Exhibit 10.1
AMENDED AND RESTATED
CREDIT AGREEMENT
(New Credit Agreement)
among
CHATTEM, INC.,
as Borrower,
Domestic Subsidiaries of Borrower,
as Guarantors,
THE LENDERS IDENTIFIED HEREIN,
AND
NATIONSBANK OF TENNESSEE, N.A.,
as Agent
DATED AS OF MARCH 24, 1998
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS.........................................................1
1.1 Definitions............................................................................1
1.2 Computation of Time Periods and Other Definitional Provisions.........................23
1.3 Accounting Terms......................................................................24
SECTION 2 CREDIT FACILITIES.......................................................................24
2.1 Revolving Loans.......................................................................24
2.2 Swingline Loan Subfacility............................................................26
2.3 Continuations and Conversions.........................................................28
2.4 Minimum Amounts.......................................................................28
2.5 Notes.................................................................................29
SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS..................................................29
3.1 Interest..............................................................................29
3.2 Place and Manner of Payments..........................................................29
3.3 Prepayments...........................................................................30
3.4 Fees..................................................................................32
3.5 Payment in full at Maturity...........................................................32
3.6 Computations of Interest and Fees.....................................................32
3.7 Pro Rata Treatment....................................................................33
3.8 Allocation of Payments After Event of Default.........................................34
3.9 Sharing of Payments...................................................................35
3.10 Capital Adequacy.....................................................................35
3.11 Inability To Determine Interest Rate.................................................36
3.12 Illegality...........................................................................36
3.13 Requirements of Law..................................................................37
3.14 Taxes................................................................................38
3.15 Indemnity............................................................................40
3.16 Replacement of Lenders...............................................................41
SECTION 4 GUARANTY................................................................................41
4.1 Guaranty of Payment...................................................................41
4.2 Obligations Unconditional.............................................................41
4.3 Modifications.........................................................................42
4.4 Waiver of Rights......................................................................43
4.5 Reinstatement.........................................................................43
4.6 Remedies..............................................................................43
4.7 Limitation of Guaranty................................................................44
4.8 Rights of Contribution................................................................44
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SECTION 5 CONDITIONS PRECEDENT....................................................................45
5.1 Closing Conditions....................................................................45
5.2 Conditions to All Extensions of Credit................................................51
SECTION 6 REPRESENTATIONS AND WARRANTIES..........................................................52
6.1 Financial Condition...................................................................52
6.2 No Material Change....................................................................52
6.3 Organization and Good Standing........................................................52
6.4 Due Authorization.....................................................................53
6.5 No Conflicts..........................................................................53
6.6 Consents..............................................................................53
6.7 Enforceable Obligations...............................................................53
6.8 No Default............................................................................54
6.9 Ownership.............................................................................54
6.10 Indebtedness.........................................................................54
6.11 Litigation...........................................................................54
6.12 Taxes................................................................................54
6.13 Compliance with Law..................................................................54
6.14 ERISA................................................................................55
6.15 Subsidiaries.........................................................................56
6.16 Use of Proceeds; Margin Stock........................................................56
6.17 Government Regulation................................................................56
6.18 Environmental Matters................................................................57
6.19 Intellectual Property................................................................58
6.20 Solvency.............................................................................58
6.21 Investments..........................................................................58
6.22 No Financing of Corporate Takeovers..................................................59
6.23 Location of Collateral...............................................................59
6.24 Disclosure...........................................................................59
6.25 Licenses, etc........................................................................59
6.26 No Burdensome Restrictions...........................................................59
6.27 Brokers' Fees........................................................................59
6.28 Labor Matters........................................................................60
6.29 Collateral Documents.................................................................60
6.30 Related Transactions.................................................................60
6.31 Representations and Warranties Incorporated from Purchase Agreement..................60
6.32 Senior Debt..........................................................................60
SECTION 7 AFFIRMATIVE COVENANTS...................................................................61
7.1 Information Covenants.................................................................61
7.2 Preservation of Existence and Franchises..............................................65
7.3 Books and Records.....................................................................65
7.4 Compliance with Law...................................................................65
7.5 Payment of Taxes and Other Indebtedness...............................................65
7.6 Insurance.............................................................................65
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7.7 Maintenance of Property...............................................................66
7.8 Performance of Obligations............................................................67
7.9 Collateral............................................................................67
7.10 Use of Proceeds......................................................................67
7.11 Audits/Inspections...................................................................67
7.12 Financial Covenants..................................................................68
7.13 Additional Credit Parties............................................................69
7.14 Ownership of Subsidiaries............................................................70
7.15 Appraisal Reports....................................................................70
7.16 Year 2000 Compatibility..............................................................70
SECTION 8 NEGATIVE COVENANTS......................................................................70
8.1 Indebtedness..........................................................................70
8.2 Liens.................................................................................71
8.3 Nature of Business....................................................................71
8.4 Consolidation and Merger..............................................................71
8.5 Sale or Lease of Assets...............................................................72
8.6 Advances, Investments and Loans.......................................................72
8.7 Dividends.............................................................................72
8.8 Transactions with Affiliates..........................................................73
8.9 Fiscal Year; Organizational Documents.................................................73
8.10 Prepayments of Indebtedness..........................................................73
8.11 Subordinated Debt....................................................................73
8.12 Limitations..........................................................................74
8.13 Sale Leasebacks......................................................................74
8.14 Negative Pledges.....................................................................74
8.15 Capital Expenditures.................................................................74
8.16 Operating Leases.....................................................................74
8.17 Payment Blockage Notice..............................................................74
SECTION 9 EVENTS OF DEFAULT.......................................................................75
9.1 Events of Default.....................................................................75
9.2 Acceleration; Remedies................................................................78
S0.1ECTION 10 AGENCY PROVISIONS...................................................................79
10.1 Appointment..........................................................................79
10.2 Delegation of Duties.................................................................80
10.3 Exculpatory Provisions...............................................................80
10.4 Reliance on Communications...........................................................80
10.5 Notice of Default....................................................................81
10.6 Non-Reliance on Agent and Other Lenders..............................................81
10.7 Indemnification......................................................................82
10.8 Agent in Its Individual Capacity.....................................................82
10.9 Successor Agent......................................................................82
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SECTION 11 MISCELLANEOUS..........................................................................83
11.1 Notices..............................................................................83
11.2 Right of Set-Off.....................................................................83
11.3 Benefit of Agreement.................................................................83
11.4 No Waiver; Remedies Cumulative.......................................................86
11.5 Payment of Expenses; Indemnification.................................................87
11.6 Amendments, Waivers and Consents.....................................................87
11.7 Counterparts.........................................................................88
11.8 Headings.............................................................................89
11.9 Defaulting Lender....................................................................89
11.10 Survival of Indemnification and Representations and Warranties......................89
11.11 Governing Law; Venue................................................................89
11.12 Waiver of Jury Trial................................................................90
11.13 Time................................................................................90
11.14 Severability........................................................................90
11.15 Entirety............................................................................90
11.16 Binding Effect......................................................................90
iv
SCHEDULES
Schedule 1.1(a) Commitment Percentages
Schedule 1.1(b) Existing Permitted Investments
Schedule 5.1(g) Mortgaged Properties and Leasehold Properties
Schedule 6.10 Indebtedness
Schedule 6.14 ERISA Matters
Schedule 6.15 Subsidiaries
Schedule 6.18 Environmental Matters
Schedule 6.19 Intellectual Property
Schedule 6.23(a) Real Property Locations
Schedule 6.23(b) Personal Property Locations
Schedule 6.23(c) Chief Executive Offices
Schedule 7.6 Insurance
Schedule 8.2 Liens
Schedule 8.8 Affiliate Transactions
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1 Form of Notice of Borrowing
Exhibit 2.3 Form of Notice of Continuation/Conversion
Exhibit 2.5(a) Form of Revolving Loan Note
Exhibit 2.5(b) Form of Swingline Note
Exhibit 7.1(d) Form of Officer's Certificate
Exhibit 7.1(f) Form of Borrowing Base Certificate
Exhibit 7.13 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment Agreement
AMENDED AND RESTATED CREDIT AGREEMENT
(New Credit Agreement)
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Credit Agreement"),
is entered into as of March 24, 1998 among CHATTEM, INC., a Tennessee
corporation (the "Borrower"), each of the Borrower's Domestic Subsidiaries,
individually a "Guarantor" and collectively the "Guarantors"), the New Credit
Agreement Lenders (as defined herein), and NATIONSBANK OF TENNESSEE, N.A., as
agent for the New Credit Agreement Lenders (in such capacity, the "Agent").
RECITALS
WHEREAS, the Borrower, the Guarantors, the lenders party thereto and
NationsBank of Tennessee, N.A., as agent are currently parties to that certain
Credit Agreement dated as of June 26, 1997 (as amended or modified from time to
time, the "New Credit Agreement"). The New Credit Agreement replaced and
refinanced the credit facilities provided by the lenders pursuant to that
certain Credit Agreement dated as of April 26, 1996 (as amended or modified from
time to time, the "Prior New Credit Agreement"). The credit facilities provided
pursuant to the Prior New Credit Agreement replaced and refinanced the credit
facilities provided to the Borrower by The First National Bank of Chicago, as
agent and certain other lenders under the credit agreements dated as of June 17,
1994;
WHEREAS, the Borrower and the Guarantors have requested that the New
Credit Agreement Lenders provide an amended and restated $45,000,000 credit
facility to replace and refinance the credit facilities provided pursuant to the
Prior New Credit Agreement, making this Credit Agreement the New Credit
Agreement under the Indenture (as hereinafter defined); and
WHEREAS, the New Credit Agreement Lenders have agreed to make the
requested credit facility available to the Borrower on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Acquired Assets" means, collectively, those assets acquired
under and pursuant to the Purchase Agreement.
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date, as provided in Section 7.13.
"Additional Subordinated Debt" means the Indebtedness
evidenced by the Second Indenture or by the guarantees thereof in an
aggregate amount not to exceed $200,000,000.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Agent" means NationsBank of Tennessee, N.A. or any
successor administrative agent appointed pursuant to Section 10.9.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to
all directors and executive officers of such Person), controlled by or
under direct or indirect common control with such Person. A Person
shall be deemed to control a corporation if such Person possesses,
directly or indirectly, the power (i) to vote 10% or more of the
securities having ordinary voting power for the election of directors
of such corporation or (ii) to direct or cause direction of the
management and policies of such corporation, whether through the
ownership of voting securities, by contract or otherwise.
"Agency Services Address" means NationsBank of Tennessee,
N.A., NC1-001-15-04, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, Attn: Agency Services, or such other address as may be
identified by written notice from the Agent to the Borrower.
"Applicable Percentage" means for Revolving Loans, the
appropriate applicable percentages corresponding to the Leverage Ratio
in effect as of the most recent Calculation Date as shown below:
Applicable Percentage For Applicable Percentage
Pricing Leverage Eurodollar For Base Rate
Level Ratio Loans Loans
-------- ---------------- -------------------------- -----------------------
I < 4.0 to 1.0 2.25% 1.25%
II > 4.0 to 1.0 2.50% 1.50%
-
but < 4.5 to 1.0
III > 4.5 to 1.0 but 2.75% 1.75%
-
< 5.0 to 1.0
2
IV > 5.0 to 1.0 3.00% 2.00%
The Applicable Percentage for Revolving Loans shall, in each
case, be determined and adjusted quarterly on the date (each a
"Calculation Date") five Business Days after the date by which the
Borrower is required to provide the officer's certificate in accordance
with the provisions of Section 7.1(e); provided, however that (i) the
initial Applicable Percentage for Revolving Loans shall be based on
Pricing Level II (as shown above) and shall remain at Pricing Level II
until the first Calculation Date subsequent to the Closing Date and,
thereafter, the Pricing Level shall be determined by the then current
Leverage Ratio, and (ii) if the Borrower fails to provide the officer's
certificate required by Section 7.1(e) on or before the most recent
Calculation Date or fails to deliver a copy of such officer's
certificate to the Agency Services Address as required by Section
7.1(e), the Applicable Percentage for Revolving Loans from such
Calculation Date shall be based on Pricing Level IV until such time
that an appropriate officer's certificate is provided whereupon the
Pricing Level shall be determined by the then current Leverage Ratio.
Each Applicable Percentage shall be effective from one Calculation Date
until the next Calculation Date. Any adjustment in the Applicable
Percentage shall be applicable to all existing Loans as well as any new
Loans made or issued.
"Asset Disposition" means the disposition of any or all of the
assets of the Borrower, or any of its Subsidiaries, whether by sale,
lease, transfer or otherwise unless such disposition is permitted by
the terms of Section 8.5(a), (b) or (c) hereof.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day plus 1/2 of 1% or (b) the Prime Rate in effect on such day. If for
any reason the Agent shall have determined (which determination shall
be conclusive absent manifest error) that it is unable after due
inquiry to ascertain the Federal Funds Rate for any reason, including
the inability or failure of the Agent to obtain sufficient quotations
in accordance with the terms hereof, the Base Rate shall be determined
without regard to clause (a) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist.
Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any successors and permitted assigns.
3
"Borrowing Base" means, as of any day, the sum, calculated in
Dollars, of (a) 80% of Eligible Receivables plus (b) 50% of Eligible
Inventory in each case as set forth in the most recent Borrowing Base
Certificate delivered to the Agent and the Lenders in accordance with
the terms of Section 7.1(g) plus (c) $3 million during the period of
December 1 to May 31 of each year.
"Borrowing Base Certificate" means a Borrowing Base
Certificate substantially in the form of Exhibit 7.1(g).
"Business Day" means any day other than a Saturday, a Sunday,
a legal holiday or a day on which banking institutions are authorized
or required by law or other governmental action to close in Charlotte,
North Carolina; provided that in the case of Eurodollar Loans, such day
is also a day on which dealings between banks are carried on in U.S.
dollar deposits in the London interbank market.
"Calculation Date" has the meaning set forth in the definition
of Applicable Percentage.
"Capital Expenditures" means all expenditures of the Credit
Parties and their Subsidiaries which, in accordance with GAAP, would be
classified as capital expenditures, including, without limitation,
Capital Leases.
"Capital Lease" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated (or with respect to Foreign
Subsidiaries, U.S. dollar denominated and non U.S. dollar denominated)
time deposits and certificates of deposit of (i) any Lender or SunTrust
Bank, Chattanooga, N.A., (ii) any domestic (or with respect to Foreign
Subsidiaries, any domestic or nondomestic) commercial bank of
recognized standing having capital and surplus in excess of
4
$500,000,000 or (iii) any bank whose short-term commercial paper rating
from S&P is at least A-1 or the equivalent thereof or from Xxxxx'x is
at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than 270
days from the date of acquisition, (c) commercial paper and variable or
fixed rate notes issued by any Approved Bank (or by the parent company
thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by
S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within six months of the date of acquisition, (d) repurchase
agreements with a bank or trust company (including any of the Lenders
or SunTrust Bank, Chattanooga, N.A.) or recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of
America in which the Borrower shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date
of purchase thereof, a fair market value of at least 100% of the amount
of the repurchase obligations and (e) Investments, classified in
accordance with GAAP as current assets, in money market investment
programs registered under the Investment Company Act of 1940, as
amended, which are administered by SunTrust Bank, Chattanooga, N.A. or
reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of
the character described in the foregoing subdivisions (a) through (d).
"Change of Control" means any of the following events: either
(i) a "person" or a "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of more than 35% of the then outstanding voting
stock of the Borrower or (ii) a majority of the Board of Directors of
the Borrower shall consist of individuals who are not Continuing
Directors; "Continuing Director" means, as of any date of
determination, (A) an individual who on the date two years prior to
such determination date was a member of the Borrower's Board of
Directors or (B) any new Director whose nomination for election by the
Borrower's shareholders was approved by a vote of at least 75% of the
Directors then still in office who either were Directors on the date
two years prior to such determination date or whose nomination for
election was previously so approved.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
modified, succeeded or replaced from time to time.
"Collateral" means all collateral referred to in and covered
by the Collateral Documents.
"Collateral Documents" means the Security Agreements, the
Pledge Agreement, the Mortgage Documents and such other documents
executed and delivered in connection with the attachment and perfection
of the Lenders' security interests in the assets of the Credit Parties,
including, without limitation, UCC financing statements and patent and
trademark filings.
"Commitment Fees" means the fees payable to the New Credit
Agreement Lenders pursuant to Section 3.4(a).
"Commitments" means the Revolving Committed Amount and the
Swingline Committed Amount.
"Credit Documents" means this Credit Agreement, the Notes, any
Joinder Agreement, the Collateral Documents, the Fee Letter and all
other related agreements and documents issued or delivered hereunder or
thereunder or pursuant hereto or thereto.
5
"Credit Parties" means the Borrower and the Guarantors and
"Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (a) all
of the obligations of the Credit Parties to the New Credit Agreement
Lenders and the Agent, whenever arising, under this Credit Agreement,
the Notes, the Collateral Documents or any of the other Credit
Documents to which the Borrower or any other Credit Party is a party
(including, but not limited to, any interest accruing after the
occurrence of a Bankruptcy Event with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the
Bankruptcy Code) and (b) all liabilities and obligations owing from a
Credit Party to any New Credit Agreement Lender, or any Affiliate of a
New Credit Agreement Lender, arising under interest rate protection
agreements, foreign currency exchange agreements, commodity purchase or
option agreements or other interest or exchange rate or commodity price
hedging agreements (collectively, the "Hedging Agreements").
"Debt Issuance" means the issuance of any Indebtedness by a
Credit Party or any of its Subsidiaries, other than Indebtedness
permitted by Section 8.1.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, at
such time (a) has failed to make a Loan, Tranche A Term Loan or Tranche
B Term Loan or purchase a Participation Interest required pursuant to
the terms of this Credit Agreement or Supplemental Credit Agreement,
(b) has failed to pay to the Agent or any Lender an amount owed by such
Lender pursuant to the terms of this Credit Agreement or Supplemental
Credit Agreement or (c) has been deemed insolvent or has become subject
to a bankruptcy or insolvency proceeding or to a receiver, trustee or
similar official.
"Domestic Subsidiaries" means all Subsidiaries of the Borrower
that are domiciled, incorporated or organized under the laws of any
state of the United States or the District of Columbia.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"EBIT" means, for any period, with respect to the Borrower and
its Subsidiaries on a consolidated basis, the sum of (a) Net Income for
such period (excluding the effect of any extraordinary or other
non-recurring gains or losses outside of the ordinary course of
business) plus (b) an amount which, in the determination of Net Income
for such period has been deducted for (i) Interest Expense for such
period and (ii) total Federal, state, foreign or other income taxes for
such period, all as determined in accordance with GAAP.
6
"EBITDA" means, for any period, with respect to the Borrower
and its Subsidiaries on a consolidated basis, the sum of (a) Net Income
for such period (excluding the effect of any extraordinary or other
non-recurring gains or losses outside of the ordinary course of
business) plus (b) an amount which, in the determination of Net Income
for such period has been deducted for (i) Interest Expense for such
period, (ii) total Federal, state, foreign or other income taxes for
such period and (iii) all depreciation, amortization and other non-cash
charges for such period, all as determined in accordance with GAAP.
"Effective Date" means the date on which the conditions set
forth in Section 5.1 shall have been fulfilled (or waived in the sole
discretion of the Lenders) and on which the initial Loans shall have
been made.
"Eligible Assignee" means (a) any Lender or Affiliate or
subsidiary of a Lender and (b) any other commercial bank, financial
institution or "accredited investor" (as defined in Regulation D of the
Securities and Exchange Commission) reasonably acceptable to the Agent
and the Borrower.
"Eligible Inventory" means, as of any date of determination
and without duplication, the lower of (a) the aggregate book value
(based on a FIFO or a moving average cost valuation, consistently
applied) or (b) fair market value of all raw materials and finished
goods inventory owned by the Borrower, in either case, less appropriate
reserves determined in accordance with GAAP, but excluding in any event
(i) inventory subject to any Lien, other than Liens securing Credit
Party Obligations, (ii) inventory which is not in good condition or
fails to meet standards for sale or use imposed by governmental
agencies, departments or divisions having regulatory authority over
such goods, (iii) inventory which is not useable or saleable at prices
approximating their cost in the ordinary course of the Borrower's
business (including without duplication the amount of any reserves for
obsolescence, unsalability or decline in value), (iv) inventory located
outside of the United States, (v) inventory located at a location not
owned or leased by the Borrower, (vi) inventory located at a location
leased by the Borrower or in a public warehouse facility with respect
to which the Agent shall not have received a landlord, bailee and/or
warehousemen's access and lien waiver satisfactory to the Agent, (vii)
inventory which is leased or on consignment, (viii) inventory
consisting of packaging materials and supplies, (ix) inventory which
consists of goods in transit, (x) inventory with respect to which the
Agent does not have a valid and perfected first-priority security
interest and (xi) inventory which fails to meet such other
specifications and requirements as may from time to time be established
by the Agent in its reasonable discretion.
"Eligible Receivables" means, at any time, the aggregate book
value of all accounts receivable, receivables, and obligations for
payment created or arising from the sale of inventory or the rendering
of services in the ordinary course of business (collectively, the
"Receivables"), owned by or owing to the Borrower, net of allowances
and reserves for doubtful or uncollectible accounts and sales
adjustments consistent with the Borrower's internal policies and in any
event in accordance with GAAP, but
7
excluding in any event (i) Receivables subject to any Lien, other than
Liens securing Credit Party Obligations, (ii) Receivables which are
more than 60 days past due (net of reserves for bad debts in connection
with any such Receivables), (iii) Receivables not otherwise excluded by
clause (ii) above but owing from an account debtor having twenty
percent (20%) of the balance owing by such account debtor to the
Borrower (calculated without taking into account any credit balances of
such account debtor) more than sixty (60) days past due, (iv)
Receivables evidenced by notes, chattel paper or other instruments,
unless such notes, chattel paper or instruments have been delivered to
and are in the possession of the Agent, (v) Receivables owing by an
account debtor which is not solvent or is subject to any bankruptcy or
insolvency proceeding of any kind, (vi) Receivables owing by an account
debtor located outside of the United States (unless payment for the
goods shipped is secured by an irrevocable letter of credit in a form
and from an institution acceptable to the Agent), (vii) Receivables
which are contingent or subject to offset, deduction, counterclaim,
dispute or other defense to payment, in each case to the extent of such
offset, deduction, counterclaim, dispute or other defense, (viii)
Receivables for which any direct or indirect Subsidiary of the Borrower
or any Affiliate of the Borrower is the account debtor, (ix)
Receivables representing a sale to the government of the United States
of America or any subdivision thereof unless the Borrower has complied
(to the satisfaction of the Agent), with respect to the granting of a
security interest in such Receivable, with the Federal Assignment of
Claims Act or other similar applicable law, (x) Receivables from any
single account debtor and its Affiliates which otherwise constitute
Eligible Receivables comprising more than twenty five percent (25%) of
all Eligible Receivables, but only to the extent in excess of such
twenty-five percent (25%) and (xi) Receivables which fail to meet such
other specifications and requirements as may from time to time be
established by the Agent in its reasonable discretion.
"Environmental Claim" means any investigation, written notice,
violation, written demand, written allegation, action, suit,
injunction, judgment, order, consent decree, penalty, fine, lien,
proceeding, or written claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an
actual or alleged violation of, any Environmental Law, (b) in
connection with any Hazardous Material, (c) from any assessment,
abatement, removal, remedial, corrective, or other response action in
connection with an Environmental Law or other order of a Governmental
Authority or (d) from any actual or alleged damage, injury, threat, or
harm to health, safety, natural resources, or the environment.
