EXHIBIT A
EXHIBIT 10.49
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AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of July 1, 2002
among
ADVANCE AUTO PARTS, INC.,
ADVANCE STORES COMPANY, INCORPORATED, as Borrower,
The Lenders Party Hereto
and
JPMORGAN CHASE BANK,
as Administrative Agent
---------------------------
X.X. XXXXXX SECURITIES INC.,
as Sole Lead Arranger and Sole Bookrunner,
and
CREDIT SUISSE FIRST BOSTON and
XXXXXX COMMERCIAL PAPER INC.,
as Syndication Agents
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
SECTION 1.01. Defined Terms....................................... 1
SECTION 1.02. Classification of Loans and Borrowings.............. 43
SECTION 1.03. Terms Generally..................................... 44
SECTION 1.04. Accounting Terms; GAAP; Fiscal Month................ 44
ARTICLE II
The Credits
SECTION 2.01. Commitments ........................................ 45
SECTION 2.02. Loans and Borrowings................................ 45
SECTION 2.03. Requests for Borrowings............................. 46
SECTION 2.04. Swingline Loans..................................... 47
SECTION 2.05. Letters of Credit................................... 50
SECTION 2.06. Funding of Borrowings............................... 56
SECTION 2.07. Interest Elections.................................. 57
SECTION 2.08. Termination and Reduction of Commitments............ 59
SECTION 2.09. Repayment of Loans; Evidence of Debt................ 60
SECTION 2.10. Amortization of Term Loans.......................... 61
SECTION 2.11. Prepayment of Loans................................. 63
SECTION 2.12. Fees ............................................... 65
SECTION 2.13. Interest ........................................... 67
SECTION 2.14. Alternate Rate of Interest.......................... 68
SECTION 2.15. Increased Costs..................................... 69
SECTION 2.16. Break Funding Payments.............................. 70
SECTION 2.17. Taxes .............................................. 71
SECTION 2.18. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs................................. 74
SECTION 2.19. Mitigation Obligations; Replacement of Lenders...... 76
SECTION 2.20. Incremental Facility................................ 77
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers................................ 79
SECTION 3.02. Authorization; Enforceability....................... 80
SECTION 3.03. Governmental Approvals; No Conflicts................ 80
SECTION 3.04. Financial Condition; No Material Adverse Change..... 81
SECTION 3.05. Properties ......................................... 81
SECTION 3.06. Litigation and Environmental Matters................ 82
SECTION 3.07. Compliance with Laws and Agreements................. 83
SECTION 3.08. Investment and Holding Company Status............... 83
SECTION 3.09. Taxes .............................................. 83
SECTION 3.10. ERISA .............................................. 83
SECTION 3.11. Disclosure ......................................... 84
SECTION 3.12. Subsidiaries........................................ 84
SECTION 3.13. Insurance .......................................... 85
SECTION 3.14. Labor Matters....................................... 85
SECTION 3.15. Solvency ........................................... 85
SECTION 3.16. Senior Indebtedness................................. 86
SECTION 3.17. Security Documents.................................. 86
ARTICLE IV
Conditions
SECTION 4.01. [Intentionally Omitted]............................. 87
SECTION 4.02. Each Credit Event................................... 88
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information.......... 88
SECTION 5.02. Notices of Material Events.......................... 91
SECTION 5.03. Information Regarding Collateral.................... 92
SECTION 5.04. Existence; Conduct of Business...................... 93
SECTION 5.05. Payment of Obligations.............................. 93
SECTION 5.06. Maintenance of Properties........................... 93
SECTION 5.07. Insurance .......................................... 94
SECTION 5.08. Casualty and Condemnation........................... 95
SECTION 5.09. Books and Records; Inspection and Audit Rights...... 96
SECTION 5.10. Compliance with Laws................................ 96
SECTION 5.11. Use of Proceeds and Letters of Credit............... 97
SECTION 5.12. Additional Subsidiaries............................ 97
SECTION 5.13. Further Assurances................................. 98
SECTION 5.14. Collection Deposit Accounts........................ 99
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Certain Equity Securities............ 100
SECTION 6.02. Liens ............................................. 103
SECTION 6.03. Fundamental Changes................................ 104
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions....................................... 105
SECTION 6.05. Asset Sales ....................................... 108
SECTION 6.06. Hedging Agreements................................. 110
SECTION 6.07. Restricted Payments; Certain Payments of
Indebtedness....................................... 110
SECTION 6.08. Transactions with Affiliates....................... 115
SECTION 6.09. Restrictive Agreements............................. 116
SECTION 6.10. Amendment of Material Documents.................... 117
SECTION 6.11. Sale and Lease-Back Transactions................... 117
SECTION 6.12. Capital Expenditures............................... 118
SECTION 6.13. Leverage Ratio..................................... 119
SECTION 6.14. Consolidated Interest Expense Coverage Ratio........ 119
SECTION 6.15. Current Assets to Funded Senior Debt Ratio.......... 119
SECTION 6.16. Purchase and Sale of Vehicles; Vehicle Subsidiary.. 119
SECTION 6.17. Senior Leverage Ratio.............................. 120
ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices ........................................... 127
SECTION 9.02. Waivers; Amendments................................ 129
SECTION 9.03. Expenses; Indemnity; Damage Waiver................. 131
SECTION 9.04. Successors and Assigns............................. 133
SECTION 9.05. Survival .......................................... 138
SECTION 9.06. Counterparts; Integration; Effectiveness........... 139
SECTION 9.07. Severability....................................... 139
SECTION 9.08. Right of Setoff.................................... 139
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process............................................ 139
SECTION 9.10. WAIVER OF JURY TRIAL............................... 141
SECTION 9.11. Headings .......................................... 141
SECTION 9.12. Confidentiality.................................... 141
SECTION 9.13. Interest Rate Limitation........................... 142
SECTION 9.14. Original Credit Agreement; Effectiveness of
Amendment and Restatement.......................... 143
SCHEDULES:
Schedule 1.01(a) -- Office Buildings and Distribution
Centers Held for Sale
Schedule 1.01(b) -- Mortgaged Property
Schedule 2.01 -- Commitments
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 3.17 -- Mortgage Filing Offices
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
Schedule 6.05(a) -- Specified Assets
Schedule 6.05(b) -- Specified Stores
Schedule 6.08 -- Existing Affiliated Leases
Schedule 6.09 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Indemnity, Subrogation and
Contribution Agreement
Exhibit C -- Form of Guarantee Agreement
Exhibit D -- Form of Pledge Agreement
Exhibit E -- Form of Security Agreement
AMENDED AND RESTATED CREDIT AGREEMENT dated as of July
1, 2002, among ADVANCE AUTO PARTS, INC., ADVANCE STORES
COMPANY, INCORPORATED, the LENDERS party hereto and JPMORGAN
CHASE BANK, as Administrative Agent.
WHEREAS, Holdings, the Borrower, the lenders party thereto and
JPMorgan Chase Bank, as administrative agent, are parties to a Credit Agreement
dated as of November 28, 2001 (as amended, the "Original Credit Agreement"), as
in effect immediately prior to the Restatement Effective Date (as defined
herein);
WHEREAS, Holdings, the Borrower, the Required Restatement Lenders
(as defined therein) and JPMorgan Chase Bank, as administrative agent, are
parties to an Amendment and Restatement Agreement dated as of June 28, 2002 (the
"Amendment and Restatement Agreement");
WHEREAS, subject to the satisfaction of the conditions set forth
in the Amendment and Restatement Agreement, the Original Credit Agreement shall
be amended and restated as provided herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Additional Lender" has the meaning assigned such term in Section
2.20.
2
"Additional Senior Subordinated Notes" means the senior
subordinated notes to be issued by the Borrower on or prior to the Effective
Date with gross proceeds not exceeding $186,000,000.
"Additional Subordinated Debt" means the Additional Senior
Subordinated Notes, any Guarantees thereof and the Indebtedness represented
thereby.
"Additional Subordinated Debt Documents" means the indenture
under which the Additional Subordinated Debt is issued and all other
instruments, agreements and other documents evidencing or governing the
Additional Subordinated Debt or providing for any Guarantee or other right in
respect thereof.
"Adjusted Consolidated Net Income" means, for any period, net
income or loss of Holdings and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, provided that, without duplication,
(a) there shall be excluded (i) the income of any Person in which any other
Person (other than the Borrower or any of the Subsidiaries or any director
holding qualifying shares in compliance with applicable law) has a joint
interest, except such income shall be included to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of the
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary or is merged into or
consolidated with the Borrower or any of the Subsidiaries or the date that
Person's assets are acquired by the Borrower or any of the Subsidiaries and
(iii) gains and losses from the sale or other disposition of material assets
outside the ordinary course of business; (b) there shall be excluded
Reorganization Expenses incurred prior to December 31, 2005 in an aggregate
amount not to exceed (i) $20,000,000 during the fiscal year ending on January 3,
2004, (ii) $10,000,000 during any such fiscal year ending after January 3, 2004
and (iii) $60,000,0000 for all five fiscal years ending on or prior to December
31, 2005, combined; (c) there shall be excluded non-recurring non-cash charges
in an aggregate amount not to exceed $10,700,000 resulting from a write-down of
any of the office buildings or distribution centers set forth on Schedule
1.01(a); (d) there shall be excluded non-cash charges incurred prior to the end
of the fiscal year ending
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December 28, 2002 resulting from an increase in the reserve in respect of
accounts receivable generated at the Calexico facility in an aggregate amount
not to exceed $2,400,000; (e) there shall be excluded write-downs during the
90-day period commencing on the Effective Date of Low Turnover Inventory in an
aggregate amount not to exceed 25% of the cost of such Low Turnover Inventory;
(f) there shall be excluded non-cash charges incurred prior to, and reserves
taken no later than, the end of the fiscal quarter ending December 29, 2001 in
an aggregate amount not to exceed $4,000,000 resulting from either (i) clearance
markdowns of Inventory or (ii) closings of Stores owned by the Borrower prior to
consummation of the Reorganization and relating to the Reorganization; and (g)
except for purposes of calculating the Consolidated Interest Expense Coverage
Ratio, Adjusted Consolidated Net Income shall be determined on a pro forma basis
to give effect to any Permitted Acquisitions and any divestitures by the
Borrower or any Subsidiary of all or substantially all the assets of, or all the
Equity Interests in, a Person or division or line of business of a Person
occurring during such period as if such transactions had occurred on the first
day of such period. Notwithstanding the foregoing, for purposes of calculating
each of the Consolidated Interest Expense Coverage Ratio, the Leverage Ratio and
the Senior Leverage Ratio as of any date after the Effective Date and on or
prior to December 28, 2002 (i) if the period for which such calculation is being
made includes the fiscal quarter ended April 21, 2001, Adjusted Consolidated Net
Income for such fiscal quarter shall be deemed to be $8,705,000, (ii) if the
period for which such calculation is being made includes the fiscal quarter
ended July 14, 2001, Adjusted Consolidated Net Income for such fiscal quarter
shall be deemed to be $25,850,000, (iii) if the period for which such
calculation is being made includes the fiscal quarter ended October 6, 2001,
Adjusted Consolidated Net Income for such fiscal quarter shall be deemed to be
$21,154,000 and (iv) if the period for which such calculation is being made
includes the fiscal quarter ended December 29, 2001, Adjusted Consolidated Net
Income for such fiscal quarter shall be deemed to equal the sum of (x) the net
income of the Borrower and its Subsidiaries (determined prior to giving effect
to the Reorganization) for the period commencing on and including October 7,
2001, and ending on and including December 29, 2001, (y) the net income of DAP
and its subsidiaries for the period commencing on and
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including October 1, 2001, and ending on and including November 27, 2001, and
(z) the product of (1) the quotient obtained by dividing (aa) the net income of
DAP and its subsidiaries for the period commencing on and including the
Effective Date and ending on and including December 29, 2001, by (bb) the number
of days during the period described in clause (aa) above, multiplied by (2) 32.
"Adjusted LIBO Rate" means an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to, with respect to any
Eurodollar Tranche A Borrowing, Eurodollar Tranche C Borrowing or Eurodollar
Revolving Borrowing for any Interest Period, (i) the LIBO Rate for such Interest
Period multiplied by (ii) the Statutory Reserve Rate.
"Administrative Agent" means JPMorgan Chase Bank, in its capacity
as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Agents" means, collectively, the Administrative Agent, the
Collateral Agent and the Co-Agents.
"AHC Holdings" means Advance Holding Corporation, a Virginia
corporation.
"AHC Merger" means the merger of AHC Holdings with and into
Holdings, in accordance with the Merger Agreement, with Holdings being the
surviving corporation.
"Alternate Base Rate" means, for any day, a rate per annum equal
to the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD
Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to
a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be
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effective from and including the effective date of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Amendment and Restatement Agreement" has the meaning given such
term in the recitals hereto.
"Applicable Percentage" means, with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment. If the Revolving Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day:
(a) with respect to any ABR Loan or Eurodollar Loan that is a
Tranche C Term Loan, the applicable rate per annum set forth below under the
caption "ABR Spread" or "Eurodollar Spread", as the case may be, based upon the
Leverage Ratio as of the most recent determination date; provided that until the
delivery of the financial statements pursuant to Section 5.01 for the fiscal
quarter ending July 13, 2002, the "Applicable Rate" for purposes of this clause
(a) shall be the applicable rate per annum set forth in Category 2:
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ABR Eurodollar
Leverage Ratio: Spread Spread
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Category 1
Leverage Ratio is less than 2.00 to 1.00 1.25% 2.25%
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Category 2
Leverage Ratio is greater than or equal to 2.00 to 1.00 1.50% 2.50%
and less than 2.75 to 1.00
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Category 3
Leverage Ratio is greater than or equal to 2.75 to 1.00 1.75% 2.75%
and less than 3.50 to 1.00
6
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ABR Eurodollar
Leverage Ratio: Spread Spread
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Category 4
Leverage Ratio is greater than or equal to 3.50 to 1.00 2.00% 3.00%
======================================================================================================
(b) with respect to any ABR Loan or Eurodollar Loan that is a
Revolving Loan or a Tranche A Term Loan or with respect to commitment fees
payable under Section 2.12(a), as the case may be, the applicable rate per annum
set forth below under the caption "ABR Spread", "Eurodollar Spread" or
"Commitment Fee Rate", as the case may be, based upon the Leverage Ratio as of
the most recent determination date; provided that until the delivery of the
financial statements pursuant to Section 5.01 for the fiscal quarter ending July
13, 2002, the "Applicable Rate" for
purposes of this clause (b) shall be the applicable rate per annum set forth
below in Category 5:
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ABR Eurodollar Commitment Fee
Leverage Ratio: Spread Spread Rate
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Category 1
Leverage Ratio is less than 2.00 to 1.00 1.25% 2.25% 0.375%
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Category 2
Leverage Ratio is greater than or equal to 1.75% 2.75% 0.500%
2.00 to 1.00 and less than 2.50 to 1.00
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Category 3
Leverage Ratio is greater than or equal to 2.00% 3.00% 0.500%
2.50 to 1.00 and less than 3.00 to 1.00
7
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ABR Eurodollar Commitment Fee
Leverage Ratio: Spread Spread Rate
------------------------------------------------------------------------------------------------------
Category 4
Leverage Ratio is greater than or equal to 2.25% 3.25% 0.500%
3.00 to 1.00 and less than 3.50 to 1.00
Category 5
Leverage Ratio is greater than or equal to 2.50% 3.50% 0.500%
3.50 to 1.00
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For purposes of the foregoing clauses (a) and (b), (i) the
Leverage Ratio shall be determined as of the end of each fiscal quarter of the
Borrower's fiscal year based upon the Borrower's consolidated financial
statements delivered pursuant to Section 5.01(a) or (b) and (ii) each change in
the Applicable Rate resulting from a change in the Leverage Ratio shall be
effective during the period commencing on and including the date of delivery to
the Administrative Agent of such consolidated financial statements indicating
such change and ending on the date immediately preceding the effective date of
the next such change; provided that the Leverage Ratio shall be deemed to be in
Category 4, for purposes of the foregoing clause (a), or Category 5, for
purposes of the foregoing clause (b), (A) at any time that an Event of Default
has occurred and is continuing or (B) if the Borrower fails to deliver the
consolidated financial statements required to be delivered by it pursuant to
Section 5.01(a) or (b), during the period from the expiration of the time for
delivery thereof until such consolidated financial statements are delivered.
"Approved Fund" means, with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Assessment Rate" means, for any day, the annual assessment rate
in effect on such day that is payable by a
8
member of the Bank Insurance Fund classified as "well-capitalized" and within
supervisory subgroup "B" (or a comparable successor risk classification) within
the meaning of 12 C.F.R. Part 327 (or any successor provision) to the Federal
Deposit Insurance Corporation for insurance by such Corporation of time deposits
made in dollars at the offices of such member in the United States; provided
that if, as a result of any change in any law, rule or regulation, it is no
longer possible to determine the Assessment Rate as aforesaid, then the
Assessment Rate shall be such annual rate as shall be determined by the
Administrative Agent to be representative of the cost of such insurance to the
Lenders.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Available Excess Cash Flow" means, as of any date, an amount
equal to (a) the sum of Excess Cash Flow for each preceding fiscal year for
which a mandatory prepayment was required by Section 2.11(c) less (b) the sum of
the prepayments made by the Borrower pursuant to Section 2.11(c).
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD
Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means Advance Stores Company, Incorporated, a Virginia
corporation.
"Borrowing" means (a) Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Swingline Loan.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
9
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capex Adjustment" means, in respect of any fiscal year for which
Excess Cash Flow is required to be calculated hereunder, an amount equal to any
liabilities in respect of payment for Capital Expenditures for such fiscal year
that are included in the Borrower's consolidated current liabilities as of the
end of such fiscal year for purposes of determining the increase or decrease in
Net Working Capital for such fiscal year, but only to the extent that such
liabilities are paid in cash prior to the last day of the first fiscal quarter
of the immediately succeeding fiscal year; provided that the Borrower may elect,
in its discretion, to exclude any such amount in calculating the Excess Cash
Flow for such fiscal year, in which case the "Capex Adjustment" shall be such
lesser amount (not less than zero) as the Borrower shall elect in calculating
Excess Cash Flow for such fiscal year.
"Capital Expenditures" means, for any period, (a) the additions
to property, plant and equipment and other capital expenditures of the Borrower
and its consolidated Subsidiaries that are (or would be) set forth in a
consolidated statement of cash flows of the Borrower for such period prepared in
accordance with GAAP and (b) without duplication, Capital Lease Obligations
incurred by the Borrower and its consolidated Subsidiaries during such period.
"Capital Expenditures" shall not include the purchase of the property subject to
the DAP Synthetic Lease Agreement.
"Capital Lease Obligations" of any Person means the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
10
"Cash Concentration Account" means the "Cash Concentration
Account", as defined in the Security Agreement.
"Change in Control" means at any time, (a) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person
other than Holdings of any shares of capital stock of the Borrower; (b) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of Rule 13d-5 under the United States
Securities and Exchange Act of 1934 in effect on the date hereof), other than
FS&C Investors and their Affiliates or Sears and its Affiliates, of shares
representing more than 25% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of Holdings; (c) occupation of a
majority of the seats (other than vacant seats) on the board of directors of
Holdings by Persons who were not Continuing Directors; or (d) while any of the
Existing Subordinated Debt, Additional Subordinated Debt, Holdings Senior
Discount Debentures or Replacement Subordinated Debt is outstanding, a "Change
of Control" (as defined in the Existing Subordinated Debt Documents, Additional
Subordinated Debt Documents, Holdings Senior Discount Debenture Documents or
Replacement Subordinated Debt Documents, as applicable) shall have occurred.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the Effective Date, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the Effective Date or (c) compliance by any Lender or the
Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such
Lender or by such Lender's or the Issuing Bank's holding company, if any) with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the Effective Date.
