolving
Credit Loan.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Borrower that is treated
as "domestic" for U.S. federal income tax purposes.
"EBITDA": for any period, with respect to CNG and its Subsidiaries on
a Consolidated basis, determined in accordance with GAAP, an amount equal
to the sum of (a) Net Income for such period, plus (b) income taxes,
excluding income taxes (either positive or negative) attributable to
extraordinary and non-recurring gains or losses or sales or other
dispositions of assets permitted under subsection 8.6, plus (c) Interest
Expense for such period, plus (d) depreciation for such period, plus (e)
amortization for such period, plus (f) any other non-cash items (including
minority interests) reducing Net Income for such period, plus (g)
amortization of deferred financing costs and expenses for such period,
minus (h) all non-cash items increasing Net Income for such period, minus
(i) all cash payments made in such period in respect of restructuring
charges deducted in calculating Net Income for such period or any prior
period.
9
"EBITDAR": for any period, with respect to CNG and its Subsidiaries on
a Consolidated basis, determined in accordance with GAAP, an amount equal
to the sum of EBITDA and Rental Expense for such period.
"ELIGIBLE ACCOUNTS": at any time, an amount equal to the aggregate
outstanding balance of all Accounts of the Borrowers and their Subsidiaries
(other than Accounts consisting of payment obligations with respect to
which the Obligor is a franchisee of any Borrower or any Subsidiary arising
from Investments made pursuant to subsection 8.9(e)) payable in the United
States of America in Dollars as set forth in the aging reports of billed
Accounts for the Borrowers and their Subsidiaries as of such time, PROVIDED
that, unless otherwise approved in writing by the Administrative Agent, no
amount owing in respect of any Account shall be deemed to be included in
any calculation of Eligible Accounts if:
(a) such Account was, at the date of the original issuance of the
respective invoice therefor, payable more than 60 days after such
date;
(b) such Account is not a bona fide, valid and legally enforceable
obligation of the account debtor in respect thereof arising from the
actual sale and delivery of goods or rendition and acceptance of
services in the ordinary course of business to such account debtor;
(c) such Account remains unpaid for more than 60 days after the date
set forth for payment in the invoice originally issued therefor;
(d) the Obligor is any Borrower or any Subsidiary or Affiliate
thereof;
(e) the sale giving rise thereto is to an Obligor in any jurisdiction
outside the United States unless the obligation thereunder is backed
by a letter of credit acceptable to the Administrative Agent;
(f) such Account is a Defaulted Account;
(g) such Account is the result of a charge-back or a reinvoice of a
disputed Account or Defaulted Account;
(h) the Obligor thereon is the obligor in respect of any other
Defaulted Account;
(i) it is an Account which may be set off or charged against (i) any
adverse security deposit or other similar deposit made by or for the
benefit of the applicable Obligor or (ii) any trade payable, rebate
obligation or other similar liability owing to the applicable Obligor;
PROVIDED that any Account deemed ineligible pursuant to this clause
(i) shall only be ineligible to the extent of such set-off or charge
against such adverse security deposit, trade payable, rebate
obligation or other similar deposit or liability;
(j) it arises from the sale to the Obligor on a xxxx-and-hold,
guarantied sale, sale-and-return, sale on approval or consignment
basis or made pursuant to any other
10
written agreement providing for repurchase or return; PROVIDED,
HOWEVER, that no Account shall be excluded pursuant to this clause (j)
solely as a result of customary quality warranties or the general
right to return goods provided by the Borrower or its Subsidiaries;
(k) the Obligor thereon has disputed its liability on, or the Obligor
thereon has made any claim or defense with respect to, such Account or
any other Account due from such Obligor to any Loan Party, which has
not been resolved; PROVIDED that any Account deemed ineligible
pursuant to this clause (k) shall only be ineligible to the extent of
the amount owed by such Loan Party to the Obligor thereon or the
amount of such dispute, claim or defense;
(l) a proceeding under bankruptcy or similar laws has occurred and is
continuing with respect to the Obligor thereon;
(m) the Obligor thereon is any Governmental Authority unless all
Requirements of Law relating to the creation and perfection of a Lien
thereon in favor of the Lenders shall have been satisfied;
(n) the goods giving rise to such Account have not been shipped and
delivered to the Obligor thereon or the services giving rise to such
Account have not been performed or such Account otherwise does not
represent a final sale or transfer of title to such Obligor;
(o) such Account does not comply in all material respects with all
applicable legal requirements;
(p) if the Accounts due from any Obligor exceed an amount equal to 20%
of the aggregate of all Accounts at said time, an amount of such
Accounts equal to such excess;
(q) such Account is not owned solely by such Person free and clear of
all Liens or other rights or claims of any other Person (except in
favor of the Administrative Agent);
(r) such Account is subject to any material restrictions on the
transfer, assignability or sale thereof, enforceable against the
assignee, except pursuant to any Loan Document; or
(s) the Administrative Agent does not have a valid and perfected first
priority security interest in such Account for the benefit of the
Lenders or such Account does not otherwise conform in all material
respects to the representations and warranties contained in this
Agreement or any of the Security Documents.
"ELIGIBLE INVENTORY": at any time, an amount equal to the aggregate
value (determined in accordance with the immediately succeeding sentence)
of all Inventory of (i) Xxxx Vision and its Subsidiaries, located at
distribution centers and laboratories owned or operated by Xxxx Vision or
its Subsidiaries, (ii) Pearle and its Subsidiaries, located at
11
stores owned or operated by Pearle or its Subsidiaries and distribution
centers and laboratories owned or operated by Pearle or its Subsidiaries
and (iii) Things Remembered and its Subsidiaries, located at stores owned
or operated by Things Remembered or its Subsidiaries and distribution
centers owned or operated by Things Remembered or its Subsidiaries, in each
case that consists of inventory other than work in process, excluding all
Inventory located at a distribution center received from a third-party
customer in exchange for the initial stocking of Inventory of such
third-party customer in any changeover or conversion. In determining the
amount to be so included, the amount of such Inventory shall be valued at
the lower of cost or market on a basis consistent with such Borrower's or
such Subsidiary's current and historical accounting practice LESS reserves
taken, if any, (i) on account of physical inventory adjustments, (ii) for
warranty and price changes as recorded in such Borrower's or such
Subsidiary's accounting records, (iii) for any goods returned or rejected
by such Borrower's or such Subsidiary's customers as damaged or defective,
scrap, obsolete or otherwise non-salable, return to vendor goods,
miscellaneous non-perpetual inventory, cores, rental tools or supplies,
(iv) for goods in transit to third parties that are not excluded pursuant
to clause (a), (b), (c), (d) or (e) below, (v) for Liens referred to in
clause (c)(i) below and (vi) for Liens referred to in clause (c)(ii) below
as established by the Administrative Agent in its reasonable judgment.
Unless otherwise approved in writing by the Administrative Agent, no
Inventory shall be deemed Eligible Inventory of the Borrowers or its
Subsidiaries if:
(a) the Inventory is not owned solely by such Borrower or such
Subsidiary or is leased or on consignment or such Borrower or such
Subsidiary does not have good and valid title thereto;
(b) the Inventory is not located at or in transit to property that is
owned or leased by such Borrower or such Subsidiary;
(c) the Inventory is not subject to a perfected Lien in favor of the
Administrative Agent prior to all other Liens except for (i) Liens
arising by operation of law with respect to which either a Landlord
Consent has been obtained or the amount of Eligible Inventory has been
reduced by the amount of the applicable Rent Reserve and (ii) with
respect to Eligible Inventory located at or in transit to sites
described in clause (b) above, for Liens for normal and customary
warehousing and transportation charges (appropriate reserves for which
have been reasonably established for borrowing base purposes by such
Borrower or such Subsidiary); PROVIDED that in no event shall any
Inventory which is subject to a Lien permitted by subsection 8.3(m)
constitute Eligible Inventory;
(d) the Inventory is not located in the United States; or
(e) the Inventory does not conform in all material respects to the
representations and warranties contained in this Agreement or any of
the Security Documents.
"ELIGIBLE PROPERTY": at any time, an amount equal to the aggregate
book value of all tangible assets (other than Inventory) of (i) Xxxx Vision
and its Subsidiaries, located at distribution centers, stores and
laboratories owned or operated by Xxxx Vision or its
12
Subsidiaries, (ii) Pearle and its Subsidiaries, located at stores owned or
operated by Pearle or its Subsidiaries and offices, distribution centers,
laboratories and other facilities owned or operated by Pearle or its
Subsidiaries and (iii) Things Remembered and its Subsidiaries, located at
stores owned or operated by Things Remembered or its Subsidiaries and
distribution centers owned or operated by Things Remembered or its
Subsidiaries, in each case less the amount of any Indebtedness (other than
Indebtedness under any Loan Document) secured by a Lien on such assets,
PROVIDED that no amount shall be included in any calculation of Eligible
Property with respect to an asset (i) which is subject to any material
restrictions on the transfer, assignability or sale thereof, enforceable
against the assignee (except pursuant to any Loan Document), (ii) upon
which the Administrative Agent does not have a valid and perfected first
priority security interest (subject only to (x) Liens of the type described
in and permitted by Section 8.3(e), (y) Landlord's Liens arising by
operation of law with respect to which either a Landlord Consent has been
obtained or the amount of Eligible Property has been reduced by the amount
of the applicable Rent Reserve and (z) other Liens arising by operation of
law with respect to which the amount of Eligible Property has been reduced
by the amount of the obligations secured by such Liens) for the benefit of
the Lenders or (iii) which does not otherwise conform in all material
respects to the representations and warranties contained in this Agreement
or any of the Security Documents.
"ENVIRONMENTAL COSTS": any and all costs or expenses (including,
without limitation, reasonable attorney's and consultant's fees,
investigation and laboratory fees, response costs, court costs and
litigation expenses, fines, penalties, damages, settlement payments,
judgments and awards), of whatever kind or nature, contingent or otherwise,
arising out of, or in any way relating to, any violation of, noncompliance
with or liability under any Environmental Laws or any orders, requirements,
demands, or investigations of any person related to any Environmental Laws.
Environmental Costs include any and all of the foregoing, without regard to
whether they arise out of or are related to any past, pending or threatened
proceeding of any kind.
"ENVIRONMENTAL LAWS": any and all laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, or other legally enforceable
requirements (including, without limitation, common law) of any foreign
government, the United States, or any state, local, municipal or other
Governmental Authority, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or of human
health, or employee health and safety, as has been, is now, or may at any
time hereafter be, in effect.
"ENVIRONMENTAL PERMITS": any and all permits, licenses, registrations,
notifications, exemptions and any other authorization required under any
Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of
13
reserve requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves under any regulations
of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing
with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of such Board)
maintained by a member bank of such System.
"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined by
the Administrative Agent to be the arithmetic mean of the offered rates for
deposits in Dollars with a term comparable to such Interest Period that
appears on the Telerate British Bankers Assoc. Interest Settlement Rates
Page (as defined below) at approximately 11:00 A.M., London time, on the
second full Business Day preceding the first day of such Interest Period;
PROVIDED, HOWEVER, that if there shall at any time no longer exist a
Telerate British Bankers Assoc. Interest Settlement Rates Page, "Eurodollar
Base Rate" shall mean, with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum equal to the rate at
which CIBC is offered Dollar deposits at or about 10:00 A.M., New York City
time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its Eurodollar Loans are then being
conducted for delivery on the first day of such Interest Period for the
number of days comprised therein and in an amount comparable to the amount
of its Eurodollar Loan to be outstanding during such Interest Period.
"TELERATE BRITISH BANKERS ASSOC. INTEREST SETTLEMENT RATES PAGE" shall mean
the display designated as Page 3750 on the Telerate System Incorporated
Service (or such other page as may replace such page on such service for
the purpose of displaying the rates at which Dollar deposits are offered by
leading banks in the London interbank deposit market).
"EURODOLLAR LOANS": Revolving Credit Loans the rate of interest
applicable to which is based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
EURODOLLAR BASE RATE
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EVENT OF DEFAULT": any of the events specified in Section 9, PROVIDED
that any requirement for the giving of notice, the lapse of time, or both,
or any other condition, has been satisfied.
"EXCHANGE ACT": the Securities Exchange Act of 1934, as amended.
"EXISTING CREDIT AGREEMENT": as defined in the recitals hereto.
"EXCLUDED FOREIGN SUBSIDIARY": any Foreign Subsidiary in respect of
which either (a) the pledge of all of the Capital Stock of such Subsidiary
as Collateral or (b) the
14
guaranteeing by such Subsidiary of the obligations and liabilities of any
of the Loan Parties hereunder or under any other Loan Documents, would, in
the good faith judgment of a Borrower, result in adverse tax consequences
to a Borrower.
"FEDERAL FUNDS RATE": for any particular date, an interest rate per
annum equal to the interest rate (rounded upwards, if necessary, to the
nearest 1/16th of 1%) offered in the interbank market to the Administrative
Agent as the overnight Federal Funds Rate at or about 10:00 A.M. New York
City time, on such day (or if such day is not a Business Day, for the next
preceding Business Day).
"FINANCING LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"FOREIGN SUBSIDIARY": any Subsidiary of the Borrower that is treated
as a corporation for United States tax purposes and that is not a Domestic
Subsidiary.
"GAAP": generally accepted accounting principles in the United States
set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature
and authority within the accounting profession), or in such other statement
by such other entity as may be in general use by significant segments of
the U.S. accounting profession; PROVIDED, that, with respect to the
calculation of the financial ratios and the terms used in the covenants
contained in this Agreement and the definitions related thereto, "GAAP"
means generally accepted accounting principles in effect in the United
States on the dates of the financial statements referred to in subsection
5.1, it being understood that, upon any change in GAAP as at such dates
that in the reasonable opinion of the Administrative Agent affects in any
material respect the financial ratios and covenants contained in this
Agreement, the Borrowers and the Administrative Agent, on behalf of the
Lenders, will negotiate in good faith to adapt or conform any such
financial ratios and covenants and the definitions related thereto to any
such changes in GAAP to the extent necessary to maintain the original
economic terms of such financial ratios and covenants as in effect under
this Agreement on the date hereof, the Administrative Agent shall promptly
notify the Lenders in writing of the negotiated changes to such financial
ratios, covenants and definitions, and if, by the 30th day after the date
such notice is given (i) the Majority Lenders shall not have objected in
writing to such changes, such changes shall be deemed to be effective, and
this Agreement shall be deemed to be amended accordingly, as of such 30th
day, without further action on the part of any party hereto or (ii) the
Majority Lenders shall have objected to such changes, then, until this
Agreement shall be amended in accordance with the terms of Section 11.1 to
reflect such changes as may be necessary to maintain the original economic
terms of such financial ratios and covenants, the financial ratios and
covenants immediately in effect prior to such amendment shall remain in
effect.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or other
political subdivision thereof and any entity (including, without
limitation, any central bank)
15
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government. For purposes of subsections 4.9,
4.10 and 11.15, the term "Governmental Authority" shall be deemed to
include, without limitation, the National Association of Insurance
Commissioners.
"GUARANTEE": as defined in the definition of "Guarantor."
"GUARANTEE AND COLLATERAL AGREEMENT": the Amended and Restated
Guarantee and Collateral Agreement to be executed and delivered by each
Borrower and each Subsidiary (other than any Excluded Foreign Subsidiary or
any other Subsidiary which, in accordance with subsection 7.10(e), is not
required to execute and deliver such Agreement) in substantially the form
attached hereto as Exhibit B-1, as the same may be amended, supplemented or
otherwise modified from time to time.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "PRIMARY OBLIGATIONS") of any other third Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; PROVIDED,
HOWEVER, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrowers in
good faith.
"GUARANTOR": any Person which is now or hereafter a party to (a) the
Guarantee and Collateral Agreement or the CNC Guarantee or (b) any other
guarantee (a "GUARANTEE") hereafter delivered to the Administrative Agent
guaranteeing the obligations and liabilities of each of the Loan Parties
hereunder or under any other Loan
16
Documents, including, without limitations, any guarantee delivered pursuant
to subsection 7.10.
"HMO SUBSIDIARY": any Subsidiary of a Borrower which, by reason of its
engagement in the managed vision care business and the operation of
subsection 7.10(e), is not a Subsidiary Guarantor.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits
or advances of any kind, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of
such Person upon which interest charges are customarily paid, (d) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of
property or services (excluding accounts payable incurred in the ordinary
course of such Person's business), (f) all Indebtedness of others 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 owned or
acquired by such Person, whether or not the Indebtedness secured thereby
has been assumed, (g) all obligations of such Person under Financing
Leases, (h) for purposes of subsection 8.2 and Section 9(e), all
obligations of such Person in respect of interest rate protection
agreements, interest rate futures, interest rate options, interest rate
caps and any other interest rate, currency, commodity or other hedging
arrangement, (i) all Guarantee Obligations of such Person with respect to
Indebtedness of others, (j) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters
of guaranty and (k) all obligations, contingent or otherwise, of such
Person in respect of bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person's ownership interest
in or other relationship with such entity, except to the extent the terms
of such Indebtedness provide that such Person is not liable therefor.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTEREST EXPENSE": for any period and without duplication, with
respect to CNG and its Subsidiaries on a Consolidated basis, (a) the
aggregate amount of interest which would be set forth opposite the caption
"interest expense" or any like caption on an income statement for CNG and
its Subsidiaries on a Consolidated basis, determined in accordance with
GAAP, for such period plus, to the extent not included in such interest,
(i) imputed interest included in Financing Leases for such period, (ii) all
commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing permitted by subsection
8.2 for such period; (iii) the net payments made in connection with
Interest Rate Protection Agreements for such period, (iv) the interest
portion of any deferred payment obligation for such period, (v)
amortization of discount or premium, if any, for such period, (vi) all
other non-cash interest expense
17
(other than interest amortized to cost of sales) for such period, (vii) all
net capitalized interest for such period and (viii) all interest paid under
any Guarantee Obligation, minus (b) net payments received in connection
with Interest Rate Protection Agreements for such period, minus (c)
amortization of deferred financing costs and expenses for such period.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day of each
fiscal quarter of CNG, (b) as to any Eurodollar Loan having an Interest
Period of three months or less, the last day of such Interest Period, and
(c) as to any Eurodollar Loan having an Interest Period longer than three
months, each day which is three months, or a whole multiple thereof, after
the first day of such Interest Period and the last day of such Interest
Period.
"INTEREST PERIOD": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the respective Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by such
Borrower by irrevocable notice to the Administrative Agent not less
than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
PROVIDED that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Revolving Credit Commitment Termination Date shall end on the
Revolving Credit Commitment Termination Date;
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month; and
(4) the Borrowers shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Revolving Credit Loan.