"Environmental Laws" means any current or future legal
requirement of any Governmental Authority pertaining to (a) the
protection of health, safety, and the indoor or outdoor environment,
(b) the conservation, management, or use of natural resources and
wildlife, (c) the protection or use of surface water and groundwater,
(d) the management, manufacture, possession, presence, use, generation,
transportation, treatment, storage, disposal, release, threatened
release, abatement, removal, remediation or handling of, or exposure
to, any hazardous or toxic substance or material or (e) pollution
(including any release to air, land, surface water, and groundwater),
and includes, without limitation, the Comprehensive Environmental
Response, Compensation,
8
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 USC 9601 et seq., Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act of 1976
and Hazardous and Solid Waste Amendment of 1984, 42 USC 6901 et seq.,
Federal Water Pollution Control Act, as amended by the Clean Water Act
of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as amended, 42 USC
7401 et seq., Toxic Substances Control Act of 1976, 15 USC 2601 et
seq., Hazardous Materials Transportation Act, 49 USC App. 1801 et seq.,
Occupational Safety and Health Act of 1970, as amended, 29 USC 651 et
seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency
Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et seq.,
National Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe
Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq., any
analogous implementing or successor law, and any amendment, rule,
regulation, order, or directive issued thereunder.
"Equity Issuance" means any issuance by the Borrower to any
Person of (a) shares of its capital stock or other equity interests,
(b) any shares of its capital stock or other equity interests pursuant
to the exercise of options (other than stock issued to employees and
directors pursuant to employees or directors stock option plans) or
warrants or (c) any shares of its capital stock or other equity
interests pursuant to the conversion of any debt securities to equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
form time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity, whether or not
incorporated, which is under common control with any Credit Party or
any of its Subsidiaries within the meaning of Section 4001(a)(14) of
ERISA, or is a member of a group which includes any Credit Party or any
of its Subsidiaries and which is treated as a single employer under
Sections 414(b), (c), (m), or (o) of the Code.
"Eurodollar Loan" means any Loan, Tranche A Term Loan or
Tranche B Term Loan bearing interest based at a rate determined by
reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
London Interbank Offered Rate
Eurodollar Rate = ---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from time to time or any successor regulation, as the maximum reserve
9
requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined), whether or not Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurodollar Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from
time to time to a Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" has the meaning specified in Section 9.1.
"Excess Cash Flow" means, with respect to any fiscal year
period of the Borrower and its Subsidiaries, on a consolidated basis,
an amount equal to (a) EBITDA for such period minus (b) Capital
Expenditures for such period minus (c) cash Interest Expense for such
period minus (d) Federal, state and other income taxes actually paid
during such period minus (e) Principal Amortization Payments made
during such period minus (f) voluntary prepayments made with respect to
the Tranche A Term Loans or Tranche B Term Loans during such period
minus (g) increases in Working Capital for such period plus (h)
decreases in Working Capital for such period, minus (i) any cash gain
from an Asset Disposition (to the extent included in EBITDA and paid to
the Lenders as a mandatory prepayment pursuant to Section 3.3(b)(iii)
hereof and Section 3.3(b)(iii) of the Supplemental Credit Agreement).
"Extension of Credit" means, as to any Lender, the making of a
Loan by such Lender (or a participation therein by a Lender).
"Federal Funds Rate" means for any day the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day and (b) if no such rate is so published on such next
preceding Business Day, the Federal Funds Rate for such day shall be
the average rate quoted to the Agent on such day on such transactions
as determined by the Agent.
"Fee Letter" means that certain letter agreement, dated as of
February 24, 1998, between the Agent and the Borrower, as amended,
modified, supplemented or replaced from time to time.
"Fixed Charge Coverage Ratio" means, as of the end of each
fiscal quarter of the Borrower, for the twelve month period ending on
such date, with respect to the Borrower and its Subsidiaries on a
consolidated basis, the ratio of (a) EBITDA for the applicable
10
period minus Capital Expenditures for the applicable period minus
Federal, State and other income taxes paid in cash for the applicable
period to (b) the sum of (i) cash Interest Expense for the applicable
period plus (ii) Scheduled Funded Debt Payments for the applicable
period.
"Foreign Subsidiaries" means all Subsidiaries of the
Borrower that are not Domestic Subsidiaries.
"Funded Debt" means, without duplication, the sum of (a) all
Indebtedness of the Borrower and its Subsidiaries for borrowed money,
(b) all purchase money Indebtedness of the Borrower and its
Subsidiaries, (c) the principal portion of all obligations of the
Borrower and its Subsidiaries under Capital Leases, (d) commercial
letters of credit and the maximum amount of all performance and standby
letters of credit issued or bankers' acceptance facilities created for
the account of the Borrower or any of its Subsidiaries, including,
without duplication, all unreimbursed draws thereunder, (e) all
Guaranty Obligations of the Borrower and its Subsidiaries with respect
to Funded Debt of another person, (f) all Funded Debt of another entity
secured by a Lien on any property of the Borrower or any of its
Subsidiaries whether or not such Funded Debt has been assumed by a
Borrower or any of its Subsidiaries, (g) all Funded Debt of any
partnership or unincorporated joint venture to the extent the Borrower
or one of its Subsidiaries is legally obligated or has a reasonable
expectation of being liable with respect thereto, net of any assets of
such partnership or joint venture and (h) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product
pursuant to which a Borrower or any of its Subsidiaries is the obligor
where such transaction is considered borrowed money indebtedness for
tax purposes but is classified as an operating lease in accordance with
GAAP.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to Section 1.3.
"Governmental Authority" means any Federal, state, local,
provincial or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Guarantor" means each of the Domestic Subsidiaries of the
Borrower and each Additional Credit Party which has executed a Joinder
Agreement, together with their successors and assigns.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness,
leases, dividends or other obligations of any other Person in any
manner, whether direct or indirect, and including without limitation
any obligation, whether or not contingent, (a) to purchase any such
Indebtedness or other obligation or any property constituting security
therefor, (b) to advance or provide funds or other support for the
payment or purchase of such indebtedness or obligation or to maintain
working capital,
11
solvency or other balance sheet condition of such other Person
(including, without limitation, maintenance agreements, comfort
letters, take or pay arrangements, put agreements or similar agreements
or arrangements) for the benefit of the holder of Indebtedness of such
other Person, (c) to lease or purchase property, securities or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation, or (d) to otherwise assure or hold harmless the owner of
such Indebtedness or obligation against loss in respect thereof. The
amount of any Guaranty Obligation hereunder shall (subject to any
limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount (or maximum principal amount, if larger)
of the Indebtedness in respect of which such Guaranty Obligation is
made.
"Hazardous Materials" means any substance, material or waste
defined or regulated in or under any Environmental Laws.
"Hedging Agreements" has the meaning set forth in the
definition of Credit Party Obligations.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c)
all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person to
the extent of the value of such property (other than customary
reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations,
including without limitation, intercompany items, of such Person issued
or assumed as the deferred purchase price of property or services
purchased by such Person which would appear as liabilities on a balance
sheet of such Person, (e) 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, or payable out of the
proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (f)
all Guaranty Obligations of such Person, (g) the principal portion of
all obligations of such Person under (i) Capital Leases and (ii) any
synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product of such Person where
such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with
GAAP (collectively, "TROLS"), (h) all obligations of such Person in
respect of interest rate protection agreements, foreign currency
exchange agreements, or other interest or exchange rate or commodity
price hedging agreements, (i) the maximum amount of all performance and
standby letters of credit issued or bankers' acceptances facilities
created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (j) all preferred
stock issued by such Person and required by the terms thereof to be
redeemed, or for which mandatory sinking fund payments are due, by a
fixed date and (k) the aggregate amount of uncollected accounts
receivable of such Person subject at such time to a sale of receivables
(or similar transaction) regardless of whether such transaction is
effected without recourse to such Person or in a manner that would not
be reflected on the balance sheet of such Person in
12
accordance with GAAP. The Indebtedness of any Person shall include the
Indebtedness of any partnership or unincorporated joint venture in
which such Person is legally obligated or has a reasonable expectation
of being liable with respect thereto.
"Indenture" means that certain Indenture dated as of August 3,
1994 among the Borrower as issuer, Signal Investment & Management Co.
as guarantor and SouthTrust Bank of Alabama, National Association, as
trustee, as the same may be modified, supplemented or amended from time
to time.
"Interest Coverage Ratio" means, as of the end of each fiscal
quarter of the Borrower, for the twelve month period ending on such
date, with respect to the Borrower and its Subsidiaries on a
consolidated basis, the ratio of (a) EBIT for the applicable period to
(b) cash Interest Expense for the applicable period.
"Interest Expense" means, for any period, with respect to the
Borrower and its Subsidiaries on a consolidated basis, all interest
expense, including the interest component under Capital Leases, as
determined in accordance with GAAP.
"Interest Payment Date" means (a) as to Base Rate Loans other
than Swingline Loans, the last Business Day of each fiscal quarter of
the Borrower and on the Revolving Loan Maturity Date and (b) as to
Eurodollar Loans or any Swingline Loan, on the last day of each
applicable Interest Period and on the Revolving Loan Maturity Date.
"Interest Period" means, (i) as to Eurodollar Loans, a period
of one, two or three months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof) and (ii) as to any Swingline
Loan, a period commencing in each case on the date of the borrowing and
ending on the date agreed to by the Borrower and the Swingline Lender
in accordance with the provision of Section 2.3(b)(i) (such ending date
in any event to be not more than seven (7) Business Days from the date
of borrowing); provided, however, (a) if any Interest Period would end
on a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day (except that where the
next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding Business Day), (b) no Interest Period
shall extend beyond the Revolving Loan Maturity Date and (c) where an
Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is
to end, such Interest Period shall end on the last Business Day of such
calendar month.
"Investment" means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of capital stock, bonds, notes,
debentures, partnership, joint venture or other ownership interests or
other securities of any Person or (b) any deposit with, or advance,
loan or other extension of credit to, any Person (other than deposits
made in connection with the purchase of equipment or other assets in
the ordinary course of business) or (c) any other capital contribution
to or investment in such Person, including, without limitation, any
Guaranty Obligation incurred for the benefit of such person.
13
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 7.13.
"Leasehold Properties" has the meaning set forth in Section
5.1(h).
"Lender" means collectively, the Supplemental Credit
Lenders and the New Credit Agreement Lenders.
"Leverage Ratio" means, as of the end of each fiscal quarter
of the Borrower, with respect to the Borrower and its Subsidiaries on a
consolidated basis, the ratio of (a) Funded Debt on such date to (b)
EBITDA for the twelve month period ending on such date.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including,
without limitation, any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any financing or
similar statement or notice filed under the Uniform Commercial Code as
adopted and in effect in the relevant jurisdiction or other similar
recording or notice statute, and any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans and/or the
Swingline Loans (or a portion of any Revolving Loan), individually or
collectively, as appropriate.
"London Interbank Offered Rate" means, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately
11:00 A.M. (London time) two Business Days prior to the first day of
such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Telerate Page
3750, the applicable rate shall be the arithmetic mean of all such
rates. If, for any reason, such rate is not available, the term "London
Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. (London time)
two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates.
"Material Adverse Effect" means a material adverse effect,
after taking into account applicable insurance (to the extent the
provider thereof has the financial ability to support its obligations
with respect thereto and is not disputing same), on (a) the operations,
financial condition, business or prospects of the Borrower and its
Subsidiaries taken as a whole, (b)
14
the ability of a Credit Party to perform its respective obligations
under this Credit Agreement, or any of the other Credit Documents, the
Supplemental Credit Agreement or any of the other Supplemental Credit
Documents or (c) the validity or enforceability of this Credit
Agreement, or any of the other Credit Documents, the Supplemental
Credit Agreement or any of the other Supplemental Credit Documents, or
the rights and remedies of the Lenders hereunder or thereunder taken as
a whole.
"Moody's" means Xxxxx'x Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Mortgage Documents" means the Mortgages, the Mortgage
Policies and such other documents and agreements executed or delivered
in connection with the Real Properties.
"Mortgage Policies" has the meaning set forth in Section
5.1(g).
"Mortgages" has the meaning set forth in Section 5.1(g).
"Mortgaged Properties" has the meaning set forth in Section
5.1(g).
"Multiemployer Plan" means a Plan covered by Title IV of ERISA
which is a multiemployer plan as defined in Sections 3(37) or
4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan covered by Title IV of
ERISA, other than a Multiemployer Plan, which any Credit Party or any
of its Subsidiaries or any ERISA Affiliate and at least one employer
other than a Credit Party or any of its Subsidiaries or any ERISA
Affiliate are contributing sponsors.
"NationsBank" means NationsBank of Tennessee, N.A. and its
successors.
"Net Cash Proceeds" means the gross cash proceeds (including
cash actually received by way of deferred payment pursuant to a
promissory note, receivable, or otherwise) received from an Asset
Disposition, an Equity Issuance, a Debt Issuance or Recovery Event net
of (a) transaction costs payable to third parties or (b) a good faith
estimate of the taxes payable with respect to such proceeds (including,
without duplication, withholding taxes).
"Net Income" means, for any period, the net income after taxes
for such period of the Borrower and its Subsidiaries on a consolidated
basis, as determined in accordance with GAAP.
"Net Worth" means, as of any date, shareholders' equity or net
worth of the Borrower and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP.
15
"New Credit Agreement Lender" means any of the Persons
identified as a "New Credit Agreement Lender" on the signature pages
hereto, and any Person which may become a Lender by way of assignment
in accordance with the terms hereof, together with their successors and
permitted assigns.
"Non-Excluded Taxes" has the meaning set forth in Section
3.14.
"Note" or "Notes" means the Revolving Loan Notes and/or the
Swingline Note, individually or collectively, as appropriate.
"Notice of Borrowing" means a request by the Borrower for a
Revolving Loan, in the form of Exhibit 2.1.
"Notice of Continuation/Conversion" means a request by the
Borrower to continue an existing Eurodollar Loan to a new Interest
Period or to convert a Eurodollar Loan to a Base Rate Loan or a Base
Rate Loan to a Eurodollar Loan, in the form of Exhibit 2.5.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Participation Interest" means the Extension of Credit by a
Lender by way of the issuance of or a purchase of a participation in
Swingline Loans as provided in Section 2.2, or in any Loans as provided
in Section 3.9.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereto.
"Permitted Acquisition" means the acquisition of all of the
capital stock of another Person, all or substantially all of the assets
of another Person or a brand or product line of another Person,
provided that each of the following conditions are satisfied: (v) prior
to such acquisition, the Borrower shall deliver to the Agent and
Lenders evidence reasonably satisfactory to the Agent and Required
Lenders demonstrating that after giving effect to such acquisition on a
pro forma basis, as if such acquisition had occurred on the first day
of the twelve month period ending on the last day of the Borrower's
most recently completed fiscal quarter, the Credit Parties and their
Subsidiaries would have been in compliance with all the financial
covenants set forth in Section 7.12, (w) simultaneously with any such
acquisition, the Borrower shall have taken all action required under
applicable law, or reasonably requested by the Agent, to grant to the
Agent, for the benefit of the Lenders, a valid and perfected
first-priority security interest in all the assets acquired pursuant to
such acquisition, (x) the acquisition is consummated pursuant to a
negotiated acquisition agreement and involves the purchase of a
consumer product or product line similar to those manufactured,
distributed or sold by the Borrower as of the date hereof, or of a
business that manufactures, distributes or
16
sells one or more consumer products or product lines, similar to those
manufactured, distributed or sold by the Borrower as of the date
hereof, (y) after giving effect to the acquisition, the representations
and warranties set forth in Section 6 hereof shall be true and correct
in all material respects on and as of the date of such acquisition with
the same effect as though made on and as of such date, and (z) no
Default or Event of Default exists and is continuing or would result
from such acquisition.
"Permitted Investments" means Investments which are (a) cash
or Cash Equivalents, (b) accounts receivable created, acquired or made
in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms, (c) Investments in a Domestic
Subsidiary of a Credit Party, (d) loans to directors, officers,
employees, agents, customers or suppliers in the ordinary course of
business for reasonable business expenses, not to exceed in the
aggregate $500,000.00 at any one time, (e) Investments subsequent to
the Closing Date in (i) Chattem (Canada) Inc. not to exceed $500,000.00
in the aggregate, (ii) Chattem (U.K.) Limited not to exceed $500,000.00
in the aggregate, and (iii) HBA Insurance, Ltd. not to exceed
$500,000.00 in the aggregate, (f) Investments in Permitted
Acquisitions, including any contingency payments associated therewith,
not to exceed $5,000,000 in the aggregate during the term of this
Credit Agreement, (g) the purchase, redemption, acquisition or
retirement by the Borrower of any shares of its capital stock of any
class or any warrants or options to purchase any such shares in an
amount not to exceed $2,000,000 in the aggregate and (h) all those
existing Investments of the Borrower identified on Schedule 1.1(b)
attached hereto.
"Permitted Liens" means (a) Liens securing Credit Party
Obligations, (b) Liens for taxes not yet due or Liens for taxes being
contested in good faith by appropriate proceedings for which adequate
reserves determined in accordance with GAAP have been established (and
as to which the property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof), (c) Liens in respect of
property imposed by law arising in the ordinary course of business such
as materialmen's, mechanics', warehousemen's, carrier's, landlords' and
other nonconsensual statutory Liens which are not due and payable or,
if due and payable, are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the property subject to any
such Lien is not yet subject to foreclosure, sale or loss on account
thereof), (d) pledges or deposits made in the ordinary course of
business to secure payment of worker's compensation insurance,
unemployment insurance, pensions or social security programs, (e) Liens
arising from good faith deposits in connection with or to secure
performance of tenders, bids, leases, government contracts, performance
and return-of-money bonds and other similar obligations incurred in the
ordinary course of business (other than obligations in respect of the
payment of borrowed money), (f) Liens arising from good faith deposits
in connection with or to secure performance of statutory obligations
and surety and appeal bonds, (g) easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or irregularities in
title and other similar charges or encumbrances not, in any material
respect, impairing the use of the encumbered property for its intended
purposes, (h) judgment Liens that would not constitute an Event of
Default, (i) Liens in connection
17
with Indebtedness allowed under Section 8.1(c), (j) Liens arising by
virtue of any statutory or common law provision relating to banker's
liens, rights of setoff or similar rights as to deposit accounts or
other funds maintained with a creditor depository institution and (k)
Liens existing on the date hereof and identified on Schedule 8.2;
provided that no such Lien shall extend to any property other than the
property subject thereto on the Closing Date.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated), or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Credit Party or any of its Subsidiaries or any ERISA Affiliate is (or,
if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" within the meaning of Section 3(5)
of ERISA.
"Pledge Agreement" means the Amended and Restated Pledge
Agreement, executed and delivered by each of the applicable Credit
Parties in favor of the Agent, for the benefit of the Lenders, to
secure their obligations under the Credit Documents, as amended,
modified, extended, renewed or replaced from time to time.
"Prime Rate" means the per annum rate of interest established
from time to time by the Agent as its Prime Rate. Any change in the
interest rate resulting from a change in the Prime Rate shall become
effective as of 12:01 a.m. of the Business Day on which each change in
the Prime Rate is announced by the Agent. The Prime Rate is a reference
rate used by the Agent in determining interest rates on certain loans
and is not intended to be the lowest rate of interest charged on any
extension of credit to any debtor.
"Principal Amortization Payment" means a principal payment on
the Tranche A Term Loan as set forth in Section 2.1(c) of the
Supplemental Credit Agreement.
"Purchase Agreement" means that certain Asset Purchase
Agreement, as amended and modified from time to time, by and among
Xxxxxxx-Xxxxx Squibb Company, as the seller, and Signal and the
Borrower, as the purchasers, dated as of February 22, 1998.
"Recovery Event" means the receipt by the Borrower or any of
its Subsidiaries of any cash insurance proceeds, condemnation award
payable or indemnification payments from other third parties by reasons
of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.
"Regulation D, G, U, or X" means Regulation D, G, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
18
"Reportable Event" means a "reportable event" as defined in
Section 4043 of ERISA with respect to which the notice requirements to
the PBGC have not been waived.
"Required Lenders" means Lenders whose aggregate Credit
Exposure (as hereinafter defined) constitutes at least 67% of the
Credit Exposure of all Lenders at such time; provided, however, that if
any Lender shall be a Defaulting Lender at such time then there shall
be excluded from the determination of Required Lenders the aggregate
principal amount of Credit Exposure of such Lender at such time. For
purposes of the preceding sentence, the term "Credit Exposure" as
applied to each Lender shall mean (a) at any time prior to the
termination of the Commitments, the sum of (i) the Revolving Loan
Commitment Percentage of such Lender multiplied by the Revolving
Committed Amount plus (ii) the Tranche A Term Loan Commitment
Percentage of such Lender multiplied by the aggregate principal amount
of Tranche A Term Loans outstanding at such time plus (iii) the Tranche
B Term Loan Commitment Percentage of such Lender multiplied by the
aggregate principal amount of Tranche B Term Loans outstanding at such
time and (b) at any time after the termination of the Commitments, the
sum of (i) the principal balance of the outstanding Loans of such
Lender plus (ii) the principal balance of the outstanding Tranche A
Term Loans of such Lender plus (iii) the principal balance of
outstanding Tranche B Term Loans of such Lender.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or to which any of its material property is
subject.
"Revolving Loan Commitment Percentage" means, for each New
Credit Agreement Lender, the percentage identified as its Revolving
Loan Commitment Percentage on Schedule 1.1(a), as such percentage may
be modified in connection with any assignment made in accordance with
the provisions of Section 11.3.
"Revolving Committed Amount" means THIRTY MILLION DOLLARS
($30,000,000) or such lesser amount as the Revolving Committed Amount
may be reduced pursuant to Section 2.1(d) or Section 3.3.
"Revolving Loans" means the Revolving Loans made to the
Borrower pursuant to Section 2.1.
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrower in favor of each of the New Credit Agreement
Lenders evidencing the Revolving Loans provided pursuant to Section
2.1, individually or collectively, as appropriate, as such promissory
notes may be amended, modified, supplemented, extended, renewed or
replaced from time to time and as evidenced in the form of Exhibit
2.5(a).
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"Revolving Loan Maturity Date" means the earlier of (i) June
26, 2002 and (ii) the date on which the Tranche A Term Loans are repaid
in full.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Scheduled Funded Debt Payments" means, as of the date of
determination, for the Borrower and its Subsidiaries, on a consolidated
basis, the sum of all scheduled payments of principal on Funded Debt
for the applicable period ending on the date of determination
(including the principal component of payments due on Capital Leases
during the applicable period ending on the date of determination); it
being understood that Scheduled Funded Debt Payments shall not include
voluntary prepayments or the mandatory prepayments required pursuant to
Section 3.3.
"Second Indenture" means that certain Indenture dated as of
the Closing Date among the Borrower, Signal and SouthTrust Bank of
Alabama, National Association, as the same may be amended, modified,
restated or supplemented from time to time.
"Security Agreements" means the Amended and Restated Security
Agreements, including without limitation, a separate Security Agreement
for aircraft as amended or modified from time to time, executed and
delivered by each of the Credit Parties in favor of the Agent for the
benefit of the Lenders to secure their obligations under the Credit
Documents, as such may be amended, modified, extended, renewed,
restated or replaced from time to time.
"Senior Leverage Ratio" means as of the end of each fiscal
quarter of the Borrower, with respect to the Borrower and its
Subsidiaries on a consolidated basis, the ratio of (a) Funded Debt
minus Subordinated Debt minus Additional Subordinated Debt on such date
to (b) EBITDA for the twelve month period ending on such date.
"Signal" means Signal Investment & Management Co., a Delaware
corporation, which is a wholly-owned subsidiary of the Borrower.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Solvent" means, with respect to any Person as of a particular
date, that on such date (a) such Person is able to pay its debts and
other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (b) such Person does not
intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's assets would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged
or is to engage, (d) the fair value of the assets of such
20
Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person and (e) the
present fair saleable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured. In
computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"Subordinated Debt" means the Indebtedness evidenced by the
Indenture or by the guarantees thereof in an aggregate amount not to
exceed $75,000,000.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such
person directly or indirectly through Subsidiaries has more than a 50%
equity interest at any time.
"Supplemental Credit Agreement" means that certain
Supplemental Credit Agreement dated as of the date hereof, among the
Borrower, the Guarantors, NationsBank of Tennessee, N.A., as agent, and
certain other lenders named therein, as amended, modified, supplemented
or renewed from time to time.
"Supplemental Credit Documents" means the Supplemental Credit
Agreement, the Tranche A Term Loan Notes, the Tranche B Term Loan
Notes, any Joinder Agreement, the Collateral Documents, the Fee Letter
and all other related agreements and documents issued or delivered
thereunder or pursuant thereto.