"Class", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans, Tranche A Term Loans, Tranche C Term Loans, Incremental Loans or
Swingline Loans and, when used in reference to any Commitment, refers to whether
such Commitment is a
11
Revolving Commitment, Tranche A Commitment or Tranche C Commitment.
"Co-Agents" means, collectively, X.X. Xxxxxx Securities Inc., in
its capacity as sole lead arranger and sole bookrunner, and Credit Suisse First
Boston and Xxxxxx Commercial Paper Inc., each in its capacity as syndication
agent.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Collateral Agent" means the "Collateral Agent", as defined in
any applicable Security Document.
"Collection Deposit Account" means the "Collection Deposit
Account", as defined in the Security Agreement.
"Collection Deposit Letter Agreement" means the "Collection
Deposit Letter Agreement", as defined in the Security Agreement.
"Commitment" means a Revolving Commitment, Tranche A Commitment
or Tranche C Commitment, or any combination thereof (as the context requires).
"Consolidated EBITDA" means, for any period, Adjusted
Consolidated Net Income for such period, plus, without duplication and to the
extent deducted from revenues in determining Adjusted Consolidated Net Income,
the sum of (a) consolidated interest expense for such period, (b) the aggregate
amount of letter of credit fees accrued during such period, (c) the aggregate
amount of income tax expense for such period, (d) all depreciation and
amortization expense for such period and (e) other non-cash charges for such
period, and minus, without duplication and to the extent added to revenues in
determining Adjusted Consolidated Net Income for such period, all non-cash gains
during such period, all as determined on a consolidated basis with respect to
Holdings and the Subsidiaries in accordance with GAAP.
12
"Consolidated Interest Expense" means, for any period, the
interest expense of Holdings and its Subsidiaries for such period, determined on
a consolidated basis in accordance with GAAP; provided that, in the case of
Holdings, interest expense in respect of the Holdings Senior Discount Debentures
shall be included only to the extent paid in cash. For purposes of calculating
Consolidated Interest Expense for each of the four-fiscal-quarter periods ending
on December 29, 2001, April 20, 2002, July 13, 2002 and October 5, 2002,
Consolidated Interest Expense shall be deemed to equal the product of (a) the
quotient obtained by dividing (i) Consolidated Interest Expense for the period
commencing on and including the Effective Date and ending on and including the
last day of the period for which such calculation is required to be made, by
(ii) the number of days during the period described in clause (i) above,
multiplied by (b) 364.
"Consolidated Interest Expense Coverage Ratio" means, on any
date, the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Expense
(net of interest income) for the period of four consecutive fiscal quarters of
the Borrower ended as of such date, all determined on a consolidated basis in
accordance with GAAP.
"Continuing Directors" means the directors of Holdings on the
Effective Date, after giving effect to the Reorganization, and each other
director, if, in each case, such other director's nomination for election to the
board of directors of Holdings is approved by a majority of the then Continuing
Directors or such other director receives the vote of FS&C in his or her
election by the stockholders of Holdings.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Current Assets" means, as of any date of determination, the
amount of all inventory and accounts receivable (excluding all accounts
receivable sold or transferred pursuant to any Receivables Program) owned by
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the Borrower and the Subsidiary Loan Parties as of such date, determined on a
consolidated basis in accordance with GAAP.
"DAP" means Discount Auto Parts, Inc., a Florida corporation.
"DAP Equity Transfer" means the contribution by Holdings of the
Equity Interests of DAP to the Borrower as a capital contribution after
consummation of the DAP Merger.
"DAP Master Lease Agreement" means, collectively, (a) the Master
Lease dated as of February 27, 2001, between DAPPER Properties I, LLC and DAP,
(b) the Master Lease dated as of February 27, 2001, between DAPPER Properties
II, LLC and DAP, (c) the Master Lease dated as of February 27, 2001, between
DAPPER Properties III, LLC and DAP and (d) the Sale, Leaseback Agreement dated
as of February 27, 2001, among DAPPER Properties I, LLC, DAPPER Properties II,
LLC, DAPPER Properties III, LLC and DAP.
"DAP Merger" means the merger of Newco Sub with and into DAP, in
accordance with the Merger Agreement, pursuant to which (a) DAP will be the
surviving corporation and will become a wholly owned subsidiary of Holdings and
(b) the Persons that, immediately prior to such merger, are stockholders of DAP
(or holders of "in the money" options to acquire common stock or other equity
equivalents of DAP) will become entitled to receive the DAP Merger Consideration
as consideration for the conversion or cancelation of their interests in DAP.
"DAP Merger Consideration" means the consideration payable to the
Persons that, immediately prior to the DAP Merger, were shareholders of DAP (or
holders of "in the money" options to acquire common stock or other equity
equivalents of DAP), in accordance with the Merger Agreement, consisting of (a)
cash in an aggregate amount of $128,400,000 and (b) approximately 4,305,000
shares of Holdings common stock.
"DAP Synthetic Lease Agreement" means, collectively, (a) the
Master Agreement dated as of May 30, 2000, among DAP, Discount Auto Parts
Distribution Center, Inc., certain other subsidiaries of DAP, Atlantic Financial
14
Group, Ltd. and SunTrust Bank and (b) the Master Lease Agreement dated as of May
30, 2000, among Atlantic Financial Group, Ltd., Discount Auto Parts Distribution
Center, Inc. and certain other subsidiaries of DAP.
"Default" means any event or condition which constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and
the environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means November 28, 2001, the date on which the
conditions specified in Section 4.01 of the Original Credit Agreement were
satisfied.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of Holdings, the Borrower or any
Subsidiary directly or indirectly resulting from or based upon (a) violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited
15
liability company, beneficial interests in a trust or other equity ownership
interests in a Person or any warrants, options or other rights to acquire such
interests.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
16
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excess Cash Flow" means, for any fiscal year, the sum (without
duplication) of:
(a) the consolidated net income (or loss) of the Borrower and its
consolidated Subsidiaries for such fiscal year, adjusted to exclude (i) any
gains or losses attributable to Prepayment Events and (ii) to the extent
not otherwise excluded, any Restricted Payments made to Holdings during
such fiscal year by the Borrower and its Subsidiaries; plus
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining such consolidated net income (or loss) for
such fiscal year; plus
(c) the sum of (i) the amount, if any, by which Net Working
Capital decreased during such fiscal year plus (ii) the amount, if any, by
which the consolidated deferred revenues of the Borrower and its
consolidated Subsidiaries increased during such fiscal year plus (iii) the
aggregate amount of Capital Lease Obligations and principal of other
Indebtedness incurred during such fiscal year to finance Capital
Expenditures, to the extent that mandatory principal payments in respect of
such Indebtedness would not be excluded from clause (f) below when made
plus (iv) if any Capex Adjustment was deducted for the immediately
preceding fiscal year pursuant to clause (d) below, the amount of such
Capex Adjustment; minus
(d) the sum of (i) any non-cash gains included in determining
such consolidated net income (or loss) for such fiscal year plus (ii) the
amount, if any, by which Net Working Capital increased during such fiscal
year plus (iii) the amount, if any, by which the consolidated deferred
revenues of the Borrower and its consolidated Subsidiaries decreased during
such fiscal year plus (iv) any Capex Adjustment for such fiscal year; minus
(e) Capital Expenditures for such fiscal year; minus
17
(f) the aggregate principal amount of Indebtedness repaid or
prepaid by the Borrower and its consolidated Subsidiaries during such
fiscal year, excluding (i) Indebtedness in respect of Revolving Loans and
Letters of Credit, (ii) Term Loans prepaid pursuant to Section 2.11(c) or
(d), (iii) repayments or prepayments of Indebtedness financed (A) by
incurring other Indebtedness, to the extent that mandatory principal
payments in respect of such other Indebtedness would not be excluded from
this clause (f) when made, or (B) with the proceeds of any IPO, Public
Offering or Incremental Loans and (iv) Indebtedness referred to in clauses
(viii) and (ix) of Section 6.01(a); and minus
(g) the aggregate amount of cash dividends paid or loans made by
the Borrower to Holdings during such fiscal year pursuant to Section
6.07(a)(viii), but only to the extent that any such cash dividends or loans
(i) are used to purchase Holdings Senior Discount Debentures as permitted
by Section 6.07(b)(vii) and (ii) are not financed with the proceeds of any
Replacement Senior Subordinated Notes, IPO, Public Offering or Incremental
Loans.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.17(e), except to the
extent that such Foreign Lender (or its assignor, if
18
any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 2.17(a).
"Existing Credit Agreement" means the Credit Agreement dated as
of April 15, 1998, as amended and restated as of October 19, 1998, and as
amended and in effect immediately prior to the Effective Date, among AHC
Holdings, the Borrower, the lenders party thereto and The Chase Manhattan Bank,
as administrative agent.
"Existing DAP Credit Agreement" means the Revolving Credit
Agreement dated as of July 29, 1999, as amended and in effect immediately prior
to the Effective Date, among DAP, SunTrust Bank, Central Florida, National
Association, individually and as Administrative Agent, SunTrust Equitable
Securities Corporation, as Arranger and Book Manager, Bank of America, N.A.,
individually and as Syndication Agent, First National Bank of Chicago,
individually and as Documentation Agent, SouthTrust Bank, National Association,
Amsouth Bank, First Union National Bank, Banque Nationale de Paris, Regions Bank
and Hibernia National Bank.
"Existing DAP Indebtedness" means all principal, interest and
other amounts in respect of the Indebtedness of DAP and its subsidiaries
outstanding at the time of (and immediately prior to giving effect to) the DAP
Merger.
"Existing DAP Issuing Bank" means SunTrust Bank.
"Existing Issuing Bank" means First Union National Bank.
"Existing Letters of Credit" means all letters of credit
outstanding as of the Effective Date that have been issued under (a) the
Existing Credit Agreement or (b) the Existing DAP Credit Agreement.
"Existing Senior Subordinated Notes" means the Senior
Subordinated Notes issued by the Borrower prior to the Effective Date and due
April 2008 in the aggregate principal amount of $169,500,000.
19
"Existing Subordinated Debt" means the Existing Senior
Subordinated Notes, any Guarantees thereof and the Indebtedness represented
thereby.
"Existing Subordinated Debt Documents" means the indenture under
which the Existing Subordinated Debt is outstanding and all other instruments,
agreements and other documents evidencing or governing the Existing Subordinated
Debt or providing for any Guarantee or other right in respect thereof.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, vice
president of finance, principal accounting officer, treasurer or controller of
Holdings or the Borrower, as applicable.
"Financing Transactions" means (a) the execution, delivery and
performance by each Loan Party of the Original Credit Agreement and the
documents related thereto to which it was a party, the borrowing of Loans
thereunder, the use of the proceeds thereof and the issuance of Letters of
Credit under the Original Credit Agreement and (b) the execution, delivery and
performance by each Loan Party of the Additional Subordinated Debt Documents to
which it is a party, the issuance of the Additional Subordinated Debt and the
use of the proceeds thereof.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
20
"Foreign Subsidiary" means any Subsidiary that is organized under
the laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"FS&C" means Xxxxxxx Xxxxxx & Co. LLC.
"FS&C Investors" means FS&C and certain other investors arranged
by FS&C that are equity investors in AHC Holdings immediately prior to (and
become equity investors in Holdings as a result of) the AHC Merger.
"Funded Senior Debt" means, as of any date, Total Debt as of such
date, excluding (to the extent included therein) Indebtedness in respect of the
Existing Senior Subordinated Notes, the Additional Senior Subordinated Notes and
any Replacement Senior Subordinated Notes.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the
21
primary obligor to pay such Indebtedness or other obligation or (d) as an
account party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or obligation; provided, that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary course
of business.
"Guarantee Agreement" means the Guarantee Agreement,
substantially in the form of Exhibit C, made by Holdings and the Subsidiary Loan
Parties in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Holdings" means Advance Auto Parts, Inc., a Delaware
corporation.
"Holdings Senior Discount Debenture Documents" means the
indenture under which the Holdings Senior Discount Debentures are outstanding
and all other instruments, agreements and other documents evidencing or
governing the Holdings Senior Discount Debentures or providing for any Guarantee
or other right in respect thereof.
"Holdings Senior Discount Debentures" means the Senior Discount
Debentures due 2009 issued by AHC Holdings on April 15, 1998, that will become
Indebtedness of Holdings as a result of the AHC Merger.
"Incremental Facility" has the meaning assigned to such term in
Section 2.20.
22
"Incremental Facility Amendment" has the meaning assigned to such
term in Section 2.20.
"Incremental Facility Closing Date" has the meaning assigned to
such term in Section 2.20.
"Incremental Loans" has the meaning assigned to such term in
Section 2.20.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding accounts payable
incurred in the ordinary course of business that are not overdue by more than 90
days), (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 property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person
of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor. The
amount of any Indebtedness described in clause (f) above shall be limited to the
maximum amount payable under the applicable Guarantee of such Person if such
Guarantee contains limitations on the amount payable thereunder.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
23
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit B, among Holdings, the Borrower, the Subsidiary Loan Parties and the
Administrative Agent.
"Initial Revolving Borrowing" means the Revolving Borrowing on
the Effective Date not in excess of $25,000,000.
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
"Interest Period" means with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the
24
effective date of the most recent conversion or continuation of such Borrowing.
"Inventory" means, as of any date of determination, (a)
"inventory", as defined in the Uniform Commercial Code as in effect in the State
of New York and (b) all finished goods, wares and merchandise, finished or
unfinished parts, components, assemblies held for sale to third party customers
based on perpetual inventory reports, including reconciling items to the
perpetual reports, defined and classified by the Borrower and its Subsidiaries
on a basis consistent with current and historical accounting practice in
accordance with GAAP.
"IPO" means the issuance by Holdings of shares of its common
stock to the public pursuant to a bona fide underwritten public offering after
the Effective Date, resulting in the receipt by Holdings of at least $80,000,000
of gross cash proceeds.
"Issuing Bank" means (a) JPMorgan Chase Bank, in its capacity as
the issuer of Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.05(i), (b) solely with respect to the Existing Letters
of Credit issued under the Existing DAP Credit Agreement, the Existing DAP
Issuing Bank, (c) solely with respect to the Existing Letters of Credit issued
by it under the Existing Credit Agreement, the Existing Issuing Bank or (d) any
other Lender approved by the Administrative Agent and the Borrower. An Issuing
Bank may, in its discretion, arrange for one or more Letters of Credit to be
issued by Affiliates of such Issuing Bank, in which case the term "Issuing Bank"
shall include any such Affiliate with respect to Letters of Credit issued by
such Affiliate.
"LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender
at any time shall be its Applicable Percentage of the total LC Exposure at such
time.
25
"Lenders" means the Persons listed on Schedule 2.01, the Persons
listed on Schedule 1 to the Amendment and Restatement Agreement and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance or an Incremental Facility Amendment, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Acceptance. Unless the
context otherwise requires, the term "Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant to
this Agreement. Each Existing Letter of Credit will be deemed to constitute a
Letter of Credit for all purposes under the Loan Documents as though each
Existing Letter Credit had been issued hereunder on the Effective Date.
"Leverage Ratio" means, on any date, the ratio of (a) Total Debt
as of such date to (b) Consolidated EBITDA for the period of four consecutive
fiscal quarters of Holdings most recently ended as of such date (or, if such
date is not the last day of a fiscal quarter, then most recently ended prior to
such date), all determined on a consolidated basis in accordance with GAAP.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Markets
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the LIBO Rate with
respect to such Eurodollar Borrowing for such Interest Period shall be the rate
at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two
26
Business Days prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the promissory notes, if
any, executed and delivered pursuant to Section 2.09(e), the Amendment and
Restatement Agreement, the Reaffirmation Agreement, any Incremental Facility
Amendment, the Guarantee Agreement, the Indemnity, Subrogation and Contribution
Agreement and the Security Documents.
"Loan Parties" means Holdings, the Borrower and the Subsidiary
Loan Parties.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement, the Amendment and Restatement Agreement or an
Incremental Facility Amendment.
"Low Turnover Inventory" means slow-moving inventory of the
Borrower or its Subsidiaries identified on a certificate of a Financial Officer
of the Borrower (which certificate shall be delivered to the Administrative
Agent no later than 90 days after the Effective Date) that is expected to be
returned to the respective suppliers of such inventory for cash at a discount to
cost within 18 months after the Effective Date; provided that the aggregate cost
of such inventory shall not exceed $70,000,000.
"Material Adverse Effect" means a material adverse effect on (a)
the business, assets, operations, prospects or condition, financial or
otherwise, of Holdings, the Borrower and the Subsidiaries taken as a whole, (b)
the ability of any Loan Party to perform any of its obligations under any Loan
Document or (c) the rights
27
of or benefits available to the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans
and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of Holdings, the Borrower and their Subsidiaries
in an aggregate principal amount exceeding $5,000,000. For purposes of
determining Material Indebtedness, the "principal amount" of the obligations of
Holdings, the Borrower or any Subsidiary in respect of any Hedging Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that Holdings, the Borrower or such Subsidiary would be required to
pay if such Hedging Agreement were terminated at such time.
"Merger Agreement" means the Agreement and Plan of Merger dated
as of August 7, 2001, by and among Holdings, AHC Holdings, the Borrower, Newco
Sub and DAP.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases
and rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations. Each Mortgage shall be
satisfactory in form and substance to the Collateral Agent.
"Mortgaged Property" means, initially, each parcel of real
property and the improvements thereto owned or leased by a Loan Party and
identified on Schedule 1.01(b), and includes each other parcel of real property
and improvements thereto with respect to which a Mortgage is granted pursuant to
Section 5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means, with respect to any event (a) the cash
proceeds received in respect of such event including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds, and (iii) in the case of a condemnation
or similar event, condemnation awards and similar cash payments, net of (b) the
sum of (i) all commissions, fees and out-of-pocket expenses paid
28
by Holdings, the Borrower and the Subsidiaries to third parties (other than
Affiliates) in connection with such event, (ii) in the case of a sale, transfer
or other disposition of an asset (including pursuant to a sale and leaseback
transaction or a casualty or other damage or condemnation or similar
proceeding), the amount of all payments required to be made by Holdings, the
Borrower and the Subsidiaries as a result of such event to repay Indebtedness
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event, and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by Holdings, the Borrower and the
Subsidiaries, and the amount of any reserves established by Holdings, the
Borrower and the Subsidiaries to fund (A) retained liabilities relating to the
assets sold or (B) contingent liabilities reasonably estimated to be payable, in
each case during the year that such event occurred or the next two succeeding
years and that are directly attributable to such event (as determined reasonably
and in good faith by the chief financial officer of the Borrower).
"Net Working Capital" means, at any date, (a) the consolidated
current assets of the Borrower and its consolidated Subsidiaries as of such date
(excluding cash and Permitted Investments) minus (b) the consolidated current
liabilities of the Borrower and its consolidated Subsidiaries as of such date
(excluding current liabilities in respect of Indebtedness). Net Working Capital
at any date may be a positive or negative number. Net Working Capital increases
when it becomes more positive or less negative and decreases when it becomes
less positive or more negative.