18
"INTEREST RATE PROTECTION AGREEMENT": any interest rate protection
agreement, interest rate future, interest rate option, interest rate cap or
collar or other interest rate hedge arrangement, to or under which any
Borrower or any of its Subsidiaries is a party or a beneficiary on the
Closing Date or becomes a party or a beneficiary after the Closing Date.
"INVENTORY": as defined in the Uniform Commercial Code as in effect in
the State of New York; and, with respect to the Borrowers and their
Subsidiaries, all such Inventory of such Borrower or such Subsidiary
including, without limitation, all finished goods, wares and merchandise,
finished or unfinished parts, components, assemblies held for sale to third
party customers by such Borrower or such Subsidiary.
"INVESTMENT": as defined in subsection 8.9.
"ISP 98": the International Standby Practices, International Chamber
of Commerce Publication No. 590, as the same may be amended from time to
time.
"ISSUING LENDER": CIBC or any of its affiliates.
"LANDLORD CONSENT": a written agreement reasonably acceptable to the
Administrative Agent, pursuant to which a Person shall waive or subordinate
its rights and claims as landlord in any Inventory of the Borrowers or
their Subsidiaries for unpaid rents, grant access to the Administrative
Agent for the repossession and sale of such inventory and make other
agreements relative thereto.
"L/C FEE PAYMENT DATE": the last day of each fiscal quarter of CNG.
"L/C OBLIGATIONS": at any date, the sum of (a) the aggregate amount
then available to be drawn under all outstanding Letters of Credit and (b)
the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed by the Borrowers pursuant to subsection 3.5.
"L/C PARTICIPANTS": the collective reference to all the Lenders other
than the Issuing Lender.
"L/C SUBLIMIT": $30,000,000.
"LENDERS": as defined in the preamble hereto and including, without
limitation, the Issuing Lender.
"LETTERS OF CREDIT": as defined in subsection 3.1.
"LETTER OF CREDIT APPLICATION": an application in such form as the
Issuing Lender may specify from time to time, requesting the Issuing Lender
to issue a Letter of Credit.
"LEVERAGE RATIO": as of the end of each fiscal quarter of CNG, with
respect to CNG and its Subsidiaries on a Consolidated basis, the ratio of
(a) Total Indebtedness on such date to (b) EBITDA for the twelve month
period ending on such date.
19
"LIEN": any mortgage, pledge, hypothecation, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest
or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Financing Lease having substantially the same economic effect as any of the
foregoing).
"LOAN DOCUMENTS": this Agreement, any Revolving Credit Notes, any
Letter of Credit Applications, any Letters of Credit, the Security
Documents and any Guarantees.
"LOAN PARTIES": CNC, CNG, the Borrowers and each Subsidiary of a
Borrower which is a party to a Loan Document, individually, a "LOAN PARTY".
"MAJORITY LENDERS": (i) at such times as each Lender's Revolving
Credit Commitment Percentage is less than 30%, Non-Defaulting Lenders the
Revolving Credit Commitment Percentages of which aggregate more than 50% of
the aggregate Revolving Credit Commitment Percentages of all Non-Defaulting
Lenders and (ii) at all other times, Non-Defaulting Lenders the Revolving
Credit Commitment Percentages of which aggregate more than 66-2/3% of the
aggregate Revolving Credit Commitment Percentages of all Non-Defaulting
Lenders.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Borrowers and their Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos or
asbestos-containing materials, pollutants, contaminants, radioactivity, and
any other substances of any kind, whether or not any such substance is
defined as hazardous or toxic under any Environmental Law, that is
regulated pursuant to or could give rise to liability under any
Environmental Law.
"XXXXX'X": as defined in the definition of "Cash Equivalents."
"MORTGAGES": the mortgages and deeds of trust to be executed and
delivered or previously executed and delivered by the Borrowers and certain
Subsidiaries, in a form reasonably satisfactory to the Administrative
Agent, as the same may be amended, supplemented or otherwise modified from
time to time.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS": with respect to any sale or other disposition of
assets by CNG, any Borrower or any of their Subsidiaries or any Recovery
Event, the net amount equal to the aggregate amount received in cash
(including any cash received by way of deferred payment pursuant to a note
receivable, other non-cash consideration or
20
otherwise, but only as and when such cash is so received) MINUS the sum of
(i) the reasonable fees, commissions and other out-of-pocket expenses
incurred by CNG, such Borrower or such Subsidiary in connection therewith,
(ii) federal, state and local taxes incurred in connection therewith,
whether payable at such time or thereafter, (iii) in the case of any such
sale or other disposition of assets subject to a Lien securing any
Indebtedness (which Lien and Indebtedness are permitted by this Agreement),
any amounts required to be repaid by CNG, such Borrower or such Subsidiary
in respect of such Indebtedness (other than Indebtedness under this
Agreement and any Revolving Credit Notes) in connection with such sale or
other disposition and (iv) any amounts deposited in escrow or on deposit as
collateral in respect of environmental or other liabilities not assumed by
the purchaser in connection with a sale or other disposition of assets, but
only so long as such amounts remain on deposit or in escrow.
"NET INCOME": for any period, the aggregate of the net income of CNG
and its Subsidiaries for such period on a Consolidated basis, determined in
accordance with GAAP, for such period; PROVIDED, HOWEVER, that there shall
be excluded from Net Income (a) the net income of a Person whose net income
is not consolidated with the CNG's under GAAP (other than the amount of
dividends and other distributions paid or made by such Person to CNG or any
of its Subsidiaries during such period), (b) the net income of any Person
for such period acquired in a pooling of interests transaction for any
period prior to the date of such acquisition, (c) any net gain or loss for
such period (net of the related tax effect thereof) resulting from any sale
or other disposition of assets or any sale or other disposition of any
Capital Stock of any Person by CNG or any of its Subsidiaries, in each
case, other than in the ordinary course of business and permitted by
subsection 8.6, (d) extraordinary gains and losses for such period (net of
the related tax effect thereof), and (e) non-recurring gains and losses for
such period (net of the related tax effect thereof); PROVIDED that there
shall be added back to Net Income non-cash restructuring charges deducted
in calculating Net Income for such period.
"NON-DEFAULTING LENDER": each Lender other than a Defaulting Lender.
"NON-EXCLUDED TAXES": as defined in subsection 4.11.
"OBLIGOR": any purchaser of goods or services or other Person
obligated to make payment to any Borrower or any Subsidiary in respect of a
purchase of such goods or services.
"ORIGINAL CLOSING DATE": the date on which the conditions precedent
set forth in subsection 6.1 of the Existing Credit Agreement were
satisfied.
"PARTICIPANT": as defined in subsection 11.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"PEARLE": as defined in the preamble hereto.
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"PEARLE VISIONCARE LINE OF Credit AGREEMENT": that certain Line of
Credit Agreement, dated as of January 19, 2001, between Pearle and Pearle
Visioncare, Inc., including any promissory notes issued thereunder, as
amended, supplemented or otherwise modified from time to time.
"PERMITTED HEDGING ARRANGEMENT": as defined in subsection 8.14.
"PERMITTED HOLDERS": (i) Xxxxxxx X. Xxxx, (ii) any employee stock
ownership plan or any "group" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act) in which employees of CNC or its Subsidiaries
beneficially own at least 25% of the capital stock of CNC owned by such
group and (iii) any Person that is controlled by any one or more of the
Persons set forth in (i) or (ii) above.
"PERSON": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which any Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"RECOVERY EVENT": any settlement or payment in respect of any property
or insurance claim or any condemnation proceeding relating to any asset of
CNG, any Borrower or any of their Subsidiaries.
"REGISTER": as defined in subsection 11.6(d).
"REGULATION U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"REIMBURSEMENT OBLIGATIONS": the obligation of the Borrowers to
reimburse the Issuing Lender pursuant to subsection 3.5 for amounts drawn
under Letters of Credit.
"RENT RESERVE": with respect to any store, distribution center or
depot where any Inventory subject to Liens arising by operation of law is
located, a reserve equal to three (3) months' rent at such store,
distribution center or depot.
"RENTAL EXPENSE": for any period, the excess, if any, of (i) the
aggregate amount of fixed rentals payable by CNG, the Borrowers and their
Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP, with respect to leases (other than Financing Leases)
of real and personal property over (ii) the aggregate amount of fixed
rental sublease income received by CNG, the Borrowers and their
Subsidiaries from subleases during such period with respect to such real
and personal property.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
22
"REPORTABLE EVENT": any of the events set forth in Section 4043 of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .21, .22, .24, .26, .27 or .28 of PBGC Xxx.xx.
4043.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, the president, any
vice president and the treasurer of CNG.
"REVOLVING CREDIT COMMITMENT": as to any Lender, its obligation to
make Revolving Credit Loans to, and/or issue or participate in Letters of
Credit issued on behalf of, the Borrowers in an aggregate amount not to
exceed at any one time outstanding the amount set forth under such Lender's
name in Schedule I opposite the heading "Revolving Credit Commitment" or,
in the case of any Lender that is an Assignee, the amount of the assigning
Lender's Revolving Credit Commitment assigned to such Assignee pursuant to
subsection 11.6 (in each case as such amount may be adjusted from time to
time as provided herein).
"REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any Lender, the
percentage representing a fraction the numerator of which is the Revolving
Credit Commitment of such Lender (or, following the termination or
expiration of the Revolving Credit Commitments, the sum of (x) the
aggregate principal amount of such Lender's Revolving Credit Loans then
outstanding PLUS (y) such Lender's Revolving Commitment Percentage of all
L/C Obligations then outstanding), and the denominator of which is the
aggregate Revolving Credit Commitments of all Lenders (or, following the
termination or expiration of the Revolving Credit Commitments, the sum of
(x) the aggregate principal amount of all Revolving Credit Loans then
outstanding PLUS (y) the aggregate principal amount of all L/C Obligations
then outstanding).
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and including
the Original Closing Date to but not including the Revolving Credit
Commitment Termination Date.
"REVOLVING CREDIT COMMITMENT TERMINATION DATE": the earlier of (a) May
31, 2006 or, if such date is not a Business Day, the Business Day next
preceding such date and (b) the date upon which the Revolving Credit
Commitments shall have terminated pursuant hereto.
"REVOLVING CREDIT LOANS": as defined in subsection 2.1.
"REVOLVING CREDIT NOTE": as defined in subsection 2.2.
"SECURITY DOCUMENTS": the collective reference to the Guarantee and
Collateral Agreement, the CNG Guarantee and Cash Collateral Agreement, the
Copyright, Patent
23
and Trademark Security Agreement, the Mortgages and all other security
documents hereafter delivered to the Administrative Agent granting a Lien
on any asset or assets of any Person to secure the obligations and
liabilities of the Borrowers hereunder or under any of the other Loan
Documents or to secure any guarantee of any such obligations and
liabilities, including, without limitation, any security document delivered
pursuant to subsection 7.10.
"SENIOR SUBORDINATED 1997 NOTES": the 8 5/8% Senior Subordinated Notes
due 2007 issued by CNG pursuant to the Senior Subordinated 1997 Notes
Indenture, as the same may be amended, supplemented or otherwise modified
from time to time without violating Section 9(m).
"SENIOR SUBORDINATED 1997 NOTES INDENTURE": the Indenture dated as of
August 22, l997 between CNG and Xxxxx Fargo Bank Minnesota, N.A., formerly
Norwest Bank Minnesota, N.A., as trustee, pursuant to which the Senior
Subordinated 1997 Notes have been issued, as the same may be amended,
supplemented or otherwise modified from time to time without violating
Section 9(m).
"SENIOR SUBORDINATED 2002 NOTES": the senior subordinated notes due
2012 proposed to be issued by CNG pursuant to a Rule 144A offering during
the second fiscal quarter of 2002 having substantially the same
subordination provisions as the Senior Subordinated Notes and having other
terms that, in the reasonable determination of the Administrative Agent,
are not materially less favorable to the Lenders than those applicable to
the Senior Subordinated Notes in accordance with the Senior Subordinated
Notes Indenture (it being agreed that such notes will mature in 2012 and
will bear interest at a rate per annum based upon market conditions current
at the time of issuance), as the same may be amended, supplemented or
otherwise modified from time to time without violating Section 9(m).
"SENIOR SUBORDINATED 2002 NOTES INDENTURE": the indenture to be
entered into between CNG and Xxxxx Fargo Bank Minnesota, N.A., formerly
Norwest Bank Minnesota, N.A., as trustee, pursuant to which the Senior
Subordinated 2002 Notes will be issued, as the same may be amended,
supplemented or otherwise modified from time to time without violating
Section 9(m).
"SENIOR SUBORDINATED NOTES": the 9.875% Senior Subordinated Notes due
2006 of CNG issued pursuant to the Senior Subordinated Notes Indenture, as
the same may be amended, supplemented or otherwise modified from time to
time without violating Section 9(m).
"SENIOR SUBORDINATED NOTES INDENTURE": the Indenture dated as of
November 15, 1996 between CNG and Xxxxx Fargo Bank Minnesota, N.A.,
formerly Norwest Bank Minnesota, N.A., as trustee, as the same may be
amended, supplemented or otherwise modified from time to time without
violating Section 9(m).
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"SIGNIFICANT SUBSIDIARY": any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect
on the date of this Agreement.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"S&P": as defined in the definition of "Cash Equivalents."
"SUBSIDIARY": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity ("VOTING STOCK")
are at the time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrowers.
"SUBSIDIARY GUARANTOR": each Subsidiary of CNG other than (a) any
Excluded Foreign Subsidiary and (b) any other Subsidiary which is not a
"Guarantor" under the Guarantee and Collateral Agreement or any Guarantee.
"TAX SHARING AGREEMENT": the Agreement for the Allocation of Federal
Income Tax Liability and Benefits among Members of the CNC Holding
Corporation Group dated as of August 23, 1985, as amended by an Agreement
dated as of December 30, 1986 and as further amended, supplemented or
otherwise modified from time to time subsequent to the date hereof in a
manner not adverse to the interests of the Lenders or of CNG or any of its
Subsidiaries.
"THINGS REMEMBERED": as defined in the preamble hereto.
"TOTAL INDEBTEDNESS": on any date, with respect to CNG and its
Subsidiaries, all Indebtedness of CNG and its Subsidiaries on such date on
a Consolidated basis (other than Indebtedness in respect of undrawn amounts
under letters of credit which support obligations of CNG or any of its
Subsidiaries which do not constitute Indebtedness).
"TRANCHE": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Revolving Credit
Loans shall originally have been made on the same day).
"TRANSFEREE": as defined in subsection 11.6(f).
"TYPE": as to any Revolving Credit Loan, its nature as an ABR Loan or
a Eurodollar Loan.
"WACHOVIA": Wachovia Bank, National Association.
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"WHOLLY OWNED SUBSIDIARY": means any Subsidiary, all of the
outstanding voting securities of which are owned, directly or indirectly,
by a Borrower.
1.2. OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Revolving Credit Notes, any other Loan Documents or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in any Revolving Credit Notes, any other Loan
Documents and any certificate or other document made or delivered pursuant
hereto, accounting terms relating to CNG, the Borrowers and their Subsidiaries
not defined in subsection 1.1 and accounting terms partly defined in subsection
1.1, to the extent not defined, shall have the respective meanings given to them
under GAAP. Fiscal years referred to in this Agreement are identified according
to the calendar year in which they begin.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
2.1. REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
(each a "REVOLVING CREDIT LOAN", collectively, "REVOLVING CREDIT LOANS") to the
Borrowers, jointly and severally, from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender's Revolving Credit Commitment Percentage of the
then outstanding L/C Obligations, does not exceed the amount of such Lender's
Revolving Credit Commitment. Notwithstanding the foregoing, in no event shall
any Revolving Credit Loans be made or Letters of Credit be issued pursuant to
subsection 3.1 (i) if the aggregate amount of the Revolving Credit Loans to be
made and Letters of Credit to be issued would, after giving effect to the use of
proceeds, if any, thereof, exceed the then aggregate Available Revolving Credit
Commitments or (ii) if, after giving effect to such Revolving Credit Loan or
Letter of Credit, a Borrowing Base Deficiency would exist. During the Revolving
Credit Commitment Period, the Borrowers may use the Revolving Credit Commitments
by borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof, PROVIDED,
HOWEVER, that the Aggregate Outstanding Revolving Credit (other than in respect
of the undrawn portion of any Letters of Credit) with respect to all Lenders at
any time during any consecutive thirty day period during each fiscal year of the
Borrowers (such thirty day period during each fiscal year to be selected by the
Borrowers) may in no event exceed the Clean-Down Amount.
(b) The Revolving Credit Loans may from time to time be (i) Eurodollar
Loans, (ii) ABR Loans or (iii) a combination thereof, as determined by the
Borrowers and notified to the
26
Administrative Agent in accordance with subsections 2.3 and 4.4, PROVIDED that
no Revolving Credit Loan shall be made as a Eurodollar Loan after the day that
is one month prior to the Revolving Credit Commitment Termination Date.
2.2. REVOLVING CREDIT NOTES. The Borrowers agree that, upon the request
to the Administrative Agent by any Lender or in connection with any assignment
pursuant to subsection 11.6, to evidence such Lender's Revolving Credit Loans
each Borrower will execute and deliver to such Lender a promissory note
substantially in the form of Exhibit A, with appropriate insertions as to payee,
date and principal amount (each, as amended, supplemented, replaced or otherwise
modified from time to time, a "REVOLVING CREDIT Note"), payable to the order of
such Lender and in a principal amount equal to the lesser of (a) the amount set
forth under such Lender's name in Schedule I opposite the heading "Revolving
Credit Commitment" and (b) the aggregate unpaid principal amount of all
Revolving Credit Loans made by such Lender to such Borrower. Each Revolving
Credit Note shall (x) be dated the Closing Date, (y) be stated to mature on the
Revolving Credit Commitment Termination Date and (z) provide for the payment of
interest in accordance with subsection 4.1.
2.3. PROCEDURE FOR REVOLVING CREDIT BORROWING. Any Borrower may borrow
under the Revolving Credit Commitments during the Revolving Credit Commitment
Period on any Business Day, PROVIDED that such Borrower shall give the
Administrative Agent irrevocable notice, in substantially the form of Exhibit I
(which notice must be received by the Administrative Agent prior to 11:00 A.M.,
New York City time, (a) three Business Days prior to the requested Borrowing
Date, if all or any part of the requested Revolving Credit Loans are to be
initially Eurodollar Loans or (b) on the requested Borrowing Date, otherwise),
specifying (i) the amount to be borrowed, (ii) the requested Borrowing Date,
(iii) whether the borrowing is to be of Eurodollar Loans, ABR Loans or a
combination thereof and (iv) if the borrowing is to be entirely or partly of
Eurodollar Loans, the respective amount of such Type of Revolving Credit Loan
and the respective length of the initial Interest Period therefor. Each
borrowing under the Revolving Credit Commitments shall be in an amount equal to
(x) in the case of ABR Loans, $500,000 or a whole multiple of $100,000 in excess
thereof (or, if the aggregate Available Revolving Credit Commitments then in
effect are less than $500,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $1,000,000 or a whole multiple of $500,000 in excess thereof.