"Supplemental Credit Lender" means any of the Persons
identified as a "Supplemental Credit Lender" on the signature pages to
the Supplemental Credit Agreement, and any Person which may become a
Supplemental Credit Lender by way of assignment in accordance with the
terms of the Supplemental Credit Agreement, together with their
successors and permitted assigns.
"Swingline Committed Amount" shall have the meaning assigned
to such term in Section 2.2(a).
"Swingline Lender" means NationsBank.
"Swingline Loan" shall have the meaning assigned to such term
in Section 2.2(a).
21
"Swingline Note" means the promissory note of the Borrower in
favor of the Swingline Lender in the original principal amount of
$5,000,000, as such promissory note may be amended, modified, restated
or replaced from time to time.
"Termination Event" means (a) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (b) the
withdrawal of any Credit Party or any of its Subsidiaries or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(c) the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA;
(d) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (e) any
event or condition which might reasonably constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; or (f) the complete or partial
withdrawal of any Credit Party or any of its Subsidiaries or any ERISA
Affiliate from a Multiemployer Plan.
"Term Loans" means the Tranche A Term Loans and the Tranche B
Term Loans.
"Tranche A Term Loans" means the Tranche A Term Loans made to
the Borrower pursuant to Section 2.1 of the Supplemental Credit
Agreement.
"Tranche A Term Loan Commitment Percentage" means, for a
Supplemental Credit Lender, the percentage identified as its Tranche A
Term Loan Commitment Percentage on Schedule 1.1(a) of the Supplemental
Credit Agreement, as such percentage may be modified in connection with
any assignment made in accordance with the provisions of Section 11.3
of the Supplemental Credit Agreement.
"Tranche A Term Loan Committed Amount" means TWENTY SEVEN
MILLION FIVE HUNDRED FORTY THOUSAND DOLLARS ($27,540,000.00).
"Tranche A Term Loan Maturity Date" means June 26, 2002.
"Tranche A Term Loan Note" or "Tranche A Term Loan Notes"
means the promissory notes of the Borrower in favor of the Supplemental
Credit Lenders having a Tranche A Term Loan Commitment Percentage
evidencing the Tranche A Term Loans provided pursuant to Section 2.1 of
the Supplemental Credit Agreement, individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time as
evidenced in the form of Exhibit 2.4(a) of the Supplemental Credit
Agreement.
"Tranche B Term Loan Committed Amount" means THIRTY FOUR
MILLION EIGHT HUNDRED TWENTY FIVE THOUSAND DOLLARS ($34,825,000).
22
"Tranche B Term Loan Commitment Percentage" means, for a
Supplemental Credit Lender, the percentage identified as its Tranche B
Term Loan Commitment Percentage on Schedule 1.1(a) of the Supplemental
Credit Agreement, as such percentage may be modified in connection with
any assignment made in accordance with the provisions of Section 11.3
of the Supplemental Credit Agreement.
"Tranche B Term Loan Note" or "Tranche B Term Loan Notes"
means the promissory notes of the Borrower in favor of the Supplemental
Credit Lenders having a Tranche B Term Loan Commitment Percentage
evidencing the Tranche B Term Loans provided pursuant to Section 2.1 of
the Supplemental Credit Agreement, individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time as
evidenced in the form of Exhibit 2.4(b) of the Supplemental Credit
Agreement.
"Tranche B Term Loans" means, the Tranche B Term Loans made to
the Borrower pursuant to Section 2.1 of the Supplemental Credit
Agreement.
"TROLS" has the meaning set forth in the definition of
Indebtedness.
"Unused Commitment" means, for any period, the amount by which
(a) the then applicable aggregate Revolving Committed Amount exceeds
(b) the daily average sum for such period of the outstanding aggregate
principal amount of all Revolving Loans (but not including any
Swingline Loans).
"Working Capital" means, at any time, with respect to the
Borrower and its Subsidiaries on a consolidated basis, the excess of
current assets (excluding cash and Cash Equivalents) over current
liabilities (excluding the current portion of Funded Debt), as
determined in accordance with GAAP.
1.2 Computation of Time Periods and Other Definitional Provisions.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.
23
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the New Credit
Agreement Lenders hereunder shall be prepared, in accordance with GAAP applied
on a consistent basis. All financial statements delivered to the New Credit
Agreement Lenders hereunder shall be accompanied by a statement from the
Borrower that GAAP has not changed since the most recent financial statements
delivered by the Borrower to the New Credit Agreement Lenders or if GAAP has
changed describing such changes in detail and explaining how such changes affect
the financial statements. All calculations made for the purposes of determining
compliance with this Credit Agreement shall (except as otherwise expressly
provided herein) be made by application of GAAP applied on a basis consistent
with the most recent annual or quarterly financial statements delivered pursuant
to Section 7.1 (or, prior to the delivery of the first financial statements
pursuant to Section 7.1, consistent with the financial statements described in
Section 5.1(c)); provided, however, if (a) the Borrower shall object to
determining such compliance on such basis at the time of delivery of such
financial statements due to any change in GAAP or the rules promulgated with
respect thereto or (b) either Agent or the Required Lenders shall so object in
writing within 60 days after delivery of such financial statements (or after the
New Credit Agreement Lenders have been informed of the change in GAAP affecting
such financial statements, if later), then such calculations shall be made on a
basis consistent with the most recent financial statements delivered by the
Borrower to the New Credit Agreement Lenders as to which no such objection shall
have been made.
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Loan Commitment. Subject to the terms and
conditions set forth herein, each New Credit Agreement Lender severally
agrees to make revolving loans (each a "Revolving Loan" and
collectively the "Revolving Loans") to the Borrower, in Dollars, at any
time and from time to time, during the period from and including the
Effective Date to but not including the Revolving Loan Maturity Date
(or such earlier date if the Revolving Committed Amount has been
terminated as provided herein); provided, however, that (i) the sum of
the aggregate amount of Revolving Loans outstanding plus the aggregate
amount of Swingline Loans outstanding shall not exceed the lesser of
(x) the Revolving Committed Amount and (y) the Borrowing Base, and (ii)
with respect to each individual New Credit Agreement Lender, such New
Credit Agreement Lender's outstanding Revolving Loans shall not exceed
such New Credit Agreement Lender's Revolving Loan Commitment Percentage
of the Revolving Committed Amount.
24
(b) Method of Borrowing for Revolving Loans. By no later than
11:00 a.m. (i) on the Business Day of the requested borrowing of
Revolving Loans that will be Base Rate Loans or (ii) three Business
Days prior to the date of the requested borrowing of Revolving Loans
that will be Eurodollar Loans, the Borrower shall submit a written
Notice of Borrowing in the form of Exhibit 2.1 (or telephone notice
promptly confirmed in writing) to the Agent setting forth (A) the
amount requested, (B) whether such Revolving Loans shall accrue
interest at the Adjusted Base Rate or the Adjusted Eurodollar Rate, (C)
with respect to Revolving Loans that will be Eurodollar Loans, the
Interest Period applicable thereto and (D) evidence that the Borrower
has complied in all respects with Section 5.2.
(c) Funding of Revolving Loans. Upon receipt of a Notice of
Borrowing, the Agent shall promptly inform the applicable New Credit
Agreement Lenders as to the terms thereof. Each such New Credit
Agreement Lender shall make its Revolving Loan Commitment Percentage of
the requested Revolving Loans available to the Agent by 1:00 p.m. on
the date specified in the Notice of Borrowing by deposit, in Dollars,
of immediately available funds at the offices of the Agent at its
principal office in Charlotte, North Carolina or at such other address
as the Agent may designate in writing. The amount of the requested
Revolving Loans will then be made available to the Borrower by the
Agent by crediting the account of the Borrower on the books of such
office of the Agent, to the extent the amount of such Revolving Loans
are made available to the Agent.
No New Credit Agreement Lender shall be responsible for the
failure or delay by any other New Credit Agreement Lender in its
obligation to make Revolving Loans hereunder; provided, however, that
the failure of any New Credit Agreement Lender to fulfill its
obligations hereunder shall not relieve any other New Credit Agreement
Lender of its obligations hereunder. Unless the Agent shall have been
notified by any New Credit Agreement Lender prior to the date of any
such Revolving Loan that such New Credit Agreement Lender does not
intend to make available to the Agent its portion of the Revolving
Loans to be made on such date, the Agent may assume that such New
Credit Agreement Lender has made such amount available to the Agent on
the date of such Revolving Loans, and the Agent in reliance upon such
assumption, may (in its sole discretion but without any obligation to
do so) make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent, the
Agent shall be able to recover such corresponding amount from such New
Credit Agreement Lender. If such New Credit Agreement Lender does not
pay such corresponding amount forthwith upon the Agent's demand
therefor, the Agent will promptly notify the Borrower, and the Borrower
shall immediately pay such corresponding amount to the Agent. The Agent
shall also be entitled to recover from the New Credit Agreement Lender
or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount
was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent at a per annum rate
equal to (i) from the Borrower at the applicable rate for such
Revolving Loan pursuant to the Notice of Borrowing and (ii) from a New
Credit Agreement Lender at the Federal Funds Rate.
25
(d) Reductions of Revolving Committed Amount. Upon at least
three Business Days' notice, the Borrower shall have the right to
permanently terminate or reduce the aggregate unused amount of the
Revolving Committed Amount at any time or from time to time; provided
that (i) each partial reduction shall be in an aggregate amount at
least equal to $1,000,000 and in integral multiples of $500,000 above
such amount and (ii) no reduction shall be made which would reduce the
Revolving Committed Amount to an amount less than the aggregate amount
of outstanding Revolving Loans. Any reduction in (or termination of)
the Revolving Committed Amount shall be permanent and may not be
reinstated.
2.2 Swingline Loan Subfacility.
(a) Swingline Commitment. Subject to the terms and conditions
set forth herein, the Swingline Lender, in its individual capacity,
agrees to make certain revolving credit loans to the Borrower (each a
"Swingline Loan" and, collectively, the "Swingline Loans") at any time
and from time to time, during the period from and including the
Effective Date to but not including the Revolving Loan Maturity Date
for the purposes hereinafter set forth; provided, however, (i) the
aggregate amount of Swingline Loans outstanding at any time shall not
exceed FIVE MILLION DOLLARS ($5,000,000.00) (the "Swingline Committed
Amount"), and (ii) the sum of the aggregate principal amount of
outstanding Revolving Loans plus the aggregate principal amount of
outstanding Swingline Loans shall not exceed the lesser of (x) the
Revolving Committed Amount and (y) the Borrowing Base. Swingline Loans
hereunder shall be made as Base Rate Loans in accordance with the
provisions of this Section 2.2, and may be repaid and reborrowed in
accordance with the provisions hereof.
(b) Swingline Loan Advances.
(i) Notices; Disbursement. Whenever the Borrower
desires a Swingline Loan advance hereunder it shall give
written notice (or telephone notice promptly confirmed in
writing) to the Swingline Lender not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day of
the requested Swingline Loan advance. Each such notice
shall be irrevocable and shall specify (A) that a
Swingline Loan advance is requested, (B) the date of the
requested Swingline Loan advance (which shall be a
Business Day) and (C) the principal amount of the
Swingline Loan advance requested. Each Swingline Loan
shall be made as a Base Rate Loan and shall have such
maturity date as the Swingline Lender and the Borrower
shall agree upon receipt by the Swingline Lender of any
such notice from the Borrower. The Swingline Lender shall
initiate the transfer of funds representing the Swingline
Loan advance to the Borrower by 3:00 P.M. (Charlotte,
North Carolina time) on the Business Day of the requested
borrowing.
(ii) Minimum Amounts. Each Swingline Loan advance shall
be in a minimum principal amount of $100,000 and in
integral multiples of $100,000 in excess thereof.
26
(iii) Repayment of Swingline Loans. The principal
amount of all Swingline Loans shall be due and payable on
the earlier of (A) the maturity date agreed to by the
Swingline Lender and the Borrower with respect to such
Loan (which maturity date shall not be a date more than
seven (7) Business Days from the date of advance thereof)
and (B) the Revolving Loan Maturity Date. The Swingline
Lender may, at any time, in its sole discretion, by
written notice to the Borrower and the New Credit
Agreement Lenders, demand repayment of its Swingline Loans
by way of a Revolving Loan advance, in which case the
Borrower shall be deemed to have requested a Revolving
Loan advance comprised solely of Base Rate Loans in the
amount of such Swingline Loans; provided, however, that
any such demand shall be deemed to have been given one
Business Day prior to the Revolving Loan Maturity Date and
on the date of the occurrence of any Event of Default
described in Section 9.1 and upon acceleration of the
indebtedness hereunder and the exercise of remedies in
accordance with the provisions of Section 9.2. Each New
Credit Agreement Lender hereby irrevocably agrees to make
its pro rata share of each such Revolving Loan in the
amount, in the manner and on the date specified in the
preceding sentence notwithstanding (I) the amount of such
borrowing may not comply with the minimum amount for
advances of Revolving Loans otherwise required hereunder,
(II) whether any conditions specified in Section 5.2 are
then satisfied, (III) whether a Default or an Event of
Default then exists, (IV) failure of any such request or
deemed request for Revolving Loan to be made by the time
otherwise required hereunder, (V) whether the date of such
borrowing is a date on which Revolving Loans are otherwise
permitted to be made hereunder or (VI) any termination of
the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that
any Revolving Loan cannot for any reason be made on the
date otherwise required above (including, without
limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the
Borrower or any other Credit Party), then each New Credit
Agreement Lender hereby agrees that it shall forthwith
purchase (as of the date such borrowing would otherwise
have occurred, but adjusted for any payments received from
the Borrower on or after such date and prior to such
purchase) from the Swingline Lender such participations in
the outstanding Swingline Loans as shall be necessary to
cause each such New Credit Agreement Lender to share in
such Swingline Loans ratably based upon its Revolving Loan
Commitment Percentage (determined before giving effect to
any termination of the Commitments pursuant to Section
2.1(d)), provided that (A) all interest payable on the
Swingline Loans shall be for the account of the Swingline
Lender until the date as of which the respective
participation is purchased and (B) at the time any
purchase of participations pursuant to this sentence is
actually made, the purchasing New Credit Agreement Lender
shall be required to pay to the Swingline Lender, to the
extent not paid to the Swingline Lender by the Borrower in
accordance with the terms of subsection (c) below,
interest on the principal amount of participation
purchased for each day from and including the day upon
27
which such borrowing would otherwise have occurred to but
excluding the date of payment for such participation, at the
rate equal to the Federal Funds Rate.
(c) Interest on Swingline Loans. Subject to the provisions of
Section 3.1, each Swingline Loan shall bear interest at per annum rate
equal to the Base Rate. Interest on Swingline Loans shall be payable in
arrears on each applicable Interest Payment Date (or at such other
times as may be specified herein).
2.3 Continuations and Conversions.
Subject to the terms of Section 5.2, the Borrower shall have the
option, on any Business Day, to continue in existence Eurodollar Loans for a
subsequent Interest Period, to convert Base Rate Loans into Eurodollar Loans or
to convert Eurodollar Loans into Base Rate Loans; provided, however, that (a)
each such continuation or conversion must be requested by the Borrower pursuant
to a written Notice of Continuation/Conversion, in the form of Exhibit 2.3, in
compliance with the terms set forth below, (b) except as provided in Section
3.12, Eurodollar Loans may only be continued or converted into Base Rate Loans
on the last day of the Interest Period applicable thereto, (c) Eurodollar Loans
may not be continued nor may Base Rate Loans be converted into Eurodollar Loans
during the existence and continuation of a Default or Event of Default and (d)
any request to extend a Eurodollar Loan that fails to comply with the terms
hereof or any failure to request an extension of a Eurodollar Loan at the end of
an Interest Period shall constitute a request for a conversion to a Base Rate
Loan on the last day of the applicable Interest Period. Each continuation or
conversion must be requested by the Borrower no later than 11:00 a.m. (i) one
Business Day prior to the date for a requested conversion of a Eurodollar Loan
to a Base Rate Loan or (ii) three Business Days prior to the date for a
requested extension of a Eurodollar Loan or conversion of a Base Rate Loan to a
Eurodollar Loan, in each case pursuant to a written Notice of
Continuation/Conversion submitted to the Agent which shall set forth (A) whether
the Borrower wishes to continue or convert such Loans and (B) if the request is
to continue a Eurodollar Loan or convert a Base Rate Loan to a Eurodollar Loan,
the Interest Period applicable thereto.
2.4 Minimum Amounts.
Each request for a borrowing, conversion or continuation shall be
subject to the requirements that (a) each Eurodollar Loan shall be in a minimum
amount of $1,000,000 and in integral multiples of $500,000 in excess thereof,
(b) each Base Rate Loan shall be in a minimum amount of the lesser of $1,000,000
(and integral multiples of $500,000 in excess thereof) or the remaining amount
available under the Revolving Committed Amount and (c) no more than ten
Eurodollar Loans shall, in the aggregate, be outstanding under the Supplemental
Credit Agreement and hereunder at any one time. For the purposes of this
Section, all Eurodollar Loans with the same Interest Periods shall be considered
as one Eurodollar Loan, but Eurodollar Loans with different Interest Periods,
even if they begin on the same date, shall be considered as separate Eurodollar
Loans.
28
2.5 Notes.
(a) Revolving Loan Notes. The Revolving Loans made by each New
Credit Agreement Lender shall be evidenced by a duly executed
promissory note of the Borrower to each applicable New Credit Agreement
Lender in the face amount of its Revolving Loan Commitment Percentage
of the Revolving Committed Amount in substantially the form of Exhibit
2.5(a).
(b) Swingline Note. The Swingline Loans shall be evidenced by
a duly executed promissory note of the Borrower to the Swingline Lender
in substantially the form of Exhibit 2.5(b) in a principal amount equal
to the amount of the Swingline Committed Amount.
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS
3.1 Interest.
(a) Interest Rate. All Base Rate Loans (including, without
limitation, all Swingline Loans) shall accrue interest at the Adjusted
Base Rate and all Eurodollar Loans shall accrue interest at the
Adjusted Eurodollar Rate.
(b) Default Rate of Interest. Upon the occurrence, and during
the continuance, of an Event of Default, the principal of and, to the
extent permitted by law, interest on the Loans and any other amounts
owing hereunder or under the other Credit Documents (including without
limitation fees and expenses) shall bear interest, payable on demand,
at a per annum rate equal to 4% plus the rate which would otherwise be
applicable (or if no rate is applicable, then the rate for Revolving
Loans that are Base Rate Loans plus four percent (4%) per annum).
(c) Interest Payments. Interest on Loans (including, without
limitation, all Swingline Loans) shall be due and payable in arrears on
each Interest Payment Date. If an Interest Payment Date falls on a date
which is not a Business Day, such Interest Payment Date shall be deemed
to be the next succeeding Business Day (subject to accrual of interest
for the period of such extension), except that in the case of
Eurodollar Loans where the next succeeding Business Day falls in the
next succeeding calendar month, then on the next preceding day.
3.2 Place and Manner of Payments.
All payments of principal, interest, fees, expenses and other amounts
to be made by a Credit Party under this Credit Agreement shall be received not
later than 2:00 p.m. on the date when due, in Dollars and in immediately
available funds, by the Agent at its offices at NationsBank Plaza, Charlotte,
North Carolina. Payments received after such time shall be
29
deemed to have been received on the next Business Day. The Borrower shall, at
the time it makes any payment under this Credit Agreement, specify to the Agent,
the Loans, fees or other amounts payable by the Borrower hereunder to which such
payment is to be applied (and in the event that it fails to specify, or if such
application would be inconsistent with the terms hereof, the Agent shall,
subject to Section 3.7, distribute such payment to the New Credit Agreement
Lenders in such manner as the Agent may deem appropriate). The Agent will
distribute such payments to the applicable New Credit Agreement Lenders on the
date received if any such payment is received prior to 2:00 p.m.; otherwise the
Agent will distribute such payment to the applicable Lenders on the next
succeeding Business Day. Whenever any payment hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day (subject to accrual of interest and fees for
the period of such extension), except that in the case of Eurodollar Loans, if
the extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right
to prepay Loans in whole or in part from time to time without premium
or penalty; provided, however, that (i) Eurodollar Loans may only be
prepaid on three Business Days' prior written notice to the Agent and
any prepayment of Eurodollar Loans will be subject to Section 3.15;
(ii) Base Rate Loans may only be prepaid after written notice
(confirmed by a telephone call from the Borrower) to the Agent not
later than 11:00 a.m. on the Business Day of the applicable prepayment;
(iii) each such partial prepayment of Loans shall be (A) in the case of
Revolving Loans in the minimum principal amount of $500,000 and
integral multiples of $500,000 in excess thereof and (B) in the case of
Swingline Loans, in a minimum principal amount of $1,000,000 and
integral multiples of $1,000,000 in excess thereof.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time the sum
of the aggregate amount of Revolving Loans outstanding
plus the aggregate amount of Swingline Loans outstanding
exceeds the lesser of (x) the Revolving Committed Amount
and (y) the Borrowing Base, the Borrower shall immediately
make a principal payment to the Agent in the manner and in
an amount necessary to be in compliance with Section 2.1.
(ii) Excess Cash Flow. Within 10 days after the date the
audited financial statements are required to be delivered
pursuant to Section 7.1(a), the Borrower shall make a
prepayment of the Loans, Tranche A Term Loans and Tranche
B Term Loans in an amount equal to 75% of the Excess Cash
Flow earned during such prior fiscal year (to be applied
as set forth in Section 3.3(c) below).
(iii) Asset Dispositions. Immediately upon receipt by
the Borrower or any of its Subsidiaries of proceeds from
any Asset Disposition, the
30
Borrower shall forward 100% of the Net Cash Proceeds of such
Asset Disposition to the Lenders as a prepayment of the Loans,
Tranche A Term Loans and Tranche B Term Loans (to be applied
as set forth in Section 3.3(c) below).
(iv) Issuances of Equity. Immediately upon
receipt by the Borrower or any of its Subsidiaries of proceeds
from any Equity Issuance, the Borrower shall forward 50% of
the Net Cash Proceeds of such Equity Issuance to the Lenders
as a prepayment of the Loans, Tranche A Term Loans and Tranche
B Term Loans (to be applied as set forth in Section 3.3(c)
below).
(v) Recovery Event. Subject to the terms and
conditions of Section 7.6 hereof, immediately upon receipt by
the Borrower or any of its Subsidiaries of proceeds from any
Recovery Event, the Borrower shall forward 100% of the Net
Cash Proceeds from such Recovery Event to the Lenders as a
prepayment of the Loans, Tranche A Term Loans and Tranche B
Term Loans (to be applied as set forth in Section 3.3(c)
below).
(vi) Debt Issuances. Immediately upon receipt by the
Borrower or any of its Subsidiaries of proceeds from any Debt
Issuance, the Borrower shall prepay the Loans, the Tranche A
Term Loans and the Tranche B Term Loans in an aggregate amount
equal to 100% of the Net Cash Proceeds of such Debt Issuance
to the Lenders (such prepayment to be applied as set forth in
Section 3.3(c) below).
(c) Application of Prepayments. All amounts required to be
paid pursuant to Section 3.3(b)(i) shall be applied first to Revolving
Loans and second to Swingline Loans. All amounts required to be paid
pursuant to Section 3.3(b)(ii), (iii), (iv), (v) and (vi) above shall
be applied, first pro rata among the outstanding Tranche A Term Loans
and Tranche B Term Loans (which amounts shall then be applied to the
remaining Principal Amortization Payments due with respect to the
Tranche A Term Loans and Tranche B Term Loans in inverse order of
maturity thereof), second to the Revolving Loans (with a corresponding
reduction in the Revolving Committed Amount) and third to Swingline
Loans (with a corresponding reduction in the Revolving Committed
Amount). One or more holders of the Tranche B Term Loans may decline to
accept a mandatory prepayment under Sections 3.3(b)(ii), (iii), (iv),
(v) or (vi) with respect to the Tranche B Term Loans (to the extent
there is sufficient Tranche A Term Loans outstanding to be paid with
such prepayment) in which case such declined prepayments shall be
allocated pro rata among the Tranche A Term Loans and among the Tranche
B Term Loans held by Lenders accepting such prepayments; provided,
however, a Lender declining to accept a mandatory prepayment shall be
required to make such election to decline with respect to the Tranche B
Term Loan of such Lender. Within the parameters of the application set
forth above, prepayments shall be applied first to Base Rate Loans and
then to Eurodollar Loans in direct order of Interest Period maturities.