"Newco Sub" means AAP Acquisition Corporation, a Florida
corporation and a wholly owned subsidiary of Holdings.
"Obligations" has the meaning assigned to such term in the
Security Agreement.
"Original Credit Agreement" has the meaning given such term in
the recitals hereto.
"Other Taxes" means any and all current or future stamp or
documentary taxes or any other excise or property
29
taxes, charges or similar levies arising from any payment made under any Loan
Document or from the execution, delivery or enforcement of, or otherwise with
respect to, any Loan Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of
Annex 1 to the Security Agreement or any other form approved by the Collateral
Agent.
"Permitted Acquisition" means any acquisition (other than the
acquisition of DAP as a result of the Reorganization) by the Borrower or a
Subsidiary of the Borrower of all or substantially all the assets of, or all the
Equity Interests in, a Person or division or line of business of a Person if,
immediately after giving effect thereto, (a) no Default has occurred and is
continuing or would result therefrom, (b) all transactions related thereto are
consummated in accordance with applicable laws, (c) all the Equity Interests of
each Subsidiary formed for the purpose of or resulting from such acquisition
shall be owned directly by the Borrower or a Subsidiary of the Borrower and all
actions required to be taken with respect to such acquired or newly formed
Subsidiary under Sections 5.12 and 5.13 have been taken, (d) the Borrower and
its Subsidiaries are in compliance, on a pro forma basis after giving effect to
such acquisition, with the covenants contained in Sections 6.13, 6.14, 6.15 and
6.17 recomputed as of the last day of the most recently ended fiscal quarter of
the Borrower for which financial statements are available, as if such
acquisition (and any related incurrence or repayment of Indebtedness, with any
new Indebtedness being deemed to be amortized over the applicable testing period
in accordance with its terms, and assuming that any Revolving Loans borrowed in
connection with such acquisition are repaid with excess cash balances when
available) had occurred on the first day of each relevant period for testing
such compliance and (e) the Borrower has delivered to the Administrative Agent
an officers' certificate to the effect set forth in clauses (a), (b), (c) and
(d) above, together with all relevant financial information for the Person or
assets to be acquired.
30
"Permitted Asset Swap" means any transfer of properties or assets
by the Borrower or any of its Subsidiaries in which at least 80% of the
consideration received by the transferor consists of properties or assets (other
than cash) that will be used in the business of such transferor, provided that
(a) the aggregate fair market value (as determined in good faith by the board of
directors of the Borrower) of the property or assets (including cash) being
transferred by the Borrower or such Subsidiary, as the case may be, is not
greater than the aggregate fair market value (as determined in good faith by the
board of directors of the Borrower) of the property or assets (including cash)
received by the Borrower or such Subsidiary, as the case may be, in such
exchange and (b) the aggregate fair market value (as determined in good faith by
the board of directors of the Borrower) of all property or assets (other than up
to 35 Stores that are transferred by the Borrower or any of its Subsidiaries
within 90 days after the Effective Date to any of DAPPER Properties I, LLC,
DAPPER Properties II, LLC or DAPPER Properties III, LLC (and leased back under
the DAP Master Lease Agreement) in exchange for Stores transferred by DAPPER
Properties I, LLC, DAPPER Properties II, LLC or DAPPER Properties III, LLC to
the Borrower or a Subsidiary Loan Property and released from the DAP Master
Lease Agreement) transferred by the Borrower and any of its Subsidiaries in
connection with exchanges in any period of twelve consecutive months shall not
exceed $40,000,000.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes or government assessments that
are not yet due or are being contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 60 days or are being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
31
(d) deposits (and, to the extent securing a trade contract or
indemnity bond, Liens on assets to which such contract or bond relates) to
secure the performance of bids, trade contracts, leases, statutory
obligations, surety, indemnity and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(e) judgment liens in respect of judgments that do not constitute
an Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
interfere with the ordinary conduct of business of Holdings or any
Subsidiary;
(g) any interest or title of a lessor under any lease that is
limited to the property subject to such lease; and
(h) unperfected Liens of any vendor on inventory sold by such
vendor securing the unpaid purchase price of such inventory, to the extent
such Liens are stated to be reserved in such vendor's sale documents (and
not granted by separate agreement of the Borrower or any Subsidiary);
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof
32
and having, at such date of acquisition, the highest credit rating
obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of
not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered
into with a financial institution satisfying the criteria described in
clause (c) above; and
(e) investments in money market or mutual funds substantially all
the assets of which are comprised of securities of the types described in
any of clauses (a) through (d) above.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which the
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement, substantially in
the form of Exhibit D, among the Borrower, Holdings, the Subsidiaries party
thereto and the Collateral Agent for the benefit of the Secured Parties.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including pursuant
to a sale and leaseback
33
transaction) of any property or asset of the Borrower or any Subsidiary,
other than (i) dispositions described in clauses (a), (b) and (d) of
Section 6.05, (ii) dispositions pursuant to sale and leaseback transactions
described in clause (a) of Section 6.11 and (iii) other dispositions
resulting in aggregate Net Cash Proceeds not exceeding $2,000,000 during
any fiscal year of the Borrower; provided that any sale, transfer or other
disposition of Low Turnover Inventory shall be a Prepayment Event; or
(b) any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any
property or asset of the Borrower or any Subsidiary, but only to the extent
that the Net Cash Proceeds therefrom have not been applied to repair,
restore or replace such property or asset within 360 days (or, in the case
of a distribution center, two years, provided that repair, restoration or
replacement commenced within 270 days of such event) after such event; or
(c) the issuance by Holdings, the Borrower or any Subsidiary of
any Equity Interests, or the receipt by Holdings, the Borrower or any
Subsidiary of any capital contribution, other than (i) any such issuance of
Equity Interests to, or receipt of any such capital contribution from,
Holdings, the Borrower or a Subsidiary, (ii) the issuance by Holdings of
shares of its common stock for cash to the extent that (A) Holdings or the
Borrower notifies the Administrative Agent at or prior to the time of such
issuance that the Net Cash Proceeds thereof are to be applied to finance a
Permitted Acquisition and (B) such Net Cash Proceeds are so applied within
30 days after such Net Cash Proceeds are received, (iii) the issuance by
Holdings of shares of its common stock to management of Holdings, the
Borrower or any Subsidiary to the extent that the Net Cash Proceeds
received therefrom during any fiscal year of Holdings do not exceed
$10,000,000, provided that any such Net Cash Proceeds in excess of
$10,000,000 shall not be required to be applied in accordance with Section
2.11(b) until the earlier of (x) each such time as the sum of such Net Cash
Proceeds equals $5,000,000 and (y) the end of each fiscal year of the
34
Borrower or (iv) a Public Offering to the extent that the Net Cash Proceeds
received therefrom are applied as promptly as practicable, and in any event
not later than 90 days after receipt thereof, to purchase or repay all or a
portion of one or more of the Additional Senior Subordinated Notes, the
Existing Senior Subordinated Notes, the Holdings Senior Discount Debentures
or Replacement Senior Subordinated Notes; or
(d) the incurrence by Holdings, the Borrower or any Subsidiary of
any Indebtedness, other than Indebtedness permitted under Section 6.01;
provided that with respect to any event (other than a Specified Lease Financing
or the sale, transfer or other disposition of Low Turnover Inventory) described
in clause (a), if the Borrower shall deliver a certificate of a Financial
Officer to the Administrative Agent at the time of such event setting forth the
Borrower's or a Subsidiary's intent to use the Net Cash Proceeds of such event
to acquire other assets to be used in the same line of business within 270 days
of receipt of such Net Cash Proceeds and certifying that no Default has occurred
and is continuing, such event shall not constitute a Prepayment Event except to
the extent the Net Cash Proceeds therefrom are not so used at the end of such
270-day period, at which time such event shall be deemed a Prepayment Event with
Net Cash Proceeds equal to the Net Cash Proceeds so remaining unused.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by JPMorgan Chase Bank as its prime rate in effect
at its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Public Offering" means any issuance by Holdings of shares of its
common stock pursuant to a bona fide underwritten public offering following the
Restatement Effective Date, provided that (i) at the time thereof and
immediately after giving effect thereto, no Default has occurred and is
continuing or would result therefrom and (ii) the Net Cash Proceeds in respect
of all such offerings do not exceed $150,000,000 in the aggregate.
35
"Reaffirmation Agreement" means the Reaffirmation Agreement,
entered into in connection with the Amendment and Restatement Agreement,
attached thereto as Exhibit C, among Holdings, the Borrower and the other
Reaffirming Parties (as defined therein).
"Receivables Indebtedness" means Indebtedness of the Borrower
and/or its Subsidiaries arising from Receivables Programs in an aggregate
principal amount not exceeding, at any time, (a) the sum of (i) 3.5% of the
total aggregate amount of all accounts receivables sold or transferred during
the preceding 12-month period by the Borrower and its Subsidiaries to any Person
other than the Borrower and its Subsidiaries pursuant to a Receivables Program
or for which value has been received from any Person other than the Borrower and
its Subsidiaries pursuant to a Receivables Program and (ii) $3,000,000 or (b)
the amounts permitted pursuant to clause (ix) of Section 6.01(a).
"Receivables Program" means an arrangement or arrangements under
which the Borrower and its Subsidiaries sell, transfer or otherwise receive
value with respect to accounts receivable pursuant to documentation reasonably
satisfactory to the Administrative Agent.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Reorganization" means, collectively, (a) the AHC Merger, (b) the
DAP Merger and (c) the DAP Equity Transfer.
"Reorganization Expenses" means transition, conversion and
integration expenses of the Borrower and its Subsidiaries relating to the
Reorganization and bonuses paid for management and other employees of the
Borrower and its Subsidiaries (including the Subsidiaries acquired in the
Reorganization) in connection with the Reorganization.
36
"Replacement Senior Subordinated Notes" means senior subordinated
notes of the Borrower (a) that are issued on one or more occasions following the
Restatement Effective Date, (b) the Net Cash Proceeds of which are applied
solely to repay all or a portion of one or more of the Additional Senior
Subordinated Notes, the Existing Senior Subordinated Notes and the Holdings
Senior Discount Debentures, (c) that mature no earlier than the Indebtedness
refinanced thereby and (d) that have terms and conditions which are no less
favorable to the Lenders than the terms and conditions of the Additional Senior
Subordinated Notes and the Existing Senior Subordinated Notes (including with
respect to interest rates, subordination, payment provisions, covenants, events
of default and remedies). The term "Replacement Senior Subordinated Notes" shall
also include any senior subordinated notes of the Borrower issued to refinance
Replacement Senior Subordinated Notes previously issued, provided that (i) the
Net Cash Proceeds thereof are applied solely to repay all or a portion of
outstanding Replacement Senior Subordinated Notes, (ii) such notes mature no
earlier than the Replacement Senior Subordinated Notes refinanced thereby and
(iii) such notes have terms and conditions which are no less favorable to the
Lenders than the terms and conditions of the Replacement Senior Subordinated
Notes refinanced thereby (including with respect to interest rates,
subordination, payment provisions, covenants, events of default and remedies).
"Replacement Subordinated Debt" means the Replacement Senior
Subordinated Notes, any Guarantees thereof and the Indebtedness represented
thereby.
"Replacement Subordinated Debt Documents" means any indenture
under which Replacement Senior Subordinated Notes are issued and all other
instruments, agreements and other documents evidencing or governing the
Replacement Subordinated Debt or providing for any Guarantee or other right in
respect thereof.
"Required Lenders" means, at any time, Lenders having Revolving
Exposures, Term Loans, Incremental Loans and unused Commitments representing
more than 50% of the sum of the total Revolving Exposures, outstanding Term
Loans, outstanding Incremental Loans and unused Commitments at such time.
37
"Restatement Effective Date" has the meaning given such term in
the Amendment and Restatement Agreement.
"Restatement Transactions" means the execution and delivery of
the Amendment and Restatement Agreement by each Person party thereto, the
satisfaction of the conditions to the effectiveness thereof, and the
consummation of the transactions contemplated thereby, including the borrowing
of Tranche C Term Loans on the Restatement Effective Date and the use of the
proceeds thereof, together with the Borrower's cash on-hand, to prepay all
Tranche B Term Loans outstanding on the Restatement Effective Date.
"Restricted Indebtedness" means Indebtedness of Holdings, the
Borrower or any Subsidiary, the payment, prepayment, redemption, repurchase or
defeasance of which is restricted under Section 6.07(b).
"Restricted Payment" means (a) any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests of Holdings, the Borrower or any Subsidiary, (b) any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancelation or termination of any such Equity Interests of Holdings, the
Borrower or any Subsidiary or any option, warrant or other right to acquire any
such Equity Interests of Holdings, the Borrower or any Subsidiary, or (c) any
loans or advances made by the Borrower or any Subsidiary to Holdings.
"Revolving Availability Period" means the period from and
including the Effective Date to but excluding the earlier of the Revolving
Maturity Date and the date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time
38
pursuant to assignments by or to such Lender pursuant to Section 9.04. The
initial amount of each Lender's Revolving Commitment is set forth on Schedule
2.01 or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Revolving Commitment, as applicable. The initial aggregate
amount of the Lenders' Revolving Commitments is $160,000,000.
"Revolving Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure and Swingline Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment or,
if the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"Revolving Loan" means a Loan made pursuant to Section 2.01.
"Revolving Maturity Date" means November 30, 2006.
"S&P" means Standard & Poor's Ratings Group, Inc.
"Sears" means Sears Xxxxxxx and Co. and its subsidiaries.
"Secured Parties" shall have the meaning assigned to such term in
the Security Agreement.
"Security Agreement" means the Security Agreement, substantially
in the form of Exhibit E, among Holdings, the Borrower, the Subsidiary Loan
Parties and the Collateral Agent for the benefit of the Secured Parties.
"Security Documents" means the Security Agreement, the Pledge
Agreement, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.12 or 5.13 to secure
any of the Obligations.
"Senior Leverage Ratio" means, on any date, the ratio of (a)
Funded Senior Debt as of such date to (b) Consolidated EBITDA for the period of
four consecutive fiscal quarters of Holdings most recently ended as of such
39
date (or, if such date is not the last day of a fiscal quarter, then most
recently ended prior to such date), all determined on a consolidated basis in
accordance with GAAP.
"Slide Presentation" means the confidential Lender Presentation
dated June 2002, relating to Holdings, the Borrower and the Restatement
Transactions and related projections.
"Specified Lease Financing" means any sale or transfer by the
Borrower or any Subsidiary of any Specified Property that is subsequently rented
or leased by the Borrower or such Subsidiary; provided that (a) the
consideration for such sale or transfer consists solely of cash and (b) the fair
market value of all Specified Properties that are sold or disposed of on or
after the Effective Date pursuant to such transactions shall not exceed
$50,000,000 in the aggregate.
"Specified Property" means any property, real or personal, that
was acquired by the Borrower or any Subsidiary prior to the Effective Date.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject (a) with respect to the Base CD Rate, for new negotiable nonpersonal
time deposits in dollars of over $100,000 with maturities approximately equal to
three months and (b) with respect to the Adjusted LIBO Rate, for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board). Such reserve percentages shall include those imposed pursuant to
such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
40
"Stores" means all owned and leasehold properties where Inventory
owned by the Borrower or any of the Subsidiaries is sold to the public.
"subsidiary" means, with respect to any Person (the "parent") at
any date, any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of Holdings or the Borrower, as
the context requires. For purposes of the representations and warranties made
hereunder and compliance with the terms and conditions hereof, the
"Subsidiaries" shall be determined after giving effect to the Reorganization
unless the context expressly requires otherwise.
"Subsidiary Loan Party" means any Subsidiary of the Borrower
other than any Foreign Subsidiary that, if it were to Guarantee the Obligations,
would result in adverse tax consequences to Holdings or the Borrower.
"Swingline Exposure" means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.
"Swingline Lender" means JPMorgan Chase Bank, in its capacity as
lender of Swingline Loans hereunder or any successor in such capacity pursuant
to Section 2.04(d).
"Swingline Loan" means a Loan made pursuant to Section 2.04.
41
"Synthetic Purchase Agreement" means any swap, derivative or
other agreement or combination of agreements pursuant to which Holdings, the
Borrower or a Subsidiary is or may become obligated to make (a) any payment in
connection with a purchase by a third party from a Person other than Holdings,
the Borrower or a Subsidiary of any Equity Interest or Restricted Indebtedness
or (b) any payment (other than on account of a permitted purchase by it of any
Equity Interest or any Restricted Indebtedness) the amount of which is
determined by reference to the price or value at any time of any Equity Interest
or Restricted Indebtedness; provided that no phantom stock or similar plan
providing for payments only to current or former directors, officers,
consultants, advisors or employees of Holdings, the Borrower or the Subsidiaries
(or to their heirs or estates) shall be deemed to be a Synthetic Purchase
Agreement.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loans" means Tranche A Term Loans and Tranche C Term Loans.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
42
"Total Debt" means, as of the date of determination, an amount
equal to (a) all Indebtedness of the Borrower and its Subsidiaries outstanding
on such date, excluding Indebtedness described in clauses (e), (f) and (h) of
the definition of "Indebtedness", minus (b) the aggregate amount that would
appear as "Cash and cash equivalents" on a consolidated balance sheet of the
Borrower prepared as of such date in accordance with GAAP; provided that any
letters of credit and letters of guaranty referred to in clause (h) of the
definition "Indebtedness" shall not be excluded from Total Debt to the extent
issued to support any other obligations constituting Indebtedness.
"Tranche A Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche A Term Loan pursuant to
clause (a) of Section 2.01 of the Original Credit Agreement. The initial
aggregate amount of the Lenders' Tranche A Commitments was $180,000,000.
"Tranche A Lender" means a Lender with an outstanding Tranche A
Term Loan.
"Tranche A Maturity Date" means November 30, 2006.
"Tranche A Term Loan" means a Loan made pursuant to clause (a) of
Section 2.01 of the Original Credit Agreement. The aggregate principal amount of
the Tranche A Term Loans outstanding on the Restatement Effective Date is
$90,013,584.23.
"Tranche B Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche B Term Loan pursuant to
clause (b) of Section 2.01 of the Original Credit Agreement.
"Tranche B Term Loan" means a loan made pursuant to clause (b) of
Section 2.01 of the Original Credit Agreement.
"Tranche C Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender under the Amendment and Restatement Agreement
to make a Tranche C Term Loan on the Restatement Effective Date in an amount
equal to the amount set forth opposite such Lender's name
43
on Schedule 1 to the Amendment and Restatement Agreement. The initial aggregate
amount of the Lenders' Tranche C Commitments is $250,000,000.
"Tranche C Lender" means a Lender with a Tranche C Commitment or
an outstanding Tranche C Term Loan.
"Tranche C Maturity Date" means November 30, 2007.
"Tranche C Term Loan" means a Loan made pursuant to Section 3 of
the Amendment and Restatement Agreement.
"Transactions" means the Reorganization, the Financing
Transactions and the Restatement Transactions.
"Type", when used in reference to any Loan or Borrowing, refers
to whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Vehicle" means any van, truck, tractor or trailer (other than a
commercial delivery vehicle) that is covered by a certificate of title issued
under the laws of any jurisdiction in the United States of America and used in
the distribution and delivery of inventory.
"Vehicle Subsidiary" means Advance Trucking Corporation, a
Virginia corporation, and wholly owned Subsidiary of the Borrower.
"Withdrawal Liability" means liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type
(e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar
Revolving Borrowing").