Upon receipt of any such notice from such Borrower, the Administrative Agent
shall promptly notify each such Lender thereof. Each Lender will make the amount
of its pro rata share of each borrowing available to the Administrative Agent
for the account of such Borrower at the office of the Administrative Agent
specified in subsection 11.2 prior to 1:00 P.M., New York City time, on the
Borrowing Date requested by such Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to such
Borrower by the Administrative Agent crediting the account of such Borrower on
the books of such office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
2.4. COMMITMENT FEES. The Borrowers agree, jointly and severally, to
pay to the Administrative Agent for the account of each Lender, a commitment fee
for the period from and including the first day of the Revolving Credit
Commitment Period to the Revolving Credit Commitment Termination Date, computed
on the average daily amount of the Available Revolving Credit Commitment of such
Lender during the period for which payment is made at
27
the rate per annum set forth under the heading "Commitment Fees" on Schedule II
opposite the percentage which the average daily amount of the Aggregate
Outstanding Revolving Credit of all Lenders constitutes of the aggregate
Revolving Credit Commitments of all Lenders during such payment period, payable
quarterly in arrears on the last day of each fiscal quarter of CNG and on the
Revolving Credit Commitment Termination Date, commencing on the first of such
days to occur after the Closing Date.
2.5. TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS. (a) The
Borrowers shall have the right, upon not less than three Business Days' notice
to the Administrative Agent (which will promptly notify the Lenders thereof), to
terminate the Revolving Credit Commitments or, from time to time, to reduce the
amount of the Revolving Credit Commitments; PROVIDED that no such termination or
reduction shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans made on the effective date thereof,
the aggregate principal amount of the Revolving Credit Loans then outstanding
when added to the sum of the then outstanding L/C Obligations, would exceed the
Revolving Credit Commitments then in effect. Any such reduction shall be in an
amount equal to $1,000,000 or a whole multiple of $500,000 in excess thereof and
shall reduce permanently the Revolving Credit Commitments then in effect.
(b) The Revolving Credit Commitments shall be automatically reduced in
accordance with subsection 4.3(a). Any such reduction shall reduce permanently
the Revolving Credit Commitments then in effect.
2.6. REPAYMENT OF REVOLVING CREDIT LOANS. (a) The Borrowers hereby
unconditionally promise, jointly and severally, to pay to the Administrative
Agent, for the account of each Lender, the then unpaid principal amount of each
Revolving Credit Loan of such Lender made to each Borrower on the Revolving
Credit Commitment Termination Date (or such earlier date on which the Revolving
Credit Loans become due and payable pursuant to Section 9). The Borrowers hereby
further agree, jointly and severally, to pay interest on the unpaid principal
amount of the Revolving Credit Loans from time to time outstanding from the date
of the making of the Revolving Credit Loans until payment in full thereof at the
rates per annum, and on the dates, set forth in subsection 4.1.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrowers to such Lender
resulting from each Revolving Credit Loan of such Lender from time to time,
including, without limitation, the amounts of principal and interest payable and
paid to such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 11.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Revolving Credit Loan made hereunder, the Type
thereof and each Interest Period, if any, applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder and (iii) both the amount of any sum received
by the Administrative Agent hereunder from the Borrowers and each Lender's share
thereof.
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(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.6(c) shall, to the extent permitted by
applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrowers therein recorded; PROVIDED, HOWEVER, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrowers to repay, jointly and severally (with applicable
interest), the Revolving Credit Loans made to any Borrower by such Lender in
accordance with the terms of this Agreement.
SECTION 3. LETTERS OF CREDIT
3.1. L/C COMMITMENT. (a) Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Lenders set forth
in subsection 3.4(a), agrees to issue standby letters of credit ("LETTERS OF
CREDIT") for the account of any Borrower on any Business Day during the
Revolving Credit Commitment Period in such form as may be approved from time to
time by the Issuing Lender; provided that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Sublimit (ii) the
Available Revolving Credit Commitment of all Lenders would be less than zero or
(iii) a Borrowing Base Deficiency would exist.
(b) Each Letter of Credit shall (i) be denominated in Dollars, (ii) be
a standby letter of credit issued to support obligations of such Borrower or any
of its Subsidiaries, contingent or otherwise, to finance the working capital and
business needs of such Borrower or any of its Subsidiaries in the ordinary
course of business and (iii) expire no later than the earlier of (x) the date
that is 12 months after the date of its issuance and (y) the fifth Business Day
prior to the Revolving Credit Commitment Termination Date, PROVIDED that any
Letter of Credit with an expiration date of 12 months after the date of its
issuance may provide for the renewal thereof for additional 12 month periods,
but in no event shall the expiration date as extended be later than the fifth
Business Day prior to the Revolving Credit Termination Date.
(c) Each Letter of Credit shall be subject to ISP 98 and, to the extent
not inconsistent therewith, the laws of the State of New York.
(d) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2. PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. A Borrower may
request that the Issuing Lender issue a Letter of Credit at any time prior to
the fifth Business Day prior to the Revolving Credit Commitment Termination Date
by delivering to the Issuing Lender at its address for notices specified herein
a Letter of Credit Application therefor, completed to the satisfaction of the
Issuing Lender, and such other certificates, documents and other papers and
information as the Issuing Lender may request. Upon receipt of any Letter of
Credit Application, the Issuing Lender will process such Letter of Credit
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Letter of Credit requested thereby (but
in no event shall the Issuing Lender be required to issue any Letter of Credit
earlier than three Business Days after its receipt of the Letter of Credit
Application
29
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender
and such Borrower. The Issuing Lender shall furnish a copy of such Letter of
Credit to such Borrower promptly following the issuance thereof.
3.3. FEES, COMMISSIONS AND OTHER CHARGES. (a) The Borrowers shall pay,
jointly and severally, to the Administrative Agent, for the account of the
Issuing Lender and the L/C Participants, a letter of credit fee with respect to
each Letter of Credit, computed for the period from and including the date of
issuance of such Letter of Credit to the expiration date, or earlier
cancellation, of such Letter of Credit (the "L/C PERIOD") at a rate per annum
equal to the Applicable Margin then in effect for Eurodollar Loans calculated on
the basis of the actual number of days elapsed over a 360-day year on the
aggregate face amount of Letters of Credit outstanding, payable in arrears on
each L/C Fee Payment Date and on the Revolving Credit Commitment Termination
Date. Such fee shall be payable to the Administrative Agent to be shared ratably
among the Lenders in accordance with their respective Revolving Credit
Commitment Percentages. In addition, the Borrowers shall pay, jointly and
severally, to the Issuing Lender, for its own account a fee equal to 0.25% per
annum of the aggregate face amount of outstanding Letters of Credit, computed
for the L/C Period, payable quarterly in arrears on each L/C Fee Payment Date
and on the Revolving Credit Commitment Termination Date and calculated on the
basis of the actual number of days elapsed over a 360-day year.
(b) In addition to the foregoing fees and commissions, the Borrowers
shall pay or reimburse, jointly and severally, the Issuing Lender for such
normal and customary costs and expenses as are incurred or charged by the
Issuing Lender in issuing, effecting payment under, amending or otherwise
administering any Letter of Credit.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this subsection.
3.4. L/C PARTICIPATIONS. (a) The Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Commitment Percentage from time to time in effect
in the Issuing Lender's obligations and rights under each Letter of Credit
issued hereunder and the amount of each draft paid by the Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably agrees with the
Issuing Lender that, if a draft is paid under any Letter of Credit for which the
Issuing Lender is not reimbursed in full by the Borrowers in accordance with the
terms of this Agreement, such L/C Participant shall pay to the Issuing Lender
upon demand at the Issuing Lender's address for notices specified herein an
amount equal to such L/C Participant's then Revolving Credit Commitment
Percentage of the amount of such draft, or any part thereof, which is not so
reimbursed; provided that, if such demand is made prior to 12:00 Noon, New York
City time, on a Business Day, such L/C Participant shall make such payment to
the Issuing Lender prior to the end of such Business Day and otherwise such L/C
Participant shall make such payment on the next succeeding Business Day.
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(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to paragraph 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to paragraph
3.4(a) is not in fact made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to ABR Loans hereunder. A certificate of the Issuing
Lender submitted to any L/C Participant with respect to any amounts owing under
this subsection shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with subsection 3.4(a), the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from a Borrower or otherwise, including proceeds of collateral applied thereto
by the Issuing Lender), or any payment of interest on account thereof, the
Issuing Lender will, if such payment is received prior to 12:00 Noon, New York
City time, on a Business Day, distribute to such L/C Participant its pro rata
share thereof prior to the end of such Business Day and otherwise the Issuing
Lender will distribute such payment on the next succeeding Business Day;
PROVIDED, HOWEVER, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
3.5. REIMBURSEMENT OBLIGATION OF THE BORROWERS. (a) The Borrowers agree
to reimburse, jointly and severally, the Issuing Lender on the same Business Day
on which a draft is presented under any Letter of Credit and paid by the Issuing
Lender, provided that the Issuing Lender provides notice to the Borrowers prior
to 12:00 Noon, New York City time, on such Business Day and otherwise the
Borrowers will reimburse the Issuing Lender on the next succeeding Business Day;
provided, further, that the failure to provide such notice shall not affect the
Borrowers' absolute and unconditional obligation to reimburse the Issuing Lender
for any draft paid under any Letter of Credit. The Issuing Lender shall provide
notice to the Borrowers on such Business Day as a draft is presented and paid by
the Issuing Lender indicating the amount of (i) such draft so paid and (ii) any
taxes, fees, charges or other costs or expenses incurred by the Issuing Lender
in connection with such payment. Each such payment shall be made to the Issuing
Lender at its address for notices specified herein in lawful money of the United
States of America and in immediately available funds.
(b) Interest shall be payable on any and all amounts remaining unpaid
by the Borrowers under this subsection from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the rate which would be payable on any outstanding Revolving Credit Loans
that are ABR Loans which were then overdue.
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(c) Each drawing under any Letter of Credit shall constitute a request
by the Borrowers to the Administrative Agent for a borrowing pursuant to
subsection 2.3 of ABR Loans in the amount of such drawing. The Borrowing Date
with respect to such borrowing shall be the date of such drawing.
3.6. OBLIGATIONS ABSOLUTE. (a) The Borrowers' obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrowers may have or have had against the Issuing Lender, any L/C Participant
or any beneficiary of a Letter of Credit.
(b) The Borrowers also agree with the Issuing Lender that the Issuing
Lender shall not be responsible for, and the Borrowers' Reimbursement
Obligations under subsection 3.5(a) shall not be affected by, among other
things, (i) the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or (ii) any dispute between or among any Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or (iii) any claims whatsoever of any Borrower against
any beneficiary of such Letter of Credit or any such transferee.
(c) Neither the Issuing Lender nor any L/C Participant shall be liable
for any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with any
Letter of Credit, except for errors or omissions caused by the Issuing Lender's
gross negligence or willful misconduct.
(d) The Borrowers agree that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the Borrowers and shall not
result in any liability of the Issuing Lender or any L/C Participant to any
Borrower.
3.7. LETTER OF CREDIT PAYMENTS. If any draft shall be presented for
payment under any Letter of Credit, the responsibility of the Issuing Lender to
the Borrowers in connection with such draft shall, in addition to any payment
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
3.8. APPLICATION. To the extent that any provision of any Letter of
Credit Application related to any Letter of Credit is inconsistent with the
provisions of this Agreement or any other Loan Document, the provisions of this
Agreement or such Loan Document shall apply.
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SECTION 4. GENERAL PROVISIONS
4.1. INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
CIBC Alternate Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Revolving Credit
Loan, (ii) any interest payable thereon, (iii) any commitment fee or (iv) any
other amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), the principal of the Revolving Credit
Loans and any such overdue interest, commitment fee or other amount shall bear
interest at a rate per annum which is (x) in the case of principal, the rate
that would otherwise be applicable thereto pursuant to the foregoing provisions
of this subsection plus 2% or (y) in the case of any such overdue interest,
commitment fee or other amount, the rate described in paragraph (b) of this
subsection plus 2%, in each case from the date of such non-payment until such
overdue principal, interest, commitment fee or other amount is paid in full (as
well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
PROVIDED that interest accruing pursuant to paragraph (c) of this subsection
shall be payable from time to time on demand.
4.2. OPTIONAL PREPAYMENTS. Any Borrower may at any time and from time
to time prepay the Revolving Credit Loans made to it in whole or in part,
without premium or penalty, on any Business Day, PROVIDED that (i) such Borrower
shall have given (x) at least three Business Days' irrevocable notice to the
Administrative Agent (in the case of Eurodollar Loans) or (y) same-day
irrevocable notice to the Administrative Agent (in the case of ABR Loans), (ii)
such notice specifies the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans, ABR Loans or a combination thereof, and, in
each case if a combination thereof, the principal amount allocable to each and
(iii) each prepayment is in a minimum principal amount of $100,000 and a
multiple of $100,000 in excess thereof. Upon the receipt of any such notice the
Administrative Agent shall promptly notify each of the Lenders thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with any amounts payable
pursuant to subsection 4.12.
4.3. MANDATORY PREPAYMENTS AND REDUCTION OF REVOLVING CREDIT
COMMITMENTS. (a) If, subsequent to the Closing Date, CNG, any Borrower or any of
their Subsidiaries shall receive Net Cash Proceeds from any sale or other
disposition of assets (other than the sale of inventory in the ordinary course
of business and sales or other dispositions of assets permitted by subsections
8.6(c), (d) or (e)) or from any Recovery Event, then 100% of such Net Cash
Proceeds shall on the first Business Day after receipt thereof be applied toward
the permanent reduction of the Revolving Credit Commitments; PROVIDED that the
first $10,000,000 of such Net Cash Proceeds received after the Closing Date by
CNG, the Borrowers and their Subsidiaries, in the aggregate, shall not be
required to be applied to the permanent reduction of the Revolving Credit
Commitments hereunder unless such Net Cash Proceeds
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would otherwise be required to be applied to repurchase or redeem the Senior
Subordinated 1997 Notes or the Senior Subordinated 2002 Notes; and PROVIDED,
FURTHER, the Borrowers and their Subsidiaries may use or commit to use any or
all of such Net Cash Proceeds to acquire fixed or capital assets or, in the case
of any Recovery Event, to rebuild or replace the property lost or condemned
within 180 days of receipt of such Net Cash Proceeds and any such Net Cash
Proceeds so used within 180 days of receipt or within 180 days of being
committed to be so used shall not be required to be applied to the permanent
reduction of the Revolving Credit Commitments hereunder, but any such Net Cash
Proceeds not so used shall be applied toward the permanent reduction of the
Revolving Credit Commitments on the earlier of (x) the later of (I) 180th day
after receipt of such Net Cash Proceeds and (II) the 180th day after such Net
Cash Proceeds were committed to be used, as the case may be, and (y) the date on
which the Borrowers have reasonably determined that such Net Cash Proceeds shall
not be so used.
(b) If, at any time during the Revolving Credit Commitment Period, the
Aggregate Outstanding Revolving Credit with respect to all Lenders exceeds the
aggregate Revolving Credit Commitments then in effect, the Borrowers shall,
without notice or demand, immediately repay the Revolving Credit Loans in an
aggregate principal amount equal to such excess, together with interest accrued
to the date of such payment or prepayment and any amounts payable under
subsection 4.12. To the extent that after giving effect to any prepayment of the
Revolving Credit Loans required by the preceding sentence, the Aggregate
Outstanding Revolving Credit with respect to all Lenders exceeds the aggregate
Revolving Credit Commitments then in effect, the Borrowers shall, without notice
or demand, immediately cash collateralize the then outstanding L/C Obligations
in an amount equal to such excess upon terms reasonably satisfactory to the
Administrative Agent. On the Business Day next succeeding the date on which a
payment has caused the Aggregate Outstanding Revolving Credit with respect to
all Lenders to be equal to or less than the Revolving Credit Commitments then in
effect, the Administrative Agent shall return to the Borrowers the cash used to
cash collateralize the then outstanding L/C Obligations pursuant to the
preceding sentence.
(c) If, at any time during the Revolving Credit Commitment Period, the
Aggregate Outstanding Revolving Credit (other than in respect of the undrawn
portion of any Letters of Credit) with respect to all Lenders is not less than
the Clean-Down Amount for at least a consecutive thirty day period during each
fiscal year of the Borrowers, the Borrowers shall, without notice or demand,
immediately repay the Revolving Credit Loans in an aggregate principal amount
equal to such excess, together with interest accrued to the date of such payment
or prepayment and any amounts payable under subsection 4.12, and any borrowings
of Revolving Credit Loans during such thirty day period shall be subject to the
proviso to subsection 2.1(a).
(d) If, at any time during the Revolving Credit Commitment Period, a
Borrowing Base Deficiency shall exist, the Borrowers shall, without notice or
demand, immediately prepay the Revolving Credit Loans in an aggregate principal
amount equal to such Borrowing Base Deficiency, together with interest accrued
to the date of such payment or prepayment and any amounts payable under
subsection 4.12. To the extent that after giving effect to any prepayment of the
Revolving Credit Loans required by the preceding sentence, a Borrowing Base
Deficiency shall continue to exist, the Borrowers shall, without notice or
demand, immediately cash collateralize the then outstanding L/C Obligations in
an amount equal to such Borrowing Base
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Deficiency upon terms reasonably satisfactory to the Administrative Agent. On
the Business Day next succeeding the date on which a payment has cured such
Borrowing Base Deficiency, the Administrative Agent shall return to the
Borrowers the cash used to cash collateralize the then outstanding L/C
Obligations pursuant to the preceding sentence.
4.4. CONVERSION AND CONTINUATION OPTIONS. (a) The Borrowers may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least three Business Days' prior irrevocable notice of
such election, in substantially the form of Exhibit J, PROVIDED that any such
conversion of Eurodollar Loans may only be made on the last day of an Interest
Period with respect thereto. The Borrowers may elect from time to time to
convert ABR Loans to Eurodollar Loans by giving the Administrative Agent at
least three Business Days' prior irrevocable notice of such election. Any such
notice of conversion to Eurodollar Loans shall specify the length of the initial
Interest Period or Interest Periods therefor. Upon receipt of any such notice
the Administrative Agent shall promptly notify each Lender thereof. All or any
part of outstanding Eurodollar Loans and ABR Loans may be converted as provided
herein, PROVIDED that (i) unless the Majority Lenders otherwise consent, no
Revolving Credit Loan may be converted into a Eurodollar Loan when any Event of
Default has occurred and is continuing and (ii) no Revolving Credit Loan may be
converted into a Eurodollar Loan after the date that is one month prior to the
Revolving Credit Commitment Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the respective
Borrower giving notice to the Administrative Agent, in substantially the form of
Exhibit J, in accordance with the applicable provisions of the term "Interest
Period" set forth in subsection 1.1, of the length of the next Interest Period
to be applicable to such Revolving Credit Loans, PROVIDED that no Eurodollar
Loan may be continued as such (i) unless the Majority Lenders otherwise consent,
when any Event of Default has occurred and is continuing or (ii) after the date
that is one month prior to the Revolving Credit Commitment Termination Date and
PROVIDED, FURTHER, that if such Borrower shall fail to give such notice or if
such continuation is not permitted such Revolving Credit Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period.