All prepayments hereunder shall be subject to Section 3.15.
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3.4 Fees.
(a) Commitment Fees. In consideration of the Revolving
Committed Amount being made available by the New Credit Agreement
Lenders hereunder, the Borrower agrees to pay to the Agent, for the pro
rata benefit of each applicable New Credit Agreement Lender (based on
each New Credit Agreement Lender's Revolving Loan Commitment Percentage
of the Revolving Committed Amount), a fee equal to one-half of one
percent (.5%) per annum on the Unused Commitment (the "Commitment
Fees"). The accrued Commitment Fees shall commence to accrue on the
Closing Date and shall be payable quarterly in arrears on the 15th day
following the last day of each calendar quarter (as well as on the
Revolving Loan Maturity Date and on any date that the Revolving
Committed Amount is reduced) for the immediately preceding fiscal
quarter (or portion thereof), beginning with the first of such dates to
occur after the Closing Date.
(b) Administrative Fees. The Borrower agrees to pay to the
Agent, for its own account, an annual fee as agreed to between the
Borrower and the Agent in the Fee Letter.
3.5 Payment in full at Maturity.
On the Revolving Loan Maturity Date, the entire outstanding
principal balance of all Revolving Loans, together with accrued but
unpaid interest and all other sums owing with respect thereto, shall be
due and payable in full, unless accelerated sooner pursuant to Section
9.
3.6 Computations of Interest and Fees.
(a) Except for Base Rate Loans, in which case interest shall
be computed on the basis of a 365 or 366 day year as the case may be
(unless the Base Rate is determined by reference to the Federal Funds
Rate), all computations of interest and fees hereunder shall be made on
the basis of the actual number of days elapsed over a year of 360 days.
Interest shall accrue from and include the date of borrowing (or
continuation or conversion) but exclude the date of payment.
(b) It is the intent of the New Credit Agreement Lenders and
the Credit Parties to conform to and contract in strict compliance with
applicable usury law from time to time in effect. All agreements
between the New Credit Agreement Lenders and the Borrower are hereby
limited by the provisions of this paragraph which shall override and
control all such agreements, whether now existing or hereafter arising
and whether written or oral. In no way, nor in any event or contingency
(including but not limited to prepayment or acceleration of the
maturity of any obligation), shall the interest taken, reserved,
contracted for, charged, or received under this Credit Agreement, under
the Notes or otherwise, exceed the maximum nonusurious amount
permissible under applicable law. If, from any possible construction of
any of the Credit Documents or any other document, interest would
otherwise be payable in excess of the maximum
32
nonusurious amount, any such construction shall be subject to the
provisions of this paragraph and such documents shall be automatically
reduced to the maximum nonusurious amount permitted under applicable
law, without the necessity of execution of any amendment or new
document. If any New Credit Agreement Lender shall ever receive
anything of value which is characterized as interest on the Loans under
applicable law and which would, apart from this provision, be in excess
of the maximum lawful amount, an amount equal to the amount which would
have been excessive interest shall, without penalty, be applied to the
reduction of the principal amount owing on the Loans and not to the
payment of interest, or refunded to the Borrower or the other payor
thereof if and to the extent such amount which would have been
excessive exceeds such unpaid principal amount of the Loans. The right
to demand payment of the Loans or any other indebtedness evidenced by
any of the Credit Documents does not include the right to receive any
interest which has not otherwise accrued on the date of such demand,
and the New Credit Agreement Lenders do not intend to charge or receive
any unearned interest in the event of such demand. All interest paid or
agreed to be paid to the New Credit Agreement Lenders with respect to
the Loans shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated
term (including any renewal or extension) of the Loans so that the
amount of interest on account of such indebtedness does not exceed the
maximum nonusurious amount permitted by applicable law.
3.7 Pro Rata Treatment.
Except to the extent otherwise provided herein, each Loan borrowing,
each Tranche A Term Loan borrowing, each Tranche B Term Loan borrowing, each
payment or prepayment of principal of any Loan, Tranche A Term Loan, or Tranche
B Term Loan, each payment of fees (other than the Administrative Fees retained
by the Agent for its own account), each reduction of the Revolving Committed
Amount, and each conversion or continuation of any Loan, Tranche A Term Loan or
the Tranche B Term Loan, shall be allocated pro rata among the relevant Lenders
in accordance with the respective Revolving Loan Commitment Percentages, Tranche
A Term Loan Commitment Percentages and Tranche B Term Loan Commitment
Percentages, as applicable, of such Lenders (or, if the Commitments, Tranche A
Term Loan Committed Amount or Tranche B Term Loan Committed Amount of such
Lenders have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans, Tranche A Term Loans, Tranche B
Term Loans and Participation Interests of such Lenders); provided that, if any
Lender shall have failed to pay its applicable pro rata share of any Loan,
Tranche A Term Loan or Tranche B Term Loan then any amount to which such Lender
would otherwise be entitled pursuant to this Section shall instead be payable to
the Agent; provided further, that in the event any amount paid to any Lender
pursuant to this Section is rescinded or must otherwise be returned by the
Agent, each Lender shall, upon the request of the Agent, repay to the Agent the
amount so paid to such Lender, with interest for the period commencing on the
date such payment is returned by the Agent until the date the Agent receives
such repayment at a rate per annum equal to, during the period to but excluding
the date two Business Days after such request, the Federal Funds Rate, and
thereafter, the Base Rate plus four percent (4%) per annum.
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3.8 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement or the
Supplemental Credit Agreement, after the occurrence and during the
continuance of an Event of Default, all amounts collected or received by an
Agent or any Lender on account of amounts outstanding under any of the Credit
Documents or any of the Supplemental Credit Documents or in respect of the
Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agent in connection with enforcing the rights of the New Credit
Agreement Lenders under the Credit Documents and the Supplemental
Credit Lenders under the Supplemental Credit Documents and any
protective advances made by the Agent with respect to the Collateral
under or pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees owed to an Agent in its
capacity as Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses, (including, without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights
under the Credit Documents and the Supplemental Credit Documents;
FOURTH, to the payment of all accrued fees and interest
payable to (i) the New Credit Agreement Lenders hereunder and (ii) the
Supplemental Credit Lenders under the Supplemental Credit Agreement;
FIFTH, to the payment of the outstanding principal amount of
the Loans, Tranche A Term Loans and Tranche B Term Loans, and to any
principal amounts outstanding under Hedging Agreements, pro rata, as
set forth below;
SIXTH, to all other obligations which shall have become due
and payable under the Credit Documents and Supplemental Credit
Documents, pro rata, and not repaid pursuant to clauses "FIRST" through
"FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whomever
may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category and (b) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding
Loans, outstanding Tranche A Term Loans, outstanding Tranche B Term Loans and
obligations under Hedging Agreements held by such Lender bears to the
aggregate then outstanding Loans, outstanding Tranche A Term Loans,
outstanding Tranche B Term Loans and obligations under Hedging Agreements) of
amounts available to be applied pursuant to clauses "THIRD", "FOURTH,"
"FIFTH," and "SIXTH" above.
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3.9 Sharing of Payments.
The New Credit Agreement Lenders agree among themselves that, except
to the extent otherwise provided herein, in the event that any Lender shall
obtain payment in respect of any Loan, Tranche A Term Loan or Tranche B Term
Loan, or any other obligation owing to such Lender under this Credit
Agreement or the Supplemental Credit Agreement through the exercise of a
right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of the Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender
under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders for cash an interest in such Loans, Tranche A
Term Loans or Tranche B Term Loans, and other obligations in such amounts,
and make such other adjustments from time to time, as shall be equitable to
the end that all New Credit Agreement Lenders and Supplemental Credit Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement and the Supplemental Credit Agreement.
The New Credit Agreement Lenders further agree among themselves that if
payment to a New Credit Agreement Lender or Supplemental Credit Lender
obtained by such New Credit Agreement Lender or Supplemental Credit Lender
through the exercise of a right of setoff, banker's lien, counterclaim or
other event as aforesaid shall be rescinded or must otherwise be restored,
each Lender which shall have shared the benefit of such payment shall, by
repurchase of the interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect
thereto) to each Lender or Supplemental Credit Lender whose payment shall
have been rescinded or otherwise restored. The Borrower agrees that any
Lender so purchasing such an interest may, to the fullest extent permitted by
law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such interest as fully as if such Lender were a
holder of such Loan, Tranche A Term Loan or Tranche B Term Loan or other
obligation in the amount of such interest. Except as otherwise expressly
provided in this Credit Agreement, if any Lender or the Agent shall fail to
remit to the Agent or any other Lender an amount payable by such Lender or
the Agent to the Agent or such other Lender pursuant to this Credit Agreement
or the Supplemental Credit Agreement on the date when such amount is due,
such payments shall be made together with interest thereon for each date from
the date such amount is due until the date such amount is paid to the Agent
or such other Lender at a rate per annum equal to the Federal Funds Rate. If
under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section 3.9
applies, such Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Lenders under this Section 3.9 to share in the benefits of any recovery on
such secured claim.
3.10 Capital Adequacy.
If, after the date hereof, any New Credit Agreement Lender has
determined that the adoption or the becoming effective of, or any change in,
or any change by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof in the
interpretation or administration of, any applicable law, rule or regulation
regarding capital adequacy, or compliance by such New Credit Agreement Lender
with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such
35
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such New Credit Agreement Lender's capital or
assets as a consequence of its commitments or obligations hereunder to a
level below that which such New Credit Agreement Lender could have achieved
but for such adoption, effectiveness, change or compliance (taking into
consideration such New Credit Agreement Lender's policies with respect to
capital adequacy), then, upon notice from such New Credit Agreement Lender to
the Borrower, the Borrower shall be obligated to pay to such New Credit
Agreement Lender such additional amount or amounts as will compensate such
New Credit Agreement Lender for such reduction. Each determination by any
such New Credit Agreement Lender of amounts owing under this Section shall,
absent manifest error, be conclusive and binding on the parties hereto.
3.11 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Agent shall
have determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar
Rate for such Interest Period, the Agent shall promptly give telecopy or
telephonic notice thereof to the Borrower and the New Credit Agreement
Lenders. If such notice is given (a) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as Base Rate
Loans, (b) any Loans that were to have been converted on the first day of
such Interest Period to or continued as Eurodollar Loans shall be converted
to or continued as Base Rate Loans and (c) any outstanding Eurodollar Loans
shall be converted, on the first day of such Interest Period, to Base Rate
Loans. Until such notice has been withdrawn by the Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrower
have the right to convert Base Rate Loans to Eurodollar Loans.
3.12 Illegality.
Notwithstanding any other provision herein, if the adoption of or
any change in any Requirement of Law or in the interpretation or application
thereof occurring after the Closing Date shall make it unlawful for any New
Credit Agreement Lender to make or maintain Eurodollar Loans as contemplated
by this Credit Agreement, (a) such New Credit Agreement Lender shall promptly
give written notice of such circumstances to the Borrower and the Agent
(which notice shall be withdrawn whenever such circumstances no longer
exist), (b) the commitment of such New Credit Agreement Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base
Rate Loan to Eurodollar Loans shall forthwith be canceled and, until such
time as it shall no longer be unlawful for such New Credit Agreement Lender
to make or maintain Eurodollar Loans, such New Credit Agreement Lender shall
then have a commitment only to make a Base Rate Loan when a Eurodollar Loan
is requested and (c) such New Credit Agreement Lender's Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to
Base Rate Loans on the respective last days or the then current Interest
Periods with respect to such Loans or within such earlier period as required
by law. If any such conversion of a Eurodollar Loan occurs on a day which is
not the last day of the then current Interest Period with respect thereto,
the Borrower shall pay to such New Credit Agreement Lender such amounts, if
any, as may be required pursuant to Section 3.15.
36
3.13 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any New Credit Agreement
Lender, or compliance by any New Credit Agreement Lender with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority, in each case made subsequent to the Closing
Date (or, if later, the date on which such New Credit Agreement Lender
becomes a New Credit Agreement Lender):
(a) shall subject such New Credit Agreement Lender to any tax
of any kind whatsoever with respect to any Eurodollar Loans made by it
or its obligation to make Eurodollar Loans, or change the basis of
taxation of payments to such New Credit Agreement Lender in respect
thereof (except for Non-Excluded Taxes covered by Section 3.14
(including Non-Excluded Taxes imposed solely by reason of any failure
of such New Credit Agreement Lender to comply with its obligations
under Section 3.14(b)) and changes in taxes measured by or imposed upon
the overall net income, or franchise tax (imposed in lieu of such net
income tax), of such New Credit Agreement Lender or its applicable
lending office, branch, or any affiliate thereof);
(b) 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 New Credit Agreement Lender
which is not otherwise included in the determination of the Eurodollar
Rate hereunder; or
(c) shall impose on such New Credit Agreement Lender any other
condition (excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such New
Credit Agreement Lender, by an amount which such New Credit Agreement Lender
reasonably deems to be material, of making, converting into, continuing or
maintaining Eurodollar Loans or to reduce any amount receivable hereunder in
respect thereof, then, in any such case, upon notice to the Borrower from
such New Credit Agreement Lender, through the Agent, in accordance herewith,
the Borrower shall be obligated to promptly pay such New Credit Agreement
Lender, upon its demand, any additional amounts necessary to compensate such
New Credit Agreement Lender for such increased cost or reduced amount
receivable, provided that, in any such case, the Borrower may elect to
convert the Eurodollar Loans made by such New Credit Agreement Lender
hereunder to Base Rate Loans by giving the Agent at least one Business Day's
notice of such election, in which case the Borrower shall promptly pay to
such New Credit Agreement Lender, upon demand, without duplication, such
amounts, if any, as may be required pursuant to Section 3.15. If any New
Credit Agreement Lender becomes entitled to claim any additional amounts
pursuant to this Section 3.13, it shall provide prompt notice thereof to the
Borrower, through the Agent, certifying (x) that one of the events described
in this Section 3.13 has occurred and describing in reasonable detail the
nature of such event, (y) as to the increased cost or reduced amount
resulting from such event and (z) as to the additional amount demanded by
37
such New Credit Agreement Lender and a reasonably detailed explanation of the
calculation thereof. Such a certificate as to any additional amounts payable
pursuant to this Section 3.13 submitted by such New Credit Agreement Lender,
through the Agent, to the Borrower shall be conclusive and binding on the
parties hereto in the absence of manifest error. This covenant shall survive
the termination of this Credit Agreement and the payment of the Loans and all
other amounts payable hereunder.
3.14 Taxes.
(a) Except as provided below in this Section 3.14, all
payments made by the Borrower under this Credit Agreement and any Notes
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 court, or governmental body, agency or other official,
excluding taxes measured by or imposed upon the overall net income of
any New Credit Agreement Lender or its applicable lending office, or
any branch or affiliate thereof, and all franchise taxes, branch taxes,
taxes on doing business or taxes on the overall capital or net worth of
any New Credit Agreement Lender or its applicable lending office, or
any branch or affiliate thereof, in each case imposed in lieu of net
income taxes: (i) by the jurisdiction under the laws of which such New
Credit Agreement Lender, applicable lending office, branch or affiliate
is organized or is located, or in which its principal executive office
is located, or any nation within which such jurisdiction is located or
any political subdivision thereof; or (ii) by reason of any connection
between the jurisdiction imposing such tax and such New Credit
Agreement Lender, applicable lending office, branch or affiliate other
than a connection arising solely from such New Credit Agreement Lender
having executed, delivered or performed its obligations, or received
payment under or enforced, this Credit Agreement or any Notes. 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 Agent or any New Credit
Agreement Lender hereunder or under any Notes, (A) the amounts so
payable to the Agent or such Lender shall be increased to the extent
necessary to yield to an Agent or such New Credit Agreement 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 Credit Agreement and any Notes, provided, however, that the
Borrower shall be entitled to deduct and withhold any Non-Excluded
Taxes and shall not be required to increase any such amounts payable to
any New Credit Agreement 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 Section 3.14
whenever any Non-Excluded Taxes are payable by the Borrower, and (B) as
promptly as possible thereafter the Borrower shall send to the Agent
for its own account or for the account of such New Credit Agreement
Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the Borrower
shall indemnify the Agent and the New Credit Agreement Lenders for any
incremental
38
taxes, interest or penalties that may become payable by the Agent or
any New Credit Agreement Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts
payable hereunder.
(b) Each New Credit Agreement Lender that is not incorporated
under the laws of the United States of America or a state thereof
shall:
(i)(A) on or before the date of any payment by the
Borrower under this Credit Agreement or Notes to such New
Credit Agreement Lender, deliver to the Borrower and the Agent
(x) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224, or successor applicable
form, as the case may be, certifying that it is entitled to
receive payments under this Credit Agreement and any Notes
without deduction or withholding of any United States federal
income taxes and (y) an Internal Revenue Service Form W-8 or
W-9, or successor applicable form, as the case may be,
certifying that it is entitled to an exemption from United
States backup withholding tax;
(B) deliver to the Borrower and the 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 Borrower; and
(C) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Agent; or
(ii) in the case of any such New Credit Agreement
Lender that is not a "bank" within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, (A) represent to
the Borrower (for the benefit of the Borrower and the Agent)
that it is not a bank within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, (B) agree to
furnish to the Borrower, on or before the date of any payment
by the Borrower, with a copy to the Agent, two accurate and
complete original signed copies of Internal Revenue Service
Form W-8, or successor applicable form certifying to such New
Credit Agreement 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 Internal Revenue
Code with respect to payments to be made under this Credit
Agreement and any Notes (and to deliver to the Borrower and
the 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 Borrower or the Agent for filing
and completing such forms), and (C) agree, to the extent
legally entitled to do so, upon reasonable request by the
Borrower, to provide to the Borrower (for the benefit of the
Borrower and the Agent) such other forms as may be reasonably
required in order to establish the legal entitlement of such
Lender to an
39
exemption from withholding with respect to payments under this
Credit Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation
has occurred after the date such Person becomes a New Credit Agreement
Lender hereunder which renders all such forms inapplicable or which
would prevent such New Credit Agreement Lender from duly completing and
delivering any such form with respect to it and such New Credit
Agreement Lender so advises the Borrower and the Agent then such New
Credit Agreement Lender shall be exempt from such requirements. Each
Person that shall become a New Credit Agreement Lender or a participant
of a New Credit Agreement Lender pursuant to Section 11.3 shall, upon
the effectiveness of the related transfer, be required to provide all
of the forms, certifications and statements required pursuant to this
subsection (b); provided that in the case of a participant of a New
Credit Agreement Lender, the obligations of such participant of a New
Credit Agreement Lender pursuant to this subsection (b) shall be
determined as if the participant of a New Credit Agreement Lender were
a New Credit Agreement Lender except that such participant of a New
Credit Agreement Lender shall furnish all such required forms,
certifications and statements to the New Credit Agreement Lender from
which the related participation shall have been purchased.
3.15 Indemnity.
The Borrower promises to indemnify each New Credit Agreement Lender
and to hold each New Credit Agreement Lender harmless from any loss or
expense which such New Credit Agreement Lender may sustain or incur (other
than through such New Credit Agreement Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Credit Agreement, (b) default by the Borrower in making
any prepayment of a Eurodollar Loan after the Borrower has given a notice
thereof in accordance with the provisions of this Credit Agreement and (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 (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 the applicable 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 Eurodollar Loans provided for herein
(excluding, however, the Applicable Percentage included therein, if any)
minus (ii) the amount of interest (as reasonably determined by such New
Credit Agreement Lender) which would have accrued to such New Credit
Agreement Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank Eurodollar market. The
agreements in this Section shall survive the termination of this Credit
Agreement and the payment of the Loans and all other amounts payable
hereunder.
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3.16 Replacement of Lenders.
If any New Credit Agreement Lender delivers a notice to the Borrower
pursuant to Sections 3.10, 3.13 or 3.14, then the Borrower shall have the
right, if no Default or Event of Default then exists, to either (i) replace
such New Credit Agreement Lender (the "Replaced Lender") with one or more
additional banks or financial institutions (collectively, the "Replacement
Lender"), provided that (A) at the time of any replacement pursuant to this
Section 3.16, the Replacement Lender shall enter into one or more assignment
agreements substantially in the form of Exhibit 11.3 pursuant to, and in
accordance with the terms of, Section 11.3(b) (and with all fees payable
pursuant to said Section 11.3(b) to be paid by the Replacement Lender)
pursuant to which the Replacement Lender shall acquire all of the rights and
obligations of the Replaced Lender hereunder and, in connection therewith,
shall pay to the Replaced Lender in respect thereof an amount equal to the
sum of (a) the principal of, and all accrued interest on, all outstanding
Loans of the Replaced Lender, and (b) all accrued, but theretofore unpaid,
fees owing to the Replaced Lender pursuant to Section 3.4, and (B) all
obligations of the Borrower owing to the Replaced Lender (including all
obligations, if any, owing pursuant to Section 3.10, 3.13 or 3.14, but
excluding those obligations specifically described in clause (A) above in
respect of which the assignment purchase price has been, or is concurrently
being paid) shall be paid in full to such Replaced Lender concurrently with
such replacement or (ii) if a Replacement Lender is not located within 60
days of such notice, terminate the Commitments and repay the Loans owing to
such Replaced Lender.
SECTION 4
GUARANTY
4.1 Guaranty of Payment.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each New Credit Agreement
Lender, each Affiliate of New Credit Agreement Lender that enters into a
Hedging Agreement and the Agent the prompt payment of the Credit Party
Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise). The Guarantors additionally,
jointly and severally, unconditionally guarantee to each New Credit Agreement
Lender the timely performance of all other obligations under the Credit
Documents and Hedging Agreements. This Guaranty is a guaranty of payment and
not of collection and is a continuing guaranty and shall apply to all Credit
Party Obligations whenever arising.
4.2 Obligations Unconditional.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity
or enforceability of any of the Credit Documents or the Hedging Agreements,
or any other agreement or instrument referred to therein, to the fullest
extent permitted by applicable law, irrespective of any other circumstance
whatsoever which might otherwise constitute a legal or equitable discharge or
defense of a surety or
41
guarantor. Each Guarantor agrees that this Guaranty may be enforced by the
New Credit Agreement Lenders without the necessity at any time of resorting
to or exhausting any other security or collateral and without the necessity
at any time of having recourse to the Notes or any other of the Credit
Documents or any collateral, if any, hereafter securing the Credit Party
Obligations or otherwise and each Guarantor hereby waives the right to
require the New Credit Agreement Lenders to proceed against the Borrower or
any other Person (including a co-guarantor) or to require the New Credit
Agreement Lenders to pursue any other remedy or enforce any other right. Each
Guarantor further agrees that it shall have no right of subrogation,
indemnity, reimbursement or contribution against the Borrower or any other
Guarantor of the Credit Party Obligations for amounts paid under this
Guaranty until such time as the New Credit Agreement Lenders (and any
Affiliates of New Credit Agreement Lenders entering into Hedging Agreements)
have been paid in full, all Commitments under the Credit Agreement have been
terminated and no Person or Governmental Authority shall have any right to
request any return or reimbursement of funds from the New Credit Agreement
Lenders in connection with monies received under the Credit Documents. Each
Guarantor further agrees that nothing contained herein shall prevent the New
Credit Agreement Lenders from suing on the Notes or any of the other Credit
Documents or any of the Hedging Agreements or foreclosing its security
interest in or Lien on any collateral, if any, securing the Credit Party
Obligations or from exercising any other rights available to it under this
Credit Agreement, the Notes, any other of the Credit Documents, or any other
instrument of security, if any, and the exercise of any of the aforesaid
rights and the completion of any foreclosure proceedings shall not constitute
a discharge of any of any Guarantor's obligations hereunder; it being the
purpose and intent of each Guarantor that its Guarantor's obligations
hereunder shall be absolute, independent and unconditional under any and all
circumstances. Neither any Guarantor's obligations under this Guaranty nor
any remedy for the enforcement thereof shall be impaired, modified, changed
or released in any manner whatsoever by an impairment, modification, change,
release or limitation of the liability of the Borrower or by reason of the
bankruptcy or insolvency of the Borrower. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Credit
Party Obligations and notice of or proof of reliance by the Agent or any New
Credit Agreement Lender upon this Guarantee or acceptance of this Guarantee.