44
SECTION 1.03. Terms Generally The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP; Fiscal Month. Except as
otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such
45
provision amended in accordance herewith. Except as otherwise provided herein,
all references to a fiscal month shall mean any period of four or five calendar
weeks used by the Borrower for recording or reporting its interim financial
information.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make Revolving Loans to the Borrower
from time to time during the Revolving Availability Period in an aggregate
principal amount that will not result in such Lender's Revolving Exposure
exceeding such Lender's Revolving Commitment. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Revolving Loans. Subject to the terms and conditions set
forth herein and in the Amendment and Restatement Agreement, each Lender having
a Tranche C Commitment made Tranche C Term Loans to the Borrower on the
Restatement Effective Date in a principal amount equal to its Tranche C
Commitment. Amounts repaid in respect of Term Loans may not be reborrowed. All
Tranche A Term Loans, Revolving Loans and Letters of Credit outstanding under
the Original Credit Agreement on the Restatement Effective Date shall remain
outstanding hereunder on the terms set forth herein.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the
same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Notwithstanding anything to the
46
contrary contained herein, all Borrowings made on the Effective Date shall be
ABR Borrowings. Each Swingline Loan shall be an ABR Loan. Each Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $3,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $100,000 and not less than $1,000,000;
provided that (i) an ABR Revolving Borrowing may be in an aggregate amount that
is equal to the entire unused balance of the total Revolving Commitments and
(ii) an ABR Revolving Borrowing may be in an aggregate amount that is equal to
the amount that is required to finance the reimbursement of an LC Disbursement
as contemplated by Section 2.05(e). Each Swingline Loan shall be in an amount
that is an integral multiple of $100,000 and not less than $200,000. Borrowings
of more than one Type and Class may be outstanding at the same time; provided
that there shall not at any time be more than a total of 8 Eurodollar Borrowings
outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Revolving Maturity Date, Tranche A Maturity Date or Tranche C Maturity
Date, as applicable.
SECTION 2.03. Requests for Borrowings To request a Revolving
Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before the date of the proposed Borrowing;
provided that any such notice of an ABR Revolving Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be
47
given not later than 10:00 a.m., New York City time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Borrower. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Swingline Loans (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
to the Borrower from time to time during the Revolving Availability Period, in
an aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of outstanding Swingline Loans exceeding
$30,000,000 or (ii) the sum of the total Revolving Exposures exceeding the
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total Revolving Commitments; provided that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an outstanding Swingline Loan.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a credit to the general
deposit account of the Borrower with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(e), by remittance to the Issuing Bank) by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Revolving Lender, specifying in such notice
such Lender's Applicable Percentage of such Swingline Loan or Loans. Each
Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of
notice as provided above, to pay to the Administrative Agent, for the account of
the Swingline Lender, such Lender's Applicable Percentage of such Swingline Loan
or Loans. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations in Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
49
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Revolving
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Revolving Lenders. The Administrative Agent shall notify
the Borrower of any participations in any Swingline Loan acquired pursuant to
this paragraph, and thereafter payments in respect of such Swingline Loan shall
be made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Borrower of any default in the payment thereof.
(d) Replacement of Swingline Lender. A Swingline Lender may be
replaced by any other Lender at any time that there are no outstanding Swingline
Loans by a written agreement among the Administrative Agent, the Borrower and
successor Swingline Lender. The Administrative Agent shall notify the Lenders of
any such replacement of the Swingline Lender. From and after the effective date
of any such replacement, (i) the successor Swingline Lender shall have all the
rights and obligations of the Swingline Lender under this Agreement and (ii)
references herein to the term "Swingline Lender" shall be deemed to refer to
such successor Swingline Lender. After the replacement of the Swingline Lender
pursuant to this clause (d), the replaced Swingline Lender shall not be required
to make any Swingline Loans. Notwithstanding any provisions to the contrary in
Section 9.04, at no time following the replacement of the Swingline Lender
pursuant to this clause (d), may the Swingline Lender as of such
50
time make an assignment or assignments the effect of which would be to reduce
its Revolving Commitment to zero.
SECTION 2.05. Letters of Credit (a) General. Subject to the
terms and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the applicable Issuing Bank, at any time and from time
to time during the Revolving Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, an Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the applicable Issuing Bank) to
the applicable Issuing Bank and the Administrative Agent (reasonably in advance
of the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If there is more than one
Issuing Bank, the Borrower may select among the Issuing Banks in connection with
the issuance of any Letter of Credit. If requested by the Issuing Bank, the
Borrower also shall submit a letter of credit application on the Issuing Bank's
standard form in connection with any request for a Letter of Credit. A Letter of
Credit shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
51
amendment, renewal or extension (i) the LC Exposure shall not exceed $35,000,000
and (ii) the total Revolving Exposures shall not exceed the total Revolving
Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by the Borrower on the date due as provided in paragraph (e)
of this Section, or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each Revolving Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the
52
Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m.,
New York City time, on such date, or, if such notice has not been received by
the Borrower prior to such time on such date, then not later than 12:00 noon,
New York City time, on (i) the Business Day that the Borrower receives such
notice, if such notice is received prior to 10:00 a.m., New York City time, on
the day of the receipt, or (ii) the Business Day immediately following the day
that the Borrower receives such notice, if such notice is not received prior to
such time on the day of receipt; provided that, if such LC Disbursement is not
less than $100,000, the Borrower may, subject to the conditions to borrowing set
forth herein, request in accordance with Section 2.03 or 2.04 that such payment
be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent
amount and, to the extent so financed, the Borrower's obligation to make such
payment shall be discharged and replaced by the resulting ABR Revolving
Borrowing or Swingline Loan. If the Borrower fails to make such payment when
due, the Administrative Agent shall notify each Revolving Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Revolving Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.06 with respect to Loans made by such
Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the Issuing Bank or, to the extent that
Revolving Lenders have made payments pursuant to this paragraph to reimburse the
Issuing Bank, then to such Lenders and the Issuing Bank as their interests may
appear. Any payment made by a Revolving Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Revolving Loans or a Swingline Loan as contemplated above) shall not
constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.
53
(f) Obligations Absolute. The Borrower's obligation to reimburse
LC Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision herein or therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or wilful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
54
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(i) Replacement of the Issuing Bank. An Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent and the successor to
55
such Issuing Bank. The Administrative Agent shall notify the Lenders of any such
replacement of an Issuing Bank. At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of the
replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective
date of any such replacement, (i) the successor Issuing Bank shall have all the
rights and obligations of an Issuing Bank under this Agreement with respect to
Letters of Credit to be issued by it thereafter and (ii) references herein to
the term "Issuing Bank" shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require. After the replacement of an Issuing Bank hereunder,
the replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but shall
not be required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur
and be continuing, on the Business Day that the Borrower receives notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to 105% of the LC Exposure
as of such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (h) or (i) of Article VII. Each such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower's
risk and
56
expense, such deposits shall not bear interest. Interest or profits, if any, on
such investments shall accumulate in such account. Moneys in such account shall
be applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Revolving Lenders with LC
Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. If the Borrower
is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.
(k) Each of the Existing Issuing Bank and the Existing DAP
Issuing Bank shall deliver to the Administrative Agent, on or prior to the
Effective Date, a schedule identifying all Existing Letters of Credit issued by
it. Each of the Existing Issuing Bank and the Existing DAP Issuing Bank also
shall notify the Administrative Agent of any LC Disbursement or any expiration,
termination or renewal of any Existing Letters of Credit issued by it.
SECTION 2.06. Funding of Borrowings (a) Each Lender shall make
each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders; provided that Swingline Loans shall be made as
provided in Section 2.04. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower designated by the Borrower in the
applicable Borrowing Request; provided that ABR Revolving Loans made to finance
the reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of
57
any Borrowing that such Lender will not make available to the Administrative
Agent such Lender's share of such Borrowing, the Administrative Agent may assume
that such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections (a) Each Revolving Borrowing
and Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Swingline Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower
were requesting a Revolving Borrowing of the Type
58
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Interest Election Request in a form approved by the Administrative Agent
and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02 and paragraph
(f) of this Section:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant
to clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar
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Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding
any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the request of the Required Lenders,
so notifies the Borrower, then, so long as an Event of Default is continuing (i)
no outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period applicable thereto.
(f) A Borrowing of any Class may not be converted to or continued
as a Eurodollar Borrowing if after giving effect thereto (i) the Interest Period
therefor would commence before and end after a date on which any principal of
the Loans of such Class is scheduled to be repaid and (ii) the sum of the
aggregate principal amount of outstanding Eurodollar Borrowings of such Class
with Interest Periods ending on or prior to such scheduled repayment date plus
the aggregate principal amount of outstanding ABR Borrowings of such Class would
be less than the aggregate principal amount of Loans of such Class required to
be repaid on such scheduled repayment date.
SECTION 2.08. Termination and Reduction of Commitments. (a)
Unless previously terminated, (i) the Tranche C Commitments shall terminate at
5:00 p.m., New York City time, on the Restatement Effective Date and (ii) the
Revolving Commitments shall terminate on the Revolving Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Revolving Commitments; provided that (i) each reduction of the
Revolving Commitments shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.11,
the sum of the Revolving Exposures would exceed the total Revolving Commitments.
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(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Revolving Commitments under paragraph (b) of
this Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Revolving
Commitments shall be permanent. Each reduction of the Revolving Commitments
shall be made ratably among the Lenders in accordance with their respective
Revolving Commitments.
(d) The parties hereto acknowledge that the Tranche A Commitments
and Tranche B Commitments have terminated.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Maturity Date, (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Term Loan of such Lender as provided in Section 2.10 and (iii) to
the Swingline Lender the then unpaid principal amount of each Swingline Loan on
the earlier of the Revolving Maturity Date and the first date after such
Swingline Loan is made that is the 15th or last day of a calendar month and is
at least two Business Days after such Swingline Loan is made; provided that on
each date that a Revolving Borrowing is made, the Borrower shall repay all
Swingline Loans then outstanding.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
61
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.10. Amortization of Term Loans. (a) Subject to
adjustment pursuant to paragraph (d) of this Section, the Borrower shall repay
Tranche A Term Borrowings on each date set forth below in the aggregate
principal amount set forth opposite such date:
Date Amount
---- ------
May 31, 2003 $ 1,548,665.41
November 30, 2003 $ 7,804,052.72
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May 31, 2004 $ 12,418,127.69
November 30, 2004 $ 12,418,127.69
May 31, 2005 $ 13,956,152.68
November 30, 2005 $ 13,956,152.68
May 31, 2006 $ 13,956,152.68
Tranche A Maturity Date $ 13,956,152.68
(b) Subject to adjustment pursuant to paragraph (d) of this
Section, the Borrower shall repay Tranche C Term Borrowings on each date set
forth below in the aggregate principal amount set forth opposite such date:
Date Amount
---- ------
November 30, 2003 $ 2,083,333.33
May 31, 2004 $ 2,083,333.33
November 30, 2004 $ 2,083,333.33
May 31, 2005 $ 2,083,333.33
November 30, 2005 $ 2,083,333.33
May 31, 2006 $ 2,083,333.33
November 30, 2006 $ 2,083,333.33
May 31, 2007 $ 2,083,333.33
Tranche C Maturity Date $ 233,333,333.33
(c) To the extent not previously paid, (i) all Tranche A Term
Loans shall be due and payable on the Tranche A Maturity Date and (ii) all
Tranche C Term Loans shall be due and payable on the Tranche C Maturity Date.
(d) Any prepayment of a Term Borrowing of either Class shall be
applied to reduce the subsequent scheduled repayments of the Term Borrowings of
such Class to be made pursuant to this Section ratably; provided that any
prepayment made pursuant to Section 2.11(a) shall be applied, first, to reduce
the next scheduled repayments of the Term Borrowings of such Class to be made
pursuant to this Section in chronological order, to the extent such repayments
are scheduled to be due within 12 months after such prepayment is made, until
such next scheduled repayments have been eliminated as a result of reductions
hereunder and, second, to reduce the subsequent scheduled repayments of the Term
Borrowings of such Class to be made pursuant to this Section ratably. The
parties hereto
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acknowledge that the amortization amounts set forth in paragraph (a) above
reflect all adjustments for prepayments of Tranche A Term Loans made prior to
the Restatement Effective Date.
(e) Prior to any repayment of any Term Borrowings of either Class
hereunder, the Borrower shall select the Borrowing or Borrowings of the
applicable Class to be repaid and shall notify the Administrative Agent by
telephone (confirmed by telecopy) of such selection not later than 11:00 a.m.,
New York City time, three Business Days before the scheduled date of such
repayment; provided that each repayment of Term Borrowings of either Class shall
be applied to repay any outstanding ABR Term Borrowings of such Class before any
other Borrowings of such Class. Each repayment of a Borrowing shall be applied
ratably to the Loans included in the repaid Borrowing. Repayments of Term
Borrowings shall be accompanied by accrued interest on the amount repaid.
SECTION 2.11. Prepayment of Loans. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to the requirements of this Section.
(b) In the event and on each occasion that any Net Cash Proceeds
are received by or on behalf of Holdings, the Borrower or any Subsidiary in
respect of any Prepayment Event, the Borrower shall, immediately after such Net
Cash Proceeds are received, prepay Term Borrowings in an aggregate amount equal
to such Net Cash Proceeds; provided that, in the case of a Prepayment Event
described in clause (c) of the definition of the term "Prepayment Event", if
such Prepayment Event is an IPO and if the Borrower delivers to the
Administrative Agent, on or prior to the date of such IPO, a certificate of a
Financial Officer certifying that (i) no Default has occurred and is continuing
and (ii) the Borrower or Holdings intends to apply a portion of the Net Cash
Proceeds from such IPO (which portion shall be specified in such certificate and
shall not exceed 25% of such Net Cash Proceeds), within 365 days after the date
of such IPO, for the purposes specified in clause (viii) of Section 6.07(b),
then the amount of the prepayment required by this paragraph in respect of such
event shall be reduced by the portion of the Net Cash Proceeds therefrom
specified in such certificate;
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provided further that, upon the expiration of such 365-day period, if the
Borrower and Holdings have not applied the entire amount of such portion of such
Net Cash Proceeds for the purposes specified in clause (viii) of Section
6.07(b), the Borrower shall notify the Administrative Agent thereof and a
prepayment shall be required under this paragraph to the extent such portion has
not been so applied during such period.
(c) Following the end of each fiscal year of the Borrower,
commencing with the fiscal year ending December 28, 2002, the Borrower shall
prepay Term Borrowings in an aggregate amount equal to 50% of Excess Cash Flow
for such fiscal year; provided that the amount of the prepayment required by
this paragraph shall be equal to 25% (instead of 50%) of Excess Cash Flow for
such fiscal year if, at the end of such fiscal year, the Leverage Ratio is less
than or equal to 2.00 to 1.00. Each prepayment pursuant to this paragraph shall
be made on the last day of the first fiscal quarter of the fiscal year following
the fiscal year for which Excess Cash Flow is being calculated.
(d) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (e) of this Section; provided that each prepayment of Borrowings of
any Class shall be applied to prepay ABR Borrowings of such Class before any
other Borrowings of such Class. In the event of any optional or mandatory
prepayment of Term Borrowings made at a time when Term Borrowings of both
Classes remain outstanding, the Borrower shall select Term Borrowings to be
prepaid so that the aggregate amount of such prepayment is allocated among the
Tranche A Borrowings and Tranche C Term Borrowings pro rata based on the
aggregate principal amount of outstanding Borrowings of each such Class;
provided that any Tranche C Lender may elect, by notice to the Administrative
Agent by telephone (confirmed by telecopy) at least one Business Day prior to
the prepayment date, to decline all or any portion of any prepayment of its
Tranche C Term Loans pursuant to this Section (other than an optional prepayment
pursuant to paragraph (a) of this Section, which may not be declined), in which
case the aggregate amount of the prepayment that would have been applied to
prepay Tranche C Term Loans but was so declined shall be applied to prepay
Tranche A Term
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Borrowings on a pro rata basis. The rights of the Tranche C Lenders under this
Section 2.11(d) shall not be changed without the written consent of the Tranche
C Lenders holding a majority of the outstanding Tranche C Term Loans.
(e) The Borrower shall notify the Administrative Agent (and, in
the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City time,
on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment; provided that, if a
notice of optional prepayment is given in connection with a conditional notice
of termination of the Revolving Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any such
notice (other than a notice relating solely to Swingline Loans), the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to
the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.13.
SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee,
which shall accrue at the Applicable Rate on the average daily unused amount of
the Revolving Commitment of such Lender during the period from and including the
Effective Date to but excluding the date on which the Revolving Commitments
terminate. Accrued
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commitment fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Revolving
Commitments terminate, commencing on the first such date to occur after the
Effective Date. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). For purposes of computing commitment
fees, a Revolving Commitment of a Lender shall be deemed to be used to the
extent of the outstanding Revolving Loans and LC Exposure of such Lender (and
the Swingline Exposure of such Lender shall be disregarded for such purpose).
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate as interest on Eurodollar Revolving Loans on the average daily amount of
such Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Revolving Commitment terminates and the date on which such Lender ceases to have
any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue
at the rate of 1/4 of 1% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Revolving Commitments and
the date on which there ceases to be any LC Exposure, as well as the Issuing
Bank's standard fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.
Participation fees and fronting fees accrued through and including the last day
of March, June, September and December of each year shall be payable on the
third Business Day following such last day, commencing on the first such date to
occur after the Effective Date; provided that all such fees shall be payable on
the date on which the Revolving Commitments terminate and any such fees accruing
after the date on which the Revolving Commitments terminate shall be payable on
demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
67
shall be payable within 10 days after demand. All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately agreed
upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR
Borrowing (including each Swingline Loan) shall bear interest at the Alternate
Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Revolving Loans as provided in paragraph (a) of
this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Revolving Commitments; provided that (i) interest
68
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer
69
exist, (i) any Interest Election Request that requests the conversion of any
Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall
be ineffective and (ii) if any Borrowing Request requests a Eurodollar
Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or
70
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Bank's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender or the Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender's or the Issuing Bank's holding company for any such
reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing Bank or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section, and, in reasonable detail, the basis therefor, shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender or the Issuing Bank, as the case may be, the amount shown
as due on any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or
71
prepay any Revolving Loan or Term Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.11(e) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section, and, in reasonable
detail, the basis therefor, shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such
72
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each
Lender and the Issuing Bank, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder or under any other Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability, and
setting forth, in reasonable detail, the basis therefor, delivered to the
Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its
own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive
absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the Code, the law of the jurisdiction in
which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
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prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate. Any
Foreign Lender which is not a "bank" within the meaning of Section 881(c)(3)(A)
of the Code and intends to claim exemption from U.S. Federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest" shall deliver to the Borrower (with a copy for the
Administrative Agent) a Form W-8BEN, or any subsequent versions thereof or
successors thereto (and, if such Foreign Lender delivers a Form W-8BEN, a
certificate representing that such Foreign Lender is not a bank for purposes of
Section 881(c) of the Code, is not a ten-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled
foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Foreign Lender claiming complete exemption from, or a reduced rate of, U.S.
Federal withholding tax on payments of interest by the Borrower under this
Agreement and the other Loan Documents.