4.5. MINIMUM AMOUNTS AND MAXIMUM NUMBER OF TRANCHES. All borrowings,
conversions and continuations of Revolving Credit Loans hereunder and all
selections of Interest Periods hereunder shall be in such amounts and be made
pursuant to such elections so that, after giving effect thereto, the aggregate
principal amount of the Revolving Credit Loans comprising each Tranche shall be
equal to $1,000,000 or a whole multiple of $500,000 in excess thereof. In no
event shall there be more than 15 Tranches outstanding at any time.
4.6. COMPUTATION OF INTEREST AND FEES. (a) Interest (other than
interest based on the CIBC Prime Rate) on all Revolving Credit Loans and
commitment fees payable pursuant hereto shall be calculated on the basis of a
year of 360 days for the actual days elapsed; interest based on the CIBC Prime
Rate shall be calculated on the basis of a 365-(or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrowers and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on the Revolving Credit Loans
resulting from a change in the CIBC Alternate Base Rate or the Eurocurrency
Reserve Requirements shall become effective as of the opening of
35
business on the day on which such change shall become effective, PROVIDED that
such change becomes effective prior to 5:00 P.M., New York City time, on such
day. The Administrative Agent shall as soon as practicable notify the Borrowers
and each Lender of the effective date and the amount of each such change.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrowers, deliver to the
Borrowers a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to subsection 4.1.
4.7. INABILITY TO DETERMINE INTEREST RATE. If prior to the first day of
any Interest Period: (a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Interest
Period, or (b) the Administrative Agent shall have received notice from the
Majority Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders (or any affiliate of any such Lender from which such Lender customarily
obtains funds) (as conclusively certified by such Lenders) of making or
maintaining their affected Revolving Credit Loans during such Interest Period,
then the Administrative Agent shall give telecopy or telephonic notice thereof
to the Borrowers and the Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans, (y) any ABR Loans that were
to have been converted on the first day of such Interest Period to Eurodollar
Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans
shall be converted, on the first day of such Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrowers
have the right to convert ABR Loans to Eurodollar Loans.
4.8. PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing of Revolving
Credit Loans by any Borrower from the Lenders hereunder shall be made, each
payment by any Borrower on account of any commitment fee in respect of the
Revolving Credit Commitments hereunder shall be allocated by the Administrative
Agent, and any reduction of the Revolving Credit Commitments of the Lenders
shall be allocated by the Administrative Agent, PRO RATA according to the
Revolving Credit Commitment Percentages of the Lenders. Each payment (including
each prepayment) by any Borrower on account of principal of and interest on any
Revolving Credit Loan shall be allocated by the Administrative Agent PRO RATA
according to the respective outstanding principal amounts of such Revolving
Credit Loans then held by the Lenders. All payments (including prepayments) to
be made by the Borrowers hereunder and under any Revolving Credit Notes, whether
on account of principal, interest, fees, Reimbursement Obligations or otherwise,
shall be made without set-off or counterclaim and shall be made prior to 2:30
p.m., New York City time, on the due date thereof to the Administrative Agent,
for the account of the Lenders holding the relevant Revolving Credit Loans or
the L/C Participants, as the case may be, at the Administrative Agent's office
specified in subsection 11.2, in Dollars and in immediately available funds.
Payments received by the Administrative Agent after such time shall be deemed to
have been received on the next
36
Business Day. If any payment hereunder (other than payments on Eurodollar Loans)
becomes due and payable on a day other than a Business Day, the maturity of such
payment shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a Eurodollar Loan
becomes due and payable on a day other than a Business Day, the maturity of such
payment shall be extended to the next succeeding Business Day (and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension) unless the result of such extension would
be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its Revolving Credit Commitment Percentage of such
borrowing available to the Administrative Agent, the Administrative Agent may
assume that such Lender is making such amount available to the Administrative
Agent, and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrowers a corresponding amount. If such amount is not made
available to the Administrative Agent by the required time on the Borrowing Date
therefor and the Administrative Agent shall have advanced such amount to the
Borrowers, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon at a rate equal to the daily average Federal Funds
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent, PROVIDED that if such Lender's Revolving Credit
Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such Borrowing
Date, the Administrative Agent shall also be entitled to recover such amount
with interest thereon at the rate per annum applicable to ABR Loans hereunder,
on demand, from the Borrowers. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error.
4.9. ILLEGALITY. Notwithstanding any other provision herein, if the
adoption after the date of this Agreement of or any change after the date of
this Agreement in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Lender (or any affiliate of such Lender
from which such Lender customarily obtains funds) to make or maintain Eurodollar
Loans as contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Revolving Credit Loans then outstanding as Eurodollar Loans, if any,
shall be converted automatically to ABR Loans on the respective last days of the
then current Interest Periods with respect to such Revolving Credit Loans or
within such earlier period as required by law. If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the then current
Interest Period with respect thereto, the Borrowers shall pay to such Lender
such amounts, if any, as may be required pursuant to subsection 4.12.
4.10. REQUIREMENTS OF LAW. (a) If the adoption after the date of this
Agreement of or any change after the date of this Agreement in any Requirement
of Law or in the interpretation or application thereof or compliance by any
Lender with any request or directive
37
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note, any Letter of Credit, any
Letter of Credit Application or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by subsection 4.11 and
changes in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender (or any affiliate of such Lender
from which such Lender customarily obtains funds) which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender (or such affiliate) any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrowers shall promptly upon demand pay
such Lender such additional amount or amounts as will compensate such Lender for
such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption after the
date of this Agreement of or any change after the date of this Agreement in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its obligations
hereunder or under any Letter of Credit to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time upon demand, the Borrowers shall promptly
pay to such Lender such additional amount or amounts as will compensate such
Lender or such corporation for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, such Lender shall promptly notify the Borrowers
(with a copy to the Administrative Agent) of the event by reason of which it has
become so entitled. A certificate as to any additional amounts payable pursuant
to this subsection, and the calculation thereof, submitted by such Lender to the
Borrowers (with a copy to the Administrative Agent) shall be conclusive in the
absence of manifest error. The agreements in this subsection shall survive the
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termination of this Agreement and the payment of the Revolving Credit Loans and
all other amounts payable hereunder.
4.11. TAXES. (a) All payments made by the Borrowers under this
Agreement, any Revolving Credit Notes, any Letters of Credit or any Letter of
Credit Applications shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
as a result of a present or former connection between the Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Revolving Credit Note). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under any
Revolving Credit Note, any Letters of Credit or any Letter of Credit
Applications, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement, PROVIDED, HOWEVER, that the Borrowers shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this subsection. Whenever any
Non-Excluded Taxes are payable by any Borrower, as promptly as possible
thereafter such Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by such Borrower showing payment
thereof or, if an official receipt cannot be obtained with commercially
reasonable effort, other evidence of payment reasonably acceptable to the
Administrative Agent or such Lender. If any Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence after receiving appropriate notification of such tax
liability from the affected Lender(s), the Borrowers shall indemnify, jointly
and severally, the Administrative Agent and the Lenders for any incremental
Non-Excluded Taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Revolving Credit Loans and all other amounts payable
hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(X) except as otherwise provided in clause (Y) below,
(i) deliver to the Borrowers and the Administrative Agent (on or
before the date of any payment by the Borrowers) two duly completed
copies of
39
Internal Revenue Service Form X-0XXX, X-0XXX, other applicable form,
or successor applicable form, as the case may be;
(ii) deliver to the Borrowers and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrowers; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the
Borrowers or the Administrative Agent; or
(Y) in the case of any such Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, (i) represent to the Borrowers (for
the benefit of the Borrowers and the Administrative Agent) that it is not a bank
within the meaning of Section 881(c)(3)(A) of the Code, (ii) agree to furnish to
the Borrowers on or before the date of any payment by the Borrowers, with a copy
to the Administrative Agent, (A) a certificate substantially in the form of
Exhibit E (any such certificate a "U.S. TAX COMPLIANCE CERTIFICATE") and (B) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 BEN, or successor applicable form certifying to such Lender's legal
entitlement at the date of such certificate to an exemption from U.S.
withholding tax under the provisions of Section 881(c) of the Code with respect
to payments to be made under this Agreement and any Revolving Credit Notes (and
to deliver to the Borrowers and the Administrative Agent two further copies of
such form on or before the date it expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recently provided form
and, if necessary, obtain any extensions of time reasonably requested by the
Borrowers or the Administrative Agent for filing and completing such forms), and
(iii) agree, to the extent legally entitled to do so, upon reasonable request by
the Borrowers, to provide to the Borrowers (for the benefit of the Borrowers and
the Administrative Agent) such other forms as may be reasonably required in
order to establish the legal entitlement of such Lender to an exemption from
withholding with respect to payments under this Agreement and any Revolving
Credit Notes, PROVIDED that in determining the reasonableness of a request under
this clause (iii) such Lender shall be entitled to consider the cost (to the
extent unreimbursed by the Borrowers) which would be imposed on such Lender of
complying with such request;
unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrowers and the Administrative Agent. Each non-United States Person that shall
become a Lender or a Participant pursuant to subsection 11.6 shall, upon the
effectiveness of the related transfer, be required to provide all of the forms,
certifications and statements required pursuant to this subsection, PROVIDED
that in the case of a Participant the obligations of such Participant pursuant
to this paragraph (b) shall be determined as if such Participant were a Lender
except that such Participant shall furnish all such required forms,
40
certifications and statements to the Lender from which the related participation
shall have been purchased.
4.12. INDEMNITY. The Borrowers agree to indemnify, jointly and
severally, each Lender and to hold each Lender harmless from any loss or expense
which such Lender may sustain or incur as a consequence of (a) default by any
Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after such Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement, (b) default by any Borrower in making any
prepayment of Eurodollar Loans after such Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Revolving Credit Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. This covenant shall survive
the termination of this Agreement and the payment of the Revolving Credit Loans
and all other amounts payable hereunder.
4.13. CHANGE OF LENDING OFFICE; REPLACEMENT OF LENDERS. (a) Each Lender
agrees that if it makes any demand for payment under subsection 4.10 or 4.11(a),
or if any adoption or change of the type described in subsection 4.9 shall occur
with respect to it, it shall use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions and so long as such
efforts would not be disadvantageous to it, as determined in its sole
discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrowers to make payments
under subsection 4.10 or 4.11(a), or would eliminate or reduce the effect of any
adoption or change described in subsection 4.9.
(b) If at any time any Lender (i) makes any demand for payment under
subsection 4.10 or 4.11(a) as a result of any condition described in any such
subsection, (ii) is subject to any adoption or change of the type described in
Section 4.9, or (iii) becomes a Defaulting Lender, then the Borrowers may, if
such condition continues to exist after such Lender shall have used reasonable
efforts pursuant to paragraph (a) of this subsection 4.13 (in the circumstances
described in the preceding clause (i)) or such Lender continues to be a
Defaulting Lender (in the circumstances described in the preceding clause (ii))
and on ten Business Days' prior written notice to the Administrative Agent and
such Lender, replace such Lender by causing such Lender to (and such Lender
shall) assign pursuant to subsection 11.6 (c) all of its rights and obligations
under this Agreement to another Lender or other bank or financial institution
selected by the Borrowers and acceptable to the Administrative Agent for a
purchase price equal to the outstanding principal amount of all Revolving Credit
Loans and all Reimbursement Obligations, accrued interest, fees and other
amounts owing to such Lender; PROVIDED that (i) the Borrowers shall have no
right to replace the Administrative Agent, (ii) neither the Administrative Agent
nor any Lender shall have any obligation to the Borrowers to find a replacement
Lender or other
41
bank or financial institution, (iii) such replacement must take place no later
than 180 days after such Lender shall have made any such demand for payment or
shall have become a Defaulting Lender, as the case may be, (iv) in no event
shall any Lender hereby replaced be required to pay or surrender to such
replacement Lender or other bank or financial institution any of the fees
received by such Lender pursuant to this Agreement, (v) the Borrowers shall pay
such amounts demanded under subsection 4.10 or 4.11(a) to such Lender, together
with any amounts as may be required pursuant to subsection 4.12, prior to such
Lender being replaced and the payment of such amounts shall be a condition to
the replacement of such Lender and (vi) such Lender shall not be required to pay
any fees required by subsection 11.6(e) in connection with such replacement.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Revolving Credit Loans and issue or participate in the
Letters of Credit, each Borrower hereby represents and warrants, on the Closing
Date and on any date thereafter on which any Revolving Credit Loan or any other
extension of credit is requested to be made by any Lender or on which any Letter
of Credit is requested to be issued by the Issuing Lender, to the Administrative
Agent and each Lender that:
5.1. FINANCIAL CONDITION. The Consolidated balance sheets of CNG and
its Subsidiaries as of January 29, 2000, February 3, 2001 and February 2, 2002
and the related Consolidated statements of income and of cash flows for the
fiscal years ended on such dates, reported on by Xxxxxx Xxxxxxxx LLP, copies of
which have heretofore been furnished to each Lender, present fairly the
Consolidated financial condition of CNG and its Subsidiaries as at such dates,
and the Consolidated results of their operations and their Consolidated cash
flows for the fiscal years then ended. The unaudited Consolidated balance sheet
of CNG and its Subsidiaries as at March 30, 2002, the related unaudited
Consolidated income statement for the one-month period ended on such date and
the related unaudited Consolidated statement of cash flows for the portion of
the fiscal year through such date, certified by a Responsible Officer, copies of
which have heretofore been furnished to each Lender, present fairly the
Consolidated financial condition of CNG and its Subsidiaries as at such date,
and the Consolidated results of their operations and their Consolidated cash
flows for the respective periods covered by such statements then ended (subject
to normal year-end audit adjustments). All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved by
such accountants or Responsible Officer, as the case may be, and as disclosed
therein). Neither CNG nor any of its Subsidiaries had, at February 2, 2002, any
material Guarantee Obligation, contingent liability or liability for taxes, or
any long-term lease or other material agreement or unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign currency
swap or exchange transaction, which is not reflected in the foregoing statements
or in the notes thereto or in Schedule 5.1. During the period from February 2,
2002 to and including the Closing Date there has been no sale, transfer or other
disposition by CNG or any of its Subsidiaries of any material part of its
business or property and no purchase or other acquisition of any business or
property (including any capital stock of any other Person) material in relation
to the Consolidated financial condition of CNG and its Subsidiaries at February
2, 2002.
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5.2. NO CHANGE; SOLVENCY. Since February 2, 2002 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect. As of the Closing Date, after giving effect to the
transactions contemplated by the Loan Documents, the Borrowers and their
Subsidiaries are solvent, on a Consolidated basis and on an individual basis.
5.3. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Borrowers
and the other Loan Parties (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate or other necessary power and authority, and the legal right, to own
and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified to
do business and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except for jurisdictions in which the failure to so
qualify, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect, and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
5.4. CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each of
the Borrowers and the other Loan Parties has the corporate or other necessary
power and authority, and the legal right, to execute, deliver and perform the
Loan Documents to which it is a party and, in the case of each Borrower, to
borrow hereunder and each of the Borrowers and the other Loan Parties has taken
all necessary corporate action to authorize the borrowings on the terms and
conditions of this Agreement and any Revolving Credit Notes and to authorize the
execution, delivery and performance of the Loan Documents to which it is a
party. No consent or authorization of, filing with, notice to or other act by or
in respect of, any Governmental Authority or any other Person is required to be
received, made, given or completed by any of the Loan Parties in connection with
the borrowings hereunder or with the execution, delivery, performance, validity
or enforceability of the Loan Documents to which any Borrower or any of the
other Loan Parties is a party other than filings and recordings to perfect the
security interest of the Lenders created by the Security Documents and other
than those set forth on Schedule 5.4. All of such consents, authorizations,
filings, notices and other acts set forth on Schedule 5.4 have been heretofore
received, made, given or completed except for such consents, authorizations,
filings, notices and other acts that a Borrower's or other Loan Party's failure
to receive, make, give or complete could not reasonably be expected to have a
Material Adverse Effect. This Agreement has been duly executed and delivered by
each Borrower, and each of the other Loan Documents to which each Borrower or
any of the other Loan Parties is a party has been duly executed and delivered by
such Borrower or such other Loan Party. This Agreement constitutes a legal,
valid and binding obligation of each Borrower, and each other Loan Document to
which each Borrower or any of the other Loan Parties is a party constitutes a
legal, valid and binding obligation of such Borrower or such other Loan Party,
enforceable against such Borrower or such other Loan Party in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
43
5.5. NO LEGAL BAR. The execution, delivery and performance of the Loan
Documents to which any Borrower or any of the other Loan Parties is a party, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or Contractual Obligation of any Borrower or of any of the
other Loan Parties and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation (other than
the Loan Documents). Schedule 5.5 constitutes a complete list as of the date
hereof of all material Contractual Obligations to which any Loan Party is a
party and all orders and decrees of courts which are applicable to or binding on
any Loan Party or to which any Loan Party or any of its property is subject.
5.6. NO MATERIAL LITIGATION. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of any Borrower, threatened by or against any Borrower or any of the
other Loan Parties or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby or (b) which could reasonably be
expected to have a Material Adverse Effect.
5.7. NO DEFAULT. No Borrower nor any of the other Loan Parties is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
5.8. OWNERSHIP OF PROPERTY; LIENS. Each of the Borrowers and the other
Loan Parties has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its material real property, and good title to, or a
valid leasehold interest in, all its other material property, and none of such
property is subject to any Lien except as permitted by subsection 8.3. Except as
set forth on Schedule 5.8, the properties to be encumbered by the Mortgages
pursuant to subsection 7.10(a) constitute all of the material real properties
owned in fee by the Borrowers and the other Loan Parties.
5.9. INTELLECTUAL PROPERTY. Each Borrower and each of the other Loan
Parties owns, or is licensed to use, all trademarks, tradenames, copyrights,
technology, know-how and processes necessary for the conduct of its business as
currently conducted except for those the failure to own or license which could
not reasonably be expected to have a Material Adverse Effect (the "INTELLECTUAL
PROPERTY"). No claim has been asserted and is pending by any Person challenging
or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, except for such claims which,
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect, nor does any Borrower know of any valid basis for any such claim. The
use of such Intellectual Property by each Borrower and the other Loan Parties
does not infringe on the rights of any Person, except for such infringements
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
5.10. NO BURDENSOME RESTRICTIONS. No Requirement of Law or Contractual
Obligation of any Borrower or any of the other Loan Parties could reasonably be
expected to have a Material Adverse Effect.