The Credit Party Obligations, and any of them, shall conclusively be deemed
to have been created, contracted or incurred, or renewed, extended, amended
or waived, in reliance upon this Guarantee. All dealings between the Borrower
and any of the Guarantors, on the one hand, and the Agent and the New Credit
Agreement Lenders, on the other hand, likewise shall be conclusively presumed
to have been had or consummated in reliance upon this Guarantee.
4.3 Modifications.
Each Guarantor agrees that (a) all or any part of the security now
or hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the New Credit Agreement
Lenders shall not have any obligation to protect, perfect, secure or insure
any such security interests, liens or encumbrances now or hereafter held, if
any, for the Credit Party Obligations or the properties subject thereto; (c)
the time or place of payment of the Credit Party Obligations may be changed
or extended, in whole or in part, to a time certain or otherwise, and may be
renewed or accelerated, in whole or in part; (d) the Borrower and any other
party liable for payment under the Credit Documents may be granted
42
indulgences generally; (e) any of the provisions of the Notes or any of the
other Credit Documents may be modified, amended or waived; (f) any party
(including any co-guarantor) liable for the payment thereof may be granted
indulgences or be released; and (g) any deposit balance for the credit of the
Borrower or any other party liable for the payment of the Credit Party
Obligations or liable upon any security therefor may be released, in whole or
in part, at, before or after the stated, extended or accelerated maturity of
the Credit Party Obligations, all without notice to or further assent by the
Guarantor, which shall remain bound thereon, notwithstanding any such
exchange, compromise, surrender, extension, renewal, acceleration,
modification, indulgence or release.
4.4 Waiver of Rights.
Each Guarantor expressly waives: (a) notice of acceptance of this
Guaranty by the New Credit Agreement Lenders and of all extensions of credit
to the Borrower by the Lenders; (b) presentment and demand for payment or
performance of any of the Credit Party Obligations; (c) protest and notice of
dishonor or of default (except as specifically required in the Credit
Agreement) with respect to the Credit Party Obligations or with respect to
any security therefor; (d) notice of the New Credit Agreement Lenders
obtaining, amending, substituting for, releasing, waiving or modifying any
security interest, lien or encumbrance, if any, hereafter securing the Credit
Party Obligations, or the New Credit Agreement Lenders' subordinating,
compromising, discharging or releasing such security interests, liens or
encumbrances, if any; (e) all other notices to which the Guarantor might
otherwise be entitled; and (f) demand for payment under this Guaranty.
4.5 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit
Party Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees of counsel) incurred by an
Agent or such New Credit Agreement Lender in connection with such rescission
or restoration, including any such costs and expenses incurred in defending
against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
4.6 Remedies.
The Guarantors agree that, as between the Guarantors, on the one
hand, and the Agent and the New Credit Agreement Lenders, on the other hand,
the Credit Party Obligations may be declared to be forthwith due and payable
as provided in Section 9 (and shall be deemed to have become automatically
due and payable in the circumstances provided in Section 9) notwithstanding
any stay, injunction or other prohibition preventing such declaration (or
preventing such Credit Party
43
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors. The Guarantors
acknowledge and agree that their obligations hereunder are secured in
accordance with the terms of the Security Agreements and the other Collateral
Documents and that the New Credit Agreement Lenders may exercise their
remedies thereunder in accordance with their terms.
4.7 Limitation of Guaranty.
Notwithstanding any provision to the contrary contained herein or in
any of the Credit Documents, to the extent the obligations of any Guarantor
shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal
law relating to fraudulent conveyances or transfers) then the obligations of
such Guarantor hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and including,
without limitation, the Bankruptcy Code).
4.8 Rights of Contribution.
The Guarantors hereby agree, as among themselves, that if any
Guarantor shall become an Excess Funding Guarantor (as defined below), each
other Guarantor shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence hereof), pay to such Excess Funding Guarantor an
amount equal to such Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess
Payment (as defined below). The payment obligation of any Guarantor to any
Excess Funding Guarantor under this Section 4.8 shall be subordinate and
subject in right of payment to the prior payment in full of the obligations
of such Guarantor under the other provisions of this Section 4, and such
Excess Funding Guarantor shall not exercise any right or remedy with respect
to such excess until payment and satisfaction in full of all of such
obligations. For purposes hereof, (i) "Excess Funding Guarantor" shall mean,
in respect of any obligations arising under the other provisions of this
Section 4 (hereafter, the "Guaranteed Obligations"), a Guarantor that has
paid an amount in excess of its Pro Rata Share of the Guaranteed Obligations;
(ii) "Excess Payment" shall mean, in respect of any Guaranteed Obligations,
the amount paid by an Excess Funding Guarantor in excess of its Pro Rata
Share of such Guaranteed Obligations; and (iii) "Pro Rata Share", for the
purposes of this Section 4.8, shall mean, for any Guarantor, the ratio
(expressed as a percentage) of (a) the amount by which the aggregate present
fair saleable value of all of its assets and properties exceeds the amount of
all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (b) the amount by which the
aggregate present fair saleable value of all assets and other properties of
the Borrower and all of the Guarantors exceeds the amount of all of the debts
and liabilities (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of the Borrower and
the Guarantors hereunder) of the Borrower and all of the Guarantors, all as
of the Closing Date (if any Guarantor becomes a party hereto subsequent to
the Closing Date, then for the purposes of this Section 4.8 such subsequent
Guarantor shall be deemed to have been a Guarantor as of the Closing Date and
the information pertaining to, and
44
only pertaining to, such Guarantor as of the date such Guarantor became a
Guarantor shall be deemed true as of the Closing Date).
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions.
The obligation of the New Credit Agreement Lenders to enter into this
Credit Agreement and make the initial Extension of Credit is subject to
satisfaction of the following conditions (in form and substance acceptable to
the Lenders in their sole discretion):
(a) Executed Credit Documents. Receipt by the Agent of
duly executed copies of: (i) this Credit Agreement; (ii) the Notes;
(iii) the Collateral Documents and (iv) all other Credit Documents.
(b) Corporate Documents. Receipt by the Agent of the
following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of
each Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and certified
by a secretary or assistant secretary of such Credit Party to
be true and correct as of the Effective Date.
(ii) Bylaws. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Effective Date.
(iii) Resolutions. Copies of resolutions of the Board
of Directors of each Credit Party approving and adopting the
Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and
effect as of the Effective Date.
(iv) Good Standing. Copies of (A) certificates of
good standing, existence or its equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing would
have a Material Adverse Effect on the business or operations
of a Credit Party in such jurisdiction and (B) to the extent
available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.
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(v) Incumbency. An incumbency certificate of each
Credit Party certified by a secretary or assistant secretary
to be true and correct as of the Effective Date.
(c) Financial Statements. Receipt by the Agent and the Lenders
of (i) the financial statements with respect to the Acquired Assets for
the years ending December 31, 1995, 1996 and 1997, including balance
sheets and income and cash flow statements, in each case audited by
nationally recognized independent public accountants and prepared in
conformity with GAAP, (ii) the consolidated financial statements of the
Borrower and its Subsidiaries for fiscal year ending November 30, 1997,
including balance sheets and income and cash flow statements, audited
by nationally recognized independent public accountants and containing
an unqualified opinion of such firm that such statements fairly present
in all material respects the consolidated financial condition of the
Borrower and its Subsidiaries and have been prepared in conformity with
GAAP, (iii) a satisfactory proforma consolidated balance sheet of the
Borrower and its Subsidiaries as of the Closing Date giving effect to
the acquisition of the Acquired Assets and the transactions
contemplated by the Purchase Agreement and reflecting estimated
purchase price accounting adjustments, prepared by nationally
recognized independent accountants and (v) such other information
relating to the Acquired Assets as the Agent may reasonably require in
connection with the structuring and syndication of credit facilities of
the type described herein.
(d) Opinion of Counsel. Receipt by the Lenders of an opinion,
or opinions (which shall cover, among other things, authority,
legality, validity, binding effect, enforceability and attachment and
perfection of liens), satisfactory to the Agent, addressed to the Agent
on behalf of the Lenders and dated as of the Effective Date, from legal
counsel to the Credit Parties.
(e) Appraisal Report. Receipt by the Lenders of asset
appraisal reports with respect to the Acquired Assets in form and
substance reasonably satisfactory to the Agent.
(f) Personal Property Collateral. The Agent shall have
received, in form and substance satisfactory to the Agent:
(i) to the extent not previously received by the
Agent, searches of Uniform Commercial Code ("UCC") filings in
the jurisdiction of the chief executive office of each Credit
Party and each jurisdiction where any Collateral is located or
where a filing would need to be made in order to perfect the
Lenders' security interest in the Collateral, copies of the
financing statements on file in such jurisdictions and
evidence that no Liens exist other than Permitted Liens;
(ii) to the extent not previously received by the
Agent, duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Agent's sole
discretion, to perfect the Lenders' security interest in the
Collateral;
46
(iii) to the extent not previously received by the
Agent, searches of ownership of intellectual property in the
appropriate governmental offices and such
patent/trademark/copyright filings as requested by the Agent
in order to perfect the Agent's security interest in the
Collateral;
(iv) to the extent not previously received by the
Agent, all stock certificates evidencing the stock pledged to
the Agent pursuant to the Pledge Agreement, together with duly
executed in blank undated stock powers attached thereto;
(v) to the extent not previously received by the
Agent, all instruments and chattel paper in the possession of
a Credit Party together with allonges or assignments as may be
necessary or appropriate to perfect the Lenders' security
interest in the Collateral; and
(vi) to the extent not previously received by the
Agent, all material contracts or agreements to which a Credit
Party is a party including, without limitation, the Purchase
Agreement together with assignments and third party consents
as may be necessary or appropriate to perfect the Lenders'
security interest in the Collateral.
(g) Real Property Collateral. The Agent shall have received,
in form and substance satisfactory to the Agent:
(i) (A) fully executed and notarized mortgages, deeds
of trust or deeds to secure debt and (B) fully executed
amendments and notarized amendments to existing mortgages,
deeds of trust and deeds to secure debt (each such mortgage,
deed of trust, deed to secure debt, as amended shall be
referred to herein as, a "Mortgage" and collectively as the
"Mortgages") encumbering the fee interest of the Credit
Parties in each real property asset owned by a Credit Party
set forth on Schedule 5.1(g) (each a "Mortgaged Property" and
collectively the "Mortgaged Properties"), together with such
UCC-1 or UCC-3 financing statements, as appropriate, as the
Agent shall deem appropriate with respect to each such
Mortgaged Property;
(ii) an opinion of counsel (which counsel shall be
satisfactory to the Agent) in the state in which each
Mortgaged Property is located with respect to the
enforceability of the form of Mortgage and sufficiency of the
form of UCC-1 or UCC-3 financing statements, as appropriate,
to be recorded or filed in such state and such other matters
as the Agent may request, in form and substance satisfactory
to the Agent;
(iii) to the extent not previously received by the
Agent, in the case of each leasehold estate of the Credit
Parties set forth on Schedule 5.1(g) (each a "Leasehold
Property" and collectively the "Leasehold Properties"), such
estoppel letters, consents and waivers from the landlords of
such real property as may be
47
reasonably required by the Agent, which estoppel letters shall
be in form and substance reasonably satisfactory to the Agent;
(iv) to the extent not previously received by the
Agent, ALTA mortgagee title insurance policies (the "Mortgage
Policies") issued by title insurers satisfactory to the Agent
(the "Title Insurance Company"), in amounts satisfactory to
the Agent with respect to all Mortgaged Properties, assuring
the Agent that the applicable Mortgages, as applicable, create
valid and enforceable first priority mortgage liens on the
respective Mortgaged Properties, free and clear of all defects
and encumbrances except Permitted Liens which Mortgage
Policies shall be in form and substance satisfactory to the
Agent and containing such endorsements as shall be
satisfactory to the Agent and for any other matters that the
Agent may request, and shall provide for affirmative insurance
and such reinsurance as the Agent may request, all of the
foregoing in form and substance satisfactory to the Agent;
(v) to the extent not previously received by the
Agent, certification from a registered engineer or land
surveyor in a form reasonably satisfactory to the Agent or
other evidence acceptable to the Agent that none of the
improvements on the Mortgaged Properties are located within
any area designated by the Director of the Federal Emergency
Management Agency as a "special flood hazard" area or if any
improvements on the Mortgaged Properties are located within a
"special flood hazard" area, evidence of a flood insurance
policy from a company and in an amount satisfactory to the
Agent for the applicable portion of the premises, naming the
Agent for the benefit of the Lenders, as mortgagee;
(vi) to the extent not previously received by the
Agent, evidence satisfactory to the Agent that each of the
Mortgaged Properties, and the uses of the Mortgaged
Properties, are in compliance with all applicable laws,
regulations and ordinances including without limitation health
and environmental protection laws, erosion control ordinances,
storm drainage control laws, doing business and/or licensing
laws, zoning laws (the evidence submitted as to zoning should
include the zoning designation made for each of the Mortgaged
Properties, the permitted uses of each such Mortgaged
Properties under such zoning designation and zoning
requirements as to parking, lot size, ingress, egress and
building setbacks) and laws regarding access and facilities
for disabled persons including, but not limited to, the
federal Architectural Barriers Act, the Fair Housing
Amendments Act of 1988, the Rehabilitation Act of 1973 and the
Americans with Disabilities Act of 1990.
(h) Availability. After giving effect to the initial Loans
made on the Effective Date, the lesser of (x) the Revolving Committed
Amount and (y) the Borrowing Base shall be at least $3,000,000 in
excess of the sum of the aggregate amount of the Revolving Loans
outstanding plus the aggregate amount of Swingline Loans outstanding.
48
(i) Evidence of Insurance. To the extent not previously
received by the Agent, receipt by the Agent of copies of insurance
policies or certificates of insurance of the Borrower and its
Subsidiaries evidencing liability and casualty insurance meeting the
requirements set forth in the Credit Documents, including, but not
limited to, naming the Agent as sole loss payee on behalf of the
Lenders.
(j) Corporate Structure. The corporate capital and ownership
structure of the Borrower and its Subsidiaries shall be satisfactory in
form and substance to the Agent.
(k) Certain Consents. Receipt by the Agent of evidence that
(i) all governmental, shareholder and material third party consents
(including, without limitation, Xxxx-Xxxxx-Xxxxxx clearance), (ii)
evidence satisfactory to the Agent that the consent of any
manufacturers is not required and (iii) written consent, if necessary
in the sole discretion of the Agent, of any existing lenders or
bondholders and approvals necessary or desirable in connection with the
acquisition of the Acquired Assets and the related financings and other
transactions contemplated hereby and expiration of all applicable
waiting periods without any action being taken by any authority that
could reasonably be likely to restrain, prevent or impose any material
adverse conditions on the acquisition of the Acquired Assets or such
other transactions or that could reasonably be likely to seek or
threaten any of the foregoing, and no law or regulation shall be
applicable which in the judgment of the Agent could reasonably be
likely to have such effect.
(l) Material Adverse Effect. (i) With respect to the Borrower
and its Subsidiaries, there shall not have occurred a change since
November 30, 1997 that has had or could reasonably be expected to have
a Material Adverse Effect, including specifically without limitation
any such change resulting from any matter not disclosed in the Purchase
Agreement or resulting from a change in status of any matter disclosed
in the Purchase Agreement (including matters related to litigation,
tax, accounting, labor, insurance and pension liabilities) and (ii)
with respect to the Acquired Assets, there shall not have occurred a
change since December 31, 1997 that has had or could reasonably be
expected to have a material adverse effect on the business, assets,
operations, condition (financial or otherwise) or prospects of the
Acquired Assets.
(m) Litigation. There shall not exist any (i) order, decree,
judgment, ruling or injunction which restrains the consummation of the
acquisition of the Acquired Assets in the manner contemplated by the
Purchase Agreement or (ii) pending or threatened action, suit,
investigation or proceeding which if adversely determined against the
Borrower or any of its Subsidiaries would have or would reasonably be
expected to have a Material Adverse Effect.
(n) Other Indebtedness. Receipt by the Agent of evidence that
after the acquisition of the Acquired Assets, the Borrower and its
Subsidiaries shall have no borrowed money Indebtedness other than (i)
the Indebtedness under the Credit Documents and Supplemental Credit
Documents, (ii) the Subordinated Debt and (iii) other indebtedness
disclosed on Schedule 6.10 attached hereto.
49
(o) Solvency Opinion. Receipt by the Lenders of a
certification from an officer of the Borrower as to the financial
condition, solvency and related matters of the Borrower and its
Subsidiaries, in each case after giving effect to the acquisition of
the Acquired Assets and the initial borrowings under the Credit
Documents and Supplemental Credit Documents.
(p) Purchase Agreement. There shall not have been any material
modification, amendment, supplement or waiver to the Purchase Agreement
without the prior written consent of the Lenders, including, but not
limited to, any modification, amendment, supplement or waiver relating
to the amount or type of consideration to be paid in connection with
the acquisition of the Acquired Assets and the contents of all
disclosure schedules and exhibits, and the acquisition of the Acquired
Assets shall have been consummated in accordance with the terms of the
Purchase Agreement and all applicable law and the aggregate cash amount
paid in connection with such acquisition at the Closing Date shall not
exceed $165 million. Receipt by the Agent of the final Purchase
Agreement, together with all exhibits and schedules thereto, certified
by an officer of the Borrower.
(q) Second Indenture. (i) The Borrower shall have entered into
the Second Indenture, which such Second Indenture shall contain
subordination provisions acceptable to the Lenders and otherwise be in
form and substance satisfactory to the Lenders, (ii) the Agent shall
have received a copy, certified by an officer of the Borrower as true
and complete of the Second Indenture and (iii) the Borrower shall have
received proceeds pursuant to the terms of the Second Indenture in an
aggregate principal amount of $175 million (less customary fees and
expenses).
(r) Change in Market. The absence of any material adverse
change in the market for syndicated bank credit facilities similar in
nature to the transactions described herein or a material disruption
of, or a material adverse change in, financial, banking or capital
market conditions.
(s) Officer's Certificate. The Agent shall have received a
certificate executed by the chief financial officer or chief operating
officer of the Borrower as of the Effective Date stating that (A) the
Borrower and each of the Borrower's Subsidiaries are in compliance with
all existing financial obligations, (B) all governmental, shareholder
and third party consents and approvals, if any, with respect to the
Credit Documents and Supplemental Credit Documents and the transactions
contemplated thereby have been obtained, (C) no action, suit,
investigation or proceeding is pending or threatened in any court or
before any arbitrator or governmental instrumentality that purports to
effect the Borrower, any of the Borrower's Subsidiaries or any
transaction contemplated by the Credit Documents or the Supplemental
Credit Documents, or could have or might be reasonably expected to have
a Material Adverse Effect, (D) the transactions contemplated by the
Purchase Agreement have been consummated in accordance with the terms
thereof and (E) immediately after giving effect to this Credit
Agreement, the Supplemental Credit Agreement, the other Credit
Documents, the Supplemental Credit Documents and all the transactions
contemplated herein or therein to occur on such date, (1) the Borrower
and
50
each of the Borrower's Subsidiaries is Solvent, (2) no Default or Event
of Default exists, (3) all representations and warranties contained
herein, in the other Credit Documents and the Supplemental Credit
Documents are true and correct in all material respects, and (4) the
Credit Parties are in compliance with each of the financial covenants
set forth in Section 7.12.
(t) Fees and Expenses. Payment by the Credit Parties of all
fees and expenses owed by them to the Lenders and the Agent, including,
without limitation, payment to the Agent of the fees set forth in the
Fee Letter.
(u) First Priority Lien. Receipt by the Agent of evidence
satisfactory in form and substance to the Agent, that the Agent, on
behalf of the Lenders, holds a perfected, first priority lien, subject
to no other Liens other than Permitted Liens, in the Collateral.
(v) Accountant Certificate. Receipt from Xxxxxx Xxxxxxxx of a
calculation satisfactory to the Agent calculating the Fixed Charge
Coverage Ratio (as defined in the Indenture) at an amount of at least
2.0 to 1.0 after giving effect to (i) the acquisition of the Acquired
Assets and the incurrence of Indebtedness related thereto and (ii) the
incurrence of Indebtedness under this Credit Agreement and the
Supplemental Credit Agreement as of the Closing Date.
(w) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to (after giving effect to the
purchase of the Acquired Assets), information regarding litigation,
tax, accounting, labor, insurance, pension liabilities (actual or
contingent), real estate leases, material contracts, debt agreements,
property ownership and contingent liabilities of the Borrower and its
Subsidiaries.
5.2 Conditions to All Extensions of Credit.
In addition to the conditions precedent stated elsewhere herein, the
New Credit Agreement Lenders shall not be obligated to make, continue or convert
Loans unless:
(a) Notice. The Borrower shall have delivered (i) in the case
of any new Revolving Loan, a Notice of Borrowing, duly executed and
completed, by the time specified in Section 2.1 and (ii) in the case of
any continuation or conversion of a Loan, a duly executed and completed
Notice of Continuation/Conversion by the time specified in Section 2.2;
(b) Representations and Warranties. The representations and
warranties made by the Credit Parties in any Credit Document and any
Supplemental Credit Document are true and correct in all material
respects at and as if made as of such date;
(c) No Default. No Default or Event of Default shall
exist or be continuing either prior to or after giving effect
thereto;
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(d) No Material Adverse Effect. There shall not have occurred
any Material Adverse Effect; and
(e) Availability. Immediately after giving effect to the
making of such Loan (and the application of the proceeds thereof), the
sum of the Revolving Loans outstanding plus Swingline Loans outstanding
shall not exceed the Revolving Commitment Amount.
The delivery of each Notice of Borrowing and each Notice of Extension/Conversion
shall constitute a representation and warranty by the Borrower of the
correctness of the matters specified in subsections (b), (c), (d) and (e) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each New Credit
Agreement Lender that:
6.1 Financial Condition.
The financial statements delivered to the Lenders pursuant to Section
5.1(c)(ii), (a) have been prepared in accordance with GAAP and (b) present
fairly (on the basis disclosed in the footnotes to such financial statements)
the consolidated and consolidating (as applicable) financial condition, results
of operations and cash flows of the Credit Parties and their Subsidiaries as of
such date and for such periods. Since November 30, 1996, there has been no sale,
transfer or other disposition by the Borrower or any of its Subsidiaries of any
material part of the business or property of the Borrower or any of its
Subsidiaries, and no purchase or other acquisition by any of them of any
business or property (including any capital stock of any other Person) material
in relation to the consolidated financial condition of the Borrower and its
Subsidiaries, in each case, which, is not reflected in the foregoing financial
statements or in the notes thereto.
6.2 No Material Change.
Since November 30, 1996, (a) there has been no development or event
relating to or affecting Borrower or any of its Subsidiaries which has had or
would be reasonably expected to have a Material Adverse Effect and (b) no
dividends or other distributions have been declared, paid or made upon the
capital stock or other equity interest in Borrower or any of its Subsidiaries
nor, except as otherwise permitted under this Credit Agreement, has any of the
capital stock or other equity interest in a Credit Party been redeemed, retired,
purchased or otherwise acquired for value.
6.3 Organization and Good Standing.
The Borrower and each of its Subsidiaries (a) is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
(or other jurisdiction) of its
52
incorporation, (b) is duly qualified and in good standing as a foreign
corporation authorized to do business in every jurisdiction where the failure to
be so qualified would have a Material Adverse Effect and (c) has the requisite
corporate power and authority to own its properties and to carry on its business
as now conducted and as proposed to be conducted.
6.4 Due Authorization.
Each Credit Party (a) has the requisite corporate power and authority
to execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party and to incur the obligations herein and therein
provided for and (b) is duly authorized to, and has been authorized by all
necessary corporate action, to execute, deliver and perform this Credit
Agreement and the other Credit Documents to which it is a party.