(f) If the Administrative Agent or a Lender determines, in its
sole discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section 2.17, it shall pay
over such refund to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section 2.17 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. Nothing contained in this Section 2.17(f)
shall require the Administrative Agent or any Lender to make available its tax
returns (or any other information
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relating to its taxes which it deems confidential) to the Borrower or any other
Person.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments under each Loan Document shall be made in
dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
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principal and unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Revolving Loans, Term Loans
and participations in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for
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the account of the Lenders or the Issuing Bank hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the Issuing Bank, as the case may
be, the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or
9.03(c), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.15 or 2.17, as the case may be, in the future and (ii) in the
reasonable judgment of such Lender, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
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(b) If any Lender requests compensation under Section 2.15, or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the Issuing Bank and Swingline
Lender), which consent shall not unreasonably be withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a material reduction in such compensation or payments.
A Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
SECTION 2.20. Incremental Facility. The Borrower may at any
time, by notice to the Administrative Agent (whereupon the Administrative Agent
shall promptly deliver a copy to each of the Lenders), request the addition of a
new tranche of term loans under this Agreement in an aggregate principal amount
of up to $350,000,000 (all such loans, collectively, the "Incremental Loans")
pursuant to an additional term loan credit facility (the "Incremental
Facility"), provided that both at the time of any such request and upon the
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effectiveness of the Incremental Facility Amendment referred to below, (A) no
Default shall exist, (B) the Borrower and its Subsidiaries are in compliance, on
a pro forma basis after giving effect to any borrowing under the Incremental
Facility, with the covenants contained in Sections 6.13, 6.14, 6.15 and 6.17
recomputed as of the last day of the most recently ended fiscal quarter of the
Borrower for which financial statements are available, as if any such borrowing
had occurred on the first day of each relevant period for testing such
compliance and (C) borrowings under the Incremental Facility will not require
any Indebtedness (other than Incremental Loans) to be secured by any Collateral.
The Incremental Loans (i) shall rank pari passu in right of payment and of
security with the Revolving Loans and Term Loans, (ii) shall mature no earlier
than the Tranche C Maturity Date (but may, subject to clause (iii) below, have
nominal amortization and commitment reductions prior to such date), (iii) shall
not have a weighted average life that is shorter than that of the Tranche C Term
Loans, and (iv) except as set forth above, shall be treated substantially the
same as (and in any event no more favorably than) the Tranche C Term Loans
(including with respect to mandatory and voluntary prepayments); provided that
(a) the terms and conditions applicable to Incremental Loans maturing after the
Tranche C Maturity Date may provide for material additional or different
financial or other covenants applicable only during periods after the Tranche C
Maturity Date and (b) subject to the provisions set forth below, Incremental
Loans may be priced differently than the Term Loans and the Revolving Loans.
Such notice shall set forth the requested amount of Incremental Loans, which
shall be in a minimum principal amount of not less than $25,000,000. In the
event that existing Lenders provide commitments in an aggregate amount less than
the total amount of the Incremental Loans requested by the Borrower, the
Borrower may arrange for one or more banks or other financial institutions (any
such bank or other financial institution being called an "Additional Lender") to
extend commitments to provide Incremental Loans in an aggregate amount equal to
the unsubscribed amount. Commitments in respect of Incremental Loans shall
become Commitments under this Agreement pursuant to an amendment (an
"Incremental Facility Amendment") to this Agreement and, as appropriate, the
other Loan Documents, executed by the Borrower, each Lender agreeing to provide
such Commitment, if any, each
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Additional Lender, if any, and the Administrative Agent. The Incremental
Facility Amendment may, without the consent of any other Lenders, effect such
amendments to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the opinion of the Administrative Agent, to effect the
provisions of this Section. The effectiveness of any Incremental Facility
Amendment shall be subject to the satisfaction on the date thereof (the
"Incremental Facility Closing Date") of each of the conditions set forth in
Section 4.02 (it being understood that all references to "the date of such
Borrowing" in such Section 4.02 shall be deemed to refer to the Incremental
Facility Closing Date). No Lender shall be obligated to provide any Incremental
Loans unless it so agrees. Incremental Loans will bear interest at rates at all
times equal to the interest rate applicable to Tranche C Term Loans, plus or
minus a spread that is fixed at the time such Incremental Loans are made,
provided that such spread shall not exceed the spread on the Tranche C Term
Loans by more than 0.25% per annum. The proceeds of Incremental Loans may be
used for general corporate purposes, which may include repayment of all or a
portion of one or more of the Additional Senior Subordinated Notes, the Existing
Senior Subordinated Notes, the Holdings Senior Discount Debentures and
Replacement Senior Subordinated Notes, in each case, in accordance with the
terms hereof.
ARTICLE III
Representations and Warranties
Each of Holdings and the Borrower represents and warrants to the
Lenders on the Restatement Effective Date and on each date thereafter as
required under any Loan Document that:
SECTION 3.01. Organization; Powers. Each of Holdings, the
Borrower and their Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect, is
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qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions to
be entered into by each Loan Party are within such Loan Party's corporate powers
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement has been duly executed and delivered by each
of Holdings and the Borrower and constitutes, and each other Loan Document to
which any Loan Party is to be a party, when executed and delivered by such Loan
Party, will constitute, a legal, valid and binding obligation of Holdings, the
Borrower or such Loan Party (as the case may be), enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except (i) such
as have been obtained or made and are in full force and effect and except
filings necessary to perfect Liens created under the Loan Documents or (ii)
where the failure to obtain such consent or approval or make such registration
or filing, individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Effect, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of
Holdings, the Borrower or any of their Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any
material indenture, agreement or other instrument binding upon Holdings, the
Borrower or any of their Subsidiaries or their assets, or give rise to a right
thereunder to require any payment to be made by Holdings, the Borrower or any of
their Subsidiaries (other than repayment of the Existing DAP Indebtedness and
repayment of Indebtedness outstanding under the Existing Credit Agreement as of
the Effective Date), and (d) will not result in the creation or imposition of
any Lien on any asset of Holdings, the
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Borrower or any of their Subsidiaries, except Liens created under the Loan
Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) Each of Holdings and the Borrower has heretofore furnished to the Lenders
its consolidated balance sheet and statements of income, stockholders equity and
cash flows (i) as of and for the fiscal year ended December 30, 2001, reported
on by Xxxxxx Xxxxxxxx LLP, independent public accountants, (ii) as of and for
the fiscal quarter and the portion of the fiscal year ended April 20, 2002,
certified by one of its Financial Officers and (iii) as of the end of and for
each fiscal month ended after the end of the fiscal quarter ended April 20, 2002
and prior to the date 30 days prior to the Restatement Effective Date, certified
by one of its Financial Officers. Such financial statements present fairly, in
all material respects, the financial position and results of operations and cash
flows of Holdings and its consolidated subsidiaries as of such dates and for
such periods in accordance with GAAP, subject to year-end audit adjustments and
the absence of footnotes in the case of the statements referred to in clauses
(ii) and (iii) above.
(b) Except as disclosed in the financial statements referred to
above or the notes thereto or in the Slide Presentation and except for the
Disclosed Matters, after giving effect to the Transactions, none of Holdings,
the Borrower or their Subsidiaries has, as of the Restatement Effective Date,
any material contingent liabilities.
(c) Since December 30, 2001, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of Holdings, the Borrower and their Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of Holdings, the Borrower and
their Subsidiaries has good title to, or valid leasehold interests in, all its
real and personal property material to its business (including its Mortgaged
Properties), except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
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(b) Each of Holdings, the Borrower and their Subsidiaries owns,
or is licensed to use, all trademarks, trade names, copyrights, patents and
other intellectual property material to its business, and the use thereof by
Holdings, the Borrower and their Subsidiaries does not infringe upon the rights
of any other Person, except for any such infringements that, individually or in
the aggregate, would not reasonably be expected to result in a Material Adverse
Effect.
(c) The Borrower has delivered to the Administrative Agent a
schedule setting forth the address of each real property that is owned or leased
by Holdings or any of its Subsidiaries as of the Effective Date after giving
effect to the Transactions.
(d) As of the Restatement Effective Date, neither Holdings, the
Borrower nor any of their Subsidiaries has received notice of, or has knowledge
of, any pending or contemplated condemnation proceeding affecting any Mortgaged
Property or any sale or disposition thereof in lieu of condemnation. Neither any
Mortgaged Property nor any interest therein is subject to any right of first
refusal, option or other contractual right to purchase such Mortgaged Property
or interest therein (other than options to purchase any such Mortgaged Property
leased by the Borrower as lessee).
SECTION 3.06. Litigation and Environmental Matters. (a) There
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of Holdings or the Borrower,
threatened against or affecting Holdings, the Borrower or any of their
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, would reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than the Disclosed Matters) or (ii) that involve any of the Loan Documents or
the Transactions.
(b) Except for the Disclosed Matters and except with respect to
any other matters that, individually or in the aggregate, would not reasonably
be expected to result in a Material Adverse Effect, neither Holdings, the
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Borrower nor any of their Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the Effective Date, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of
Holdings, the Borrower and their Subsidiaries is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, except where the failure to do so, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither
Holdings, the Borrower nor any of their Subsidiaries is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of Holdings, the Borrower and their
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which Holdings, the Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so would not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when
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taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed by more
than $1,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $1,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. Holdings and the Borrower have
disclosed to the Lenders all agreements, instruments and corporate or other
restrictions to which Holdings, the Borrower or any of their Subsidiaries is
subject, and all other matters known to any of them, that, individually or in
the aggregate, would reasonably be expected to result in a Material Adverse
Effect. Neither the Slide Presentation nor any of the other reports, financial
statements, certificates or other information furnished by or on behalf of any
Loan Party to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Document or delivered hereunder
or thereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, Holdings and the Borrower represent only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
SECTION 3.12. Subsidiaries. After giving effect to the
consummation of the Reorganization on the Effective Date, Holdings does not have
any Subsidiaries other than the Borrower and the Borrower's Subsidiaries.
Schedule 3.12 sets forth the name of, and the ownership interest of the Borrower
in, each Subsidiary of the Borrower and identifies each Subsidiary that is a
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Subsidiary Loan Party, in each case as of the Restatement Effective Date.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a description
of all insurance maintained by or on behalf of Holdings, the Borrower and their
Subsidiaries as of the Restatement Effective Date. As of the Restatement
Effective Date, all premiums in respect of such insurance have been paid.
SECTION 3.14. Labor Matters. As of the Restatement Effective
Date, there are no strikes, lockouts or slowdowns against Holdings, the Borrower
or any Subsidiary pending or, to the knowledge of Holdings or the Borrower,
threatened. Holdings, the Borrower and the Subsidiaries have not been in
material violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with the hours worked by or
payments made to employees or any similar matters. All payments due from
Holdings, the Borrower or any Subsidiary, or for which any claim may be made
against Holdings, the Borrower or any Subsidiary, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of Holdings, the Borrower or such
Subsidiary, except where the failure to pay such liability individually or in
the aggregate, would not reasonably be expected to result in a Material Adverse
Effect. The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which Holdings, the Borrower or any
Subsidiary is bound.
SECTION 3.15. Solvency. Immediately after the consummation of
the Restatement Transactions to occur on the Restatement Effective Date and
immediately following the making of each Loan made on the Restatement Effective
Date and after giving effect to the application of the proceeds of such Loans,
(a) the fair value of the assets of each Loan Party, at a fair valuation, will
exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the
present fair saleable value of the property of each Loan Party will be greater
than the amount that will be required to pay the probable liability of its debts
and other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and
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matured; (c) each Loan Party will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) each Loan Party will not have unreasonably small
capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted following the
Restatement Effective Date.
SECTION 3.16. Senior Indebtedness. The Obligations constitute
"Senior Debt" and "Designated Senior Debt" under and as defined in the Existing
Subordinated Debt Documents and the Additional Subordinated Debt Documents.
SECTION 3.17. Security Documents. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and, when such Collateral is
delivered to the Collateral Agent, the Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title and
interest of each pledgor thereunder in such Collateral, in each case prior and
superior in right to any other Person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the Security
Agreement) and, when financing statements in appropriate form are filed in the
offices specified on Schedule 6 to the Perfection Certificate, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such Collateral
other than the Intellectual Property (as defined in the Security Agreement), to
the extent that a security interest can be perfected in such Collateral by
filing, recording or registering a financing statement or analogous document in
the United States (or any political subdivision thereof) and its territories and
possessions pursuant to the Uniform Commercial Code or other applicable law in
such jurisdiction, in each case prior and superior in right to any other Person,
other than with respect to Liens expressly permitted by Section 6.02.
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(c) When the Security Agreement is filed in the United States
Patent and Trademark Office and the United States Copyright Office, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in the Intellectual Property
(as defined in the Security Agreement) in which a security interest may be
perfected by filing, recording or registering a security agreement, financing
statement or analogous document in the United States Patent and Trademark Office
or the United States Copyright Office, as applicable, in each case prior and
superior in right to any other Person other than Liens expressly permitted by
Section 6.02 (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a Lien on registered trademarks, trademark applications and
copyrights acquired by the Loan Parties after the Effective Date).
(d) The Mortgages are effective to create, subject to the
exceptions listed in each title insurance policy covering such Mortgage (or, in
the case of the Mortgages with respect to each Mortgaged Property set forth on
Schedule 1.01(b) and identified with an asterisk, subject to Permitted
Encumbrances), in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable Lien on all of the Loan Parties'
right, title and interest in and to the Mortgaged Properties thereunder and the
proceeds thereof, and when the Mortgages are filed in the offices specified on
Schedule 3.17, the Mortgages shall constitute a Lien on, and security interest
in, all right, title and interest of the Loan Parties in such Mortgaged
Properties and the proceeds thereof, in each case prior and superior in right to
any other Person, other than with respect to the rights of Persons pursuant to
Liens expressly permitted by Section 6.02.
ARTICLE IV
Conditions
SECTION 4.01. [Intentionally Omitted].
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SECTION 4.02. Each Credit Event. The obligation of each Lender
to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to
issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct on and as of the date
of such Borrowing or the date of issuance, amendment, renewal or extension
of such Letter of Credit, as applicable, except for representations and
warranties expressly made as of an earlier date, which shall be true and
correct as of such earlier date.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by Holdings
and the Borrower on the date thereof as to the matters specified in paragraphs
(a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each of Holdings and the
Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information.
Holdings and the Borrower will furnish to the Administrative Agent and each
Lender:
(a) within 90 days after the end of each fiscal year of Holdings
and the Borrower, both Holdings' and
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the Borrower's audited consolidated and consolidating balance sheets and
related statements of operations, stockholders' equity and cash flows as of
the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by Xxxxxx
Xxxxxxxx LLP or other independent public accountants of recognized national
standing (without a "going concern" or like qualification or exception and
without any qualification or exception as to the scope of such audit) to
the effect that such consolidated and consolidating financial statements
present fairly in all material respects the financial condition and results
of operations of Holdings or the Borrower, as applicable, and their
consolidated Subsidiaries on a consolidated and consolidating basis in
accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of Holdings and the Borrower, both
Holdings' and the Borrower's consolidated and consolidating balance sheets
and related statements of operations, stockholders' equity and cash flows
as of the end of and for such fiscal quarter and the then elapsed portion
of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by
one of its Financial Officers as presenting fairly in all material respects
the financial condition and results of operations of Holdings or the
Borrower, as applicable, and their consolidated Subsidiaries on a
consolidated and consolidating basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;
(c) within 30 days after the end of each month (other than the
last month) of each fiscal quarter of Holdings and the Borrower, both
Holdings' and the Borrower's consolidated balance sheets and related
statements of operations, stockholders' equity as of the end of and for
such fiscal month and the then elapsed portion of the fiscal year, all
certified by one of its Financial Officers as presenting in all
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material respects the financial condition and results of operations of
Holdings or the Borrower, as applicable, and their consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes; provided that, with respect to the balance sheets and related
statements as of the end of November 2001, the Borrower and Holdings may
provide consolidated balance sheets and related statements for Holdings and
all Subsidiaries which were Subsidiaries prior to the Reorganization and
separate consolidated balance sheets and related statements for all other
Subsidiaries;
(d) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth a
reasonably detailed calculation of the Leverage Ratio as of the end of the
period covered by such financial statements, (iii) setting forth reasonably
detailed calculations demonstrating compliance with Sections 6.12, 6.13,
6.14, 6.15 and 6.17 and (iv) stating whether any change in GAAP or in the
application thereof has occurred since the date of Holdings' audited
financial statements referred to in Section 3.04 and, if any such change
has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any Default
(which certificate may be limited to the extent required by accounting
rules or guidelines);
(f) as soon as the same are complete, but in no event more that
60 days after the commencement of each fiscal year of Holdings, a detailed
consolidated
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budget presented on a quarterly basis for such fiscal year (including a
projected consolidated balance sheet and related statements of projected
operations and cash flow as of the end of and for such fiscal year) and,
promptly when available, any significant revisions of such budget;
(g) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials filed
by Holdings, the Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or all
of the functions of said Commission, or with any national securities
exchange, or distributed by Holdings to its shareholders generally, as the
case may be;
(h) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of Holdings, the Borrower or any Subsidiary, or compliance with
the terms of any Loan Document, as the Administrative Agent or any Lender
may reasonably request; and
(i) at the same time as it delivers the financial statements
required under the provisions of this Section 5.01(a), copies of the
"Management Letter" delivered to Holdings and the Borrower by their
independent certified public accountants in connection with the delivery of
such financial statements.
SECTION 5.02. Notices of Material Events. Upon Holdings or the
Borrower obtaining knowledge thereof, Holdings and the Borrower will furnish to
the Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or affecting
Holdings, the Borrower or any Affiliate thereof that, if adversely
determined, could reasonably be expected to result in a Material Adverse
Effect;
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(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of Holdings, the Borrower and their
Subsidiaries in an aggregate amount exceeding $1,000,000; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of Holdings or the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) Holdings or
the Borrower will furnish to the Administrative Agent prompt written notice of
any change (i) in any Loan Party's corporate name, (ii) in the jurisdiction of
incorporation or organization of any Loan Party, (iii) in any office in which
any Loan Party maintains books or records relating to Collateral owned by it or
(iv) in any Loan Party's Organizational Identification Number. Holdings and the
Borrower agree not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the Uniform Commercial Code or
otherwise that are required in order for the Administrative Agent to continue at
all times following such change to have a valid, legal and perfected security
interest in all the Collateral. Holdings and the Borrower also agree promptly to
notify the Administrative Agent if any material portion of the Collateral is
damaged or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section 5.01, Holdings or the Borrower shall deliver to the Administrative Agent
a certificate of a Financial Officer of Holdings or the Borrower (i) setting
forth the information required pursuant to Section 2 of the Perfection
Certificate or confirming that there has been no change in such information
since the date of the Perfection Certificate
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delivered on the Effective Date or the date of the most recent certificate
delivered pursuant to this Section and (ii) certifying that all Uniform
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations, including all
refilings, rerecordings and reregistrations, containing a description of the
Collateral have been filed of record in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (i) above
to the extent necessary to protect and perfect the security interests under the
Security Agreement for a period of not less than 18 months after the date of
such certificate (except as noted therein with respect to any continuation
statements to be filed within such period).