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5.11. TAXES. Each of the Borrowers and the other Loan Parties has filed
or caused to be filed all United States federal income tax returns and all other
material tax returns which, to the knowledge of the Borrowers, are required to
be filed and has paid all taxes shown to be due and payable on said returns or
on any assessments made against it or any of its property and all other taxes,
fees or other charges imposed on it or any of its property by any Governmental
Authority (other than any taxes, fees or other charges (i) with respect to which
the failure to pay, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect or (ii) the amount or validity of which are currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of the
relevant Borrower or any of the other Loan Parties, as the case may be); no tax
Lien has been filed, and, to the knowledge of any Borrower, no claim is being
asserted, with respect to any such tax, fee or other charge.
5.12. FEDERAL RESERVE REGULATIONS. No part of the proceeds of any
Revolving Credit Loans or other extensions of credit hereunder have been or will
be used for any purpose which violates the provisions of the Regulations of the
Board of Governors of the Federal Reserve System, including, without limitation,
Regulation U thereunder. If requested by any Lender or the Administrative Agent,
each Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of Form FR
G-3 or Form FR U-1 referred to in said Regulation U.
5.13. ERISA. Except as disclosed on Schedule 5.13, neither a Reportable
Event nor an "accumulated funding deficiency" (within the meaning of Section 412
of the Code or Section 302 of ERISA) has occurred during the five-year period
prior to the date on which this representation is made or deemed made with
respect to any Plan, and each Plan has complied in all material respects with
the applicable provisions of ERISA and the Code. No termination of an
insufficiently funded Single Employer Plan has occurred, and no Lien in favor of
the PBGC or a Plan has arisen, during such five year period. The present value
of all accrued benefits under all Single Employer Plans taken as a whole does
not exceed the value of the assets of such Single Employer Plans by more than
$75,000,000. Neither any Borrower nor any Commonly Controlled Entity has
incurred or is expected to incur any liability for a complete or partial
withdrawal from any Multiemployer Plan, and neither any Borrower nor any
Commonly Controlled Entity would become subject to any liability under ERISA
which could reasonably be expected to have a Material Adverse Effect if such
Borrower or any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. As of the Closing Date, and
to the knowledge of any Borrower on any Borrowing Date thereafter, no such
Multiemployer Plan is in Reorganization or Insolvent.
5.14. COLLATERAL. The provisions of each of the Security Documents
constitute in favor of the Administrative Agent for the ratable benefit of the
Lenders, a legal, valid and enforceable security interest in all right, title,
and interest of each Borrower or any of the other Loan Parties which is a party
to such Security Document, as the case may be, in the Collateral described in
such Security Document. As of the Closing Date, all Equipment and Inventory (as
each of such terms is defined in the Guarantee and Collateral Agreement) of the
Borrowers and each of its Subsidiaries will be kept at, or will be in transit
to, the locations listed on Schedule 5.14, and, financing statements having been
filed in the offices in the jurisdictions listed in
45
Schedule 3 to the Guarantee and Collateral Agreement, appropriate filings having
been made in the U.S. Patent and Trademark Office and the U.S. Copyright Office,
and such other actions as are described in each of the Security Documents having
been taken in accordance with the Security Documents, the security interest
created by each of the Security Documents constitutes a perfected security
interest in all right, title and interest of each Borrower or such other Loan
Parties, as the case may be, in the Collateral described therein, and except for
Liens existing on the Closing Date which are permitted by subsection 8.3 and
whose priority cannot be superseded by the provisions hereof or of any Security
Document and the filings hereunder or thereunder, a perfected first lien on, and
security interest in, all right, title and interest of such Borrower or such
other Loan Parties, as the case may be, in the Collateral described in each
Security Document.
5.15. INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Borrower is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No
Borrower is subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
5.16. SUBSIDIARIES AND JOINT VENTURES. Schedule 5.16 hereto sets forth
all of the Subsidiaries of each Borrower, and all of the joint ventures in which
each Borrower or any of its Subsidiaries has an interest, at the Closing Date,
the jurisdiction of their incorporation and the direct or indirect ownership
interest of each Borrower therein.
5.17. PURPOSE OF REVOLVING CREDIT LOANS. The proceeds of the Revolving
Credit Loans shall be used for the general corporate purposes of the Borrowers
and their Subsidiaries in the ordinary course of business.
5.18. ENVIRONMENTAL MATTERS. Other than exceptions to any of the
following that would not, individually or in the aggregate, reasonably be
expected to give rise to a Material Adverse Effect:
(i) The Borrowers and the other Loan Parties: (A) are, and within the
period of all applicable statutes of limitation have been, in compliance with
all applicable Environmental Laws; (B) hold all Environmental Permits (each of
which is in full force and effect) required for any of their current operations
or for any property owned, leased, or otherwise operated by any of them and have
no reason to believe that they will not be able to timely obtain without
material expense all such Environmental Permits required for planned operations;
(C) are, and within the period of all applicable statutes of limitation have
been, in compliance with all of their Environmental Permits; and (D) have no
reason to believe that: any of their Environmental Permits will not be, or will
entail material expense to be, timely renewed or complied with; any additional
Environmental Permits that may be required of any of them will not be, or will
entail material expense to be, timely granted or complied with; or that
compliance with any Environmental Law that is applicable to any of them will not
be, or will entail material expense to be, timely attained and maintained.
(ii) Materials of Environmental Concern have not been generated,
transported, disposed of, emitted, discharged, or otherwise released or
threatened to be released, to or at any
46
real property presently or formerly owned, leased or operated by any Borrower or
any of the other Loan Parties or, to the best knowledge of any Borrower, at any
other location, which could reasonably be expected to (A) give rise to liability
of any Borrower or any of the other Loan Parties under any applicable
Environmental Law, or (B) interfere with any Borrower's or any other Loan
Party's planned or continued operations, or (C) impair the fair saleable value
of any real property owned or leased by any Borrower or any other Loan Parties.
(iii) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under any Environmental
Law to which any Borrower or any of the other Loan Parties is named as a party
that is pending or, to the knowledge of any Borrower, threatened.
(iv) No Borrower nor any of the other Loan Parties has received any
written request for information, or been notified that it is a potentially
responsible party, under the federal Comprehensive Environmental Response,
Compensation, and Liability Act or any similar Environmental Law, or received
any other written request for information with respect to any actual or
potential liability for, or violation caused by any, Materials of Environmental
Concern.
(v) No Borrower nor any of the other Loan Parties has entered into or
agreed to any consent decree, order, or settlement or other agreement, nor is
subject to any judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum, relating to compliance with or
liability under any Environmental Law, as to which any obligation has not been
fully and finally resolved.
(vi) No Borrower nor any of its Subsidiaries has assumed or retained,
by contract or, to the best knowledge of any Borrower, by operation of law, any
liabilities of any kind, fixed or contingent, known or unknown, under any
applicable Environmental Law or with respect to any Material of Environmental
Concern.
5.19. REGULATION H. Except as otherwise disclosed in writing to the
Administrative Agent, no Mortgage to be delivered pursuant to subsection 7.10(a)
encumbers improved real property which is located in an area that has been
identified by the Secretary of Housing and Urban Development as an area having
special flood hazards and in which flood insurance has been made available under
the National Flood Insurance Act of 1968.
5.20. NO MATERIAL MISSTATEMENTS. The written information, reports,
financial statements, exhibits and schedules furnished by or on behalf of the
Borrowers and each other Loan Party to the Administrative Agent and the Lenders
in connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto, taken as a whole, do not contain, and will not
contain as of the Closing Date, any material misstatement of fact and do not,
taken as a whole, omit, and will not, taken as a whole, omit as of the Closing
Date, to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not materially
misleading. It is understood that no representation or warranty is made
concerning the forecasts, estimates, PRO FORMA information, projections and
statements as to anticipated future performance or conditions, and the
assumptions on which they were based, contained in any such information,
reports, financial statements, exhibits or schedules, except that as of the date
such forecasts, estimates, PRO FORMA information, projections
47
and statements were generated, (a) such forecasts, estimates, PRO FORMA
information, projections and statements were based on the good faith assumptions
of the management of the Borrowers and (b) such assumptions were believed by
such management to be reasonable.
SECTION 6. CONDITIONS PRECEDENT
6.1. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Agreement
is subject to the satisfaction of the following conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of each
Borrower, with a counterpart for each Lender, (ii) for the account of each
of the Lenders which has requested a Note pursuant to subsection 2.2, a
Revolving Credit Note conforming to the requirements hereof and executed
and delivered by a duly authorized officer of each Borrower, (iii) the
Guarantee and Collateral Agreement, executed and delivered by a duly
authorized officer of each Borrower and each Subsidiary thereof (other than
each Excluded Foreign Subsidiary and each other Subsidiary which, in
accordance with subsection 7.10(e), is not required to execute and deliver
such Agreement), with a counterpart or a conformed copy for each Lender,
(iv) the Copyright, Patent and Trademark Security Agreement, executed and
delivered by a duly authorized officer of each Borrower, and the other
signatories thereto, with a counterpart or a conformed copy for each
Lender, (v) the CNG Guarantee and Cash Collateral Agreement, executed and
delivered by a duly authorized officer of CNG, with a counterpart or
conformed copy for each Lender, (vi) the CNC Guarantee, executed and
delivered by a duly authorized officer of CNC, with a counterpart or
conformed copy for each Lender and (vii) a "control" agreement with
Wachovia Securities, Corporate & Investment Banking, executed and delivered
by a duly authorized officer of Wachovia in substantially the form of
Exhibit A to the CNG Guarantee and Cash Collateral Agreement or such other
form as is reasonably acceptable to the Administrative Agent.
(b) FEES. The Lenders and the Administrative Agent shall have received
all fees required to be paid and all expenses for which invoices have been
presented (including the invoices of Xxxxxxx Xxxxxxx & Xxxxxxxx), on or
before the Closing Date.
(c) BORROWING CERTIFICATE. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrowers, dated the Closing Date, substantially in the form of Exhibit C,
with appropriate insertions and attachments, satisfactory in form and
substance to the Administrative Agent, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of the
Borrowers.
(d) CORPORATE PROCEEDINGS OF THE LOAN PARTIES. The Administrative
Agent shall have received, with a counterpart for each Lender, a copy of
the resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of each of the Loan Parties authorizing
(i) the execution, delivery and performance of this Agreement and the other
Loan Documents to which it is a party, (ii) in the case of the Borrowers,
the borrowings contemplated hereunder and (iii) the granting by it of the
Liens created pursuant to the Security Documents, certified by the
Secretary or an
48
Assistant Secretary of such Loan Party as of the Closing Date, which
certificate shall be in form and substance satisfactory to the
Administrative Agent and shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded.
(e) INCUMBENCY CERTIFICATE OF THE LOAN PARTIES. The Administrative
Agent shall have received, with a counterpart for each Lender, a
certificate of each of the Loan Parties, dated the Closing Date, as to the
incumbency and signature of the officers of such Loan Party executing any
Loan Document satisfactory in form and substance to the Administrative
Agent, executed by the President or any Vice President and the Secretary or
any Assistant Secretary of such Loan Party.
(f) CORPORATE DOCUMENTS. The Administrative Agent shall have received,
with a counterpart for each Lender, true and complete copies of the
certificate of incorporation and by-laws of each of the Loan Parties,
certified as of the Closing Date as complete and correct copies thereof by
the Secretary or an Assistant Secretary of such Loan Party.
(g) CONSENTS, LICENSES AND APPROVALS. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of a
Responsible Officer (i) attaching copies of all consents, authorizations
and filings set forth on Schedule 5.4, and (ii) stating that such consents,
licenses and filings are in full force and effect, and each such consent,
authorization and filing shall be in form and substance satisfactory to the
Administrative Agent.
(h) LEGAL OPINION. The Administrative Agent shall have received, with
a counterpart for each Lender, the executed legal opinion of Xxxxx, Day,
Xxxxxx & Xxxxx, counsel to the Borrowers and the other Loan Parties,
substantially in the form of Exhibit D, with such changes thereto as may be
approved by the Administrative Agent. Such legal opinion shall cover such
other matters incident to the transactions contemplated by this Agreement
as the Administrative Agent may reasonably require.
(i) PLEDGED STOCK; STOCK POWERS; PLEDGED NOTES. The Administrative
Agent shall have received the certificates representing the shares pledged
pursuant to the Guarantee and Collateral Agreement, together with an
undated stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof, and the notes pledged pursuant
to the Guarantee and Collateral Agreement, each endorsed in blank by a duly
authorized officer of the pledgor thereof.
(j) ACTIONS TO PERFECT LIENS. The Administrative Agent shall have
received evidence in form and substance satisfactory to it that all
filings, recordings, registrations and other actions, including, without
limitation, the filing of duly executed financing statements on Form UCC-1,
necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Liens created by the Security Documents shall have been
completed or that all such financing statements and other documents with
respect to such filings, recordings, registrations and other actions shall
have been delivered to the Administrative Agent.
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(k) SECTION 7.10 COMPLIANCE. The Administrative Agent shall have
received evidence in form and substance satisfactory to it that the
Borrowers and their Subsidiaries shall have executed and delivered all such
documents, and taken all such action as are required so that, after giving
effect thereto, the Borrowers shall be in full compliance with their
obligations under subsection 7.10.
(l) TAX SHARING AGREEMENT. The Administrative Agent shall have
received a copy of the Tax Sharing Agreement as in effect on the date
hereof, including all amendments, supplements and other modifications
thereto, certified to be complete and correct by a Responsible Officer.
6.2. CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any Revolving Credit Loan or any other extension of credit
requested to be made by it on any date (including, without limitation, its
initial extension of credit), and of the Issuing Lender to issue any Letter of
Credit requested to be issued by it on any date, is subject to the satisfaction
of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Borrowers and any other Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects on
and as of such date as if made on and as of such date, except for
representations and warranties stated to relate to a specific earlier date,
in which case such representations and warranties shall be true and correct
in all material respects on and as of such earlier date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
(c) BORROWING BASE. The Administrative Agent shall have received the
most recent Borrowing Base Certificate required to be delivered pursuant to
subsection 7.2(e) and, after giving effect to the Revolving Credit Loans
and other extension of credit requested to be made on such date and the
Letters of Credit requested to be issued on such date, no Borrowing Base
Deficiency would exist.
(d) ADDITIONAL MATTERS. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents
shall be satisfactory in form and substance to the Administrative Agent,
and the Administrative Agent shall have received such other documents and
legal opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.
Each borrowing by and Letter of Credit issued on behalf of any Borrower
hereunder shall constitute a representation and warranty by the Borrowers as of
the date thereof that the conditions contained in this subsection have been
satisfied.
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SECTION 7. AFFIRMATIVE COVENANTS
Each Borrower hereby agrees that, on and after the Closing Date and so
long as the Revolving Credit Commitments remain in effect or any Letter of
Credit remains outstanding and unpaid or any amount is owing to any Lender or
the Administrative Agent hereunder or under any other Loan Document, each
Borrower shall and (except in the case of delivery of financial information,
reports and notices) shall cause each of its Subsidiaries to:
7.1. FINANCIAL STATEMENTS. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrowers, a copy of the Consolidated
balance sheet of CNG and its consolidated Subsidiaries as at the end of
such year and the related Consolidated statement of income and Consolidated
statements of retained earnings and of cash flows for such year and the
Compliance Package, reported on, in the case of such Consolidated financial
statements, without a "going concern" or like qualification or exception,
or qualification arising out of the scope of the audit, by Xxxxxx Xxxxxxxx
LLP or other independent certified public accountants of nationally
recognized standing selected by CNG; and
(b) as soon as available, but in any event within 45 days after the
end of each of the first three quarterly periods of each fiscal year of the
Borrowers, the unaudited Consolidated balance sheet of CNG and its
consolidated Subsidiaries as at the end of such quarter, the related
unaudited Consolidated statement of income for such quarter and the portion
of the fiscal year through the end of such quarter and the related
unaudited Consolidated statement of cash flows for the portion of the
fiscal year through the end of such quarter and the Compliance Package, in
each case, certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 30 days (or,
in the event that such 30th day is not a Business Day, the next succeeding
Business Day) after the end of each fiscal month of each fiscal year of the
Borrowers (or, in the event that (i) such month (x) is the first month of a
fiscal year or (y) is the last month of one of the first three fiscal
quarters, not later than 45 days after the end of such month or (ii) such
month is the last month of a fiscal year, not more than 60 days after the
end of such month), the unaudited Consolidated balance sheet of CNG and its
consolidated Subsidiaries as at the end of such month, the related
unaudited Consolidated statement of income for such month and the portion
of the fiscal year through the end of such month and the related unaudited
Consolidated statement of cash flows for the portion of the fiscal year
through the end of such month and the Compliance Package, in each case,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the
51
periods reflected therein and with prior periods (except as approved by such
accountants or Responsible Officer, as the case may be, and disclosed therein).
7.2. CERTIFICATES; OTHER INFORMATION. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that in connection with their audit nothing has come to their attention to
cause them to believe that any Borrower or any of their Subsidiaries failed
to comply with the covenants contained in Section 8; PROVIDED, HOWEVER,
that such audit shall not have been directed primarily toward obtaining
knowledge of such noncompliance, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a certificate of a Responsible
Officer ("COMPLIANCE CERTIFICATE") stating that, to the best of such
Officer's knowledge, during such period (i) no Subsidiary has been formed
or acquired (or, if any such Subsidiary has been formed or acquired, the
relevant Borrower has complied with the requirements of subsection 7.10
with respect thereto), (ii) neither any Borrower nor any of their
Subsidiaries has changed its name without complying with the requirements
of this Agreement and the Security Documents with respect thereto, (iii)
each Borrower has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and
the other Loan Documents to be observed, performed or satisfied by it, and
(iv) each Borrower has set forth in reasonable detail any and all
calculations necessary to show compliance with subsection 2.1(a) and all of
the financial condition covenants set forth in subsections 8.1 and 8.8,
including, without limitation, calculations and reconciliations, if any,
necessary to show compliance with such financial condition covenants on the
basis of generally accepted accounting principles in the United States of
America consistent with those utilized in preparing the audited financial
statements referred to in subsection 5.1, and that such Officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate;
(c) not later than 45 days after the end of each fiscal year of the
Borrowers, a copy of the projections by CNG of the balance sheet, statement
of income and statement of cash flows on a Consolidated basis of CNG and
its Subsidiaries for the next succeeding fiscal year, such projections to
be accompanied by a certificate of a Responsible Officer to the effect that
such projections have been prepared on the basis of sound financial
planning practice and that such projections are based upon good faith
assumptions of management of CNG and such assumptions are believed by
management of CNG to be reasonable;
(d) within ten days after the same are sent, copies of all financial
statements and reports which CNC sends to its stockholders, and within ten
days after the same are filed, copies of all financial statements and
reports which CNC may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
52
(e) within 21 days after the end of each calendar month, a borrowing
base certificate calculating the Borrowing Base as of the last day in such
calendar month, substantially in the form of Exhibit G hereto (a "BORROWING
BASE CERTIFICATE") executed by a Responsible Officer; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request as coordinated through the
Administrative Agent.