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws, (b) violate, contravene or materially conflict with any
Requirement of Law or any other law, regulation (including, without limitation,
Regulation U or Regulation X), order, writ, judgment, injunction, decree or
permit applicable to it, (c) violate, contravene or conflict with contractual
provisions of, or cause an event of default under, any indenture, loan
agreement, mortgage, deed of trust, contract or other agreement or instrument to
which it is a party or by which it may be bound, the violation of which could
have or might be reasonably expected to have a Material Adverse Effect, or (d)
result in or require the creation of any Lien (other than those contemplated in
or created in connection with the Credit Documents) upon or with respect to its
properties.
6.6 Consents.
No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or third
party in respect of a Credit Party is required in connection with the execution,
delivery or performance of this Credit Agreement or any of the other Credit
Documents by a Credit Party, or if required, such consent, approval and
authorization has been obtained.
6.7 Enforceable Obligations.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with their
respective terms, except as may be limited by bankruptcy or insolvency laws or
similar laws affecting creditors' rights generally or by general equitable
principles.
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6.8 No Default.
Neither the Borrower nor any of its Subsidiaries is in default in any
respect under any contract, lease, loan agreement, indenture, mortgage, security
agreement or other agreement or obligation to which it is a party or by which
any of its properties is bound which default would have or would be reasonably
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred or exists except as previously disclosed to the New Credit Agreement
Lenders.
6.9 Ownership.
The Borrower and each of its Subsidiaries is the owner of and has good
and marketable title to all of its assets and none of such assets are subject to
any Lien other than Permitted Liens.
6.10 Indebtedness.
The Borrower and its Subsidiaries have no Indebtedness except (a) as
disclosed in the financial statements referenced in Section 6.1, (b) as set
forth on Schedule 6.10 and (c) as otherwise permitted by this Credit Agreement.
6.11 Litigation.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against the Borrower or any of its Subsidiaries which, if adversely
determined, would have or would be reasonably expected to have a Material
Adverse Effect.
6.12 Taxes.
Each of the Borrower and its Subsidiaries has filed, or caused to be
filed, all tax returns (federal, state, local and foreign) required to be filed
and paid (a) all amounts of taxes shown thereon to be due (including interest
and penalties) and (b) all other taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. No Credit Party is aware of any proposed tax assessments
against it, any of its Subsidiaries or any other Credit Party.
6.13 Compliance with Law.
Each of the Borrower and its Subsidiaries is in compliance with all
Requirements of Law and all other laws, rules, regulations, orders and decrees
(including without limitation Environmental Laws) applicable to it, or to its
properties, unless such failure to comply would not have or would not be
reasonably expected to have a Material Adverse Effect. No Requirement of Law
would be reasonably expected to cause a Material Adverse Effect.
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6.14 ERISA.
Except as set forth on Schedule 6.14 or except as would not result in a
Material Adverse Effect:
(a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no Termination Event
has occurred, and, to the best knowledge of the Credit Parties, no
event or condition has occurred or exists as a result of which any
Termination Event could reasonably be expected to occur, with respect
to any Plan; (ii) no "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether or
not waived, has occurred with respect to any Plan; (iii) each Plan has
been maintained, operated, and funded in compliance with its own terms
and in material compliance with the provisions of ERISA, the Code, and
any other applicable federal or state laws; and (iv) no lien in favor
or the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.
(b) The actuarial present value of all "benefit liabilities"
under each Single Employer Plan (determined within the meaning of
Section 401(a)(2) of the Code, utilizing the actuarial assumptions used
to fund such Plans), whether or not vested, did not, as of the last
annual valuation date prior to the date on which this representation is
made or deemed made, exceed the current value of the assets of such
Plan allocable to such accrued liabilities.
(c) Neither the Borrower, nor any of its Subsidiaries nor any
ERISA Affiliate has incurred, or, to the best knowledge of the Credit
Parties, are reasonably expected to incur, any withdrawal liability
under ERISA to any Multiemployer Plan or Multiple Employer Plan.
Neither the Borrower, nor any of its Subsidiaries nor any ERISA
Affiliate has received any notification that any Multiemployer Plan is
in reorganization (within the meaning of Section 4241 of ERISA), is
insolvent (within the meaning of Section 4245 of ERISA), or has been
terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the best knowledge of the Credit Parties,
reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or may subject the Borrower or any of its Subsidiaries or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l)
of ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which the Borrower or any of its Subsidiaries or
any ERISA Affiliate has agreed or is required to indemnify any person
against any such liability.
(e) The present value (determined using actuarial and other
assumptions which are reasonable with respect to the benefits provided
and the employees participating) of the liability of the Borrower and
its Subsidiaries and each ERISA Affiliate for post-retirement welfare
benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of
55
ERISA), net of all assets under all such Plans allocable to such
benefits, are reflected on the Financial Statements in accordance with
FAS 106.
(f) Each Plan which is a welfare plan (as defined in Section
3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of
the Code apply has been administered in compliance in all material
respects with such sections.
6.15 Subsidiaries.
Set forth on Schedule 6.15 is a complete and accurate list of all
Subsidiaries of each Credit Party. Information on Schedule 6.15 includes
jurisdiction of incorporation, the number of shares of each class of capital
stock or other equity interests outstanding, the number and percentage of
outstanding shares of each class owned (directly or indirectly) by such Credit
Party; and the number and effect, if exercised, of all outstanding options,
warrants, rights of conversion or purchase and all other similar rights with
respect thereto. The outstanding capital stock and other equity interests of all
such Subsidiaries is validly issued, fully paid and non-assessable and is owned
by each such Credit Party, directly or indirectly, free and clear of all Liens
(other than those arising under or contemplated in connection with the Credit
Documents and Supplemental Credit Documents). Other than as set forth in
Schedule 6.15, neither any Credit Party nor any Subsidiary thereof has
outstanding any securities convertible into or exchangeable for its capital
stock nor does any such Person have outstanding any rights to subscribe for or
to purchase or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to its capital stock.
6.16 Use of Proceeds; Margin Stock.
The proceeds of the Loans hereunder will be used solely for the
purposes specified in Section 7.10. None of the proceeds of the Loans will be
used for the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U, Regulation X or Regulation G, or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
"margin stock" or any "margin security" or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of Regulation
U, Regulation X, Regulation G or Regulation T. None of the Credit Parties owns
any "margin stock".
6.17 Government Regulation.
No Credit Party is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Investment Company Act
of 1940 or the Interstate Commerce Act, each as amended. In addition, no Credit
Party is (a) an "investment company" registered or required to be registered
under the Investment Company Act of 1940, as amended, or controlled by such a
company, or (b) a "holding company," or a "Subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "Subsidiary" or a
"holding company," within the meaning of the Public Utility Holding Company Act
of 1935, as amended. No director, executive officer or principal shareholder of
the Borrower or any of its Subsidiaries is a director, executive officer or
principal shareholder of any Lender. For the
56
purposes hereof the terms "director", "executive officer" and "principal
shareholder" (when used with reference to any Lender) have the respective
meanings assigned thereto in Regulation O issued by the Board of Governors of
the Federal Reserve System.
6.18 Environmental Matters.
(a) Except as set forth on Schedule 6.18.
(i) each of the Real Properties and all operations at
the Real Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any
Environmental Law with respect to the Real Properties or the
businesses operated by the Borrower or any of its Subsidiaries
(the "Businesses"), and there are no conditions relating to
the Businesses or Real Properties that could give rise to
liability under any applicable Environmental Laws.
(ii) None of the Real Properties contains, or has
previously contained, any Hazardous Materials at, on or under
the Real Properties in amounts or concentrations that, if
released, constitute or constituted a violation of, or could
give rise to liability under, Environmental Laws.
(iii) Neither the Borrower nor any of its
Subsidiaries has received any written or oral notice of, or
inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or
potential liability regarding Hazardous Materials or
compliance with Environmental Laws with regard to any of the
Real Properties, Leasehold Properties or the Businesses, nor
does the Borrower or any of its Subsidiaries have knowledge or
reason to believe that any such notice is being threatened.
(iv) Hazardous Materials have not been transported or
disposed of from the Real Properties, or generated, treated,
stored or disposed of at, on or under any of the Real
Properties or any other location, in each case by, or on
behalf or with the permission of, the Borrower or any of its
Subsidiaries in a manner that would reasonably be expected to
give rise to liability under any applicable Environmental Law.
(v) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the
Borrower or any of its Subsidiaries, threatened, under any
Environmental Law to which the Borrower or any of its
Subsidiaries is or will be named as a party, nor are there any
consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental
Law with respect to the Borrower or any of its Subsidiaries,
the Real Properties or the Businesses.
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(vi) There has been no release or threat of release
of Hazardous Materials at or from the Real Properties or
arising from or related to the operations (including, without
limitation, disposal) of the Borrower or any of its
Subsidiaries in connection with the Real Properties or
otherwise in connection with the Businesses.
(vii) Neither the Borrower nor any of its
Subsidiaries has assumed any liability of any Person (other
than another Credit Party) under any Environmental Law.
(b) The Borrower has adopted procedures that are designed to
(i) ensure that each Credit Party and their Subsidiaries, any of their
operations and each of the properties owned or leased by each Credit
Party and their Subsidiaries remains in compliance with applicable
Environmental Laws and (ii) minimize any liabilities or potential
liabilities that each Credit Party and their Subsidiaries, any of their
operations and each of the properties owned or leased by each Credit
Party and their Subsidiaries may have under applicable Environmental
Laws.
6.19 Intellectual Property.
The Borrower and each of its Subsidiaries owns, or has the legal right
to use, all trademarks, tradenames, copyrights, technology, know-how and
processes (the "Intellectual Property") necessary for each of them to conduct
its business as currently conducted except for those the failure to own or have
such legal right to use would not have or be reasonably expected to have a
Material Adverse Effect. Set forth on Schedule 6.19 is a list of all
Intellectual Property owned by the Borrower and its Subsidiaries or that the
Borrower or one of its Subsidiaries has the right to use (which list shall
identify the Person that owns or has the right to use each such item of
Intellectual Property). Except as provided on Schedule 6.19, 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, nor does any Credit Party know of any such claim, and to
the Credit Parties' knowledge the use of such Intellectual Property by the
Borrower or any of its Subsidiaries does not infringe on the rights of any
Person, except for such claims and infringements that in the aggregate, would
not have or be reasonably expected to have a Material Adverse Effect.
6.20 Solvency.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement and the Supplemental Credit Agreement,
will be Solvent.
6.21 Investments.
All Investments of the Borrower and each of its Subsidiaries are either
Permitted Investments or otherwise permitted by the terms of this Credit
Agreement.
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6.22 No Financing of Corporate Takeovers.
No proceeds of the Loans hereunder have been or will be used to
acquire, directly or indirectly, any security in any transaction which is
subject to Sections 13 or 14 of the Securities Exchange Act of 1934, as amended
(including, without limitation, Sections 13(d) and 14(d) thereof) or to
refinance any Indebtedness used to acquire any such securities.
6.23 Location of Collateral.
Set forth on Schedule 6.23(a) is a list of all Real Properties and
Leasehold Properties with street address, county and state where located. Set
forth on Schedule 6.23(b) is a list of all locations where any personal property
of a Credit Party is located, including county and state where located. Set
forth on Schedule 6.23(c) is the chief executive office and principal place of
business of each Credit Party.
6.24 Disclosure.
Neither this Credit Agreement nor any financial statements delivered to
the New Credit Agreement Lenders nor any other document, certificate or
statement furnished to the New Credit Agreement Lenders by or on behalf of any
Credit Party in connection with the transactions contemplated hereby contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained therein or herein not
misleading.
6.25 Licenses, etc.
The Borrower and each of its Subsidiaries has obtained and holds in
full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
their respective businesses as presently conducted.
6.26 No Burdensome Restrictions.
Neither the Borrower nor any Subsidiary of the Borrower is a party to
any agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, would have or be reasonably expected to
have a Material Adverse Effect.
6.27 Brokers' Fees.
No Credit Party has any obligation to any Person in respect of any
finder's, broker's, investment banking or other similar fee in connection with
any of the transactions contemplated under the Credit Documents.
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6.28 Labor Matters.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or any Subsidiary of the Borrower and
none of such Persons has suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last five years.
6.29 Collateral Documents.
The Collateral Documents create valid security interests in, and first
Liens on, the Collateral purported to be covered thereby, which security
interests and Liens are and will remain perfected security interests and Liens,
prior to all other Liens other than Permitted Liens. Each of the representations
and warranties made by the Borrower and its Subsidiaries in the Collateral
Documents is true and correct.
6.30 Related Transactions.
The closing of the acquisition of the Acquired Assets will occur
simultaneously with the making of the initial Loans hereunder and under the
Supplemental Credit Agreement and no party has waived, without the consent of
the Required Lenders, any condition precedent to their obligations to close as
set forth in the Purchase Agreement. True and complete copies of the Purchase
Agreement have been delivered to each of the New Credit Agreement Lenders,
together with a true and complete copy of each document to be delivered at the
closing of the acquisition of the Acquired Assets.
6.31 Representations and Warranties Incorporated from Purchase
Agreement.
As of the Closing Date, each of the representations and warranties made
in the Purchase Agreement by each of the parties thereto is true and correct in
all material respects, and such representations and warranties are hereby
incorporated herein by reference with the same effect as though set forth in
their entirety herein, as qualified therein.
6.32 Senior Debt.
(a) The Loans are Senior Debt (as defined in the Indenture) under
Article 10.02 of the Indenture, meaning New Credit Agreement Lenders shall have
all of the rights and privileges of a holder of Senior Debt (as defined in the
Indenture) under the Indenture including, but not limited to, the rights set
forth in Article 10 of the Indenture, (b) this Credit Agreement is the New
Credit Agreement (as defined in the Indenture) and (c) the Loans are Senior
Indebtedness (as defined in the Second Indenture) under the Second Indenture,
meaning the New Credit Agreement Lenders shall have all of the rights and
privileges of a holder of Senior Indebtedness (as defined in the Second
Indenture) under the Second Indenture.
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SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans, together with interest, fees
and other obligations hereunder, have been paid in full and the Commitments
hereunder shall have terminated:
7.1 Information Covenants.
The Borrower will furnish, or cause to be furnished, to the Agent:
(a) Annual Financial Statements. As soon as available, and in
any event within 120 days after the close of each fiscal year of the
Borrower, a consolidated and consolidating balance sheet and income
statement of the Borrower and its Subsidiaries, as of the end of such
fiscal year, together with related consolidated and consolidating
statements of operations and retained earnings and of cash flows for
such fiscal year, setting forth in comparative form consolidated
figures for the preceding fiscal year, all such financial information
described above to be in reasonable form and detail and audited by
independent certified public accountants of recognized national
standing reasonably acceptable to the Agent and whose opinion shall be
to the effect that such financial statements have been prepared in
accordance with GAAP (except for changes with which such accountants
concur) and shall not be limited as to the scope of the audit or
qualified in any manner.
(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after the close of each fiscal quarter of
the Borrower (other than the fourth fiscal quarter, in which case 120
days after the end thereof) a consolidated balance sheet and income
statement of the Borrower and its Subsidiaries, as of the end of such
fiscal quarter, together with related consolidated statements of
operations and retained earnings and of cash flows for such fiscal
quarter in each case setting forth in comparative form consolidated
figures for the corresponding period of the preceding fiscal year, all
such financial information described above to be in reasonable form and
detail and reasonably acceptable to the Agent, and accompanied by a
certificate of the chief financial officer of the Borrower to the
effect that such quarterly financial statements fairly present in all
material respects the financial condition of the Borrower and its
Subsidiaries and have been prepared in accordance with GAAP, subject to
changes resulting from audit and normal year-end audit adjustments.
(c) Monthly Financial Statements. As soon as available and in
any event within 20 days after the end of each month of the Borrower
(other than the last month of the first three fiscal quarters in which
case 45 days after the end thereof), a consolidated balance sheet and
income statement of the Borrower and its Subsidiaries as at the end of
such month together with (i) related consolidated statements of
operations and retained earnings for such month in each case setting
forth in comparative form consolidated figures for the corresponding
period of the preceding fiscal year and (ii) a separate
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income statement for each Foreign Subsidiary (and such other financial
information as reasonably requested by the Agent or the Required
Lenders), all such financial information described above to be in
reasonable form and detail and reasonably acceptable to the Agent, and
accompanied by a certificate of the chief financial officer of the
Borrower to the effect that such monthly financial statements fairly
present in all material respects the financial condition of the
Borrower and its Subsidiaries and have been prepared in accordance with
GAAP, subject to changes resulting from audit and normal year-end audit
adjustments.
(d) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of the chief financial officer of the Borrower
substantially in the form of Exhibit 7.1(d), (i) demonstrating
compliance with the financial covenants contained in Section 7.12 by
calculation thereof as of the end of each such fiscal period and (ii)
stating that no Default or Event of Default exists, or if any Default
or Event of Default does exist, specifying the nature and extent
thereof and what action the Borrower proposes to take with respect
thereto. The Borrower shall also deliver a copy of such certificate to
the Agency Services Address.
(e) Annual Business Plan and Budgets. At least 60 days after
the end of each fiscal year of the Borrower, beginning with the fiscal
year ending November 30, 1998, an annual business plan and budget of
the Borrower and its Subsidiaries containing, among other things, pro
forma financial statements for the next fiscal year.
(f) Borrowing Base Certificate. Within 20 days after the end
of each calendar month, a Borrowing Base Certificate as of the end of
the immediately preceding month, substantially in the form of Exhibit
7.1(f) and certified by the chief financial officer of the Borrower to
be true and correct as of such date.
(g) Compliance With Certain Provisions of the Credit
Agreement. Within 120 days after the end of each fiscal year of the
Borrower, the Borrower shall deliver a certificate, containing
information regarding (i) the calculation of Excess Cash Flow and (ii)
the amount of any Asset Dispositions, Debt Issuances, Equity Issuances
and Recovery Events that were made during the prior fiscal year.
(h) Accountant's Certificate. Within the period for delivery
of the annual financial statements provided in Section 7.1(a), a
certificate of the accountants conducting the annual audit stating that
they have reviewed this Credit Agreement and stating further whether,
in the course of their audit, they have become aware of any Default or
Event of Default and, if any such Default or Event of Default exists,
specifying the nature and extent thereof.
(i) Auditor's Reports. Promptly upon receipt thereof, a copy
of any "management letter" submitted by independent accountants to the
Borrower or any of its Subsidiaries in connection with any annual,
interim or special audit of the books of the Borrower or any of its
Subsidiaries.
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(j) Reports. Promptly upon transmission or receipt thereof,
(a) copies of any filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor agency,
and copies of all financial statements, proxy statements, notices and
reports as the Borrower or any of its Subsidiaries shall send to its
shareholders generally or to a holder of any Indebtedness owed by the
Borrower or any of its Subsidiaries in its capacity as such a holder
and (b) upon the written request of the Agent, all reports and written
information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters.
(k) Notices. Upon a Credit Party obtaining knowledge thereof,
such Credit Party will give written notice to the Agent immediately of
(a) the occurrence of an event or condition consisting of a Default or
Event of Default, specifying the nature and existence thereof and what
action the Borrower proposes to take with respect thereto, and (b) the
occurrence of any of the following with respect to the Borrower or any
of its Subsidiaries (i) the pendency or commencement of any litigation,
arbitral or governmental proceeding against the Borrower or any of its
Subsidiaries which if adversely determined would have or would be
reasonably expected to have a Material Adverse Effect, or (ii) the
institution of any proceedings against the Borrower or any of its
Subsidiaries with respect to, or the receipt of notice by such Person
of potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation,
including but not limited to, Environmental Laws, the violation of
which would have or would be reasonably expected to have a Material
Adverse Effect.
(l) ERISA. Upon any of the Credit Parties or any ERISA
Affiliate obtaining knowledge thereof, Borrower will give written
notice to the Agent and each of the New Credit Agreement Lenders
promptly (and in any event within five Business Days) of: (i) any event
or condition, including, but not limited to, any Reportable Event, that
constitutes, or might reasonably lead to, a Termination Event; (ii)
with respect to any Multiemployer Plan, the receipt of notice as
prescribed in ERISA or otherwise of any withdrawal liability assessed
against the Borrower or any of its ERISA Affiliates, or of a
determination that any Multiemployer Plan is in reorganization or
insolvent (both within the meaning of Title IV of ERISA); (iii) the
failure to make full payment on or before the due date (including
extensions) thereof of all amounts which the Borrower or any of its
Subsidiaries or ERISA Affiliate is required to contribute to each Plan
pursuant to its terms and as required to meet the minimum funding
standard set forth in ERISA and the Code with respect thereto; or (iv)
any change in the funding status of any Plan that could have a Material
Adverse Effect; together, with a description of any such event or
condition or a copy of any such notice and a statement by the principal
financial officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any,
which has been or is being taken or is proposed to be taken by the
Credit Parties with respect thereto. Promptly upon request, the
Borrower shall furnish the Agent and each of the Lenders with such
additional information concerning any Plan as may be reasonably
requested, including, but not limited to, copies of each annual
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report/return (Form 5500 series), as well as all schedules and
attachments thereto required to filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section 3(39)
of ERISA).
(m) Environmental.
(i) Upon the reasonable written request of the Agent,
the Borrower will furnish or cause to be furnished to the
Agent, at the Borrower's expense, an environmental assessment
of reasonable scope, form and depth, (including, where
appropriate, invasive soil or groundwater sampling) by a
consultant reasonably acceptable to the Agent as to the nature
and extent of the presence of any Hazardous Materials on any
property owned, leased or operated by the Borrower or any of
its Subsidiaries and as to the compliance by the Borrower and
each of its Subsidiaries with Environmental Laws. If the
Borrower fails to deliver such an environmental report within
seventy-five (75) days after receipt of such written request
then the Agent may arrange for same, and the Borrower hereby
grants to the Agent and its representatives access to the Real
Properties and a license to undertake such an assessment
(including, where appropriate, invasive soil or groundwater
sampling). The reasonable cost of any assessment arranged for
by the Agent pursuant to this provision will be payable by the
Borrower on demand and added to the obligations secured by the
Collateral Documents.
(ii) The Borrower and each of its Subsidiaries will
conduct and complete all investigations, studies, sampling,
and testing and all remedial, removal, and other actions
necessary to address all Hazardous Materials on, from, or
affecting any real property owned or leased by the Borrower or
its Subsidiaries to the extent necessary to be in compliance
with all Environmental Laws and all other applicable federal,
state, and local laws, regulations, rules and policies and
with the orders and directives of all Governmental Authorities
exercising jurisdiction over such real property to the extent
any failure would have or be reasonably expected to have a
Material Adverse Effect.
(n) Star Report. At the time of delivery of the financial
statements provided for in Section 7.1(b) above, a company-prepared
report containing information as to brand sales and advertising cost
analysis for the fiscal quarter of the Borrower most recently ending.
(o) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of the Borrower and its Subsidiaries as the
Agent or the Required Lenders may reasonably request.
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7.2 Preservation of Existence and Franchises.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, do all things necessary to preserve and keep in full force and
effect in all material respects its existence, rights, franchises and authority.
7.3 Books and Records.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of GAAP
(including the establishment and maintenance of appropriate reserves).
7.4 Compliance with Law.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and orders, and all
applicable restrictions imposed by all Governmental Authorities, applicable to
it and its property (including, without limitation, Environmental Laws) if
noncompliance with any such law, rule, regulation, order or restriction would
have or reasonably be expected to have a Material Adverse Effect.
7.5 Payment of Taxes and Other Indebtedness.
Each of the Credit Parties will, and will cause its Subsidiaries to,
pay and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, might give rise to a Lien upon
any of its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that a Credit Party or
its Subsidiary shall not be required to pay any such tax, assessment, charge,
levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with GAAP, unless the failure to make any such payment
(i) would give rise to an immediate right to foreclose on a Lien securing such
amounts or (ii) would have a Material Adverse Effect.
7.6 Insurance.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance
(including worker's compensation insurance, liability insurance, casualty
insurance and business interruption insurance) in such amounts, covering such
risks and liabilities and with such deductibles or self-insurance retentions as
are in accordance with normal industry practice. All liability policies shall
have each New Credit Agreement Lender as an additional insured and all casualty
policies shall have the Agent, on behalf of the Lenders, as loss payee.
In the event there occurs any material loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party shall
promptly give written notice thereof to
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the Agent generally describing the nature and extent of such damage or
destruction. Subsequent to any loss, damage to or destruction of the Collateral
of any Credit Party or any part thereof, such Credit Party, whether or not the
insurance proceeds, if any, received on account of such damage or destruction
shall be sufficient for that purpose, at such Credit Party's cost and expense,
will promptly repair or replace the Collateral of such Credit Party so lost,
damaged or destroyed; provided, however, that such Credit Party shall not be
obligated to repair or replace any Collateral so lost, damaged or destroyed to
the extent the failure to make such repair or replacement (a) is desirable to
the proper conduct of the business of such Credit Party in the ordinary course
and otherwise is in the best interest of such Credit Party and (b) would not
materially impair the rights and benefits of the Agent or the New Credit
Agreement Lenders under this Credit Agreement or any other Credit Document. In
the event a Credit Party shall receive any insurance proceeds, as a result of
any loss, damage or destruction, in a net amount in excess of $100,000, such
Credit Party will immediately pay over such proceeds to the Agent as cash
collateral for the Credit Party Obligations. The Agent agrees to release such
insurance proceeds to such Credit Party for replacement or restoration of the
portion of the Collateral of such Credit Party lost, damaged or destroyed if,
(A) within 120 days from the date the Agent receives such insurance proceeds,
the Agent has received written application for such release from such Credit
Party together with evidence reasonably satisfactory to it that the Collateral
lost, damaged or destroyed has been or will be replaced or restored to its
condition (or by Collateral having a value at least equal to the condition of
the asset subject to the loss, damage or destruction) immediately prior to the
loss, destruction or other event giving rise to the payment of such insurance
proceeds and (B) on the date of such release no Default or Event of Default
exists. If the conditions in the preceding sentence are not met, the Agent
shall, on the first Business Day subsequent to the date 120 days after it
received such insurance proceeds, apply such insurance proceeds as a mandatory
prepayment of the Credit Party Obligations for application in accordance with
the terms of Section 3.3(b)(v) and Section 3.3(c). All insurance proceeds shall
be subject to the security interest of the New Credit Agreement Lenders under
the Collateral Documents.
The present insurance coverage of the Borrower and its Subsidiaries is outlined
as to carrier, policy number, expiration date, type and amount on Schedule 7.6,
as Schedule 7.6 may be amended from time to time by written notice to the Agent.
7.7 Maintenance of Property.
Each of the Credit Parties will, and will cause its Subsidiaries to,
maintain and preserve its properties and equipment in good repair, working order
and condition, normal wear and tear excepted, and will make, or cause to be
made, in such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
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7.8 Performance of Obligations.
Each of the Credit Parties will, and will cause its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound.
7.9 Collateral.
If, subsequent to the Closing Date, a Credit Party shall (a) acquire or
lease any real property or (b) acquire any intellectual property, securities
instruments, chattel paper or other personal property required to be delivered
to the Agent as Collateral hereunder or under any of the Collateral Documents,
the Borrower shall immediately notify the Agent of same. Each Credit Party shall
take such action (including, but not limited to, the actions set forth in
Sections 5.1(f) and (g)), as requested by the Agent and at its own expense, to
ensure that the Lenders have a first priority perfected Lien in all owned real
property (and in such leased real property as requested by the Agent or the
Required Lenders) and all personal property of the Credit Parties (whether now
owned or hereafter acquired), subject only to Permitted Liens. Each Credit Party
shall adhere to the covenants regarding the location of personal property as set
forth in the Security Agreements.
7.10 Use of Proceeds.
The Credit Parties will use proceeds of the Loans solely (a) to
refinance on the Closing Date the existing Indebtedness of the Borrower under
the Prior New Credit Agreement, (b) to provide working capital and (c) for
general corporate purposes.
7.11 Audits/Inspections.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause its Subsidiaries to, permit representatives appointed
by the Agent or any Lender, including, without limitation, independent
accountants, agents, attorneys and appraisers to visit and inspect such Credit
Party's (or its Subsidiary's) property, including its books and records, its
accounts receivable and inventory, its facilities and its other business assets,
and to make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of the Credit Parties and their Subsidiaries. The Credit Parties
agree that the Agent, and its representatives, may conduct an annual audit of
the Collateral, at the expense of the Borrower.
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7.12 Financial Covenants.
(a) Interest Coverage Ratio. The Interest Coverage Ratio, as
of the end of each fiscal quarter, shall be greater than or equal to:
(i) From the Effective Date to and including
August 31, 1998, 1.30 to 1.0;
(ii) From September 1, 1998 and thereafter, 1.40
to 1.0.
(b) Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio, as of the end of each fiscal quarter, shall be greater than or
equal to:
(i) From the Effective Date to and including
August 31, 1998, 1.10 to 1.0; and
(ii) From September 1, 1998 and thereafter, 1.20
to 1.0.
(c) Leverage Ratio. The Leverage Ratio, as of the end of each
fiscal quarter, shall be less than or equal to:
(i) From the Effective Date to and including
August 30, 1998, 10.0 to 1.0;
(ii) From August 31, 1998 to and including
November 29, 1998, 8.50 to 1.0;
(iii) From November 30, 1998 to and including
February 27, 1999, 7.50 to 1.0;
(iv) From February 28, 1999 to and including May
30, 1999, 6.75 to 1.0;
(v) From May 31, 1999, to and including August
30, 1999, 5.50 to 1.0; and
(vi) From August 31, 1999 and thereafter, 5.0 to
1.0.
(d) Senior Leverage Ratio. The Senior Leverage Ratio, as of
the end of each fiscal quarter, shall be less than or equal to:
(i) From the Effective Date to and including May
31, 1998, 3.25 to 1.0;
(ii) From June 1, 1998 to and including August
31, 1998, 3.0 to 1.0; and
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(iii) From September 1, 1998 and thereafter, 2.50
to 1.0.
(e) Net Worth. At all times Net Worth shall be no less than
Four Million Seven Hundred Thousand ($4,700,000) increased on a
cumulative basis, commencing with the fiscal quarter ending May 31,
1998, by an amount equal to, (i) as of the last day of each fiscal
quarter, 50% of Net Income for the fiscal quarter then ended (without
deductions for any losses) plus (ii) 100% of the Net Cash Proceeds from
any Equity Issuance subsequent to the Closing Date.
(f) Appraised Brand Value. As of the end of each fiscal
quarter of the Borrower, with respect to the Borrower and its
Subsidiaries on a consolidated basis, the most recent appraised value
of all brands or product lines of the Borrower and its Subsidiaries on
a consolidated basis on such date shall be greater than or equal to
$340 million.
7.13 Additional Credit Parties.
At the time any Person becomes a Subsidiary of a Credit Party, the
Borrower shall so notify the Agent and promptly thereafter (but in any event
within 30 days after the date thereof) shall cause such Person to (a) if it is a
Domestic Subsidiary, execute a Joinder Agreement in substantially the same form
as Exhibit 7.13, (b) cause all of the capital stock of such Person (if such
Person is a Domestic Subsidiary) or 65% of the capital stock of such Person (if
such Person is a Foreign Subsidiary) to be delivered to the Agent (together with
undated stock powers signed in blank) and pledged to the Agent pursuant to an
appropriate pledge agreement in substantially the form of the Pledge Agreement
and otherwise in a form acceptable to the Agent, (c) if such Person is a
Domestic Subsidiary, pledge all of its assets to the Lenders pursuant to a
security agreement in substantially the form of the Security Agreements and
otherwise in a form acceptable to the Agent, (d) if such Person has any
Subsidiaries, (i) deliver all of the capital stock of such Domestic Subsidiaries
and 65% of the capital stock of such Foreign Subsidiaries (together with undated
stock powers signed in blank) to the Agent and (ii) execute a pledge agreement
in substantially the form of the Pledge Agreement and otherwise in a form
acceptable to the Agent, (e) if such Person owns or leases any real property in
the United States of America, execute any and all necessary mortgages, deeds of
trust, deeds to secure debt, leasehold mortgages, collateral assignments of
leaseholds or other appropriate real estate collateral documentation in a form
acceptable to the Agent and (f) deliver such other documentation as the Agent
may reasonably request in connection with the foregoing, including, without
limitation, appropriate UCC-1 financing statements, real estate title insurance
policies, environmental reports, landlord waivers, certified resolutions and
other organizational and authorizing documents of such Person and favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to above), all in form, content and scope reasonably satisfactory to
the Agent.
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7.14 Ownership of Subsidiaries.
The Borrower shall at all times own 100% of the capital stock of its
Subsidiaries (other than to the extent necessary for Chattem (U.K.) Limited and
HBA Insurance Ltd. to qualify for incorporation in their respective countries of
incorporation, any nominal qualifying shares owned by any necessary governmental
authorities) and may not sell, transfer or otherwise dispose of any shares of
capital stock of any of its Subsidiaries.
7.15 Appraisal Reports.
The Borrower and its Subsidiaries shall provide the Agent, upon the
request of the Agent and at the expense of the Borrower, with asset appraisal
reports with respect to the real and personal property of the Borrower and its
Subsidiaries including, without limitation, appraisals of brand values
(provided, however, the Borrower shall not be required to pay for more than one
appraisal of brand values per year). In the event the Agent needs more than one
asset appraisal report of the real and personal property of the Borrower and its
Subsidiaries during any year, the Agent shall have the right to pay and arrange
for such report.
7.16 Year 2000 Compatibility.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, take all action necessary to assure that its computer based
systems are able to operate and effectively process data including dates on and
after January 1, 2000, and, at the reasonable request of the Agent or the
Required Lenders, the Credit Parties will provide evidence to the Lenders of
such year 2000 compatibility.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans, together with interest, fees
and other obligations hereunder, have been paid in full and the Commitments
hereunder shall have terminated:
8.1 Indebtedness.
No Credit Party will, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement,
the other Credit Documents and the Supplemental Credit Documents;
(b) the Subordinated Debt;
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(c) Indebtedness existing as of the Closing Date as referenced
in Section 6.10 (and renewals, refinancings or extensions thereof on
terms and conditions no more favorable, in the aggregate, to such
Person than such existing Indebtedness and in a principal amount not in
excess of that outstanding as of the date of such renewal, refinancing
or extension);
(d) Indebtedness owing by one Credit Party to another Credit
Party;
(e) purchase money Indebtedness (including Capital Leases)
incurred by the Borrower or any of its Subsidiaries to finance the
purchase of fixed assets; provided that (i) the total of all such
Indebtedness for all such Persons taken together shall not exceed an
aggregate principal amount of $2,000,000.00 at any one time outstanding
(including any such Indebtedness referred to in subsection (c) above);
(ii) such Indebtedness when incurred shall not exceed the purchase
price of the asset(s) financed; and (iii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing;
(f) obligations of the Credit Parties evidenced by the
interest rate protection agreements referred to in Section 7.14 of the
Supplemental Credit Agreement;
(g) Indebtedness incurred by Foreign Subsidiaries not to
exceed $500,000.00, in the aggregate, at any one time outstanding
(including any such Indebtedness referred to in subsection (c) above);
and
(h) the Additional Subordinated Debt.
8.2 Liens.
No Credit Party will, nor will it permit its Subsidiaries to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, except for Permitted Liens.
8.3 Nature of Business.
No Credit Party will, nor will it permit its Subsidiaries to, alter the
character of its business from that conducted as of the Closing Date or engage
in any business other than the business conducted as of the Closing Date, which
with respect to Signal shall be limited to the ownership of trademarks and
tradenames for the purpose of licensing such trademarks and tradenames to the
Borrower.
8.4 Consolidation and Merger.
No Credit Party will, nor will it permit its Subsidiaries to, enter
into any transaction of merger or consolidation or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution); provided that
notwithstanding the foregoing provisions of this Section 8.4, the
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following actions may be taken if (a) the Agent is given prior written notice of
such action, and the Credit Parties execute and deliver such documents,
instruments and certificates as the Agent may request in order to maintain the
perfection and priority of the Liens on the assets of the Credit Parties and (b)
after giving effect thereto no Default or Event of Default exists:
(i) any Credit Party may be merged or consolidated with or
into the Borrower or any Credit Party (other than the Borrower) may be
merged or consolidated with or into any other Credit Party; provided
that if such transaction shall be between the Borrower and another
Credit Party, the Borrower shall be the continuing or surviving
corporation; and
(ii) any Foreign Subsidiary may merge or consolidate with any
other Foreign Subsidiary.
8.5 Sale or Lease of Assets.
No Credit Party will, nor will it permit any of its Subsidiaries to,
convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any part of its business or assets whether now
owned or hereafter acquired, including, without limitation, inventory,
receivables, real property, leasehold interests, equipment and securities other
than (a) any inventory or other assets sold, leased or disposed of (or
simultaneously replaced with like goods) in the ordinary course of business, (b)
obsolete, idle or worn-out assets no longer used or useful in its business, (c)
the sale, lease or transfer or other disposal by a Credit Party other than the
Borrower of any or all of its assets to the Borrower or to any other Credit
Party, or (d) sales of product lines (or the right to produce a consumer product
or products) provided that the dispositions permitted under this subparagraph
(d) during the term of this Credit Agreement shall be limited to product lines
(or the right to produce a consumer product or products) having sales for the
twelve-month period ending on the fiscal quarter ending immediately preceding
the sale in an aggregate amount of $4,000,000 or less.
8.6 Advances, Investments and Loans.
No Credit Party will, nor will it permit any of its Subsidiaries to,
make any Investments except for Permitted Investments.
8.7 Dividends.
No Credit Party will, nor will it permit any of its Subsidiaries to,
directly or indirectly, (a) declare or pay any dividends (whether cash or
otherwise) or make any other distribution upon any shares of its capital stock
of any class other than the payment of dividends by the Subsidiaries of the
Borrower to the Borrower or (b) other than Permitted Investments purchase,
redeem or otherwise acquire or retire or make any provisions for redemption,
acquisition or retirement of any shares of its capital stock of any class or any
warrants or options to purchase any such shares.
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8.8 Transactions with Affiliates.
Except as set forth on Schedule 8.8, no Credit Party will, nor will it
permit its Subsidiaries to, enter into any transaction or series of
transactions, whether or not in the ordinary course of business, with any
officer, director, shareholder, Subsidiary or Affiliate other than on terms and
conditions substantially as favorable as would be obtainable in a comparable
arm's-length transaction with a Person other than an officer, director,
shareholder, Subsidiary or Affiliate.
8.9 Fiscal Year; Organizational Documents.
No Credit Party will, nor will it permit any of its Subsidiaries to,
change its fiscal year or materially change its articles or certificate of
incorporation or its bylaws without the prior written consent of the Required
Lenders.
8.10 Prepayments of Indebtedness.
No Credit Party will, nor will it permit any of its Subsidiaries to,
(a) amend or modify (or permit the amendment or modification of) any of the
terms of any Indebtedness if such amendment or modification would add or change
any terms in a manner adverse to the Lenders, including but not limited to,
shortening final maturity or average life to maturity of such Indebtedness or
requiring any payment to be made sooner than originally scheduled or increasing
the interest rate applicable thereto or change any subordination provision
thereof, (b) during the existence of a Default or Event of Default, or if a
Default or Event of Default would be caused as a result thereof make (or give
any notice with respect thereto) any voluntary or optional payment or prepayment
or redemption or acquisition for value of (including, without limitation, by way
of depositing money or securities with the trustee with respect thereto before
due for the purpose of paying when due), refund, refinance or exchange of any
other Indebtedness.
8.11 Subordinated Debt.
(a) No Credit Party will (i) make or offer to make any principal
payments with respect to the Subordinated Debt, (ii) redeem or offer to redeem
any of the Subordinated Debt, or (iii) deposit any funds intended to discharge
or defease any or all of the Subordinated Debt. The Subordinated Debt may not be
amended or modified in any material manner without the prior written consent of
the Required Lenders, it being specifically understood and agreed that no
amendment to Article 4 or Article 10 of the Indenture shall be made without the
prior written consent of the Required Lenders.
(b) No Credit Party will (i) make or offer to make any principal
payments with respect to the Additional Subordinated Debt, (ii) redeem or offer
to redeem any of the Additional Subordinated Debt or (iii) deposit any funds
intended to discharge or defease any or all of the Additional Subordinated Debt.
The Additional Subordinated Debt may not be amended or modified in any material
manner without the prior written consent of the Required Lenders.
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8.12 Limitations.
No Credit Party will, nor will it permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of any such Person to (a) pay dividends or make
any other distribution on any of such Person's capital stock, (b) pay any
Indebtedness owed to the Borrower or any other Credit Party, (c) make loans
or advances to any other Credit Party or (d) transfer any of its property to
any other Credit Party, except for encumbrances or restrictions existing
under or by reason of (i) customary non-assignment provisions in any lease
governing a leasehold interest, (ii) this Credit Agreement, the other Credit
Documents and the Supplemental Credit Documents, (iii) the Indenture and (iv)
the Second Indenture.
8.13 Sale Leasebacks.
No Credit Party will, nor will it permit any of its Subsidiaries to,
directly or indirectly become or remain liable as lessee or as guarantor or
other surety with respect to any lease, of any property (whether real or
personal or mixed), whether now owned or hereafter acquired, (a) which such
Credit Party or Subsidiary has sold or transferred or is to sell or transfer
to any other Person other than a Credit Party or (b) which such Credit Party
or Subsidiary intends to use for substantially the same purpose as any other
property which has been sold or is to be sold or transferred by such Credit
Party or Subsidiary to any Person in connection with such lease.
8.14 Negative Pledges.
Other than as set forth in Section 4.12 of the Indenture, none of
the Credit Parties will, nor will it permit any of its Subsidiaries to, enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of
any security for such obligation if security is given for some other
obligation.
8.15 Capital Expenditures.
The Credit Parties and their Subsidiaries will not make Capital
Expenditures, in any fiscal year, that would exceed $5,000,000.00 in the
aggregate.
8.16 Operating Leases.
Neither the Borrower nor any of its Subsidiaries shall create,
incur, assume or permit to exist obligations under Operating Leases which
require aggregate annual payments in excess of $1,500,000.00.
8.17 Payment Blockage Notice.
(a) The Borrower (i) covenants and agrees that it will not give the
Payment Blockage Notice (as defined in the Indenture) without the consent of
the Required Lenders and (ii) hereby
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designates and appoints the Agent, as attorney-in-fact of the Borrower,
irrevocably and with full power of substitution, to deliver any Payment
Blockage Notice (as defined in the Indenture) that the Borrower has the right
to deliver pursuant to the terms of the Indenture; provided that the
foregoing appointment shall terminate at such time as the Loans, together
with interest, fees and other obligations hereunder, have been paid in full
and the Commitments hereunder shall have terminated.
(b) The Borrower (i) covenants and agrees that it will not give the
Payment Blockage Notice (as defined in the Second Indenture) without the
consent of the Required Lenders and (ii) hereby designates and appoints the
Agent, as attorney-in-fact of the Borrower, irrevocably and with full power
of substitution, to deliver any Payment Blockage Notice (as defined in the
Second Indenture) that the Borrower has the right to deliver pursuant to the
terms of the Second Indenture; provided that the foregoing appointment shall
terminate at such time as the Loans, together with interest, fees and other
obligations hereunder, have been paid in full and the Commitments hereunder
shall have terminated.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall:
(i) default in the payment when due of any principal
of any of the Loans; or
(ii) default, and such default shall continue for
three or more days, in the payment when due of any interest on
the Loans or of any fees or other amounts owing hereunder,
under any of the other Credit Documents or in connection
herewith.
(b) Representations. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue
in any material respect on the date as of which it was made or deemed
to have been made.
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(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.2,
7.4, 7.5, 7.6, 7.9, 7.10, 7.12, 7.13, 7.14, 7.15, 7.16 or 8.1
through 8.17 inclusive; or
(ii) default in the due performance or observance by
it of any term, covenant or agreement contained in Section 7.1
and such default shall continue unremedied for a period of
five Business Days after the earlier of an officer of a Credit
Party becoming aware of such default or notice thereof given
by the Agent; or
(iii) default in the due performance or observance by
it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) or (ii) of this
Section 9.1) contained in this Credit Agreement and such
default shall continue unremedied for a period of at least 30
days after the earlier of an officer of a Credit Party
becoming aware of such default or notice thereof given by the
Agent.
(d) Other Credit Documents. (i) Any Credit Party shall default
in the due performance or observance of any term, covenant or agreement
in any of the other Credit Documents and such default shall continue
unremedied for a period of at least 30 days after the earlier of an
officer of a Credit Party becoming aware of such default or notice
thereof given by the Agent, or (ii) any Credit Document shall fail to
be in full force and effect or to give the Agent and/or the New Credit
Agreement Lenders the security interests, liens, rights, powers and
privileges purported to be created thereby.
(e) Guaranties. The guaranty given by the Credit Parties
hereunder or by any Additional Credit Party hereafter or any provision
thereof shall cease to be in full force and effect, or any guarantor
thereunder or any Person acting by or on behalf of such guarantor shall
deny or disaffirm such Guarantor's obligations under such guaranty.
(f) Bankruptcy, etc. The occurrence of any of the following
with respect to the Borrower or any of its Subsidiaries (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Borrower or any of its
Subsidiaries in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appoint
a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of any of the Borrower or any of its Subsidiaries or
for any substantial part of its property or ordering the winding up or
liquidation of its affairs; or (ii) an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect is commenced against the Borrower or any of its Subsidiaries
and such petition remains unstayed and in effect for a period of 60
consecutive days; or (iii) the Borrower or any of its Subsidiaries
shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent
to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment
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or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of such Person or any
substantial part of its property or make any general assignment for the
benefit of creditors; or (iv) the Borrower or any of its Subsidiaries
shall admit in writing its inability to pay its debts generally as they
become due or any action shall be taken by such Person in furtherance
of any of the aforesaid purposes.
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) of the Borrower or any of its Subsidiaries in a principal
amount in excess of $500,000.00, including, without limitation, the
Subordinated Debt, the Additional Subordinated Debt and any
indebtedness under the Supplemental Credit Agreement (i) a Credit Party
shall (A) default in any payment (beyond the applicable grace period
with respect thereto, if any) with respect to any such Indebtedness, or
(B) default (after giving effect to any applicable grace period) in the
observance or performance of any term, covenant or agreement relating
to such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event or
condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or
holders of such Indebtedness (or trustee or agent on behalf of such
holders) to cause (determined without regard to whether any notice or
lapse of time is required) any such Indebtedness to become due prior to
its stated maturity; or (ii) any such Indebtedness shall be declared
due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof.
(h) Judgments. One or more judgments, orders, or decrees shall
be entered against any one or more of the Borrower or any of its
Subsidiaries involving a liability of $500,000.00 or more, in the
aggregate, (to the extent not paid or covered by insurance provided by
a carrier who has acknowledged coverage) and such judgments, orders or
decrees shall continue unsatisfied, undischarged and unstayed for a
period ending on the first to occur of (i) the last day on which such
judgment, order or decree becomes final and unappealable or (ii) 30
days.
(i) ERISA. Any of the following events or conditions: (A) any
"accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, shall
exist with respect to any Plan, or any lien shall arise on the assets
of the Borrower or any of their Subsidiaries or any ERISA Affiliate in
favor of the PBGC or a Plan; (B) a Termination Event shall occur with
respect to a Single Employer Plan, which is, in the reasonable opinion
of the Agent, likely to result in the termination of such Plan for
purposes of Title IV of ERISA; (C) a Termination Event shall occur with
respect to a Multiemployer Plan or Multiple Employer Plan, which is, in
the reasonable opinion of the Agent, likely to result in (i) the
termination of such Plan for purposes of Title IV of ERISA, or (ii) the
Borrower or any of its Subsidiaries or any ERISA Affiliate incurring
any liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency or (within
the meaning of Section 4245 of ERISA) such Plan; or (D) any prohibited
transaction (within the meaning of Section 406 of ERISA or Section 4975
of the Code) or breach of fiduciary responsibility shall occur which
may subject the
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Borrower or any of its Subsidiaries or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which the Borrower or any of its Subsidiaries or any ERISA
Affiliate has agreed or is required to indemnify any person against any
such liability.
(j) Ownership. There shall occur a Change of Control.
(k) Subordinated Debt. (i) Any holder of the Subordinated Debt
alleges (or any Governmental Authority with applicable jurisdiction
determines) that the New Credit Agreement Lenders or Supplemental
Credit Lenders are not holders of Senior Debt (as defined in the
Indenture) or (ii) the subordination provisions in the Indenture shall,
in whole or in part, terminate, cease to be effective or cease to be
legally valid, binding and enforceable against any holder of the
Subordinated Debt.
(l) Additional Subordinated Debt. (i) Any holder of the
Additional Subordinated Debt alleges (or any Governmental Authority
with applicable jurisdiction determines) that the Supplemental Credit
Lenders or New Credit Agreement Lenders are not holders of Senior
Indebtedness (as defined in the Second Indenture) or (ii) the
subordination provisions in the Second Indenture shall, in whole or in
part, terminate, cease to be effective or cease to be legally valid,
binding and enforceable against any holder of the Additional
Subordinated Debt.
(m) Business. The Borrower commences to engage in any material
respect in a line of business or activity other than the business of
manufacturing and marketing of brand name over-the-counter
pharmaceuticals, dietary supplements, functional toiletries and
cosmetics.
(n) Indenture/Change of Control. There shall occur (i) a
Change of Control (as defined in the Indenture) under the Indenture,
(ii) a Change of Control Triggering Event (as defined in the Indenture)
under the Indenture or (iii) a Change of Control (as defined in the
Second Indenture) under the Second Indenture.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time
thereafter unless and until such Event of Default has been waived in writing
by the Required Lenders (or the Lenders as may be required hereunder), the
Agent shall, upon the request and direction of the Required Lenders, by
written notice to the Borrower, take any of the following actions:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of and
any accrued interest in respect of all Loans and any and all other
indebtedness or obligations of any and every kind owing by a Credit
Party to any of the Lenders hereunder to be due
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whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Credit Parties.
(c) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents, including,
without limitation, all rights and remedies existing under the
Collateral Documents, all rights and remedies against a Guarantor and
all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and
all Loans, all accrued interest in respect thereof, all accrued and unpaid
fees and other indebtedness or obligations owing to the Lenders hereunder
shall immediately become due and payable without the giving of any notice or
other action by the Agent or the Lenders, which notice or other action is
expressly waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Agent, each Lender has a separate right of payment and shall be considered a
separate "creditor" holding a separate "claim" within the meaning of Section
101(5) of the Bankruptcy Code or any other insolvency statute.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
Each New Credit Agreement Lender hereby designates and appoints
NationsBank of Tennessee, N.A. as Agent of such New Credit Agreement Lender
to act as specified herein and the other Credit Documents, and each such New
Credit Agreement Lender hereby authorizes the Agent, as the agent for such
New Credit Agreement Lender, to take such action on its behalf under the
provisions of this Credit Agreement and the other Credit Documents and to
exercise such powers and perform such duties as are expressly delegated by
the terms hereof and of the other Credit Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere herein and in the other Credit Documents, the Agent
shall not have any duties or responsibilities, except those expressly set
forth herein and therein, or any fiduciary relationship with any New Credit
Agreement Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Credit Agreement
or any of the other Credit Documents, or shall otherwise exist against the
Agent. The provisions of this Section are solely for the benefit of the Agent
and the New Credit Agreement Lenders and none of the Credit Parties shall
have any rights as a third party beneficiary of the provisions hereof. In
performing its functions and duties under this Credit Agreement and the other
Credit Documents, the Agent shall act solely as the agent of the New Credit
Agreement Lenders and does not assume and shall not be deemed to have assumed
any obligation or relationship of agency or trust with or for any Credit
Party.
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10.2 Delegation of Duties.
The Agent may execute any of its duties hereunder or under the other
Credit Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties. The 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 Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct)
or (b) responsible in any manner to any of the New Credit Agreement Lenders
for any recitals, statements, representations or warranties made by any of
the Credit Parties contained herein or in any of the other Credit Documents
or in any certificate, report, document, financial statement or other written
or oral statement referred to or provided for in, or received by the Agent
under or in connection herewith or in connection with the other Credit
Documents, or enforceability or sufficiency therefor of any of the other
Credit Documents, or for any failure of the Borrower to perform its
obligations hereunder or thereunder. The Agent shall not be responsible to
any New Credit Agreement Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Credit Agreement, or
any of the other Credit Documents or for any representations, warranties,
recitals or statements made herein or therein or made by the Borrower or any
Credit Party in any written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other documents in
connection herewith or therewith furnished or made by the Agent to the New
Credit Agreement Lenders or by or on behalf of the Credit Parties to the
Agent or any New Credit Agreement Lender or be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the
use of the proceeds of the Loans or of the existence or possible existence of
any Default or Event of Default or to inspect the properties, books or
records of the Credit Parties. The Agent is not a trustee for the New Credit
Agreement Lenders and owes no fiduciary duty to the Lenders.
10.4 Reliance on Communications.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to any of the Credit Parties, independent
accountants and other experts selected by the Agent with reasonable care).
The Agent may deem and treat the New Credit Agreement Lenders as the owner of
its interests hereunder for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Agent in accordance with Section 11.3(b). The Agent shall be fully justified
in failing or refusing to take any action under this Credit Agreement or
under any of the other Credit Documents unless it shall first receive such
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advice or concurrence of the Required 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 Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder or under any of
the other Credit Documents in accordance with a request of the Required
Lenders (or to the extent specifically provided in Section 11.6, all the
Lenders) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders (including their successors and
assigns).
10.5 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Credit Party referring to the Credit
Document, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders.
10.6 Non-Reliance on Agent and Other Lenders.
Each New Credit Agreement Lender expressly acknowledges that neither
the 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 Agent or any affiliate thereof hereinafter taken,
including any review of the affairs of any Credit Party, shall be deemed to
constitute any representation or warranty by the Agent to any New Credit
Agreement Lender. Each New Credit Agreement Lender represents to the Agent
that it has, independently and without reliance upon the Agent or any other
New Credit Agreement Lender, and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into
the business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Credit Parties and made its own
decision to make its Loans hereunder and enter into this Credit Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Agent or any other New Credit Agreement 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 Credit Agreement, and to make such investigation as
it deems necessary to inform itself as to the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of
the Credit Parties. Except for notices, reports and other documents expressly
required to be furnished to the New Credit Agreement Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
New Credit Agreement Lender with any credit or other information concerning
the business, operations, assets, property, financial or other conditions,
prospects or creditworthiness of the Credit Parties which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
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10.7 Indemnification.
The Lenders agree to indemnify the Agent in its capacity as such (to
the extent not reimbursed by the Borrower and without limiting the obligation
of the Borrower to do so), ratably according to their respective percentage
of the Commitments (or if the Commitments have expired or been terminated, in
accordance with the respective principal amounts of outstanding Loans and
Participation Interest of the New Credit Agreement Lenders), 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
payment in full of the Credit Party Obligations) be imposed on, incurred by
or asserted against the Agent in its capacity as such in any way relating to
or arising out of this Credit Agreement or the other Credit 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 Agent under or in connection with any of the foregoing; provided that no
New Credit Agreement 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 gross
negligence or willful misconduct of the Agent. If any indemnity furnished to
the Agent for any purpose shall, in the opinion of the Agent, be insufficient
or become impaired, the Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional
indemnity is furnished. The agreements in this Section shall survive the
payment of the Credit Party Obligations and all other amounts payable
hereunder and under the other Credit Documents.
10.8 Agent in Its Individual Capacity.
The Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or any other
Credit Party as though the Agent were not the Agent hereunder. With respect
to the Loans made and all obligations owing to it, the Agent shall have the
same rights and powers under this Credit Agreement as any New Credit
Agreement Lender and may exercise the same as though it were not the Agent,
and the terms "New Credit Agreement Lender" and "New Credit Agreement
Lenders" shall include the Agent in its individual capacity.
10.9 Successor Agent.
The Agent may, at any time, resign upon 20 days written notice to
the New Credit Agreement Lenders. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Agent. If no successor
Agent shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 45 days after the notice of resignation,
then the retiring Agent shall select a successor Agent provided such
successor is a New Credit Agreement Lender hereunder or a commercial bank
organized under the laws of the United States of America or of any State
thereof and has a combined capital and surplus of at least $400,000,000. Upon
the acceptance of any appointment as the Agent hereunder by a successor, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations as an Agent, as
appropriate, under this Credit
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Agreement and the other Credit Documents and the provisions of this Section
10.9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Agent under this Credit Agreement.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to
the number set out below, (c) the Business Day following on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address or telecopy numbers set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto.
11.2 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable
law or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and the commencement of remedies described
in Section 9.2, each New Credit Agreement Lender is authorized at any time
and from time to time, without presentment, demand, protest or other notice
of any kind (all of which rights being hereby expressly waived), to set-off
and to appropriate and apply any and all deposits (general or special) and
any other indebtedness at any time held or owing by such New Credit Agreement
Lender (including, without limitation branches, agencies or Affiliates of
such New Credit Agreement Lender wherever located) to or for the credit or
the account of any Credit Party against obligations and liabilities of such
Credit Party to the New Credit Agreement Lenders hereunder, under the Notes,
the other Credit Documents or otherwise, irrespective of whether the Agent or
the New Credit Agreement Lenders shall have made any demand hereunder and
although such obligations, liabilities or claims, or any of them, may be
contingent or unmatured, and any such set-off shall be deemed to have been
made immediately upon the occurrence of an Event of Default even though such
charge is made or entered on the books of such Lender subsequent thereto. The
Credit Parties hereby agree that any Person purchasing a participation in the
Loans and Commitments hereunder pursuant to Section 11.3(c) or 3.9 may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a New Credit Agreement Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that none of the Credit
Parties may assign and transfer any of its
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interests without the prior written consent of the Lenders; and
provided further that the rights of each New Credit Agreement Lender to
transfer, assign or grant participations in its rights and/or
obligations hereunder shall be limited as set forth in this Section
11.3. Notwithstanding the above, nothing herein shall restrict, prevent
or prohibit any New Credit Agreement Lender from (i) pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank, or (ii) granting
assignments or participation in such Lender's Loans and/or Commitments
hereunder to its parent company and/or to any Affiliate of such New
Credit Agreement Lender or to any existing New Credit Agreement Lender
or Affiliate thereof.
(b) Assignments. Each New Credit Agreement Lender may, with
the prior written consent of the Borrower and the Agent (provided that
no consent of the Borrower shall be required during the existence and
continuation of an Event of Default), which consent shall not be
unreasonably withheld or delayed, assign all or a portion of its rights
and obligations hereunder pursuant to an assignment agreement
substantially in the form of Exhibit 11.3 to one or more Eligible
Assignees; provided that (i) any such assignment shall be in a minimum
aggregate amount of $5,000,000 of the Loans of such New Credit
Agreement Lender or Commitments of such New Credit Agreement Lender and
in integral multiples of $1,000,000 above such amount (or the remaining
amount of Loans or Commitments held by such New Credit Agreement
Lender), (ii) each such assignment shall be of a constant, not varying,
percentage of all of the assigning New Credit Agreement Lender's rights
and obligations under the Loans or Commitment being assigned and (iii)
unless otherwise agreed to by the Borrower and the Agent, such New
Credit Agreement Lender proposing to assign all or a portion of its
Revolving Committed Amount shall be required to assign to such Eligible
Assignee or Assignees (to the extent held by such New Credit Agreement
Lender) an identical percentage of the Tranche A Term Loan Committed
Amount of such New Credit Agreement Lender. Any assignment hereunder
shall be effective upon (i) satisfaction of the conditions set forth
above, (ii) delivery to the Agent of a duly executed assignment
agreement together with a transfer fee of $3,500 payable to the Agent
for its own account and (iii) the recordation of an appropriate entry
with respect to such assignment in the Register pursuant to this
Section 11.3. Upon the effectiveness of any such assignment, the
assignee shall become a "New Credit Agreement Lender" for all purposes
of this Credit Agreement and the other Credit Documents and, to the
extent of such assignment, the assigning New Credit Agreement Lender
shall be relieved of its obligations hereunder to the extent of the
Loans and Commitment components being assigned. Along such lines the
Borrower agrees that upon notice of any such assignment and surrender
of the appropriate Note or Notes, it will promptly provide to the
assigning New Credit Agreement Lender and to the assignee separate
promissory notes in the amount of their respective interests
substantially in the form of the original Note or Notes (but with
notation thereon that it is given in substitution for and replacement
of the original Note or Notes or any replacement notes thereof).
By executing and delivering an assignment agreement in accordance with
this Section 11.3(b), the assigning New Credit Agreement Lender
thereunder and the assignee thereunder shall be deemed to confirm to
and agree with each other and the other parties
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hereto as follows: (i) such assigning New Credit Agreement Lender
warrants that it is the legal and beneficial owner of the interest
being assigned thereby free and clear of any adverse claim; (ii) except
as set forth in clause (i) above, such assigning New Credit Agreement
Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto or the
financial condition of any Credit Party or the performance or
observance by any Credit Party of any of its obligations under this
Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto; (iii) such
assignee represents and warrants that it is legally authorized to enter
into such assignment agreement; (iv) such assignee confirms that it has
received a copy of this Credit Agreement, the other Credit Documents
and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such
assignment agreement; (v) such assignee will independently and without
reliance upon the Agent, such assigning New Credit Agreement Lender or
any other New Credit Agreement Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this
Credit Agreement and the other Credit Documents; (vi) such assignee
appoints and authorizes the Agent to take such action on its behalf and
to exercise such powers under this Credit Agreement or any other Credit
Document as are delegated to the Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with
their terms all the obligations which by the terms of this Credit
Agreement and the other Credit Documents are required to be performed
by it as a New Credit Agreement Lender.
(c) Participations. Each New Credit Agreement Lender may sell,
transfer, grant or assign participations in all or any part of such New
Credit Agreement Lender's interests and obligations hereunder; provided
that (i) such selling New Credit Agreement Lender shall remain a "New
Credit Agreement Lender" for all purposes under this Credit Agreement
(such selling New Credit Agreement Lender's obligations under the
Credit Documents remaining unchanged) and the participant shall not
constitute a New Credit Agreement Lender hereunder, (ii) no such
participant shall have, or be granted, rights to approve any amendment
or waiver relating to this Credit Agreement or the other Credit
Documents except to the extent any such amendment or waiver would (A)
reduce the principal of or rate of interest on or fees in respect of
any Loans in which the participant is participating, (B) postpone the
date fixed for any payment of principal (including extension of the
Revolving Loan Maturity Date or the date of any mandatory prepayment),
interest or fees in which the participant is participating, or (C)
release all or substantially all of the collateral or guaranties
(except as expressly provided in the Credit Documents) supporting any
of the Loans or Commitments in which the participant is participating,
(iii) sub-participations by the participant (except to an Affiliate,
parent company or Affiliate of a parent company of the participant)
shall be prohibited, (iv) any such participations shall be in a minimum
aggregate amount of $5,000,000 of the Loans
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of such New Credit Agreement Lender or Commitments of such New Credit
Agreement Lender and in integral multiples of $1,000,000 in excess
thereof and (v) unless otherwise agreed to by the Borrower and the
Agent, such selling New Credit Agreement Lender proposing to grant or
assign a participation in the Revolving Committed Amount shall be
required to grant or assign a participation to such participant, in
like percentage, of the Tranche A Term Loan Committed Amount of such
New Credit Agreement Lender. In the case of any such participation, the
participant shall not have any rights under this Credit Agreement or
the other Credit Documents (the participant's rights against the
selling New Credit Agreement Lender in respect of such participation to
be those set forth in the participation agreement with such New Credit
Agreement Lender creating such participation) and all amounts payable
by the Borrower hereunder shall be determined as if such New Credit
Agreement Lender had not sold such participation; provided, however,
that such participant shall be entitled to receive additional amounts
under Section 3.15 to the same extent that the New Credit Agreement
Lender from which such participant acquired its participation would be
entitled to the benefit of such cost protection provisions.
(d) Registration. The Agent, acting for this purpose solely on
behalf of the Borrower, shall maintain a register (the "Register") for
the recordation of the names and addresses of the Lenders and the
principal amount of the Loans owing to each New Credit Agreement Lender
from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Agent and the New
Credit Agreement Lenders shall treat each Person whose name is recorded
in the Register as the owner of a Loan or other obligation hereunder
for all purposes of this Credit Agreement and the other Credit
Documents, notwithstanding notice to the contrary. Any assignment of
any 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 Borrower or any
New Credit Agreement Lender at any reasonable time and from time to
time upon reasonable prior notice.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or any New Credit
Agreement Lender in exercising any right, power or privilege hereunder or
under any other Credit Document and no course of dealing between the Borrower
or any Credit Party and the Agent or any New Credit Agreement Lender shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies
which the Agent or any New Credit Agreement Lender would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the New
Credit Agreement Lenders to any other or further action in any circumstances
without notice or demand.
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11.5 Payment of Expenses; Indemnification.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket
costs and expenses of (i) the Agent in connection with the negotiation,
preparation, execution and delivery and administration of this Credit
Agreement and the other Credit Documents and the documents and instruments
referred to therein (including, without limitation, the reasonable fees and
expenses of Xxxxx & Xxx Xxxxx, special counsel to the Agent and the fees and
expenses of counsel for the Agent in connection with collateral or foreign
issues), and any amendment, waiver or consent relating hereto and thereto
including, but not limited to, any such amendments, waivers or consents
resulting from or related to any work-out, renegotiation or restructure
relating to the performance by the Credit Parties under this Credit Agreement
and (ii) the Agent and the New Credit Agreement Lenders in connection with
enforcement of the Credit Documents and the documents and instruments
referred to therein (including, without limitation, in connection with any
such enforcement, the reasonable fees and disbursements of counsel for the
Agent and each of the New Credit Agreement Lenders) and (b) indemnify each
New Credit Agreement Lender, its officers, directors, employees,
representatives and agents from and hold each of them harmless against any
and all losses, liabilities, claims, damages or expenses incurred by any of
them as a result of, or arising out of, or in any way related to, or by
reason of, any investigation, litigation or other proceeding (whether or not
any New Credit Agreement Lender is a party thereto) related to (i) the
entering into and/or performance of any Credit Document or the use of
proceeds of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation, litigation or
other proceeding (but excluding any such losses, liabilities, claims, damages
or expenses to the extent incurred by reason of gross negligence or willful
misconduct on the part of the Person to be indemnified), (ii) any
Environmental Claim and (iii) any claims for Non-Excluded Taxes.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement, nor any other Credit Document, nor
any of the terms hereof or thereof may be amended, changed, waived,
discharged or terminated unless such amendment, change, waiver, discharge or
termination is in writing and signed by the Required Lenders and the Credit
Parties; provided that no such amendment, change, waiver, discharge or
termination shall
(a) without the consent of each Lender affected thereby:
(i) extend the final maturity of any Loan or any portion
thereof,
(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability
of any post-default increase in interest rates) thereon or
fees hereunder,
(iii) reduce or waive the principal amount of any Loan,
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(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a
waiver of any Default or Event of Default or mandatory
reduction in the Commitments shall not constitute a change in
the terms of any Commitment of any Lender),
(v) release all or substantially all of the Collateral
securing the Credit Party Obligations hereunder (provided that
the Agent may, without consent from any other Lender, release
any Collateral that is sold or transferred by a Credit Party
in conformance with Section 8.5),
(vi) release the Borrower or substantially all of the
other Credit Parties from its obligations under the Credit
Documents,
(vii) amend, modify or waive any provision of this Section
or Section 3.7, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15,
9.1(a), 11.2, 11.3 or 11.5,
(viii) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders, or
(ix) consent to the assignment or transfer by the
Borrower (or another Credit Party) of any of its rights and
obligations under (or in respect of) the Credit Documents
except as permitted thereby.
(b) No provision of Section 10 may be amended without the
consent of the Agent.
(c) Notwithstanding the above, (i) the right to deliver a
Payment Blockage Notice (as defined in the Indenture) shall reside
solely with the Agent, and the Agent shall deliver such Payment
Blockage Notice only upon the direction of the Required Lenders and
(ii) the right to deliver a Payment Blockage Notice (as defined in the
Second Indenture) shall reside solely with the Agent, and the Agent
shall deliver such Payment Blockage Notice only upon the direction of
the Required Lenders.
(d) Notwithstanding the fact that the consent of all the
Lenders is required in certain circumstances as set forth above, (x)
each Lender is entitled to vote as such Lender sees fit on any
bankruptcy reorganization plan that affects the Loans and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein and
(y) the Required Lenders may consent to allow a Credit Party to use
cash collateral in the context of a bankruptcy or insolvency
proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts,
each of which where so executed and delivered shall be an original, but all of
which shall constitute one and the
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same instrument. It shall not be necessary in making proof of this Credit
Agreement to produce or account for more than one such counterpart.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction
of any provision of this Credit Agreement.
11.9 Defaulting Lender.
Each New Credit Agreement Lender understands and agrees that if such
New Credit Agreement Lender is a Defaulting Lender then it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders
or to object to any matter requiring the consent of all the Lenders;
provided, however, that all other benefits and obligations under the Credit
Documents shall apply to such Defaulting Lender.
11.10 Survival of Indemnification and Representations and
Warranties.
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Credit Agreement,
the making of the Loans, the repayment of the Loans and other obligations and
the termination of the Commitments hereunder.
11.11 Governing Law; Venue.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TENNESSEE. Any legal action or proceeding with
respect to this Credit Agreement or any other Credit Document may be
brought in the courts of the State of North Carolina or the State of
Tennessee or of the United States for the Western District of North
Carolina or the Eastern District of Tennessee and, by execution and
delivery of this Credit Agreement, each Credit Party hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. Each Credit Party
further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address for notices pursuant to Section 11.1,
such service to become effective 30 days after such mailing. Nothing
herein shall affect the right of a Lender to serve process in any other
manner permitted by law or to commence legal proceedings or to
otherwise proceed against a Credit Party in any other jurisdiction.
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(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Credit Agreement or any other Credit Document brought in the
courts referred to in subsection (a) hereof and hereby further
irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
11.12 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.13 Time.
All references to time herein shall be references to Eastern Standard
Time or Eastern Daylight Time, as the case may be, unless specified otherwise.
11.14 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.15 Entirety.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.16 Binding Effect.
This Credit Agreement shall become effective at such time when all of
the conditions set forth in Section 5.1 have been satisfied or waived by the
Lenders and it shall have been executed by the Borrower, the Guarantors and the
Agent, and the Agent shall have received copies hereof (telefaxed or otherwise)
which, when taken together, bear the signatures of each New Credit Agreement
Lender, and thereafter this Credit Agreement shall be binding upon and inure to
the benefit of the Borrower, the Guarantors, the Agent and each New Credit
Agreement Lender and their respective successors and assigns.
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Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
CHATTEM, INC.,
a Tennessee corporation
By:____________________________
Name:__________________________
Title:___________________________
GUARANTOR: SIGNAL INVESTMENT & MANAGEMENT CO.,
a Delaware corporation
By:____________________________
Name:__________________________
Title:___________________________
NEW CREDIT AGREEMENT
LENDERS:
NATIONSBANK OF TENNESSEE, N.A.,
individually in its capacity as a
New Credit Agreement Lender and in
its capacity as Agent
By:_____________________________
Name:___________________________
Title:__________________________
Signature page to Amended and Restated Credit Agreement dated as of March 24,
1998 among Chattem, Inc., as Borrower, each of the Borrower's Domestic
Subsidiaries, as Guarantors, the New Credit Agreement Lenders and NationsBank
of Tennessee, N.A., as agent for the New Credit Agreement Lenders
THE FIRST NATIONAL BANK OF CHICAGO
By:_____________________________
Name:___________________________
Title:__________________________
CREDITANSTALT AG
By:_____________________________
Name:___________________________
Title:__________________________
FIRST AMERICAN NATIONAL BANK
By:_____________________________
Name:___________________________
Title:__________________________