SECTION 5.04. Existence; Conduct of Business. Each of Holdings
and the Borrower will, and will cause each of its Subsidiaries to, do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and the rights, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and trade names material to the
conduct of its business; provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.05. Payment of Obligations. Each of Holdings and the
Borrower will, and will cause each of its Subsidiaries to, pay its Indebtedness
and other obligations, including Tax liabilities, that, if not paid, would
reasonably be expected to result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b)
Holdings, the Borrower or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, (c) such contest
effectively suspends collection of the contested obligation and the enforcement
of any Lien securing such obligation and (d) the failure to make payment pending
such contest would not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.06. Maintenance of Properties. Each of Holdings and
the Borrower will, and will cause each of its Subsidiaries to, keep and maintain
all property
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material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
SECTION 5.07. Insurance. (a) Each of Holdings and the Borrower
will, and will cause each of its Subsidiaries to, maintain, with financially
sound and reputable insurance companies (i) adequate insurance for its insurable
properties, all to such extent and against such risks, including fire, casualty
and other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses operating in the same or similar
locations, (ii) such other insurance as is required pursuant to the terms of any
Security Document and (iii) business interruption insurance, insuring against
loss of gross earnings for a period of not less than 12 months arising from any
risks or occurrences required to be covered by insurance pursuant to this
Section 5.07.
(b) Fire and extended coverage policies maintained with respect
to any Collateral shall be endorsed or otherwise amended to include (i) a
non-contributing mortgage clause (regarding improvements to real property) and
lenders' loss payable clause (regarding personal property), in each case in
favor of the Administrative Agent and providing for losses thereunder to be
payable to the Administrative Agent or its designee, (ii) a provision to the
effect that neither the Borrower, the Administrative Agent nor any other party
shall be a coinsurer and (iii) such other provisions as the Administrative Agent
may reasonably require from time to time to protect the interests of the
Lenders. Commercial general liability policies shall be endorsed to name the
Administrative Agent as an additional insured. Business interruption policies
shall name the Administrative Agent as loss payee. Each such policy referred to
in this paragraph also shall provide that it shall not be canceled, modified or
not renewed (i) by reason of nonpayment of premium except upon not less than 10
days' prior written notice thereof by the insurer to the Administrative Agent
(giving the Administrative Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason except upon not less than 30 days' prior
written notice thereof by the insurer to the Administrative Agent. Holdings or
the Borrower shall deliver to the Administrative Agent, prior to the
cancelation, modification or nonrenewal of any such policy of insurance, a copy
of a renewal or replacement
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policy (or other evidence of renewal of a policy previously delivered to the
Administrative Agent) together with evidence satisfactory to the Administrative
Agent of payment of the premium therefor.
SECTION 5.08. Casualty and Condemnation. (a) Holdings or the
Borrower will furnish to the Administrative Agent and the Lenders prompt written
notice of any casualty or other insured damage to any material portion of any
Collateral or the commencement of any action or proceeding for the taking of any
Collateral or any part thereof or interest therein under power of eminent domain
or by condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section
results in Net Cash Proceeds (whether in the form of insurance proceeds,
condemnation award or otherwise), the Administrative Agent is authorized to
collect such Net Cash Proceeds and, if received by Holdings, the Borrower or any
Subsidiary, such Net Cash Proceeds shall be paid over the Administrative Agent;
provided that (i) if the aggregate Net Cash Proceeds in respect of such event
(other than proceeds of business income insurance) are less than $5,000,000,
such Net Cash Proceeds shall be paid over to Holdings or the Borrower unless a
Default has occurred and is continuing, and (ii) all proceeds of business income
insurance shall be paid over to the Borrower unless a Default has occurred and
is continuing. All such Net Cash Proceeds retained by or paid over to the
Administrative Agent shall be held by the Administrative Agent and released from
time to time to pay the costs of repairing, restoring or replacing the affected
property in accordance with the terms of the applicable Security Document,
subject to the provisions of the applicable Security Document regarding
application of such Net Cash Proceeds during a Default.
(c) If any Net Cash Proceeds retained by or paid over to the
Administrative Agent as provided above continue to be held by the Administrative
Agent on the date that is 360 days (or, in the case of a distribution center,
two years, provided that repair, restoration or replacement commenced within 270
days after the occurrence of such event) after the occurrence of the event
resulting in such Net Cash Proceeds, then such Net Cash Proceeds shall be
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applied to prepay Term Borrowings as provided in Section 2.11(b).
SECTION 5.09. Books and Records; Inspection and Audit Rights.
(a) Each of Holdings and the Borrower will, and will cause each of its
Subsidiaries to, keep proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its
business and activities. Each of Holdings and the Borrower will, and will cause
each of its Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested; provided that the Borrower shall be given the opportunity to be
present at any discussion with its independent accountants.
(b) Each of Holdings and the Borrower will, and will cause each
of its Subsidiaries to, permit any representatives designated by the
Administrative Agent (including any consultants, accountants, lawyers and
appraisers retained by the Administrative Agent) to conduct evaluations and
appraisals of (i) the inventory of the Borrower and its Subsidiaries and (ii)
the systems providing for the monitoring and reporting of such inventory, all at
such reasonable times and as often as reasonably requested. The Borrower shall
pay the reasonable fees and expenses of any representatives retained by the
Administrative Agent to conduct any such evaluation or appraisal (including the
fees and expenses associated with the services performed by the Administrative
Agent's collateral monitoring department); provided that the Borrower shall not
be required to pay such fees and expenses for more than one such evaluation or
appraisal during any calendar year unless an Event of Default has occurred and
is continuing.
SECTION 5.10. Compliance with Laws. Each of Holdings and the
Borrower will, and will cause each of its Subsidiaries to, comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or
its property, except where the failure to do so,
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individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.11. Use of Proceeds and Letters of Credit. The
proceeds of the Tranche A Term Loans, together with the proceeds of the Initial
Revolving Borrowing and the net cash proceeds of the Additional Subordinated
Debt, will be used only to pay (a) the cash portion of the DAP Merger
Consideration, (b) all amounts outstanding under the Existing Credit Agreement,
(c) all amounts outstanding in respect of the Existing DAP Indebtedness,
including accrued interest and fees and any prepayment penalties and all amounts
necessary to terminate the DAP Synthetic Lease Agreement and purchase the
property subject thereto, and (d) fees and expenses in connection with the
Reorganization and Financing Transactions. The proceeds of the Tranche C Term
Loans will be used only to prepay Tranche B Term Loans outstanding on the
Restatement Effective Date. The proceeds of the Revolving Loans (other than the
proceeds from the Initial Revolving Borrowing) and Swingline Loans will be used
only for general corporate purposes. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations U and X. Letters
of Credit will be issued only for general corporate purposes.
SECTION 5.12. Additional Subsidiaries. If any additional
Subsidiary is formed or acquired after the Effective Date, Holdings and the
Borrower will notify the Administrative Agent and the Lenders thereof and (a) if
such Subsidiary is a Subsidiary Loan Party, Holdings and the Borrower will cause
such Subsidiary to become a party to the Guarantee Agreement, the Indemnity
Subrogation and Contribution Agreement and each applicable Security Document in
the manner provided therein within three Business Days after such Subsidiary is
formed or acquired and promptly take such actions to create and perfect Liens on
such Subsidiary's assets (other than commercial delivery vehicles and leasehold
interests in Stores) to secure the Obligations as the Administrative Agent or
the Required Lenders shall reasonably request and (b) if any Equity Interests or
Indebtedness of such Subsidiary are owned by or on behalf of any Loan Party,
Holdings and the Borrower will cause such Equity Interests and promissory notes
evidencing such Indebtedness to be pledged pursuant to the
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Pledge Agreement within three Business Days after such Subsidiary is formed or
acquired (except that, if such Subsidiary is a Foreign Subsidiary and is not a
Subsidiary Loan Party, Equity Interests of such Subsidiary to be pledged
pursuant to the Pledge Agreement may be limited to 65% of the outstanding voting
Equity Interests of such Subsidiary).
SECTION 5.13. Further Assurances. (a) Each of Holdings and the
Borrower will, and will cause each Subsidiary Loan Party to, execute any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
which may be required under any applicable law, or which the Administrative
Agent or the Required Lenders may reasonably request, to effectuate the
transactions contemplated by the Loan Documents or to grant, preserve, protect
or perfect the Liens created or intended to be created by the Security Documents
or the validity or priority of any such Lien, all at the expense of the Loan
Parties. Holdings and the Borrower also agree to provide to the Administrative
Agent, from time to time upon request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Borrower or
any Subsidiary Loan Party after the Effective Date (other than assets
constituting Collateral under the Security Agreement that become subject to the
Lien of the Security Agreement upon acquisition thereof), the Borrower will
notify the Administrative Agent and the Lenders thereof, and, if requested by
the Administrative Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and will take, and
cause the Subsidiary Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Loan Parties; provided that the foregoing shall not require the
Borrower to xxxxx x Xxxx on assets constituting
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commercial delivery vehicles, leasehold interests in Stores or Vehicles owned by
the Vehicle Subsidiary.
(c) If any Mortgaged Property set forth on Schedule 1.01(b) and
identified with an asterisk is not sold prior to the date that is one year after
the Effective Date, the Borrower shall, within 60 days of such date, deliver to
the Administrative Agent a policy or policies of title insurance (or binding
commitments to issue such title policies), or a title endorsement to an existing
title policy, issued by a nationally recognized title insurance company,
insuring the Lien of each Mortgage with respect to each such Mortgaged Property
as a valid first Lien on such Mortgaged Property, free of any other Liens except
as permitted by Section 6.02, in form and substance reasonably acceptable to the
Collateral Agent, together with such endorsements, coinsurance and reinsurance
as the Collateral Agent or the Required Lenders may reasonably request.
SECTION 5.14. Collection Deposit Accounts. As promptly as
practicable and in any event prior to September 30, 2002 and at all times
thereafter, the Borrower shall maintain Collection Deposit Letter Agreements for
Collection Deposit Accounts representing the collections of Stores which account
for no less than 80% of Consolidated EBITDA for the fiscal year most recently
ended. The Borrower will use its reasonable best efforts to enter into and
maintain Collection Deposit Agreements for all other Collection Deposit
Accounts.
SECTION 5.15. Designated Senior Indebtedness. The Borrower
hereby designates the Obligations as "Designated Senior Indebtedness" under and
as defined in the Existing Subordinated Debt Documents.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, each of Holdings and the Borrower
covenants and agrees with the Lenders that:
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SECTION 6.01. Indebtedness; Certain Equity Securities. (a) The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents (including
Incremental Term Loans incurred in compliance with Section 2.20);
(ii) in the case of the Borrower, the Existing Subordinated
Debt, the Additional Subordinated Debt and the Replacement Subordinated
Debt;
(iii) Indebtedness existing on the Effective Date and set forth
in Schedule 6.01, but not any extensions, renewals or replacements of any
such Indebtedness;
(iv) Indebtedness of the Borrower to any Subsidiary of the
Borrower and of any Subsidiary of the Borrower to the Borrower or any other
Subsidiary of the Borrower; provided that Indebtedness of any Subsidiary
that is not a Loan Party to the Borrower or any Subsidiary Loan Party shall
be subject to Section 6.04;
(v) Guarantees by the Borrower of Indebtedness of any
Subsidiary of the Borrower and by any Subsidiary of the Borrower of
Indebtedness of the Borrower or any other Subsidiary of the Borrower;
provided that (A) the Indebtedness so guaranteed is permitted by this
Section, (B) Guarantees by the Borrower or any Subsidiary Loan Party of
Indebtedness of any Subsidiary that is not a Loan Party shall be subject to
Section 6.04, (C) the Existing Subordinated Debt shall not be guaranteed by
any Subsidiary that is not a Subsidiary Loan Party and any such Guarantee
shall be subordinated to the obligations hereunder of the applicable
Subsidiary on the same terms as the Existing Subordinated Debt of the
Borrower is subordinated to its obligations hereunder, (D) the Additional
Subordinated Debt shall not be guaranteed by any Subsidiary that is not a
Subsidiary Loan Party and any such Guarantee shall be subordinated to the
obligations under the Loan Documents of the applicable
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Subsidiary on the same terms as the Additional Subordinated Debt of the
Borrower is subordinated to its obligations hereunder, (E) the Holdings
Senior Discount Debentures shall not be Guaranteed and (F) the Replacement
Subordinated Debt shall not be guaranteed by any Subsidiary that is not a
Subsidiary Loan Party and any such Guarantee shall be subordinated to the
obligations under the Loan Documents of the applicable Subsidiary on the
same terms as the Replacement Subordinated Debt of the Borrower is
subordinated to its obligations hereunder;
(vi) Indebtedness of the Borrower or any Subsidiary of the
Borrower incurred to finance the acquisition, construction or improvement
of any fixed or capital assets after the Effective Date, including Capital
Lease Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements
of any such Indebtedness that do not increase the outstanding principal
amount thereof or result in an earlier maturity date or decreased weighted
average life thereof; provided that (A) such Indebtedness is incurred prior
to or within 270 days after such acquisition or the completion of such
construction or improvement and (B) the aggregate principal amount of
Indebtedness permitted by this clause (vi) shall not exceed $75,000,000 at
any time outstanding; provided further that the amount permitted under
clause (vi) above shall not include Indebtedness set forth in Schedule
6.01;
(vii) Indebtedness of (A) any Person that becomes a Subsidiary
after the Effective Date pursuant to a Permitted Acquisition to the extent
that such Indebtedness exists at the time such Person becomes a Subsidiary
and is not created in contemplation of or in connection with such Person
becoming a Subsidiary, (B) the Borrower or a Subsidiary to the extent that
such Indebtedness is assumed in connection with a Permitted Acquisition
made by the Borrower or such Subsidiary and is not created in contemplation
of such Permitted Acquisition and (C) the Borrower in respect of unsecured
promissory notes issued as consideration for Permitted Acquisitions;
provided that the
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aggregate principal amount of Indebtedness permitted by this clause (vii)
shall be subject to the limitations set forth in clause (h) of Section
6.04;
(viii) other unsecured Indebtedness of the Borrower or any
Subsidiary Loan Party in an aggregate principal amount not exceeding
$10,000,000 at any time outstanding; and
(ix) Receivables Indebtedness in an aggregate principal amount
not exceeding $45,000,000 at any time outstanding.
(b) Holdings will not create, incur, assume or permit to exist
any Indebtedness except (i) Indebtedness existing on the Effective Date and set
forth in Schedule 6.01, but not any extensions, renewals or replacements of any
such Indebtedness, (ii) Indebtedness created under the Loan Documents and (iii)
the Holdings Senior Discount Debentures.
(c) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to (i) create, incur, assume or permit to exist any
Indebtedness (other than Indebtedness created under the Loan Documents) in
reliance upon such Indebtedness constituting a "Credit Facility" (as defined in
the Existing Subordinated Debt Documents, the Additional Subordinated Debt
Documents or the Replacement Subordinated Debt Documents) for purposes of
determining whether such Indebtedness is permitted under the Existing
Subordinated Debt Documents, the Additional Subordinated Debt Documents or the
Replacement Subordinated Debt Documents, as applicable, regardless of whether
such Indebtedness is permitted by this Section, or (ii) designate any
Indebtedness (other than Indebtedness created under the Loan Documents) as
"Designated Senior Debt" (as defined in the Existing Subordinated Debt
Documents, the Additional Subordinated Debt Documents or the Replacement
Subordinated Debt Documents).
(d) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to, issue any preferred stock or other preferred Equity
Interests or be or become liable in respect of any obligation (contingent or
otherwise) to purchase, redeem, retire, acquire or make any other payment in
respect of any Equity Interests of
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Holdings, the Borrower or any Subsidiary or any option, warrant or other right
to acquire any such Equity Interests.
SECTION 6.02. Liens. (a) The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the Effective Date and set forth in Schedule 6.02;
provided that (i) such Lien shall not apply to any other property or asset
of the Borrower or any Subsidiary and (ii) such Lien shall secure only
those obligations which it secures on the date hereof and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(iv) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary (other than pursuant
to the Reorganization) or existing on any property or asset of any Person
that becomes a Subsidiary after the Effective Date prior to the time such
Person becomes a Subsidiary; provided that (A) such Lien is not created in
contemplation of or in connection with such acquisition or such Person
becoming a Subsidiary, as the case may be, (B) such Lien shall not apply to
any other property or assets of the Borrower or any Subsidiary and (C) such
Lien shall secure only those obligations which it secures on the date of
such acquisition or the date such Person becomes a Subsidiary, as the case
may be, and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;
(v) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary after the Effective Date;
provided that
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(A) such security interests secure Indebtedness permitted by clause (vi) of
Section 6.01(a), (B) such security interests and the Indebtedness secured
thereby are incurred prior to or within 270 days after such acquisition or
the completion of such construction or improvement, (C) the Indebtedness
secured thereby does not exceed the cost (including design, engineering,
sales taxes, delivery, installation and other similar costs) of acquiring,
constructing or improving such fixed or capital assets and (D) such
security interests shall not apply to any other property or assets of the
Borrower or any Subsidiary; and
(vi) Liens arising under any Receivables Program on accounts
receivables sold or transferred to Persons other than the Borrower and its
Subsidiaries pursuant to such Receivables Program.
(b) Holdings will not create, incur, assume or permit to exist
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect thereof, except Liens created under the Security Documents and
Permitted Encumbrances.
SECTION 6.03. Fundamental Changes. (a) Neither Holdings nor the
Borrower will, nor will they permit any Subsidiary to, merge into or consolidate
with any other Person, or permit any other Person to merge into or consolidate
with it, or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing (i) any Subsidiary may merge into the Borrower in a transaction in
which the Borrower is the surviving corporation, (ii) any Subsidiary (other than
the Borrower) may merge into any Subsidiary Loan Party in a transaction in which
the surviving entity is a Subsidiary Loan Party, (iii) any Subsidiary (other
than the Borrower) may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders and (iv) any
Subsidiary may merge with another entity to implement a Permitted Acquisition;
provided that any such merger involving a Person that is not a wholly owned
Subsidiary immediately
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prior to such merger shall not be permitted unless also permitted by Section
6.04; provided further that this Section shall not be construed to prohibit
consummation of the AHC Merger and the DAP Merger in accordance with the Merger
Agreement.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower, DAP and their respective
subsidiaries on the Effective Date and businesses reasonably related thereto.
(c) Holdings will not engage in any business or activity other
than the ownership of all the outstanding shares of capital stock of the
Borrower and activities incidental thereto. Holdings will not own or acquire any
assets (other than shares of capital stock of the Borrower, cash, promissory
notes held pursuant to clause (g)(i) of Section 6.04 and Permitted Investments)
or incur any liabilities (other than liabilities under the Loan Documents, the
Holdings Senior Discount Debentures, liabilities imposed by law, including tax
liabilities, and other liabilities incidental to its existence and permitted
business and activities). Holdings will not have any Subsidiaries, other than
the Borrower and its Subsidiaries.