7.3. PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, including, without limitation, taxes, except
where (a) the amount or validity thereof is currently being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of such Borrower or such
Subsidiary, as the case may be, or (b) the failure to so pay, discharge or
otherwise satisfy such obligations could not, in the aggregate, be reasonably be
expected to have a Material Adverse Effect.
7.4. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue to
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as otherwise permitted
pursuant to subsection 8.5; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, be reasonably expected to have a Material Adverse Effect.
7.5. MAINTENANCE OF PROPERTY; INSURANCE. Keep all property useful and
necessary in its business in good working order and condition, reasonable wear
and tear excepted; maintain with financially sound and reputable insurance
companies insurance on all the Collateral in accordance with the requirements of
Section 5.3 of the Guarantee and Collateral Agreement, Section 5 of each of the
Mortgages and on all its other property in at least such amounts (including as
to amounts of deductibles) and against at least such risks (but including in any
event commercial general liability, product liability and business interruption)
as are usually insured against in the same general area by companies engaged in
the same or a similar business; and furnish to each Lender, upon written request
by the Administrative Agent, full information as to the insurance carried.
7.6. INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records, including without
limitation, in connection with any collateral review or appraisal described in
paragraph (b) below, at any reasonable time and upon reasonable notice and as
often as may reasonably be desired (provided, however, that (i) the Lenders will
arrange and coordinate each such visit through and with the Administrative Agent
and (ii) so long as no Event of Default has occurred and is continuing, no more
than two such visits and inspections shall be made during any fiscal
53
year) and to discuss the business, operations, properties and financial and
other condition of the Borrowers and their Subsidiaries with officers and
employees of the Borrowers and their Subsidiaries and with its independent
certified public accountants (provided that any officers or employees of the
Borrowers shall be permitted to be present at any such discussions between
representatives of any Lender and the Borrowers' independent certified public
accountants).
(b) At any time upon the request of the Administrative Agent, permit
the Administrative Agent or its professionals (including investment bankers,
consultants, accountants, lawyers and appraisers) retained by the Administrative
Agent to conduct evaluations and appraisals of (i) the Borrowers' practices in
the computation of the Borrowing Base, (ii) the assets included in the Borrowing
Base, (iii) systems and procedures relating to the Borrowing Base items, and
(iv) other related procedures deemed necessary by the Administrative Agent and
pay the reasonable fees and expenses in connection therewith (including, without
limitation, the fees and expenses associated with services performed by the
Administrative Agent's collateral monitoring department); provided, however,
that the Administrative Agent shall not be entitled to conduct such evaluations
and appraisals more frequently than twice per year unless (x) an Event of
Default has occurred and is continuing or (y) the Administrative Agent
reasonably determines in consultation with the Borrowers that any material event
or material change has occurred with respect to the Loan Parties, their
inventory practices or the performance of the Collateral and that as a result of
such event or change more frequent evaluations or appraisals are required to
effectively monitor the Borrowing Base, in which case the Borrowers will permit
the Administrative Agent to conduct such evaluations and appraisals at such
reasonable times and as often as may be reasonably requested, in each case so
long as any Revolving Credit Loans or Letters of Credit shall be outstanding or
shall have been requested by any Borrower hereunder.
(c) In connection with any evaluation and appraisal relating to the
computation of the Borrowing Base, agree to maintain such additional reserves
(for purposes of computing the Borrowing Base) in respect of Eligible Inventory
and make such other adjustments to its parameters for including Eligible
Inventory in the Borrowing Base as the Administrative Agent shall require based
upon the results of such evaluation and appraisal, provided that the
Administrative Agent shall specify to the Borrowers in writing the reasons for
any such additional reserves or adjustments.
7.7. NOTICES. Promptly give notice to the Administrative Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of any Borrower or any Subsidiary, including, without
limitation, under the Senior Subordinated Notes, the Senior Subordinated
1997 Notes or the Senior Subordinated 2002 Notes or (ii) litigation,
investigation or proceeding which may exist at any time between any
Borrower or any Subsidiary and any Governmental Authority, which in either
case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
54
(c) any litigation or proceeding affecting any Borrower or any
Subsidiary (i) in which the amount involved is $5,000,000 or more and not
covered by insurance or (ii) in which injunctive or similar relief is
sought which could reasonably be expected to have a Material Adverse
Effect;
(d) the following events, as soon as possible and in any event within
30 days after any Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan
or (ii) the institution of proceedings or the taking of any other action by
the PBGC or any Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan;
(e) any material adverse change in the business, operations, property,
condition (financial or otherwise) or prospects of any Borrower and its
Subsidiaries taken as a whole; and
(f) any (i) release or discharge by any Borrower or any of its
Subsidiaries of any Materials of Environmental Concern required to be
reported under applicable Environmental Laws to any Governmental Authority,
unless Borrowers reasonably determine that the total Environmental Costs
arising out of such release or discharge are unlikely to exceed $5,000,000
or to have a Material Adverse Effect; (ii) condition, circumstance,
occurrence or event not previously disclosed in writing to the
Administrative Agent that could result in liability under applicable
Environmental Laws unless the Borrowers reasonably determine that the total
Environmental Costs arising out of such condition, circumstance, occurrence
or event are unlikely to exceed $5,000,000 or to have a Material Adverse
Effect, or could result in the imposition of any Lien or other restriction
on the title, ownership or transferability of any facilities and properties
owned, leased or operated by any Borrower or any of its Subsidiaries that
could reasonably be expected to have a Material Adverse Effect; and (iii)
proposed action to be taken by any Borrower or any of its Subsidiaries that
would reasonably be expected to subject such Borrower or any of its
Subsidiaries to any material additional or different requirements or
liabilities under Environmental Laws, unless the Borrowers determine that
the total Environmental Costs arising out of such proposed action are
unlikely to exceed $5,000,000 or to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrowers propose to take with respect thereto.
7.8. ENVIRONMENTAL LAWS. (a) (i) Comply substantially with, and
undertake all reasonable efforts to ensure substantial compliance by all
tenants, subtenants, and contractors with, all applicable Environmental Laws;
(ii) obtain, comply substantially with and maintain any and all Environmental
Permits necessary for its operations as conducted and as planned; and (iii)
undertake all reasonable efforts to ensure that all tenants, subtenants, and
contractors obtain,
55
comply substantially with and maintain any and all Environmental Permits
necessary for their operations as conducted and as planned, with respect to any
property leased or subleased from, or operated by any Borrower or its
Subsidiaries. For purposes of this subsection 7.8(a), each Borrower and its
Subsidiaries shall be deemed to comply substantially, or require substantial
compliance, with an Environmental Law or an Environmental Permit, if (i) it
complies with subsection 7.8(c) and (ii) upon learning of any actual or
suspected noncompliance, such Borrower and any such affected Subsidiary shall
promptly undertake all reasonable efforts, if any, to achieve compliance,
PROVIDED that in any case such noncompliance would not reasonably be expected to
have a Material Adverse Effect.
(b) Promptly comply with all orders and directives of all Governmental
Authorities issued to any Borrower or any of its Subsidiaries regarding
Environmental Laws, other than any such order or directive as to which an appeal
or other appropriate contest is or has been timely and properly taken, is being
diligently pursued in good faith, and the pendency of such appeal or other
appropriate contest would not reasonably be expected to have a Material Adverse
Effect.
(c) Maintain, update as appropriate, and implement in all material
respects an environmental program reasonably designed to (i) ensure that the
Borrowers, their Subsidiaries, any of their respective operations (including,
without limitation, disposal), and any properties owned, leased or operated by
any of them, attain and remain in substantial compliance with all applicable
Environmental Laws and (ii) reasonably and prudently manage any liabilities or
potential liabilities that the Borrowers, any of the other Loan Parties, any of
their respective operations (including, without limitation, disposal), and any
properties owned or leased by any of them, may have under all applicable
Environmental Laws.
7.9. FURTHER ASSURANCES. Upon the request of the Administrative Agent,
promptly perform or cause to be performed any and all acts and execute or cause
to be executed any and all documents (including, without limitation, financing
statements and continuation statements) for filing under the provisions of the
Uniform Commercial Code or any other Requirement of Law which are necessary or
advisable to maintain in favor of the Administrative Agent, for the benefit of
the Lenders, Liens on the Collateral that are duly perfected in accordance with
all applicable Requirements of Law.
7.10. ADDITIONAL COLLATERAL, ETC.. (a) With respect to any property
acquired after the Closing Date by any Borrower or any Subsidiary (other than
(x) any property described in paragraph (b), (c) or (d) below, (y) any property
subject to a Lien expressly permitted by subsection 8.3(f) or 8.3(l) and (z)
property acquired by any Excluded Foreign Subsidiary) as to which the
Administrative Agent, for the benefit of the Lenders, does not have a perfected
Lien, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
such property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in such property, including the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.
56
(b) With respect to any fee or leasehold interest in any real property
having a value in excess of $600,000 acquired after the Original Closing Date by
any Borrower or any Subsidiary (other than (x) any such real property subject to
a Lien expressly permitted by subsection 8.3(f) or 8.3(l) and (y) real property
acquired by any Excluded Foreign Subsidiary), promptly (i) execute and deliver a
first priority Mortgage, in favor of the Administrative Agent, for the benefit
of the Lenders, covering such real property, (ii) if requested by the
Administrative Agent, provide the Lenders with (x) title and extended coverage
insurance covering such real property in an amount at least equal to the
purchase price of such real property (or such other amount as shall be
reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor's certificate and (y) any consents or
estoppels reasonably deemed necessary or advisable by the Administrative Agent
in connection with such Mortgage, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(c) With respect to any new Subsidiary (other than an Excluded Foreign
Subsidiary) created or acquired after the Original Closing Date by any Borrower
or any Subsidiary (which, for the purposes of this paragraph (c), shall include
any existing Subsidiary that ceases to be an Excluded Foreign Subsidiary),
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in the Capital Stock
of such new Subsidiary that is owned by any Borrower or any Subsidiary, (ii)
deliver to the Administrative Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the relevant Borrower or Subsidiary, (iii) cause such
new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement,
(B) to take such actions necessary or advisable to grant to the Administrative
Agent for the benefit of the Lenders a perfected first priority security
interest in the Collateral described in the Guarantee and Collateral Agreement
with respect to such new Subsidiary, including the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent and (C) to deliver to the Administrative Agent a
certificate of such Subsidiary, in form and substance satisfactory to the
Administrative Agent, with appropriate insertions and attachments, and (iv) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Original Closing Date by any Borrower or any Subsidiary
(other than by any Borrower or any Subsidiary that is an Excluded Foreign
Subsidiary), promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by any such Borrower or any
such Subsidiary (provided that in no event
57
shall more than 66% of the total outstanding voting Capital Stock of any such
new Subsidiary be required to be so pledged), (ii) deliver to the Administrative
Agent the certificates representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a duly authorized officer of
the relevant Borrower or Subsidiary, and take such other action as may be
necessary or, in the opinion of the Administrative Agent, desirable to perfect
the Administrative Agent's security interest therein, and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(e) Anything in this subsection 7.10 to the contrary notwithstanding,
(i) Pearle shall not be required to create a Lien on any shares of Capital Stock
of Pearl Visioncare, Inc. owned by it or on any rights owned by it under the
Pearle Visioncare Line of Credit Agreement and (ii) no Subsidiary shall be
required to become a Guarantor, create Liens on its assets or permit a Lien to
be created on shares of its Capital Stock or any promissory note issued by it
(x) if and to the extent that to do so would violate any law, rule or regulation
of any Governmental Authority applicable to such Subsidiary and if there shall
have been delivered to the Administrative Agent evidence, reasonably
satisfactory to the Administrative Agent, that such a violation would result
from such guarantee or creation of Lien or (y) if the aggregate net book value
of the assets of such Subsidiary, when added to the aggregate net book value of
all other Subsidiaries with respect to which, pursuant to this clause (y), there
is then non-compliance with the provision of subsections 7.10(a), (b) and/or
(c), does not exceed $200,000. Nothing in this subsection 7.10 shall be deemed
to require that any Borrower or any Subsidiary thereof obtain, or seek to
obtain, the consent or approval by any Governmental Authority of any guarantee
or creation of Lien that would not be required pursuant to this subsection 7.10
unless such consent or approval shall have been obtained, PROVIDED that the
appropriate Borrower or Subsidiary shall be required to use commercially
reasonable efforts to obtain such consent or approval if the Administrative
Agent, at any time when an Event of Default shall have occurred and be
continuing, requests that it do so.
SECTION 8. NEGATIVE COVENANTS
Each Borrower hereby agrees that on and after the Closing Date and, so
long as the Revolving Credit Commitments remain in effect or any Letter of
Credit remains outstanding and unpaid or any amount is owing to any Lender or
the Administrative Agent hereunder or under any other Loan Document, each
Borrower shall not, and (except with respect to subsection 8.1) shall not permit
any of its Subsidiaries to, directly or indirectly, and (with respect to
subsection 8.1 only) shall not permit CNG to:
8.1. FINANCIAL CONDITION COVENANTS.
(a) LEVERAGE RATIO. Permit the Leverage Ratio as of the end of any
fiscal quarter of CNG set forth below to be greater than the ratio set forth
opposite such fiscal quarter below:
FISCAL QUARTER MAXIMUM LEVERAGE RATIO
2nd Qtr 2002 3.80 to 1.00
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3rd Qtr 2002 3.80 to 1.00
4th Qtr 2002 3.80 to 1.00
1st Qtr 2003 3.80 to 1.00
2nd Qtr 2003 3.80 to 1.00
3rd Qtr 2003 3.80 to 1.00
4th Qtr 2003 3.35 to 1.00
1st Qtr 2004 3.35 to 1.00
2nd Qtr 2004 3.35 to 1.00
3rd Qtr 2004 3.35 to 1.00
4th Qtr 2004 2.70 to 1.00
1st Qtr 2005 2.70 to 1.00
2nd Qtr 2005 2.70 to 1.00
3rd Qtr 2005 2.70 to 1.00
4th Qtr 2005 2.40 to 1.00
1st Qtr 2006 2.40 to 1.00
2nd Qtr 2006 2.40 to 1.00
(b) ADJUSTED INTEREST COVERAGE RATIO. Permit the Adjusted Interest
Coverage Ratio as of the end of any fiscal quarter of CNG set forth below to be
less than the ratio set forth opposite such fiscal quarter below:
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FISCAL QUARTER MAXIMUM ADJUSTED INTEREST
COVERAGE RATIO
2nd Qtr 2002 1.30 to 1.00
3rd Qtr 2002 1.30 to 1.00
4th Qtr 2002 1.30 to 1.00
1st Qtr 2003 1.30 to 1.00
2nd Qtr 2003 1.30 to 1.00
3rd Qtr 2003 1.30 to 1.00
4th Qtr 2003 1.50 to 1.00
1st Qtr 2004 1.50 to 1.00
2nd Qtr 2004 1.50 to 1.00
3rd Qtr 2004 1.50 to 1.00
4th Qtr 2004 1.65 to 1.00
1st Qtr 2005 1.65 to 1.00
2nd Qtr 2005 1.65 to 1.00
3rd Qtr 2005 1.65 to 1.00
4th Qtr 2005 1.75 to 1.00
1st Qtr 2006 1.75 to 1.00
2nd Qtr 2006 1.75 to 1.00
8.2. LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrowers under this Agreement and any
Revolving Credit Notes;
(b) Indebtedness of any Borrower to any Subsidiary and of any
Subsidiary Guarantor to any Borrower or any other Subsidiary;
(c) Indebtedness of the Borrowers and their Subsidiaries under
Permitted Hedging Arrangements;
(d) Indebtedness outstanding on the Closing Date and listed on
Schedule 8.2(d) and any refinancings, refundings, renewals or extensions
thereof; PROVIDED that the amount of such Indebtedness is not increased at
the time of such refinancing, refunding, renewal or extension;
(e) Indebtedness of a Person which becomes a Subsidiary of a Borrower
after the Closing Date; PROVIDED that (i) such Indebtedness existed at the
time such Person became a Subsidiary and was not created in anticipation
thereof and (ii) immediately after giving effect to the acquisition of such
Person by a Borrower no Default or Event of Default shall have occurred and
be continuing, and any refinancings, refundings, renewals or extensions
thereof; PROVIDED that the amount of such Indebtedness is not increased at
the time of such refinancing, refunding, renewal or extension;
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(f) Indebtedness of up to an aggregate outstanding face amount of
$10,000,000 of documentary letters of credit issued by Wachovia for the
account of any Borrower or any Subsidiary;
(g) Indebtedness consisting of Guarantee Obligations permitted by
subsection 8.4;
(h) Indebtedness of the Borrowers and their Subsidiaries incurred to
finance the acquisition of fixed or capital assets (whether pursuant to a
loan, a Financing Lease or otherwise) in an aggregate principal amount not
exceeding as to the Borrowers and their Subsidiaries $15,000,000 at any
time outstanding;
(i) Indebtedness resulting from loans and advances permitted under
subsection 8.9; and
(j) in addition to Indebtedness permitted by clauses (a)-(h) above,
Indebtedness of the Borrowers and their Subsidiaries in an aggregate
principal amount not exceeding as to the Borrowers and their Subsidiaries
$10,000,000 at any time outstanding.
8.3. LIMITATION ON LIENS. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings; PROVIDED that adequate reserves with
respect thereto are maintained on the books of a Borrower or a Subsidiary,
as the case may be, in conformity with GAAP;
(b) carrier's, warehousemen's, mechanic's, landlord's, materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 60 days or which are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which do not
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of such
Borrower or such Subsidiary conducted at the property subject thereto;
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(f) Liens on the property or assets of a Person which becomes a
Subsidiary of a Borrower after the Closing Date securing Indebtedness
permitted by subsection 8.2(e); PROVIDED that (i) such Liens existed at the
time such Person became a Subsidiary and were not created in anticipation
thereof, (ii) any such Lien is not spread to cover any property or assets
of such Person after the time such corporation becomes a Subsidiary (other
than additions thereto and property in replacement or substitution
thereof), and (iii) the amount of Indebtedness secured thereby is not
increased;
(g) Liens created pursuant to the Security Documents;
(h) Liens in existence on the Closing Date listed on Schedule 8.3(h),
securing Indebtedness permitted by subsection 8.2(d); PROVIDED that no such
Lien is spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(i) Liens arising by reason of any judgment, decree or order of any
court or other Governmental Authority, if appropriate legal proceedings are
being diligently prosecuted and shall not have been finally terminated or
the period within which such proceedings may be initiated shall not have
expired, in an aggregate amount not to exceed $5,000,000 at any time
outstanding;
(j) leases and subleases of real property owned or leased by any
Borrower or any Subsidiary not interfering with the ordinary conduct of the
business of such Borrowers and their Subsidiaries;
(k) renewals, extensions and replacements of the Liens permitted under
clauses (f), (h) and (j) above; PROVIDED that no such Lien shall as a
result thereof cover any additional assets (other than additions thereto
and property in replacement or substitution thereof) and the principal
amount of Indebtedness secured thereby is not increased;
(l) Liens securing Indebtedness of the Borrowers and their
Subsidiaries permitted by subsection 8.2(h) incurred to finance the
acquisition of fixed or capital assets; PROVIDED that (i) such Liens shall
be created substantially simultaneously with or within 90 days of the
acquisition of such fixed or capital assets, (ii) such Liens do not at any
time encumber any property other than the property financed by such
Indebtedness (other than additions thereto and property in replacement or
substitution thereof) and (iii) the principal amount of Indebtedness
secured thereby is not increased; and
(m) Liens on Inventory which is the subject of a trade letter of
credit issued for the account of a Borrower by Wachovia, to the extent
permitted pursuant to subsection 8.2(f), on the various documents related
thereto and on the proceeds thereof, PROVIDED that (i) any such Lien is not
spread to cover any other property or assets of any Borrower, (ii) the
amount of Indebtedness secured thereby is not increased and (iii) the Lien
on the subject property shall terminate according to its terms upon payment
in full of the reimbursement obligations with respect to the relevant trade
letter of credit.
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8.4. LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the Closing Date and listed
on Schedule 8.4(a), and any refinancing, refundings, renewals or extensions
thereof PROVIDED that the amount of such Guarantee Obligation shall not be
increased at the time of such refinancing, refunding, extension or renewal;
(b) guarantees made in the ordinary course of its business by any
Borrower or any of its Subsidiaries of obligations of any Subsidiary
Guarantor or by any Subsidiary which is not a Subsidiary Guarantor of
obligations of any Borrower or any other Subsidiary, which obligations are
otherwise permitted under this Agreement;
(c) the Guarantee and Collateral Agreement and any of the other
Guarantees;
(d) Guarantee Obligations of a Person which becomes a Subsidiary after
the Closing Date; PROVIDED that (i) such Guarantee Obligations existed at
the time such Person became a Subsidiary and were not created in
anticipation thereof and (ii) immediately after giving effect to the
acquisition of such Person by a Borrower no Default or Event of Default
shall have occurred and be continuing, and any refinancings, refundings,
renewals or extensions thereof; PROVIDED that the amount of such Guarantee
Obligations is not increased at the time of such refinancing, refunding,
renewal or extension; and
(e) Guarantee Obligations of Pearle of Indebtedness of franchisees of
Pearle, PROVIDED that the aggregate amount of such Guarantee Obligations
outstanding at any time shall not exceed $10,000,000; and
(f) Guarantee Obligations permitted by subsection 8.9.
8.5. LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of any Borrower may be merged or consolidated with
or into any Borrower (PROVIDED that such Borrower shall be the continuing
or surviving corporation) or with or into any one or more Wholly Owned
Subsidiaries of any Borrower (PROVIDED that (i) the Wholly Owned Subsidiary
or Subsidiaries shall be the continuing or surviving corporation and (ii)
if such Subsidiary is a Subsidiary Guarantor, the continuing or surviving
corporation shall be a Subsidiary Guarantor);
(b) any Wholly Owned Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to any Borrower or any other Wholly Owned Subsidiary of any
Borrower, PROVIDED that, if such transferor Wholly Owned Subsidiary is a
Subsidiary Guarantor, the transferee Wholly Owned Subsidiary shall be a
Subsidiary Guarantor; and
63
(c) sales and other dispositions of assets permitted by subsection
8.6(b).
8.6. LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than a
Borrower or any Wholly Owned Subsidiary, except:
(a) the sale or other disposition of any property in the ordinary
course of business;
(b) the sale or other disposition of any assets at fair market value,
PROVIDED that the aggregate fair market value of all assets sold pursuant
to this paragraph (b) in any fiscal year of the Borrowers shall not exceed
$25,000,000;
(c) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business, but only in connection with the
compromise or collection thereof;
(d) as permitted by subsection 8.5(b); and
(e) dispositions resulting from any casualty or condemnation of any
property.
8.7. LIMITATION ON DIVIDENDS. Declare or pay any dividend on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any shares of any class of Capital Stock of any Borrower or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of such Borrower or
any Subsidiary, except for:
(a) dividends, payments or distributions solely in common stock of a
Borrower;
(b) dividends to CNG in an amount sufficient to allow CNG to pay
interest on the Senior Subordinated Notes, the Senior Subordinated 1997
Notes and the Senior Subordinated 2002 Notes in accordance with the terms
of each thereof, PROVIDED that CNG actually uses such dividends to make
such payments of interest;
(c) so long as no Default or Event of Default shall have occurred and
be continuing or would occur after giving effect to such dividend,
dividends to CNG in an aggregate amount (declared or paid subsequent to the
Closing Date) not to exceed $50,000,000 solely to allow CNG to repurchase
Senior Subordinated Notes, Senior Subordinated 1997 Notes and/or Senior
Subordinated 2002 Notes without violating Section 9(m);
(d) so long as no Default or Event of Default shall have occurred and
be continuing or would occur after giving effect to such dividend,
dividends to CNG in an
64
aggregate amount (declared or paid subsequent to the Closing Date) not to
exceed $4,000,000 solely to allow CNG or CNC to repurchase, redeem, or
otherwise acquire or retire for value, any Capital Stock of CNG or CNC or
any current or former Subsidiary of CNG held by any of CNG's (or any of its
Subsidiaries') current or former employees;
(e) payments or distributions in respect of taxes, as provided in the
Tax Sharing Agreement, to the extent actually used to pay taxes to a taxing
authority; and
(f) dividends to CNG in an aggregate amount not to exceed an amount
equal to .25% of the aggregate net sales of the Borrowers and their
Subsidiaries for any fiscal year solely for the purpose of enabling CNC to
pay the ordinary operating and administrative expenses of CNC (including
all reasonable professional fees and expenses) in connection with complying
with its reporting obligations and obligations to prepare and distribute
business records in the ordinary course of business and CNC's costs and
expenses relating to taxes (which taxes are attributable to the operations
of CNG and its Subsidiaries or to CNC's ownership thereof) for such fiscal
year; and
(g) so long as no Default or Event of Default shall have occurred and
be continuing or would occur after giving effect to such dividend,
dividends to CNG other than dividends otherwise permitted under any of the
foregoing clauses (a) through (f) in an aggregate amount not to exceed
$10,000,000 in any fiscal year.
8.8. LIMITATION ON CAPITAL EXPENDITURES. Make any expenditure in
respect of the purchase or other acquisition of fixed or capital assets and/or
in respect of the development of computer systems owned or operated by the
Borrowers and their Subsidiaries, except for expenditures in the ordinary course
of business not exceeding, in the aggregate for the Borrowers and their
Subsidiaries subsequent to the Closing Date, $60,000,000.
8.9. LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any advance,
loan, extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting a business unit of, or make any other
investment, in cash or by transfer of assets or property, in, any Person (each,
an "INVESTMENT"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) loans and advances to employees of the Borrowers or their
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business;
(d) Investments by a Borrower in any Subsidiary thereof which is a
Subsidiary Guarantor and Investments by any Subsidiary of a Borrower in
such Borrower and in other Subsidiaries of such Borrower (PROVIDED that, if
the Subsidiary making such Investment is a Subsidiary Guarantor, the
Subsidiary in which such Investment is made shall also be a Subsidiary
Guarantor);
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(e) so long as no Default or Event of Default has occurred and is
continuing or would occur after giving effect to such Investment,
Investments in franchises in a business related to the optical business of
Pearle and Xxxx Vision as conducted on the Closing Date in an aggregate
amount not to exceed $15,000,000 during any fiscal year;
(f) Investments in HMO Subsidiaries, PROVIDED that the aggregate
amount of the Investments permitted by this paragraph (f) outstanding at
any one time shall not exceed $10,000,000;
(g) Investments in Excluded Foreign Subsidiaries in an aggregate
amount not to exceed $10,000,000; and
(h) in addition to the foregoing, Investments subsequent to the
Closing Date, other than the purchase of the Senior Subordinated 1997
Notes, the Senior Subordinated 2002 Notes or the Senior Subordinated Notes,
in an aggregate amount not to exceed $10,000,000.
8.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of such Borrower's or such Subsidiary's business and (c) upon
fair and reasonable terms no less favorable to such Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate, provided that the
requirements of this clause (c) shall not be applicable (x) in the case of
services provided or products sold by such Borrower or such Subsidiary to an HMO
Subsidiary or a Foreign Subsidiary so long as such Borrower or such Subsidiary
is reimbursed for the costs incurred by it in providing such service or, as the
case may be, producing or obtaining such products or (y) to the Pearle
Visioncare Line of Credit Agreement.
8.11. LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal year of
the Borrowers to end on a day other than the Saturday closest to January 31 in
any year.
8.12. LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into with any Person
any agreement, which prohibits or limits the ability of any Borrower or any of
its Subsidiaries to create, incur, assume or suffer to exist any Lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired,
other than (a) this Agreement, (b) agreements in effect on the Original Closing
Date listed on Schedule 8.12, including, without limitation, the Senior
Subordinated Notes Indenture, or any refinancing, refunding, renewal or
extension thereof which is permitted hereunder, (c) customary non-assignment
provisions under contracts to the extent such provisions prohibit or limit the
ability to xxxxx x Xxxx on the rights under such contracts, (d) restrictions on
granting Liens on assets under agreements to sell or otherwise dispose of such
assets, (e) the Senior Subordinated 1997 Notes Indenture, or any refinancing,
refunding, renewal or extension thereof which is permitted hereunder, (f) the
Senior Subordinated 2002 Notes Indenture, or any refinancing, refunding, renewal
or extension thereof which is permitted hereunder, (g) agreements governing
Indebtedness permitted by subsection 8.2(e) and (h) agreements governing any
purchase money Liens or Financing Leases otherwise permitted
66
hereby (in which case, any prohibition or limitation shall only be effective
against the assets financed thereby).
8.13. LIMITATION ON LINES OF BUSINESS. Enter into any business, either
directly or through any Subsidiary or any joint venture, except for those
businesses in which the Borrowers and their Subsidiaries are engaged on the
Closing Date or which are related thereto.
8.14. LIMITATIONS ON CURRENCY AND COMMODITY HEDGING TRANSACTIONS. Enter
into, purchase or otherwise acquire agreements or arrangements relating to
currency, commodity or other hedging except, to the extent and only to the
extent that, such agreements or arrangements are entered into, purchased or
otherwise acquired in the ordinary course of business of any Borrower or any
Subsidiary with reputable financial institutions and not for purposes of
investment or speculation (any such agreement or arrangement permitted by this
subsection, a "PERMITTED HEDGING ARRANGEMENT").
8.15. LIMITATION ON SALE LEASEBACKS. Enter into any arrangement with
any Person providing for the leasing by any Borrower or any Subsidiary of real
or personal property which has been or is to be sold or transferred by such
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of such Borrower or such Subsidiary (such arrangement, a
"SALE-LEASEBACK") except for Sale-Leasebacks in the ordinary course of such
Borrower's or such Subsidiary's business, consistent with past practice and at
market rates. For the avoidance of doubt, Sale-Leasebacks that result in a
Financing Lease shall be treated as Indebtedness for all purposes of this
Agreement.
8.16. CHANGES TO CASH MANAGEMENT COLLECTION SYSTEM. Without the prior
written consent of the Administrative Agent, make any changes to the cash
management collection system established in accordance with subsection 6.1(j) of
the Existing Credit Agreement that would adversely affect the interests of the
Administrative Agent and the Lenders, including, without limitation, any change
which would result in the "Cash Collateral Account" (as defined in the CNG
Guarantee and Cash Collateral Agreement) ceasing to be the principal cash
concentration account for the Borrowers.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Any Borrower shall fail to pay any principal of any Revolving
Credit Loan or any Reimbursement Obligation when due in accordance with the
terms thereof or hereof; or any Borrower shall fail to pay any interest on
any Revolving Credit Loan, or any other amount payable hereunder, within
five days after any such interest or other amount becomes due in accordance
with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by any Borrower
or any other Loan Party herein or in any other Loan Document or which is
contained in any certificate, document or financial or other written
statement furnished by it at any time under or in connection with this
Agreement or any such other Loan Document shall prove
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to have been incorrect in any material respect on or as of the date made or
deemed made; or
(c) Any Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in subsection 7.7(a)
or Section 8; or
(d) Any Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section 9), and such default shall continue
unremedied for a period of 30 days; or
(e) CNG, any Borrower or any Subsidiary shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Revolving Credit Loans and the Reimbursement Obligations) in excess of
$5,000,000 or in the payment of any Guarantee Obligation in excess of
$5,000,000, beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness or Guarantee Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Guarantee
Obligation or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to become due prior to
its stated maturity or such Guarantee Obligation to become payable; or
(f) (i) CNG, any Borrower or any Subsidiary shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or CNG, any Borrower or any Subsidiary shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against CNG, any Borrower or any Subsidiary any case, proceeding
or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against CNG, any
Borrower or any Subsidiary any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) CNG, any Borrower or any Subsidiary shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v)
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CNG, any Borrower or any Subsidiary shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of any
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Majority Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) any Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Majority Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against CNG, any
Borrower or any Subsidiary involving in the aggregate a liability (not paid
or fully covered by insurance) of $5,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof; or
(i) Except as, and to the extent, permitted by this Agreement, (i) any
of the Security Documents or any of the other Loan Documents shall cease,
for any reason, to be in full force and effect, or any Borrower or any
other Loan Party which is a party to any of the Security Documents or any
of the other Loan Documents shall so assert or (ii) the Lien created by any
of the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby; or
(j) The occurrence of any Change of Control; or
(k) The Senior Subordinated Notes, the Senior Subordinated 1997 Notes
or the Senior Subordinated 2002 Notes, for any reason, shall not be or
shall cease to be validly subordinated, as provided therein and in the
Senior Subordinated Notes Indenture, the Senior Subordinated 1997 Notes
Indenture or the Senior Subordinated 2002 Notes Indenture, to the
obligations of the Borrowers under this Agreement, any Revolving Credit
Notes and the other Loan Documents; or
(l) CNG shall engage in any business other than the owning of the
capital stock of the Borrowers and all actions incidental thereto or in
connection therewith, including, without limitation, entering into the CNG
Guarantee and Cash Collateral Agreement and the maintenance of cash
management arrangements for the Borrowers
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and their Subsidiaries or CNG shall incur any material liabilities (other
than the Senior Subordinated Notes, the Senior Subordinated 1997 Notes or
the Senior Subordinated 2002 Notes); or
(m) CNG shall (i) make any optional payment or prepayment on or
repurchase or redemption or purchase of the Senior Subordinated Notes, the
Senior Subordinated 1997 Notes or the Senior Subordinated 2002 Notes
(including, without limitation, any payment on account of, or for a sinking
or other analogous fund for the repurchase, redemption, defeasance or other
acquisition thereof) other than (x) (so long as no Default or Event of
Default has occurred and is continuing or would occur as a result of such
repurchase), repurchases (subsequent to the Closing Date) by CNG of such of
the Senior Subordinated Notes, the Senior Subordinated 1997 Notes and/or
Senior Subordinated 2002 Notes that it is able to repurchase for an
aggregate purchase price (including fees and expenses incurred in
connection with such repurchase) not to exceed $50,000,000 and (y) the
repurchase, redemption, defeasance or other acquisition of the Senior
Subordinated Notes as soon as practicable following the issuance of the
Senior Subordinated 2002 Notes with the net proceeds thereof, (ii) amend,
modify or change, or consent or agree to any material amendment,
modification or change to any of the terms of the Senior Subordinated
Notes, the Senior Subordinated 1997 Notes or the Senior Subordinated 2002
Notes (other than any such amendment, modification or change which would
extend the maturity or reduce the amount of any payment of principal
thereof or which would reduce the rate or extend the date for payment of
interest thereon or which would shorten the notice period required for
optional redemption of the Senior Subordinated Notes), or (iii) amend,
modify or change or consent or agree to any amendment, modification or
change to the subordination provisions or to any of the other provisions of
the Senior Subordinated 1997 Notes Indenture or the Senior Subordinated
2002 Notes Indenture (other than any such amendment, modification or change
which would shorten the notice period required for optional redemption of
the Senior Subordinated Notes); or
(n) CNC shall create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to any
Borrower, any Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary, automatically the Revolving
Credit Commitments shall immediately terminate and automatically the Revolving
Credit Loans hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Majority Lenders, the Administrative Agent may, or upon the request of the
Majority Lenders, the Administrative Agent shall, by notice to the Borrowers
declare the Revolving Credit Commitments to be terminated forthwith, whereupon
the Revolving Credit Commitments shall immediately terminate; and (ii) with the
consent of the Majority Lenders, the Administrative
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Agent may, or upon the request of the Majority Lenders, the Administrative Agent
shall, by notice to the Borrowers, declare the Revolving Credit Loans hereunder
(with accrued interest thereon) and all other amounts owing under this Agreement
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) and the Revolving Credit Notes to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment
for honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrowers shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. The
Borrowers hereby grant to the Administrative Agent, for the benefit of the
Issuing Lender and the L/C Participants, a security interest in such cash
collateral to secure all obligations of the Borrowers under this Agreement and
the other Loan Documents. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrowers hereunder and under the Revolving
Credit Notes. Within three days after all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Borrowers hereunder and under the
Revolving Credit Notes shall have been paid in full, the balance, if any, in
such cash collateral account shall be returned to the Borrowers. The Borrowers
shall execute and deliver to the Administrative Agent, for the account of the
Issuing Lender and the L/C Participants, such further documents and instruments
as the Administrative Agent may request to evidence the creation and perfection
of the within security interest in such cash collateral account.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 10. THE ADMINISTRATIVE AGENT
10.1. APPOINTMENT. Each Lender hereby irrevocably designates and
appoints CIBC as the Administrative Agent of such Lender under this Agreement
and the other Loan Documents, and each such Lender irrevocably authorizes CIBC
as the Administrative Agent, in such capacity, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall have no duties or responsibilities, except those
expressly set forth herein, nor any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
10.2. DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or
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attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
10.3. EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Borrower or any
officer thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Borrower to perform its obligations hereunder
or thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrowers.
10.4. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
reasonably believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrowers),
independent accountants and other experts selected by it. The Administrative
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Majority Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Majority Lenders, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Revolving Credit
Loans.
10.5. NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or a
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof reasonably promptly to the Lenders. The Administrative Agent
shall take such action reasonably promptly with respect to such Default or Event
of Default as shall be reasonably directed by the Majority Lenders; provided
that unless and until the
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Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
10.6. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrowers or any other Loan Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of any Borrower and made its
own decision to make its Revolving Credit Loans hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of any
Borrower or any of the other Loan Parties and the other Loan Parties. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Borrower or any
of the other Loan Parties which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
10.7. INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrowers or any of the other Loan Parties and without limiting the
obligation of the Borrowers or any of the other Loan Parties to do so), ratably
according to their respective Revolving Credit Commitment Percentages in effect
on the date on which indemnification is sought, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Revolving Credit Loans) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of, the Revolving
Credit Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct, as the case may be. The agreements in this
subsection shall survive the payment of the Revolving Credit Loans and all other
amounts payable hereunder.
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10.8. ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrowers as if the
Administrative Agent was not the Administrative Agent hereunder and under the
other Loan Documents. With respect to the Revolving Credit Loans made by it and
with respect to any Letter of Credit issued or participated in by it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not the Administrative Agent and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.
10.9. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Majority Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent (provided
that it shall have been approved by the Borrowers), shall succeed to the rights,
powers and duties of the Administrative Agent hereunder. Effective upon such
appointment and approval, the term "Administrative Agent" shall mean such
successor agent, and such former Administrative Agent's rights, powers and
duties as Administrative Agent shall be terminated, without any other or further
act or deed on the part of such former Administrative Agent or any of the
parties to this Agreement or any holders of the Revolving Credit Loans. After
any retiring Administrative Agent's resignation as Administrative Agent, the
provisions of this Section 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was an Administrative Agent under this
Agreement and the other Loan Documents.
10.10. ISSUING LENDER. The provisions of this Section 10 shall apply to
the Issuing Lender in its capacity as such to the same extent that such
provisions apply to the Administrative Agent.
10.11. RELEASES OF GUARANTEES AND COLLATERAL. In connection with the
sale or other disposition of all of the Capital Stock of any Guarantors (other
than CNG) permitted under subsection 8.6 or the sale or other disposition of
Collateral permitted under subsection 8.6, the Administrative Agent shall, and
is hereby authorized by the Lenders to, promptly, upon the request of the
Borrowers and at the sole expense of the Borrowers, take all actions reasonably
necessary to release such Guarantor from its guarantee contained in the
Guarantee and Collateral Agreement or its Guarantee or to release the Collateral
subject to such sale or other disposition, as the case may be, and shall take
any other actions reasonably requested by the Borrowers to effect the
transactions permitted under subsection 8.6.
SECTION 11. MISCELLANEOUS
11.1. AMENDMENTS AND WAIVERS. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Majority Lenders may, or, with the written consent of the Majority Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrowers
and the other Loan Parties written amendments, supplements or modifications
hereto and to the other Loan Documents for the purpose of amending,
supplementing or modifying any provisions of this Agreement or the other Loan
Documents or
74
changing in any manner the rights of the Lenders or of the Borrowers hereunder
or thereunder or (b) waive, on such terms and conditions as the Majority Lenders
or the Administrative Agent, as the case may be, may specify in such instrument,
any of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall:
(i) eliminate or reduce the voting rights of any Lender under
this subsection 11.1, or reduce the amount or extend the scheduled
date of maturity of any Revolving Credit Loan or any installment
thereof or any Reimbursement Obligation or reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of
any payment thereof or increase the amount or extend the expiration
date of any Lender's Revolving Credit Commitment, in each case without
the consent of each Lender affected thereby; or
(ii) reduce the percentage specified in the definition of
Majority Lenders, or consent to the assignment or transfer by any
Borrower of any of its rights and obligations under this Agreement and
the other Loan Documents or release all or substantially all of the
guarantee obligations contained in the Guarantee and Collateral
Agreement, the CNG Guarantee and Cash Collateral Agreement and the
other Guarantees or release all or substantially all of the Collateral
(other than in connection with any release permitted by subsection
10.11), in each case without the written consent of all the Lenders;
or
(iii) amend, modify or waive any provision of Section 10 without
the written consent of the then Administrative Agent; or
(iv) amend, modify or waive the provisions of any Letter of
Credit or any L/C Obligation without the written consent of the
Issuing Lender.
Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the
Borrowers, the Lenders, the Administrative Agent and all future holders of the
Revolving Credit Loans. In the case of any waiver, the Borrowers, the Lenders
and the Administrative Agent shall be restored to their former positions and
rights hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.
11.2. NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand or
by overnight courier, when delivered, (b) in the case of delivery by mail, three
days after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has been confirmed,
addressed as follows in the case of the Borrowers and the Administrative Agent,
and as set forth in Schedule I in the case of the other parties hereto, or to
such other address as may be hereafter notified by the respective parties
hereto:
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The Borrowers:
c/x Xxxx National Group, Inc.
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
The Administrative Agent:
Canadian Imperial Bank of Commerce
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Agency Services
Fax: (000) 000-0000
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.3, 2.5, 3.2, 4.2, 4.4 or 4.8 shall not
be effective until received.
11.3. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
11.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder, in the other Loan Documents (or in any amendment,
modification or supplement hereto or thereto) and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the making of the Revolving
Credit Loans hereunder.
11.5. PAYMENT OF EXPENSES AND TAXES. The Borrowers agree, jointly and
severally, (a) to pay or reimburse the Administrative Agent for all its
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and
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administration of the transactions contemplated hereby and thereby (including
the syndication of the Revolving Credit Commitments (including the reasonable
expenses of the Administrative Agent's due diligence investigation)), including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent, (b) to pay or reimburse each Lender and the Administrative
Agent for all their respective costs and expenses incurred in connection with
the enforcement of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to the respective Lenders and the Administrative Agent, (c) to pay,
indemnify, and hold each Lender and the Administrative Agent harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other Non-Excluded
Taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the Administrative Agent and their respective directors,
trustees, officers, employees and agents harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement, the other Loan Documents or the use or proposed use of the
proceeds of the Revolving Credit Loans in connection with the transactions
contemplated hereby and thereby and any such other documents regardless of
whether the Administrative Agent or any Lender is a party to the litigation or
other proceeding giving rise thereto, including, without limitation, any of the
foregoing relating to the violation of, noncompliance with or liability under,
any Environmental Law applicable to the operations of any Borrower, any of its
Subsidiaries or any of the facilities and properties owed, leased or operated by
any Borrower or any of its Subsidiaries (all the foregoing in this clause (d),
collectively, the "indemnified liabilities"), PROVIDED that the Borrowers shall
have no obligation hereunder to the Administrative Agent or any Lender or any
other Person with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the party seeking indemnification. The
agreements in this subsection shall survive repayment of the Revolving Credit
Loans and all other amounts payable hereunder.
11.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrowers, the
Lenders, the Administrative Agent and their respective successors and assigns,
except that no Borrower may assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its business or
investment activities and in accordance with applicable law, at any time sell to
one or more banks or other entities ("PARTICIPANTS") participating interests in
any Revolving Credit Loan owing to such Lender, any Revolving Credit Commitment
of such Lender or any other interest of such Lender hereunder and under the
other Loan Documents. Each Lender which sells a participating interest hereunder
shall notify the Borrowers of the identity of such Participant within a
reasonable time after such sale. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this
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Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Revolving Credit Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrowers and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. No Lender shall
be entitled to create in favor of any Participant, in the participation
agreement pursuant to which such Participant's participating interest shall be
created or otherwise, any right to vote on, consent to or approve any matter
relating to this Agreement or any other Loan Document except for those matters
specified in clauses (i) and (ii) of the proviso to subsection 11.1. The
Borrowers agree that if amounts outstanding under this Agreement are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, PROVIDED that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in subsection 11.7(a) as
fully as if it were a Lender hereunder. The Borrowers also agree that each
Participant shall be entitled to the benefits of subsections 4.10, 4.11 and 4.12
with respect to its participation in the Revolving Credit Commitments and the
Revolving Credit Loans outstanding from time to time as if it was a Lender;
PROVIDED that, in the case of subsection 4.11, such Participant shall have
complied with the requirements of said subsection and PROVIDED, FURTHER that no
Participant shall be entitled to receive any greater amount pursuant to any such
subsection than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its business or
investment activities and in accordance with applicable law, at any time and
from time to time assign to any Lender or any branch or affiliate thereof or,
with the consent of the Borrowers and the Administrative Agent (which in each
case shall not be unreasonably withheld or delayed), to an additional bank or
financial institution (an "ASSIGNEE") all or any part of its rights and
obligations under this Agreement and the other Loan Documents pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit F, executed by
such Assignee and such assigning Lender (and, in the case of an Assignee that is
not then a Lender or a branch or an affiliate thereof, by the Borrowers and the
Administrative Agent) and delivered to the Administrative Agent for its
acceptance and recording in the Register, PROVIDED that, in the case of any such
assignment to an additional bank or financial institution, if such assignment is
of less than all of the rights and obligations of the assigning Lender, the sum
of the aggregate principal amount of the Revolving Credit Loans, the aggregate
amount of the L/C Obligations and the aggregate amount of the Available
Revolving Credit Commitment being assigned shall not be less than $5,000,000 (or
such lesser amount as may be agreed to by the Borrowers and the Administrative
Agent). Upon such execution, delivery, acceptance and recording, from and after
the effective date determined pursuant to such Assignment and Acceptance, (x)
the Assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Revolving Credit Commitment as set forth therein, and (y) the
assigning Lender thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this
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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 assigning Lender shall cease to be a party hereto but shall
nonetheless continue to be entitled to the benefits of subsections 4.10, 4.11,
4.12 and 11.5). Notwithstanding any provision of this paragraph (c) and
paragraph (e) of this subsection, the consent of the Borrowers shall not be
required, and, unless requested by the Assignee and/or the assigning Lender, new
Revolving Credit Notes shall not be required to be executed and delivered by the
Borrowers, for any assignment which occurs at any time when any of the Events of
Default described in Section 9(f) shall have occurred and be continuing.
(d) The Administrative Agent, on behalf of the Borrowers, shall
maintain at the address of the Administrative Agent referred to in subsection
11.2 a copy of each Assignment and Acceptance delivered to it and a register
(the "REGISTER") for the recordation of the names and addresses of the Lenders
and the Revolving Credit Commitments of, and principal amounts of the Revolving
Credit Loans owing to, and any Revolving Credit Notes evidencing the Revolving
Credit Loans owned by, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrowers, the Administrative Agent and the Lenders shall treat each Person
whose name is recorded in the Register as the owner of a Revolving Credit Loan
or other obligation hereunder as the owner thereof for all purposes of this
Agreement and the other Loan Documents, notwithstanding any notice to the
contrary. Any assignment of any Revolving Credit Loan or other obligation
hereunder shall be effective only upon appropriate entries with respect thereto
being made in the Register. 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.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrowers and the Administrative
Agent) together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall promptly accept such
Assignment and Acceptance and record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Borrowers. Such Assignment and Acceptance and the assignment evidenced
thereby shall only be effective upon appropriate entries with respect to the
information contained therein being made in the Register pursuant to subsection
11.6(d).
(f) The Borrowers authorize each Lender to disclose to any Participant
or Assignee (each, a "TRANSFEREE") and any prospective Transferee, subject to
such Person agreeing to comply with the provisions of subsection 11.15, any and
all financial and other information in such Lender's possession concerning the
Borrowers and their Affiliates which has been delivered to such Lender by or on
behalf of the Borrowers pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of the Borrowers in connection with such Lender's
credit evaluation of the Borrowers and their Affiliates prior to becoming a
party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Revolving
Credit Loans and Revolving Credit Notes relate only to absolute assignments and
that such provisions do not prohibit
79
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Revolving Credit Loan or Revolving
Credit Note to any Federal Reserve Bank in accordance with applicable law.
11.7. ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITTED LENDER")
shall at any time receive any payment of all or part of its Revolving Credit
Loans or the Reimbursement Obligations owing to it, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 9(f), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Revolving Credit Loans or the Reimbursement Obligations owing to it, or
interest thereon, such benefitted Lender shall purchase for cash from the other
Lenders a participating interest (or, at the option of such benefitted Lender, a
direct interest) in such portion of each such other Lender's Revolving Credit
Loan or the Reimbursement Obligations owing to it, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
PROVIDED, HOWEVER, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrowers,
any such notice being expressly waived by the Borrowers to the extent permitted
by applicable law, upon any amount remaining unpaid (including, without
limitation, any amount owing to such Lender in respect of an undivided interest
purchased by such Lender in any draft paid by the Issuing Lender under any
Letter of Credit pursuant to subsection 3.4(a)) after it becomes due and payable
by the Borrowers hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any affiliate, branch or
agency thereof to or for the credit or the account of any Borrower. Each Lender
agrees promptly to notify the Borrowers and the Administrative Agent after any
such set-off and application made by such Lender, PROVIDED that the failure to
give such notice shall not affect the validity of such set-off and application.
11.8. COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrowers and the
Administrative Agent.
11.9. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
80
11.10. INTEGRATION. This Agreement and the other Loan Documents and the
Fee Letter, dated as of May 23, 2002, between CNG and the Administrative Agent
represent the agreement of the Borrowers, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents or the Fee Letter.
11.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
--------------
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.12. SUBMISSION TO JURISDICTION; WAIVERS. Each Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Borrower at its address set forth in subsection 11.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this subsection any exemplary, punitive or consequential damages.
11.13. ACKNOWLEDGEMENTS. Each Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to such Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between
81
Administrative Agent and Lenders, on one hand, and such Borrower, on the
other hand, in connection herewith or therewith is solely that of debtor
and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrowers and the Lenders.
11.14. WAIVERS OF JURY TRIAL. EACH BORROWER, THE ADMINISTRATIVE AGENT
---------------------
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
11.15. CONFIDENTIALITY. Each Lender agrees to keep confidential any
written information (a) provided to it by or on behalf of the Borrowers or any
of their Subsidiaries pursuant to or in connection with this Agreement or (b)
obtained by such Lender based on a review of the books and records of the
Borrowers or any of their Subsidiaries; PROVIDED that nothing herein shall
prevent any Lender from disclosing any such information (i) to the
Administrative Agent or any other Lender for use in connection with the
transactions contemplated by this Agreement and the other Loan Documents, (ii)
to any Transferee or prospective Transferee which agrees to comply with the
provisions of this subsection, (iii) to its employees, directors, agents,
attorneys, accountants and other professional advisors for use in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, (iv) upon the request or demand of any Governmental Authority having
jurisdiction over such Lender or as shall be required pursuant to any
Requirement of Law, (v) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (vi) in connection with any litigation to which such Lender
is a party, (vii) which has been publicly disclosed other than in breach of this
Agreement, or (viii) to the extent reasonably necessary, in connection with the
exercise of any remedy hereunder; PROVIDED, however, that, if such Lender or any
Person to whom such Lender supplies any such information becomes legally
compelled to disclosed any such information or otherwise intends to disclose any
such information in any of the circumstances contemplated by clauses (iv), (v),
(vi) or (vii) above, such Lender agrees to provide the Borrowers as promptly as
practicable with prior written notice of such compelled or intended disclosure.
11.16. REFERENCE TO AND EFFECT ON THE EXISTING CREDIT AGREEMENT. On and
after the date hereof, each reference to the "Credit Agreement" in any of the
Security Documents, the other Loan Documents and all other agreements, documents
and instruments delivered by all or one or more of the Borrower, the Lender, the
Administrative Agent and any other Person shall mean and be a reference to this
Agreement. Except as specifically amended hereby, the Existing Credit Agreement
shall remain in full force and in effect in the form of this Agreement, and is
hereby ratified and confirmed in such form.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
XXXX VISION CORPORATION
By:
-------------------------------------
Name:
Title:
THINGS REMEMBERED, INC.
By:
-------------------------------------
Name:
Title:
PEARLE, INC.
By:
-------------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY,
as Administrative Agent
By:
-------------------------------------
Name:
Title:
CIBC INC.
By:
-------------------------------------
Name:
Title:
XXXXXX COMMERCIAL PAPER INC.
By:
-------------------------------------
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION
By:
-------------------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By:
-------------------------------------
Name:
Title:
FIFTH THIRD BANK
By:
-------------------------------------
Name:
Title:
Schedule I
To Credit Agreement
-------------------
REVOLVING CREDIT COMMITMENTS AND ADDRESSES
Revolving Credit Commitments
----------------------------
CIBC INC. $16,666,666.67
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Agency Services
Telecopy: 000-000-0000
XXXXXX COMMERCIAL PAPER INC. $16,666,666.67
000 Xxxxxxx Xxx.
00xx Xxxxx
Xxx Xxxx, XX 00000
WACHOVIA BANK, NATIONAL ASSOCIATION $16,666,666.66
PA4821
0000 Xxxxxxxx Xxxxxx, 0 Xxxxxxx
Xxxxxxxxxxxx, XX 00000
KEYBANK NATIONAL ASSOCIATION $10,000,000.00
000 Xxxxxx Xxxxxx
Mail Code: OH-01-27-0606
Xxxxxxxxx, XX 00000
FIFTH THIRD BANK $15,000,000.00
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Schedule II
to Credit Agreement
APPLICABLE MARGIN CALCULATION FOR REVOLVING CREDIT LOANS
Abr Loans Eurodollar Loan
Leverage Ratio Applicable Margin Applicable Margin
-------------- ----------------- -----------------
Greater than 3.25 to 1.00 1.25% 2.25%
Greater than 2.75 to 1.00, but less than or
equal to 3.25 to 1.00 1.00% 2.00%
Less than or equal to 2.75 to 1.00 0.75% 1.75%
Notwithstanding the foregoing table, (a) during the period from and including
the Closing Date until the date which is six month thereafter, the Applicable
Margin in respect of Revolving Credit Loans shall equal (i) with respect to ABR
Loans, 1.25% per annum and (ii) with respect to Eurodollar Loans 2.25% per
annum, and (b) the Applicable Margin will be adjusted on each Adjustment Date
after such period to the applicable rate per annum set forth above under the
heading "ABR Loans Applicable Margin" or "Eurodollar Loans Applicable Margin"
minus .25% per annum in the event that, immediately preceding such Adjustment
Date, (i) the senior unsecured long-term debt of CNG shall be rated at least
"BBB-" by Standard & Poor's, a division of XxXxxx-Xxxx, Inc., and (ii) the
Administrative Agent shall have received written notice of such rating from a
Borrower.
COMMITMENT FEES
Percentage of Revolving Credit
Commitments Used Commitment Fees
------------------------------ ---------------
Greater than 33.3% 0.50%
Less than or equal to 33.3% 0.75%