(d) Prior to the consummation of the DAP Merger, Newco Sub
will not engage in any business or activity. Newco Sub will not own or acquire
any assets or incur any liabilities. Newco Sub will not have any subsidiaries.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of its Subsidiaries
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger) any Equity
Interests, evidences of indebtedness or other securities (including any option,
warrant or other right to acquire any of the foregoing) of, make or permit to
exist any loans or advances to, Guarantee any obligations of, or make or permit
to exist any investment or any other interest in, any other Person, or purchase
or otherwise acquire (in one transaction or a series of transactions) any assets
of any other Person constituting a business unit, except:
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(a) Permitted Investments;
(b) investments existing on the Effective Date and set forth
on Schedule 6.04, to the extent such investments would not be permitted
under any other clause of this Section;
(c) investments in the Equity Interests of their respective
Subsidiaries; provided that (i) any such Equity Interests held by a Loan
Party shall be pledged pursuant to the Pledge Agreement (subject to the
limitations applicable to Equity Interests of a Foreign Subsidiary referred
to in Section 5.12) and (ii) the aggregate amount of investments in, and
loans and advances to, and Guarantees of Indebtedness of, Subsidiaries that
are not Loan Parties shall not exceed $1,000,000 in the aggregate at any
time outstanding;
(d) loans or advances made by the Borrower to any Subsidiary
of the Borrower (or to Holdings, but only as permitted by Section 6.07) and
made by any Subsidiary of the Borrower to the Borrower or any other
Subsidiary of the Borrower; provided that (i) any such loans and advances
made by a Loan Party shall be evidenced by a promissory note pledged
pursuant to the Pledge Agreement and (ii) the amount of all such loans and
advances by Loan Parties to Subsidiaries that are not Loan Parties shall be
subject to the limitation set forth in clause (c)(ii) above;
(e) Guarantees constituting Indebtedness permitted by Section
6.01; provided that (i) neither the Borrower nor any Subsidiary shall
Guarantee the Holdings Senior Discount Debentures, (ii) the Existing
Subordinated Debt shall not be Guaranteed by Holdings or by any Subsidiary
other than a Subsidiary Loan Party that is a Subsidiary of the Borrower,
(iii) the Additional Subordinated Debt shall not be Guaranteed by any
Subsidiary other than a Subsidiary Loan Party that is a Subsidiary of the
Borrower, (iv) the Replacement Subordinated Debt shall not be Guaranteed by
any Subsidiary other than a Subsidiary Loan Party that is a Subsidiary of
the Borrower, (v) the
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aggregate principal amount of Indebtedness of Subsidiaries that are not
Loan Parties Guaranteed by any Loan Party shall be subject to the
limitation set forth in clause (c)(ii) above and (vi) a Subsidiary that is
not a Loan Party shall not Guarantee any Indebtedness of any Loan Party;
(f) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(g) promissory notes received from employees of Holdings and
its Subsidiaries evidencing (i) loans made for the purpose of permitting
such employees to purchase capital stock of Holdings in an aggregate
principal amount not exceeding $5,000,000 at any time outstanding or (ii)
the loan made to Xxxxxxx Xxxxx in the principal amount of $1,300,000;
(h) Permitted Acquisitions; provided that (i) the
consideration for each Permitted Acquisition shall consist solely of cash,
shares of common stock of Holdings, the assumption of Indebtedness of the
acquired Person or encumbering the acquired assets, Indebtedness referred
to in clauses (vii) and (viii) of Section 6.01(a) or a combination thereof
and (ii) the sum of all Indebtedness so assumed or otherwise resulting from
Permitted Acquisitions (including Indebtedness referred to in clauses (vii)
and (viii) of Section 6.01(a)) plus the cash consideration paid in
connection with Permitted Acquisitions (other than cash consideration
received as Net Cash Proceeds from the issuance by Holdings of additional
shares of its common stock to finance Permitted Acquisitions, as
contemplated by clause (c)(ii) of the definition of "Prepayment Event"),
minus the book value (determined, in respect of each Permitted Acquisition,
as of the date of consummation thereof) of all cash, cash equivalents,
prepaid expenses, inventory and accounts receivable acquired pursuant to
Permitted Acquisitions, shall not exceed, during any fiscal year of the
Borrower, when aggregated with the sum of all Capital Expenditures
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during such fiscal year, the amount permitted for such fiscal year pursuant
to Section 6.12;
(i) loans or advances to employees in the ordinary course of
business; provided that the aggregate amount of all loans and advances
permitted by this clause (i) shall not exceed $750,000 at any time
outstanding;
(j) other investments in an aggregate amount not exceeding
$2,000,000 at any time outstanding;
(k) obligations of management to the Borrower in connection
with split dollar life insurance policies; provided that the aggregate
amount of all obligations permitted by this clause (k) shall not exceed
$1,000,000 at any time outstanding; and
(l) promissory notes contemplated by clause (ii) of the
proviso to Section 6.05.
SECTION 6.05. Asset Sales. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, transfer, lease or otherwise dispose of
any asset, including any Equity Interests, nor will the Borrower permit any of
its Subsidiaries to issue any additional Equity Interests in such Subsidiary,
except:
(a) sales of inventory, used or surplus equipment and Permitted
Investments in the ordinary course of business;
(b) (i) sales, transfers, leases and dispositions to the Borrower
or a Subsidiary, provided that any such sales, transfers, leases or
dispositions involving a Subsidiary that is not a Loan Party shall be made
in compliance with Section 6.08, and (ii) issuances of additional Equity
Interests by any Subsidiary to the Borrower or any other Subsidiary (except
that a Subsidiary Loan Party may not issue additional Equity Interests to a
Subsidiary that is not a Loan Party), provided that any such issuances
shall be made in compliance with Section 6.04;
(c) sales, transfers and dispositions of assets (other than
Equity Interests of a Subsidiary) that are
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not permitted by any other clause of this Section; provided that the
aggregate fair market value of all assets sold, transferred or otherwise
disposed of in reliance upon this clause (c) shall not exceed $12,500,000
during any fiscal year of the Borrower and $50,000,000 in the aggregate;
(d) the Borrower may sell or otherwise convey accounts receivable
pursuant to and in accordance with any Receivables Program;
(e) sales of fixed or capital assets made pursuant to sale and
lease-back transactions permitted under Section 6.11;
(f) sales, transfers and dispositions of assets constituting
Permitted Asset Swaps;
(g) sales, transfers and other dispositions of property
identified on Schedule 6.05(a);
(h) sales, transfers and other dispositions of (i) Stores
identified on Schedule 6.05(b) and (ii) up to 35 additional Stores;
provided that the fair market value of all assets sold, transferred or
otherwise disposed of pursuant to this clause (h) shall not exceed, on a
cumulative basis from the Effective Date, $35,000,000; and
(i) sales of assets which as of the Effective Date are owned by
Western Auto of St. Xxxxxx, Inc., a Delaware corporation, Western Auto of
Puerto Rico, Inc., a Delaware corporation or WASCO Insurance Agency, Inc.,
a Missouri corporation or which constitute the Western Auto Wholesale
Network, Western Auto Specialty Stores or rights with respect to Western
Auto Dealer Stores or of the capital stock of any Subsidiary of the
Borrower substantially all the assets of which at the time of such sale are
assets permitted to be sold pursuant to this clause (i);
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clause (b) above) shall be made for fair
value and solely for cash consideration, except that (i) consideration for
Permitted Asset Swaps may consist of
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non-cash consideration as contemplated by the definition of such term, (ii) up
to 30% of the aggregate consideration for transactions permitted by clause (i)
above may consist of promissory notes, (iii) in the case of distribution
centers, up to 30% of the aggregate consideration for transactions permitted by
clause (g) above may consist of promissory notes, (iv) in the case of the Kansas
City office building, up to 80% of the aggregate consideration for the
transactions permitted by clause (g) above may consist of promissory notes and
(v) up to 10% of the aggregate consideration for transactions permitted by
clause (h) above may consist of promissory notes.
SECTION 6.06. Hedging Agreements. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any Hedging Agreement,
other than Hedging Agreements entered into in the ordinary course of business to
(a) hedge or mitigate risks to which the Borrower or any Subsidiary is exposed
in the conduct of its business or the management of its liabilities and (b)
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of the Borrower or any
Subsidiary, provided that, in the case of this clause (b), no more than 30% of
the fixed rate indebtedness of the Borrower and its Subsidiaries outstanding at
any time may be subject to such agreements.
SECTION 6.07. Restricted Payments; Certain Payments of
Indebtedness. (a) Neither Holdings nor the Borrower will, nor will they permit
any Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except:
(i) Holdings may declare and pay dividends with respect to its
capital stock payable solely in additional shares of its common stock;
(ii) Subsidiaries of the Borrower may make Restricted Payments
to the Borrower and to wholly owned Subsidiaries of the Borrower and may
declare and pay dividends ratably with respect to their Equity Interests;
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(iii) if at the time thereof and after giving effect thereto no
Default has occurred and is continuing, the Borrower may pay dividends or
make loans to Holdings at such times and in such amounts, not exceeding
$1,000,000 during any fiscal year, as shall be necessary to permit Holdings
to discharge its permitted liabilities (other than to make any payments
with respect to the Holdings Senior Discount Debentures);
(iv) following April 15, 2003, if at the time thereof and after
giving effect thereto no Default has occurred and is continuing, the
Borrower may pay dividends or make loans to Holdings at such times and in
such amounts, not exceeding $14,420,000 during any fiscal year, as shall be
necessary to permit Holdings to pay, as and when due, interest on the
Holdings Senior Discount Debentures accrued subsequent to April 15, 2003;
(v) Holdings may make Restricted Payments pursuant to and in
accordance with stock option plans or other benefit plans for management or
employees of Holdings and its Subsidiaries, including the redemption or
purchase of shares of common stock of Holdings held by former employees of
Holdings or any Subsidiary following the termination of their employment,
if (A) at the time thereof and after giving effect thereto no Default has
occurred and is continuing and (B) after giving effect to any such
Restricted Payment, the aggregate cumulative amount of Restricted Payments
made pursuant to this clause (v) shall not exceed the sum of (1) $2,000,000
during any fiscal year or (2) $10,000,000 in the aggregate from the
Effective Date, plus the amount of Net Cash Proceeds received by Holdings
and its Subsidiaries after the Effective Date and prior to making such
Restricted Payment from the issuance of additional shares of its common
stock to members of management or employees of Holdings and its
Subsidiaries; provided that the promissory notes permitted under Section
6.04(g) may be forgiven or returned without regard to the limitation in
clause (B) above and the forgiveness or return thereof shall not be treated
as Restricted Payments for purposes of determining compliance with such
clause (B) above;
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(vi) the Borrower may pay cash dividends or make loans to
Holdings in such amounts and at such times as Holdings makes Restricted
Payments permitted by clause (v) above;
(vii) if at the time thereof and after giving effect thereto no
Default has occurred and is continuing, the Borrower may pay dividends or
make loans to Holdings in such amounts and at such times as required to
permit Holdings to pay, as and when due, income taxes payable by Holdings
with respect to the consolidated, combined tax filing group that includes
the Borrower and its Subsidiaries; provided that dividends or loans
pursuant to this clause (vii) shall not at any time exceed the amount of
income taxes that would then be payable by the Borrower and its
Subsidiaries if the Borrower and its Subsidiaries were not a part of a
consolidated, combined tax filing group with Holdings or any other Person;
and
(viii) the Borrower may pay cash dividends or make loans to
Holdings in such amounts and at such times as Holdings makes payments to
purchase Holdings Senior Discount Debentures as permitted by clauses (vii)
and (viii) of Section 6.07(b).
(b) Neither Holdings nor the Borrower will, nor will they permit
any Subsidiary to, make or agree to pay or make, directly or indirectly, any
payment or other distribution (whether in cash securities or other property) in
respect of principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Indebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness other than payments
in respect of the Existing Subordinated Debt, the Additional
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Subordinated Debt or the Replacement Subordinated Debt prohibited by the
subordination provisions thereof;
(iii) refinancings of Indebtedness to the extent permitted by
Section 6.01;
(iv) payment of secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing
such Indebtedness;
(v) payment of interest on the Holdings Senior Discount
Debentures payable solely by the issuance by Holdings of additional
Holdings Senior Discount Debentures, provided that after April 15, 2003,
Holdings will be permitted to pay interest in cash on the Holdings Senior
Discount Debentures as and when due;
(vi) payment of intercompany Indebtedness between or among the
Borrower and its Subsidiaries permitted under clause (iv) of Section
6.01(a) and payment of Indebtedness permitted under clauses (viii) and (ix)
of Section 6.01(a);
(vii) payments to purchase Existing Senior Subordinated Notes,
Additional Senior Subordinated Notes, Holdings Senior Discount Debentures
or Replacement Senior Subordinated Notes; provided that (A) at the time of
and after giving effect to each such purchase of Existing Senior
Subordinated Notes, Additional Senior Subordinated Notes, Holdings Senior
Discount Debentures or Replacement Senior Subordinated Notes, as the case
may be, (1) no Default shall have occurred and be continuing and (2) the
Borrower and its Subsidiaries are in compliance, on a pro forma basis after
giving effect to any such payments (and any Public Offering made,
Replacement Subordinated Debt incurred or Incremental Loans borrowed to
effect any such payments), with the covenants contained in Sections 6.13,
6.14, 6.15 and 6.17 recomputed as of the last day of the most recently
ended fiscal quarter of the Borrower for which financial statements are
available, as if such payment (and any Public Offering made, Replacement
Subordinated Debt incurred or Incremental Loans borrowed to effect any such
payments) had occurred on the first day of each
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relevant period for testing such compliance; and (B) all Existing Senior
Subordinated Notes, Additional Senior Subordinated Notes, Holdings Senior
Discount Debentures or Replacement Senior Subordinated Notes, as the case
may be, so purchased shall be retired and canceled;
(viii) payments, in an aggregate amount not exceeding the portion of the Net
Cash Proceeds of an IPO reserved for such purpose in accordance with the proviso
to Section 2.11(b), to purchase Existing Senior Subordinated Notes, Additional
Senior Subordinated Notes, Holdings Senior Discount Debentures or Replacement
Senior Subordinated Notes within 365 days after the date of such IPO; provided
that (A) at the time of and after giving effect to each such purchase of
Existing Senior Subordinated Notes, Additional Senior Subordinated Notes,
Holdings Senior Discount Debentures or Replacement Senior Subordinated Notes, as
the case may be, no Default shall have occurred and be continuing; (B) all
Existing Senior Subordinated Notes, Additional Senior Subordinated Notes,
Holdings Senior Discount Debentures or Replacement Senior Subordinated Notes, as
the case may be, so purchased shall be retired and canceled; and (C) for
purposes of determining the amount of the Net Cash Proceeds of such IPO applied
to purchase Existing Senior Subordinated Notes, Additional Senior Subordinated
Notes, Holdings Senior Discount Debentures or Replacement Senior Subordinated
Notes as permitted by this clause (viii), the aggregate amount of such payments
shall be calculated excluding the aggregate amount of accrued and unpaid
interest on the Existing Senior Subordinated Notes, Additional Senior
Subordinated Notes, Holdings Senior Discount Debentures or Replacement Senior
Subordinated Notes so purchased that is discharged as a result of such purchase;
(ix) [intentionally omitted];
(x) the issuance of Equity Interests in Holdings to any holder
of Holdings Senior Discount Debentures in exchange for Holdings Senior
Discount Debentures; provided that (A) at the time of and after giving
effect to such exchange, no Default shall have occurred and be continuing,
(B) such exchange shall not be made in connection with any issuance of
Equity Interests in Holdings to other investors for cash
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consideration, (C) such exchange is made on an arm's length basis with
unrelated third parties and (D) all Holdings Senior Discount Debentures so
exchanged shall be retired and canceled; and
(xi) the repayment of (A) all amounts outstanding under the
Existing Credit Agreement and (B) all amounts outstanding in respect of the
Existing DAP Indebtedness, including accrued interest and fees and any
prepayment penalties and all amounts necessary to terminate the DAP
Synthetic Lease Agreement and purchase the property subject thereto.
(c) Neither Holdings nor the Borrower will, nor will they permit
any Subsidiary to, enter into or be party to, or make any payment under, any
Synthetic Purchase Agreement unless (i) in the case of any Synthetic Purchase
Agreement related to any Equity Interest of Holdings, the payments required to
be made by Holdings are limited to amounts permitted to be paid under Section
6.07(a), (ii) in the case of any Synthetic Purchase Agreement related to any
Restricted Indebtedness, the payments required to be made by Holdings, the
Borrower or the Subsidiaries thereunder are limited to the amount permitted
under Section 6.07(b) and (iii) in the case of any Synthetic Purchase Agreement,
the obligations of Holdings, the Borrower and the Subsidiaries thereunder are
subordinated to the Obligations on terms satisfactory to the Required Lenders.
SECTION 6.08. Transactions with Affiliates. Neither Holdings nor
the Borrower will, nor will they permit any Subsidiary to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) transactions that do not
involve Holdings and are at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties, provided that the Borrower
delivers to the Administrative Agent (i) with respect to any transaction or
series of related transactions involving aggregate consideration in excess of
$2,000,000, a resolution of the Borrower's board of directors set forth in an
officers' certificate certifying that such transaction complies with this clause
(a) and that such transaction has been approved by a
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majority of the disinterested members of the Borrower's board of directors and
(ii) with respect to any transaction or series of related transactions involving
aggregate consideration in excess of $10,000,000, an opinion as to the fairness
to the Lenders of such transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national standing, (b)
transactions between or among the Borrower and its Subsidiaries that are
Subsidiary Loan Parties which do not involve any other Affiliate, (c) any
Restricted Payment permitted by Section 6.07, (d) loans to management of
Holdings or the Borrower permitted by clause (g) of Section 6.04, (e) payments
made under and in accordance with agreements in effect on the Effective Date and
specified in Schedule 6.08 (without giving effect to any amendment or
modification thereof that has not been approved by the Required Lenders), (f)
any employment agreements, stock option or other compensation agreements or
plans (and the payment of amounts or the issuance of securities thereunder) and
other reasonable fees, compensation, benefits and indemnities paid or entered
into by Holdings or any of its Subsidiaries in the ordinary course of business
of Holdings or such Subsidiary to or with the officers, directors or employees
of Holdings or its Subsidiaries and (g) sales of common stock of Holdings, when
such sales are exclusively for cash.
SECTION 6.09. Restrictive Agreements. Neither Holdings nor the
Borrower will, nor will they permit any Subsidiary to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of Holdings,
the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon
any of its property or assets, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its capital stock
or to make or repay loans or advances to the Borrower or any other Subsidiary or
to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by law
or by any Loan Document, Existing Subordinated Debt Document, Additional
Subordinated Debt Document, Holdings Senior Discount Debenture Documents or
Replacement Subordinated Debt Documents, (ii) the foregoing shall not apply to
restrictions and conditions existing on the Effective Date
117
identified on Schedule 6.09 (but shall apply to any extension or renewal of, or
any amendment or modification expanding the scope of, any such restriction or
condition), (iii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause
(a) of the foregoing shall not apply to restrictions or conditions imposed by
any agreement relating to secured Indebtedness permitted by this Agreement if
such restrictions or conditions apply only to the property or assets securing
such Indebtedness and (v) clause (a) of the foregoing shall not apply to
customary provisions in leases or other contracts restricting the assignment
thereof.
SECTION 6.10. Amendment of Material Documents. Neither Holdings
nor the Borrower will, nor will they permit any Subsidiary to, amend, modify or
waive any of its rights under (a) any Existing Subordinated Debt Document,
Additional Subordinated Debt Document, Holdings Senior Discount Note Document,
Replacement Subordinated Debt Document or any agreement specified in Schedule
6.08, (b) its certificate of incorporation, by-laws or other organizational
documents or (c) the documents governing any Receivables Program or the
documents governing the XxXxxxxx County industrial revenue bonds, except
amendments and modification to agreements and documents referred to in clauses
(b) and (c) shall be permitted to the extent that the cumulative effect of all
such amendments and modifications does not have a Material Adverse Effect or a
material adverse effect on the interests of the Lenders; provided that
amendments and modifications to documents governing Receivables Programs that
have a monetary effect on the Borrower or any of its Subsidiaries shall be
deemed not to have a Material Adverse Effect or adversely affect the Lenders in
any material respect so long as the cumulative net monetary effect of such
amendments and modifications does not exceed $5,000,000 from the Effective Date
(compared to the monetary effect of the existing Receivables Programs).
SECTION 6.11. Sale and Lease-Back Transactions. Neither Holdings
nor the Borrower will, nor will they permit any Subsidiary to, enter into any
arrangement,
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directly or indirectly, with any Person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred, except for (a) any such sale and leaseback
of property involving the sale of fixed or capital assets (other than those
acquired pursuant to the Reorganization or a Permitted Acquisition), at a price
not less than the cost thereof, that is consummated within 270 days after the
date that such assets are acquired, (b) Specified Lease Financings and (c) any
such sale and leaseback of up to 35 Stores that are transferred by the Borrower
or any of its Subsidiaries within 90 days after the Effective Date to any of
DAPPER Properties I, LLC, DAPPER Properties II, LLC or DAPPER Properties III,
LLC (and leased back under the DAP Master Lease Agreement) in exchange for
Stores transferred by DAPPER Properties I, LLC, DAPPER Properties II, LLC or
DAPPER Properties III, LLC to the Borrower or a Subsidiary Loan Party and
released from the DAP Master Lease Agreement.
SECTION 6.12. Capital Expenditures. The Borrower will not permit
the sum of (a) the aggregate amount of Capital Expenditures made by the Borrower
and the Subsidiaries in any fiscal year, plus (b) all amounts that are to be
aggregated with Capital Expenditures for such fiscal year as provided in clause
(h) of Section 6.04 (the sum of the amounts referred to in clauses (a) and (b)
being referred to as "Restricted Expenditures"), to exceed the amount set forth
below opposite such year; provided, that the Restricted Expenditures in any
fiscal year (the "Pending Fiscal Year") may be increased by an amount (not
exceeding $30,000,000) equal to the excess, if any, of the sum of the amounts
set forth below under "Amount" for each fiscal year referred to below ending
prior to the Pending Fiscal Year, minus the sum of the Restricted Expenditures
for such preceding fiscal years:
Fiscal Year
Ending Amount
------ ------
December 29, 2001 $135,000,000
December 28, 2002 $140,000,000
January 3, 2004 $150,000,000
January 1, 2005 $150,000,000
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December 31, 2005 $165,000,000
December 30, 2006 $185,000,000
SECTION 6.13. Leverage Ratio. The Borrower will not permit the
Leverage Ratio as of any date during any period set forth below to be in excess
of the ratio set forth below opposite such period:
Period Ratio
------ -----
Restatement Effective Date through December 28, 2002 4.25 to 1.00
December 29, 2002 through July 12, 2003 4.00 to 1.00
July 13, 2003 through January 3, 2004 3.50 to 1.00
January 4, 2004 through July 17, 2004 3.25 to 1.00
July 18, 2004 and thereafter 3.00 to 1.00
SECTION 6.14. Consolidated Interest Expense Coverage Ratio. The
Borrower will not permit the Consolidated Interest Expense Coverage Ratio as of
the last day of any fiscal quarter ending during any period set forth below to
be less than the ratio set forth below opposite such period:
Period Ratio
------ -----
Restatement Effective Date through October 5, 2002 2.50 to 1.00
October 6, 2002 through July 17, 2004 2.75 to 1.00
July 18, 2004 and thereafter 3.00 to 1.00
SECTION 6.15. Current Assets to Funded Senior Debt Ratio. The
Borrower will not permit the ratio of (a) Current Assets to (b) Funded Senior
Debt, in each case as of the end of any fiscal quarter of the Borrower ending
during any period set forth below, to be less than the ratio set forth below
opposite such period:
Period Ratio
------ -----
Restatement Effective Date through July 12, 2003 1.25 to 1.00
July 13, 2003 through July 17, 2004 1.35 to 1.00
July 18, 2004 through January 1, 2005 1.50 to 1.00
January 2, 2005 and thereafter 1.75 to 1.00
SECTION 6.16. Purchase and Sale of Vehicles; Vehicle Subsidiary.
(a) Neither Holdings nor the Borrower will, nor will they permit any Subsidiary
(other than the
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Vehicle Subsidiary) to, own, purchase, acquire or hold title to, any Vehicle.
(b) The Vehicle Subsidiary will not engage in any business or
activity other than acquiring, owning and disposing of Vehicles used in the
business of the Borrower and its Subsidiaries, and activities incidental
thereto. The Vehicle Subsidiary will not own or acquire any assets (other than
Vehicles) or incur any liabilities (other than liabilities imposed by law,
including tax liabilities, the Guarantee of the Existing Subordinated Debt, the
Additional Subordinated Debt or any Replacement Subordinated Debt by the Vehicle
Subsidiary to the extent permitted by clause (v) of Section 6.01(a),
Indebtedness created under the Loan Documents and other liabilities incidental
to its existence and permitted business and activities). The Vehicle Subsidiary
will not have any Subsidiaries or other investments. The Borrower will not make
or permit any investments in the Vehicle Subsidiary, other than contributions of
equity capital by the Borrower to the extent necessary to permit the Vehicle
Subsidiary to acquire Vehicles and to satisfy its permitted liabilities as and
when done.
SECTION 6.17. Senior Leverage Ratio. The Borrower will not
permit the Senior Leverage Ratio as of any date during any period set forth
below to be in excess of the ratio set forth below opposite such period:
Period Ratio
------ -----
Restatement Effective Date through December 28, 2002 3.00 to 1.00
December 29, 2002 through July 12, 2003 2.75 to 1.00
July 13, 2003 through January 3, 2004 2.50 to 1.00
January 4, 2004 through July 17, 2004 2.25 to 1.00
July 18, 2004 and thereafter 2.00 to 1.00
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
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(a) the Borrower shall fail to pay any principal of any Loan or
any reimbursement obligation in respect of any LC Disbursement when and as
the same shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause (a)
of this Article) payable under this Agreement or any other Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of Holdings, the Borrower or any Subsidiary in or in connection with
any Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or
any amendment or modification thereof or waiver thereunder, shall prove to
have been incorrect in any material respect when made or deemed made;
(d) Holdings or the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.04 (with
respect to the existence of Holdings or the Borrower) or 5.11 or in Article
VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent to the Borrower (which notice will be given at the
request of any Lender);
(f) Holdings, the Borrower or any Subsidiary shall fail to make
any payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due
and payable;
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(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; provided that this clause (g)
shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization
or other relief in respect of Holdings, the Borrower or any Subsidiary or
its debts, or of a substantial part of its assets, under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Holdings, the
Borrower or any Subsidiary or for a substantial part of its assets, and, in
any such case, such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing
shall be entered;
(i) Holdings, the Borrower or any Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or petition described in
clause (h) of this Article, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for Holdings, the Borrower or any Subsidiary or for a substantial
part of its assets, (iv) file an answer admitting the material allegations
of a petition filed against it in any such proceeding,
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(v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing;
(j) Holdings, the Borrower or any Subsidiary shall become unable,
admit in writing its inability or fail generally to pay its debts as they
become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 shall be rendered against
Holdings, the Borrower, any Subsidiary or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor (and such action is not effectively
stayed) to attach or levy upon any assets of Holdings, the Borrower or any
Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in liability of the
Borrower and its Subsidiaries in an aggregate amount exceeding (i)
$3,000,000 in any year or (ii) $5,000,000 for all periods;
(m) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party not to be, a
valid and perfected Lien on any Collateral, with the priority required by
the applicable Security Document, except (i) as a result of the sale or
other disposition of the applicable Collateral in a transaction permitted
under the Loan Documents or (ii) as a result of the Collateral Agent's
failure to maintain possession of any stock certificates, promissory notes
or other instruments delivered to it under the Pledge Agreement;
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the
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continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
bank and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with Holdings, the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
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The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02), and (c) except as
expressly set forth in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to Holdings, the Borrower or any of its Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent
or any of its Affiliates in any capacity. The Administrative Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or wilful misconduct. The
Administrative Agent shall not be deemed not to have knowledge of any Default
unless and until written notice thereof is given to the Administrative Agent by
Holdings, the Borrower or a Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document, (ii)
the contents of any certificate, report or other document delivered thereunder
or in connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
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The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor the
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent,
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and the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
The provisions of this Article applicable to the Administrative
Agent also shall apply to the Collateral Agent, mutatis mutandis.
The parties hereto acknowledge and agree that none of the
Co-Agents has any duty or liability under any Loan Document in its capacity as a
Co-Agent.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by
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certified or registered mail or sent by telecopy, as follows:
(a) if to Holdings or the Borrower, to Advance Stores Company,
Incorporated at 0000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000, Attention of
Chief Financial Officer (Telecopy No. (000) 000-0000);
with a copy to:
Xxxxxxx Xxxxxx & Co. Incorporated, 000 Xxxxxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxx X. Xxxxx (Telecopy No.
(000) 000-0000);
(b) if to the Administrative Agent or the Collateral Agent, to
JPMorgan Chase Bank, Loan and Agency Services Group, One Chase Xxxxxxxxx
Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxx Xxxxxx
(Telecopy No. (000) 000-0000), with a copy to JPMorgan Chase Bank, 000 Xxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx 00000, Attention of Xxxx Xxxxxx (Telecopy No.
(000) 000-0000);
(c) if to the Issuing Bank, to JPMorgan Chase Bank in care of
JPMorgan Treasury Services, 00000 Xxxxxxxx Xxxxx Xxxxx, 0xx Xxxxx, Xxxxx,
Xxxxxxx 00000, Attention of Standby LC Department (Telecopy No. (813)
432-5161);
(d) if to the Swingline Lender, to JPMorgan Chase Bank at One
Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of
Xxxxx Xxxxxx (Telecopy No. (000) 000-0000); and
(e) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
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SECTION 9.02. Waivers; Amendments. (a) No failure or delay by
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
in exercising any right or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, the Collateral Agent,
any Lender or the Issuing Bank may have had notice or knowledge of such Default
at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Holdings, the Borrower and the Required Lenders or, in the case
of any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent or the Collateral Agent, as applicable,
and the Loan Party or Loan Parties that are parties thereto, in each case with
the consent of the Required Lenders; provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or
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postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) change any of the provisions of
this Section or the definition of "Required Lenders" or any other provision of
any Loan Document specifying the number or percentage of Lenders (or Lenders of
any Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release
Holdings or any Subsidiary Loan Party from its Guarantee under the Guarantee
Agreement (except as expressly provided in the Guarantee Agreement), or limit
its liability in respect of such Guarantee, without the written consent of each
Lender, (vii) except in strict accordance with the express provisions thereof,
release all or any substantial part of the Collateral from the Liens of the
Security Documents, without the written consent of each Lender, (viii) change
any provisions of any Loan Document in a manner that by its terms adversely
affects the rights in respect of payments due to Lenders holding Loans of any
Class differently than those holding Loans of any other Class, without the
written consent of Lenders holding a majority in interest of the outstanding
Loans and unused Commitments of each affected Class (in addition to any other
consent required under this paragraph), (ix) amend, modify or waive any
condition precedent set forth in Section 4.02 with respect to the making of
Revolving Loans, without the written consent of Revolving Lenders holding a
majority in interest of the Revolving Commitments or (x) change the rights of
the Tranche B Lenders to decline mandatory prepayments as provided in Section
2.11, without the written consent of Tranche B Lenders holding a majority of the
outstanding Tranche B Loans; provided further that (A) no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender without
the prior written consent of the Administrative Agent, the Collateral Agent, the
Issuing Bank or the Swingline Lender, as the case may be, and (B) any waiver,
amendment or modification of this Agreement that by its terms affects the rights
or duties under this Agreement of the Revolving Lenders (but not any other
Lenders), the
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Tranche A Lenders (but not any other Lenders) or the Tranche B Lenders (but not
any other Lenders) may be effected by an agreement or agreements in writing
entered into by Holdings, the Borrower and requisite percentage in interest of
the affected Class of Lenders that would be required to consent thereto under
this Section if such Class of Lenders were the only Class of Lenders hereunder
at the time. In furtherance of clause (ix) of this Section 9.02(b), (i) any
amendment or modification to or waiver of Section 6.12, 6.13, 6.14 or 6.15 of
this Agreement or (ii) any amendment or modification to or waiver of any
provision of this Agreement or any other Loan Document at a time when any
Default has occurred and is continuing, and that would have the effect of
eliminating any such Default, shall not be deemed to be effective for purposes
of determining whether the conditions precedent set forth in Section 4.02 to the
making of any Revolving Loan have been satisfied unless the Revolving Lenders
holding a majority in interest of the Revolving Commitments shall have consented
to such amendment, modification or waiver; provided that the foregoing shall not
be construed to affect any amendment or modification to any provision of this
Agreement or any other Loan Document (other than any amendment or modification
to Section 6.12, 6.13, 6.14 or 6.15 of this Agreement) if no Default has
occurred and is continuing at the time of such amendment or modification.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Agents and their respective Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Agents, in connection with the syndication
of the credit facilities provided for herein, the preparation and administration
of the Loan Documents or any amendments, modifications or waivers of the
provisions thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender, including the fees, charges
and disbursements of any counsel for the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender, in connection with
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the enforcement or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the
Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Agents, the Issuing Bank and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Loan Document or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any Mortgaged
Property or any other property currently or formerly owned or operated by
Holdings, the Borrower or any of its Subsidiaries, or any Environmental
Liability related in any way to Holdings, the Borrower or any of its
Subsidiaries, except that this clause (iii) shall not apply to Environmental
Liabilities related to a Mortgaged Property that are attributable solely to acts
or events occurring after completion of foreclosure proceedings with respect to
such Mortgaged Property and surrender of possession thereof by the Borrower and
its Subsidiaries to or as directed by the Collateral Agent or the purchasers at
any such foreclosure sale, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses resulted
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from the gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Collateral Agent, the
Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent, the Collateral
Agent, the Issuing Bank or the Swingline Lender, as the case may be, such
Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Collateral Agent, the Issuing Bank or the
Swingline Lender in its capacity as such. For purposes hereof, a Lender's "pro
rata share" shall be determined based upon its share of the sum of the total
Revolving Exposures, outstanding Term Loans and unused Commitments at the time.
(d) To the extent permitted by applicable law, neither Holdings
nor the Borrower shall assert, and each hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that
neither Holdings nor the Borrower may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by either Holdings or the Borrower
without such consent shall be null and void). Nothing in this Agreement,
expressed or
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implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit) and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate or Approved
Fund of a Lender, each of the Borrower and the Administrative Agent (and, in the
case of an assignment of all or a portion of a Revolving Commitment or any
Lender's obligations in respect of its LC Exposure or Swingline Exposure, the
Issuing Bank and the Swingline Lender) must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld), (ii) except
in the case of an assignment to a Lender or an Affiliate or Approved Fund of a
Lender or an assignment of the entire remaining amount of the assigning Lender's
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 (or, in the case of
Tranche C Commitments and Tranche C Loans, $1,000,000) unless each of the
Borrower and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, except that this
clause (iii) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender's rights and obligations in
respect of one Class of Commitments or Loans, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with (except in the case of an assignment to an
Affiliate or Approved Fund of a Lender) a processing and recordation fee of
$3,500, and (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and
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provided further that any consent of the Borrower otherwise required under this
paragraph shall not be required if an Event of Default under clause (h) or (i)
of Article VII has occurred and is continuing. Subject to acceptance and
recording thereof pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and Holdings, the Borrower, the Administrative
Agent, the Collateral Agent, the Issuing Bank and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. The Register shall be available for inspection by the Borrower,
the Issuing Bank and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative
136
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) Holdings, the Borrower,
the Administrative Agent, the Collateral Agent, the Issuing Bank and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce the Loan
Documents and to approve any amendment, modification or waiver of any provision
of the Loan Documents; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant. Subject to paragraph (f) of this Section,
the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive
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with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower's prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 2.17 unless the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 2.17(e) as though it were a
Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(h) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPV"), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower, the option to provide to
the Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant to this Agreement,
provided that (i) nothing herein shall constitute a commitment by any SPV to
make any Loan and (ii) if an SPV elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPV hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPV shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior indebtedness of any SPV,
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it will not institute against, or join any other person in instituting against,
such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States of America or any State thereof.
In addition, notwithstanding anything to the contrary in this Section 9.04, any
SPV may (i) with notice to, but without the prior written consent of, the
Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender or to any financial institutions (consented to by the Borrower and the
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPV to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPV. As this Section
9.04(h) applies to any particular SPV, this Section may not be amended without
the written consent of such SPV.
SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, the Collateral Agent, the Issuing Bank or any Lender may have had notice
or knowledge of any Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of
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the Letters of Credit and the Commitments or the termination of this Agreement
or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Document and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective as provided in the Amendment and
Restatement Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) This Agreement shall
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be construed in accordance with and governed by the law of the State of New
York.
(b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Collateral Agent, the
Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against Holdings, the
Borrower or its properties in the courts of any jurisdiction.
(c) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
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SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent,
the Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below) in accordance with their customary procedures,
except that Information may be disclosed (a) to its and its Affiliates' and
Approved Funds' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower, (h) to the extent such Information
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(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Administrative Agent, the Issuing Bank
or any Lender on a nonconfidential basis from a source other than Holdings or
the Borrower or (i) to any direct or indirect contractual counterparty with a
Lender or its affiliates in a swap agreement or such counterparty's professional
advisor (so long as such contractual counterparty or professional advisor to
such contractual counterparty agrees to be bound by the provisions of this
Section 9.12). For the purposes of this Section, "Information" means all
information received from Holdings or the Borrower relating to Holdings or the
Borrower or its business, other than any such information that is available to
the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by Holdings or the Borrower; provided that, in the
case of information received from Holdings or the Borrower after the Effective
Date, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information. Nothing in this Section 9.12 is intended to
prohibit any Lender (or any Affiliate or Approved Fund of any Lender) from
acquiring or disposing of any of the Borrower's debt securities from or to an
institutional "accredited investor" (as defined in Regulation D under the
Securities Act of 1933); provided that in connection with any such acquisition
or disposition, such Lender (or Affiliate or Approved Fund of such Lender) shall
not disclose to its trade counterparty or any other Person any Information
relating to the Borrower except in accordance with this Section 9.12.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively, the "Charges"), shall exceed
the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the
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rate of interest payable in respect of such Loan hereunder, together with all
Charges payable in respect thereof, shall be limited to the Maximum Rate and, to
the extent lawful, the interest and Charges that would have been payable in
respect of such Loan but were not payable as a result of the operation of this
Section shall be cumulated and the interest and Charges payable to such Lender
in respect of other Loans or periods shall be increased (but not above the
Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.
SECTION 9.14. Original Credit Agreement; Effectiveness of
Amendment and Restatement. Until this Agreement becomes effective in accordance
with the terms of the Amendment and Restatement Agreement, the Original Credit
Agreement shall remain in full force and effect and shall not be affected
hereby. After the Restatement Effective Date, all obligations of the Borrower
under the Original Credit Agreement shall become obligations of the Borrower
hereunder, secured by the Security Documents, and the provisions of the Original
Credit Agreement shall be superseded by the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
ADVANCE AUTO PARTS, INC.,
by
Name:
Title:
ADVANCE STORES COMPANY,
INCORPORATED,
by
Name:
Title:
JPMORGAN CHASE BANK,
individually and as
Administrative Agent,
by
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
by
Name:
Title:
by
Name:
Title:
145
XXXXXX COMMERCIAL PAPER INC.,
by
Name:
Title:
(THE OTHER LENDERS, ISSUING
BANKS AND SWINGLINE LENDERS
THAT ARE SIGNATORIES TO THE
AMENDMENT AND RESTATEMENT
AGREEMENT),
by
Name:
Title:
