LOAN AND SECURITY AGREEMENT Dated as of August 17, 2004 by and among NES Rentals Holdings, Inc., as Borrower The Subsidiaries of NES Rentals Holdings, Inc. From Time to Time Party Hereto, as Subsidiary Guarantors The Financial Institutions From Time...
Exhibit 4.6(ii)
Dated as of August 17, 2004
$275,000,000
by and among
NES Rentals Holdings, Inc.,
as Borrower
The Subsidiaries of NES Rentals Holdings,
Inc. From Time to Time Party Hereto,
as Subsidiary Guarantors
The Financial Institutions From Time to Time
Party Hereto,
as Lenders
Bear, Xxxxxxx & Co. Inc.,
as Syndication Agent
and
Bank of America, N.A.,
as Administrative Agent
Banc of America Securities LLC and Bear,
Xxxxxxx & Co. Inc.,
as Joint Lead Arrangers and Joint Book Managers
TABLE OF CONTENTS
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i
iii
THIS LOAN AND SECURITY AGREEMENT is made as of this 17th day of August, 2004 by and among BANK OF AMERICA, N.A. (“BofA”), a national banking association, as administrative agent (“Administrative Agent”) for any financial institution or other entity which is or becomes a party hereto (each such financial institution or other entity is referred to hereinafter individually as a “Lender” and collectively as the “Lenders”), the LENDERS party hereto from time to time, BEAR, XXXXXXX & CO. INC., as syndication agent (“Syndication Agent”), NES RENTALS HOLDINGS, INC., a Delaware corporation (“Borrower”), and each subsidiary of Borrower which is or becomes a party hereto (each individually a “Subsidiary Guarantor” and collectively “Subsidiary Guarantors”). Capitalized terms used in this Agreement have the meanings assigned to them in Appendix A, General Definitions. As more fully set forth in Appendix A, accounting terms not otherwise specifically defined herein shall be construed in accordance with GAAP consistently applied.
SECTION 1. CREDIT FACILITY
Subject to the terms and conditions of, and in reliance upon the representations and warranties made in, this Agreement and the other Loan Documents, Lenders agree to make a Total Credit Facility of up to $275,000,000 available upon Borrower’s request therefor, as follows:
1.1 Loans.
1.1.1 Term Loan. Each Lender, severally and not jointly, agrees to make a term loan (collectively, the “Term Loans”) to Borrower on the Closing Date, in the aggregate principal amount of such Lender’s Term Loan Commitment, which shall be repayable in accordance with the terms hereof and of the Term Notes and shall be secured by all of the Collateral.
1.1.2 Use of Proceeds. The proceeds of Term Loans shall be used solely for (i) the satisfaction of the Prior Indebtedness and fees and expenses related to such satisfaction and (ii) for Borrower’s and the Subsidiary Guarantors’ general corporate purposes, including, without limitation, operating capital needs in a manner consistent with the provisions of this Agreement and all applicable laws.
SECTION 2. INTEREST, FEES AND CHARGES
2.1 Interest.
2.1.1 Rates of Interest. Interest shall accrue on the principal amount of the Base Rate Portions outstanding at the end of each day at a fluctuating rate per annum equal to the Applicable Margin then in effect plus the Base Rate. Said rate of interest shall increase or decrease by an amount equal to any increase or decrease in the Base Rate, effective as of the opening of business on the day that any such change in the Base Rate occurs. If Borrower exercises the LIBOR Option as provided in subsection 3.1, interest shall accrue on the principal amount of the LIBOR Portions outstanding at the
end of each day at a rate per annum equal to the Applicable Margin then in effect plus the LIBOR applicable to each LIBOR Portion for the corresponding Interest Period.
2.1.2 Default Rate of Interest. If so directed by the Majority Lenders, upon and after the occurrence of an Event of Default, and during the continuation thereof upon notice to Borrower, all of the Obligations shall bear interest at a rate per annum equal to 2.0% plus the interest rate otherwise applicable thereto (the “Default Rate”); provided, that (i) the Default Rate of interest shall apply to all of the Obligations automatically without notice to Borrower or any other Person and without further action by any Person upon the occurrence of an Event of Default as described in subsection 10.1.6 and (ii) in the event no applicable interest rate is otherwise expressly stated herein with respect to any such Obligation, the Default Rate in respect thereof shall be the sum of the Base Rate, plus the Applicable Margin then in effect for Base Rate Portions, plus 2.0%.
2.1.3 Maximum Interest. In no event whatsoever shall the aggregate of all amounts deemed interest hereunder or under the Term Notes and charged or collected pursuant to the terms of this Agreement or pursuant to the Term Notes exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto (the “Maximum Rate”). If any provisions of this Agreement or the Term Notes are in contravention of any such law, such provisions shall be deemed amended to conform thereto. If at any time, the amount of interest paid hereunder is limited by the Maximum Rate, and the amount at which interest accrues hereunder is subsequently below the Maximum Rate, the rate at which interest accrues hereunder shall remain at the Maximum Rate, until such time as the aggregate interest paid hereunder equals the amount of interest that would have been paid had the Maximum Rate not applied.
2.2 Computation of Interest and Fees. Interest hereunder shall be calculated daily and shall be computed on the actual number of days elapsed over a year of 360 days, provided that interest on Base Rate Portions bearing interest based on the Prime Rate shall be computed on the actual number of days elapsed over a year of 365 or 366 days, as applicable.
2.3 Fee Letter. Borrower shall pay to Administrative Agent certain fees and other amounts in accordance with the terms of the fee letter between Borrower and Administrative Agent, dated August 17, 2004, as amended, restated or otherwise modified from time to time (the “Fee Letter”).
2.4 [Intentionally Omitted].
2.5 [Intentionally Omitted].
2.6 [Intentionally Omitted].
2.7 Reimbursement of Expenses. If, at any time or times regardless of whether or not an Event of Default then exists, (i) Administrative Agent or the Joint Lead Arrangers incur reasonable legal or accounting expenses or any other reasonable costs or out-of-
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pocket expenses in connection with the negotiation and preparation of this Agreement or any of the other Loan Documents, or any syndication or attempted syndication of the Obligations (including, without limitation, printing and distribution of materials to prospective Lenders and all costs associated with bank meetings, but excluding any closing fees paid to Lenders in connection therewith); or (ii) Administrative Agent incurs reasonable legal or accounting expenses or any other reasonable costs or out-of-pocket expenses in connection with any (1) amendment of or modification of this Agreement or any of the other Loan Documents, the administration of this Agreement or any of the other Loan Documents and the transactions contemplated hereby and thereby; or (2) any attempt to inspect or verify the Collateral; or (iii) Administrative Agent incurs legal or accounting expenses or other costs or out-of-pocket expenses in connection with (1) any litigation, contest, dispute, suit, proceeding or action (whether instituted by Administrative Agent, any Lender, Borrower, any of its Subsidiaries or any other Person) relating to the Collateral, this Agreement or any of the other Loan Documents or any of Borrower’s or any of its Subsidiaries’ affairs; (2) any attempt to enforce any rights of Administrative Agent or any Lender against Borrower, any of its Subsidiaries or any other Person which may be obligated to Administrative Agent or any Lender by virtue of this Agreement or any of the other Loan Documents, including, without limitation, the Account Debtors; or (3) any attempt to protect, preserve, restore, collect, sell, liquidate or otherwise dispose of or realize upon the Collateral; then all such legal and accounting expenses and other costs and out-of-pocket expenses of Administrative Agent or the Joint Lead Arrangers (as applicable) shall be charged to Borrower; provided, that Borrower shall not be responsible for any such legal and accounting and other costs and out-of-pocket expenses (x) to the extent incurred because of the gross negligence or willful misconduct of Administrative Agent or such Joint Lead Arrangers (as applicable) as determined by a final non-appealable (or the time to appeal for which has run) judgment of a court of competent jurisdiction or (y) to the extent such costs and expenses result from a claim brought by Borrower against Administrative Agent or such Joint Lead Arranger (as applicable) for breach in bad faith of such Person’s obligations hereunder, if Borrower has obtained a final non-appealable (or the time to appeal for which has run) judgment in its favor on such claim as determined by a court of competent jurisdiction. All amounts chargeable to Borrower under this subsection 2.7 shall be Obligations secured by all of the Collateral, shall be payable on demand to Administrative Agent or the applicable Joint Lead Arranger, as the case may be, and shall bear interest from the date such demand is made until paid in full at the rate applicable to Base Rate Portions from time to time. Borrower shall also reimburse Administrative Agent for expenses incurred by Administrative Agent in its administration of the Collateral to the extent and in the manner provided in subsections 2.8 and 2.9 hereof.
2.8 Bank Charges. Borrower shall pay to Administrative Agent, for the benefit of itself or the applicable Lenders, on demand, any and all reasonable fees, costs or expenses which Administrative Agent or any Lender pays to a bank or other similar institution arising out of or in connection with (i) the forwarding to Borrower, any of its Subsidiaries or any other Person on behalf of Borrower, by Administrative Agent or any Lender, of proceeds of Term Loans made to Borrower pursuant to this Agreement and (ii) the depositing for collection by Administrative Agent or any Lender of any check or
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item of payment received or delivered to Administrative Agent or any Lender on account of the Obligations.
2.9 Collateral Protection Expenses; Appraisals. All reasonable out-of-pocket expenses incurred in protecting, storing, warehousing, insuring, handling, maintaining and shipping the Collateral, and any and all excise, property, sales, and use taxes imposed by any state, federal, or local authority on any of the Collateral or in respect of the sale thereof shall be borne and paid by Borrower. All such expenses shall be payable upon demand, and if Borrower fails to promptly pay any portion thereof when due, Administrative Agent may, at its option, but shall not be required to, pay the same and charge Borrower therefor. Additionally, if a Default or Event of Default shall have occurred and be continuing, Borrower shall bear the cost and expense of appraisals from appraisers engaged by Administrative Agent from time to time (who may be personnel of Administrative Agent), stating the then current fair market value of all or any portion of the real estate or personal property of any Credit Party or any of its Subsidiaries, including without limitation the Inventory of any Credit Party and its Subsidiaries.
2.10 Payment of Charges. All amounts chargeable to Borrower under this Agreement shall be Obligations secured by all of the Collateral, shall be, unless specifically otherwise provided, payable on demand and shall bear interest from the date demand was made or such amount is due, as applicable, until paid in full at the Default Rate.
2.11 No Deductions.
2.11.1 Any and all payments or reimbursements made hereunder or under any other Loan Document shall be made free and clear of and without deduction for any and all taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto; excluding, however, the following: (x) taxes imposed on or measured by the net income of Administrative Agent or any Lender or franchise taxes by the United States or by the jurisdiction under the laws of which Administrative Agent or any Lender is organized or doing business or any political subdivision thereof and (y) taxes imposed on or measured by its net income by the jurisdiction of Administrative Agent’s or such Lender’s applicable lending office or any political subdivision thereof or franchise taxes (all such taxes, levies, imposts, deductions, charges or withholdings and all liabilities with respect thereto, excluding such taxes imposed on net income, herein “Tax Liabilities”). If Borrower or any Subsidiary Guarantor shall be required by law to deduct any such Tax Liabilities from or in respect of any sum payable or reimbursable hereunder or under any other Loan Document to Administrative Agent or any Lender, then (x) the sum so payable or reimbursable shall be increased as may be necessary so that, after all required deductions are made, Administrative Agent or such Lender receives an amount equal to the sum it would have received had no such deductions been made, (y) Borrower or such Subsidiary Guarantor shall make such deductions and pay the full amount deducted to the relevant taxing authority or other authority in accordance with applicable law and (z) Borrower or such Subsidiary Guarantor shall deliver to Administrative Agent evidence of such payment.
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2.11.2 In addition Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies of the United States or any political subdivision thereof or any applicable foreign jurisdiction, and all liabilities with respect thereto, which arise from any payment made under any Loan Document or from the execution, delivery or registration of, or otherwise with respect to, any Loan Document (collectively, “Other Taxes”).
2.11.3 Borrower shall indemnify Administrative Agent and each Lender for the amount of Tax Liabilities and Other Taxes (including any Tax Liabilities or Other Taxes imposed by any jurisdiction on amounts payable under this subsection 2.11) paid by Administrative Agent or such Lender (as the case may be) and any liability (including for penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Tax Liabilities or Other Taxes were correctly or legally asserted. This indemnification payment shall be made within 30 days from the date Administrative Agent or such Lender (as the case may be) makes written demand therefor.
2.11.4 Each Lender that is organized under the laws of any jurisdiction other than the United States or any state or political subdivision thereof agrees (i) to furnish to Administrative Agent and Borrower (x) either IRS Form W-8BEN or IRS Form W-8ECI, in each case certifying such Lender’s entitlement to a complete exemption from, or a reduced rate of, United States federal withholding tax on all payments made hereunder or under any other Loan Document, (y) to the extent that such Lender does not act or ceases to act for its own account with respect to any portion of any amounts paid or payable to such Lender hereunder or under any other Loan Document, IRS Form W-8IMY together with any information such Lender chooses to transmit with such form, and any other certificate or statement required under applicable United States laws and regulations, to establish that such Lender is not acting for its own account with respect to a portion of any such amounts paid or payable to such Lender or (z) any other form, certificate or document prescribed by the IRS certifying as to such Lender’s entitlement to complete exemption from, or a reduced rate of, United States federal withholding tax on all payments made hereunder or under any other Loan Document, (ii) to provide to Administrative Agent and Borrower new forms upon the obsolescence of any previously delivered forms and comparable statements in accordance with applicable United States laws and regulations and amendments, duly executed and completed by such Lender, and (iii) to comply from time to time with all applicable United States laws and regulations with regard to such withholding tax exemption or reduction in withholding tax rate. Notwithstanding any other provision of this subsection 2.11.4, no Lender that is organized under the laws of any jurisdiction other than the United States or any state or political subdivision thereof shall be required to deliver after the date such Lender became a party to this Agreement any form, certificate, document or statement pursuant to this subsection 2.11.4 that such Lender is not legally entitled to deliver.
2.11.5 Notwithstanding anything to the contrary contained in subsection 2.11.1, (i) Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold Tax Liabilities imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, fees or other amounts payable
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hereunder for the account of any Lender that is organized under the laws of any jurisdiction other than the United States or any state or political subdivision thereof to the extent that such Lender has not provided to Borrower IRS forms that establish entitlement to a complete exemption from, or a reduced rate of, United States federal withholding tax (and Borrower hereby agrees to give Administrative Agent prompt written notice in the event that it is required to so deduct or withhold) and (ii) Borrower shall not be obligated pursuant to subsection 2.11.1 hereof to pay additional amounts to any Lender that is organized under the laws of any jurisdiction other than the United States or any state or political subdivision thereof in respect of Tax Liabilities imposed by the United States to the extent that (x) the obligation to pay such additional amounts would not have arisen but for the failure of such Lender to comply with the requirements of subsection 2.11.4 or (y) the obligation to pay such additional amounts does not result from a change in applicable laws (including applicable statutes, regulations, administrative interpretations, judicial decisions and treaties) occurring after the date on which such Lender became a party to this Agreement.
2.11.6 Within 30 days after the date of any payment of Tax Liabilities or Other Taxes, Borrower shall furnish to Administrative Agent the original or a certified copy of a receipt (or any other form, certificate or document reasonably acceptable to Administrative Agent) evidencing payment thereof.
2.11.7 Without prejudice to the survival of any other agreement of Borrower hereunder, the agreements and obligations of Borrower contained in this subsection 2.11 shall survive the termination of this Agreement and the payment in full of the Obligations.
2.11.8 If any Lender determines, in its sole discretion, that it has actually received a refund in respect of any Tax Liabilities with respect to which Borrower has paid additional amounts to such Lender pursuant to subsection 2.11.1, such Lender shall promptly notify Administrative Agent and pay such refund over to Borrower (but only to the extent of additional amounts paid by Borrower under subsection 2.11.1 with respect to Tax Liabilities giving rise to such refund), on an after-tax basis, net of all expenses incurred by such Lender in connection with obtaining such refund and without interest; provided, that Borrower, upon the request of such Lender, shall repay to such Lender the amount previously paid over to Borrower (plus any penalties, interest or other charges imposed by the relevant taxing authority) in the event that such Lender is required to repay such refund to such taxing authority. Nothing in this subsection 2.11.8 shall interfere with the right of any Lender to arrange its tax affairs in whatever manner it deems fit or require any Lender to disclose to Borrower, any of its Subsidiaries or any other Person any information or any computations relating to its tax affairs.
2.11.9 (a) If Administrative Agent or any Lender claims reimbursement or compensation under this subsection 2.11, Administrative Agent shall determine the amount thereof and shall deliver to Borrower (with, if applicable, a copy to the affected Lender) a statement setting forth in reasonable detail the amount payable to Administrative Agent or the affected Lender, and such statement shall be conclusive and binding on Borrower in the absence of manifest error. Failure or delay on the part of
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Administrative Agent or any Lender to demand compensation pursuant to this subsection 2.11 shall not constitute a waiver of Administrative Agent’s or such Lender’s right to demand such compensation; provided that Borrower shall not be required to compensate Administrative Agent or a Lender pursuant to this subsection 2.11 for any Tax Liabilities, Other Taxes or additional amounts incurred more than 180 days prior to the date that Administrative Agent or such Lender, as the case may be, notifies Borrower of its intention to claim compensation under this subsection; provided further that, if the circumstances giving rise to such claim are retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.
(b) If a Lender claims any compensation pursuant to this subsection 2.11, then (a) such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to designate a different lending office or to file any statement or document reasonably requested by Borrower if the making of such designation or filing would avoid the need for, or reduce the amount of, any such amounts and would not, in the sole discretion of such Lender, be otherwise disadvantageous to such Lender and (b) at Borrower’s request, Administrative Agent or an Eligible Assignee reasonably acceptable to Administrative Agent and Borrower shall have the right (but not the obligation) to purchase from such Lender, and each such Lender shall, upon such request, sell and assign to Administrative Agent or such Eligible Assignee, all of such Lender’s outstanding Term Loans hereunder. Such sale and assignment shall be consummated promptly after Administrative Agent has arranged for a purchase by Administrative Agent or an Eligible Assignee pursuant to an Assignment and Acceptance Agreement, at a price equal to the outstanding principal balance of such Lender’s Term Loan, plus accrued interest and fees, without premium or discount.
SECTION 3. LOAN ADMINISTRATION
3.1 Manner of Borrowing/LIBOR Option. Borrowings under the credit facility established pursuant to Section 1 hereof shall be as follows:
3.1.1 Term Loan Request. Borrower shall give Administrative Agent notice of its intention to borrow the Term Loans (such notice to be in the form of Exhibit 3.1.1 hereto), in which notice Borrower shall specify the amount of the proposed borrowing of Term Loans and the proposed borrowing date (which shall be the Closing Date), no later than 11:00 a.m. (New York City time) one Business Day prior to the Closing Date. All borrowings made on the Closing Date and during the period ending five (5) Business Days thereafter must be made as Base Rate Portions.
3.1.2 Disbursement. The proceeds of Term Loans requested under subsection 3.1.1 shall be disbursed by Administrative Agent in lawful money of the United States of America in immediately available funds by wire transfer to such bank account as may be agreed upon by Borrower and Administrative Agent.
3.1.3 [Intentionally Omitted].
3.1.4 [Intentionally Omitted].
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3.1.5 [Intentionally Omitted].
3.1.6 Electronic Communications. As an accommodation to Borrower, unless a Default or an Event of Default has occurred and is continuing, Administrative Agent may, in Administrative Agent’s sole discretion, permit electronic transmittal of instructions, authorizations, agreements or reports to Administrative Agent. Unless Borrower specifically directs Administrative Agent in writing not to accept or act upon telephonic or electronic communications from Borrower, Administrative Agent shall not have any liability to Borrower or any of its Subsidiaries for any loss or damage suffered by Borrower or any of its Subsidiaries as a result of Administrative Agent’s honoring of any requests, execution of any instructions, authorizations or agreements or reliance on any reports communicated to it telephonically or electronically and purporting to have been sent to Administrative Agent by Borrower, and Administrative Agent shall not have any duty to verify the origin of any such communication or the authority of the Person sending it.
3.1.7 LIBOR Portions. Each LIBOR Request shall be irrevocable and binding on Borrower. In no event shall Borrower be permitted to have outstanding at any one time LIBOR Portions with more than seven (7) different Interest Periods.
3.1.8 Conversion of Base Rate Portions. Provided that as of both the date of the LIBOR Request and the first day of the Interest Period, no Default or Event of Default has occurred and is continuing, Borrower may, on any Business Day more than five (5) Business Days after the Closing Date, convert any Base Rate Portion into a LIBOR Portion. If Borrower desires to convert a Base Rate Portion, it shall give Administrative Agent a LIBOR Request no later than 11:00 a.m. (New York City time) on the third Business Day prior to the requested conversion date. After giving effect to any conversion of Base Rate Portions to LIBOR Portions, Borrower shall not be permitted to have outstanding at any one time LIBOR Portions with more than seven (7) different Interest Periods.
3.1.9 Continuation of LIBOR Portions. Provided that, as of both the date of the LIBOR Request and the first day of the Interest Period, no Default or Event of Default has occurred and is continuing, Borrower may, on any Business Day, continue any LIBOR Portions into a subsequent Interest Period of the same or a different permitted duration. If Borrower desires to continue a LIBOR Portion, Borrower shall give Administrative Agent a LIBOR Request no later than 11:00 a.m. (New York City time) on the third Business Day prior to the requested continuation date. After giving effect to any continuation of LIBOR Portions, Borrower shall not be permitted to have outstanding at any one time LIBOR Portions with more than seven (7) different Interest Periods. If Borrower shall fail to give timely notice of its election to continue any LIBOR Portion or portion thereof as provided above, or if such continuation shall not be permitted, such LIBOR Portion or portion thereof, unless such LIBOR Portion shall be repaid, shall automatically be converted into a Base Rate Portion at the end of the Interest Period then in effect with respect to such LIBOR Portion.
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3.1.10 Inability to Make LIBOR Portions. Notwithstanding any other provision hereof, if any applicable law, treaty, regulation or directive, or any change therein or in the interpretation or application thereof, shall make it unlawful for any Lender (for purposes of this subsection 3.1.10, the term “Lender” shall include the office or branch where such Lender or any Person then controlling such Lender makes or maintains any LIBOR Portions) to make or maintain its LIBOR Portions, or if with respect to any Interest Period, Administrative Agent is unable to determine the LIBOR relating thereto, or adverse or unusual conditions in, or changes in applicable law relating to, the London interbank market make it, in the reasonable judgment of Administrative Agent, impracticable to fund therein any of the LIBOR Portions, or make the projected LIBOR unreflective of the actual costs of funds therefor to any Lender, then, on notice thereof by such Lender or Administrative Agent (as applicable) to Borrower (with a copy to Administrative Agent, if applicable), the obligation of Administrative Agent and Lenders to make or continue LIBOR Portions or convert Base Rate Portions to LIBOR Portions hereunder shall forthwith be suspended until such Lender or Administrative Agent notifies Borrower (with a copy to Administrative Agent, if applicable) that such circumstances no longer exist and, Borrower shall, if any affected LIBOR Portions are then outstanding, promptly upon request from Administrative Agent, convert such affected LIBOR Portions into Base Rate Portions. Administrative Agent or the relevant Lender (as applicable) will endeavor to give Borrower prompt notice of the cessation of the circumstance giving rise to the suspension of LIBOR availability, provided that the failure to give any such notice shall not result in any liability of Administrative Agent or any Lender hereunder or in the modification, alteration, impairment, or waiver of the rights of Administrative Agent or any Lender hereunder.
3.1.11 Funding by Lenders; Presumption of Administrative Agent. Unless Administrative Agent shall have received notice from a Lender prior to the proposed date of any borrowing that such Lender will not make available to Administrative Agent such Lender’s share of such borrowing, Administrative Agent may assume that such Lender has made such share available on such date and may, in reliance upon such assumption, make available to Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable borrowing available to Administrative Agent, then the applicable Lender and Borrower severally agree to pay to Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to Borrower to but excluding the date of payment to Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Fed Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (B) in the case of a payment to be made by Borrower, the interest rate applicable (or that would be applicable) to any Base Rate Portion. If Borrower and such Lender shall pay such interest to Administrative Agent for the same or an overlapping period, Administrative Agent shall promptly remit to Borrower the amount of such interest paid by Borrower for such period. If such Lender pays its share of the applicable borrowing to Administrative Agent, then the amount so paid shall constitute such Lender’s Term Loan included in such borrowing. Any payment by Borrower shall be without prejudice to any claim Borrower may have against a Lender that shall have failed to make such payment to Administrative Agent.
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3.2 Payments.
3.2.1 Principal.
(i) [Intentionally Omitted].
(ii) Term Loan. Principal payable on account of the Term Loan shall be payable by Borrower in twenty-one (21) quarterly installments. Each of the first twenty (20) installments of principal shall be in an amount equal to $687,500 and shall be payable on the first day of each quarter, commencing on September 30, 2004 and ending on June 30, 2009. The final installment of principal shall be in the amount of $261,250,000 or otherwise in an amount equal to the then remaining principal balance of the Term Loans, and shall be payable on the last day of the Term. Each such installment shall be payable to Administrative Agent for the account of the applicable Lender. The Term Loans shall be payable in full on the last day of the Term. Payments or prepayments of the Term Loans may not be reborrowed.
3.2.2 Interest.
(i) Base Rate Portion. Interest accrued on the Base Rate Portion shall be due and payable on the earliest of (1) the first calendar day of each fiscal quarter (for the immediately preceding fiscal quarter), computed through the last calendar day of the preceding fiscal quarter, (2) the occurrence of an Event of Default in consequence of which Administrative Agent or Majority Lenders elect to accelerate the maturity and payment of the Obligations (or in consequence of which payment of the Obligations is automatically accelerated) or (3) termination of this Agreement pursuant to Section 4 hereof.
(ii) LIBOR Portion. Interest accrued on each LIBOR Portion shall be due and payable on each LIBOR Interest Payment Date and on the earlier of (1) the occurrence of an Event of Default in consequence of which Administrative Agent or Majority Lenders elect to accelerate the maturity and payment of the Obligations (or in consequence of which payment of the Obligations is automatically accelerated) or (2) termination of this Agreement pursuant to Section 4 hereof.
(iii) Default Interest. Interest accrued on the Obligations at the Default Rate shall be due and payable on demand by Administrative Agent.
3.2.3 Costs, Fees and Charges. Costs, fees and charges payable pursuant to this Agreement shall be payable by Borrower, as and when provided in Section 2 or Section 3 hereof, as applicable, to Administrative Agent or a Lender, as applicable, or to any other Person designated by Administrative Agent or such Lender in writing.
3.2.4 Other Obligations. The balance of the Obligations requiring the payment of money, if any, shall be payable by Borrower to Administrative Agent for distribution to Lenders, as appropriate, as and when provided in this Agreement, the Other Agreements or the Security Documents, or if not so provided, on demand.
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3.2.5 Prepayment of/Failure to Borrow LIBOR Portions. Borrower may prepay a LIBOR Portion only upon three (3) Business Days’ prior written notice to Administrative Agent (which notice shall be irrevocable). In the event of (i) the payment of any principal of any LIBOR Portion other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (ii) the conversion of any LIBOR Portion other than on the last day of the Interest Period applicable thereto, or (iii) the failure to borrow, convert, continue or prepay any LIBOR Portion on the date specified in any notice delivered pursuant hereto, then, in any such event, Borrower shall compensate each Lender for the loss, cost and expense attributable to such event, as determined by such Lender in a manner consistent with its customs and practices. If any Lender claims compensation under this subsection 3.2.5, such Lender shall determine the amount thereof and shall deliver to Borrower, within 30 days of the occurrence of the Breakage Event giving rise to a claim for compensation, a statement setting forth in reasonable detail the amount payable to such Lender, and such statement shall be conclusive and binding on Borrower in the absence of manifest error. Amounts payable pursuant to this subsection 3.2.5 shall be due and payable by Borrower within 10 days of receipt of such statement from such Lender.
3.2.6 Payments by Borrower; Presumptions by Administrative Agent. Unless Administrative Agent shall have received notice from Borrower prior to the date on which any payment is due to Administrative Agent for the account of the Lenders hereunder that Borrower will not make such payment, Administrative Agent may assume that Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to Administrative Agent forthwith on demand the amount so distributed to such Lender, in immediately available funds 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 Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation. A notice of Administrative Agent to any Lender with respect to any amount owing under this subsection 3.2.6 shall be conclusive, absent manifest error.
3.3 Mandatory and Optional Prepayments.
3.3.1 Proceeds of Sale, Loss, Destruction or Condemnation of Collateral. Except with respect to sales or dispositions permitted by subsection 8.2.8 (unless subsection 8.2.8 specifically provides for a prepayment of the Term Loans and other Obligations), if (a) Borrower or any of its Subsidiaries sells any of its Property or if any Property of Borrower or any of its Subsidiaries is lost or destroyed or taken by condemnation, and (b) at the time that a prepayment of Term Loans or other Obligations would otherwise be required under this subsection 3.3.1, the Available Liquidity is greater than or equal to $50,000,000 after giving effect to such prepayment, then Borrower shall, unless otherwise agreed to by the Majority Lenders and, in any event, only to the extent Borrower does not apply such Net Cash Proceeds to the obligations under the First Lien Debt Documents through the optional or mandatory prepayment of
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the principal amount of such obligations (and, if such prepayment is in respect of an amount that can, by its terms, be reborrowed, a corresponding permanent reduction of commitments) pursuant to the terms thereof, pay to Administrative Agent for the ratable benefit of Lenders as and when received by Borrower or any such Subsidiary as a mandatory prepayment of the Term Loans and other Obligations, as herein provided, a sum equal to the Net Cash Proceeds received by Borrower or such Subsidiary from such sale, loss, destruction or condemnation, to be applied to the Term Loans as follows:
(i) except as provided in clause (ii) below, the applicable prepayments of Term Loans pursuant to this subsection 3.3.1 (or pursuant to subsection 3.3.2 or 3.3.4) shall be applied to the installments of principal payable in respect of the Term Loans, in the inverse order of maturity (beginning with the payment due on the last day of the Term), ratably amongst any Base Rate Portion and all LIBOR Portions (and amongst all Interest Periods thereof) and ratably amongst the Lenders until paid in full;
(ii) notwithstanding clause (i) above, unless an Event of Default has occurred and is continuing on the date such Net Cash Proceeds are recovered by Borrower or its applicable Subsidiary, Administrative Agent shall remit any Net Cash Proceeds with respect to any loss or destruction of Nonrental Equipment or real Property received by Administrative Agent to Borrower or its applicable Subsidiary (so long as such Subsidiary is not a Foreign Subsidiary) for use in replacing or repairing the damaged Collateral or purchasing assets used or useful in the business of Borrower or such applicable Subsidiary. Pending such use such amounts shall not be required to so prepay the Term Loans until the expiration of 180 days from such receipt at which point that portion of such amount which has not been so used during such 180-day period shall be applied to the Term Loans and other Obligations in the manner specified in clause (i) of this subsection 3.3.1 until payment thereof in full.
3.3.2 Proceeds from Issuance of Additional Indebtedness or Equity. If (a) Borrower or any of its Subsidiaries issues any additional Indebtedness (other than Permitted Indebtedness) or issues any additional equity (other than any issuance of Securities permitted by clauses (i), (ii), (iii) or (iv) of subsection 8.2.9), and (b) at the time that a prepayment of Term Loans or other Obligations would otherwise be required under this subsection 3.3.2, the Available Liquidity is greater than or equal to $50,000,000 after giving effect to such prepayment, then Borrower shall, to the extent it does not apply such Net Cash Proceeds to the obligations under the First Lien Debt Documents through the optional or mandatory prepayment of the principal amount of such obligations (and, if such prepayment is in respect of an amount that can, by its terms, be reborrowed, a corresponding permanent reduction of commitments) pursuant to the terms thereof, pay to Administrative Agent for the ratable benefit of Lenders, when and as received by Borrower or such Subsidiary and as a mandatory prepayment of the Obligations, a sum equal to, in the case of such an issuance of Indebtedness, 100%, or, in the case of such an issuance of equity, 50% of the Net Cash Proceeds to Borrower or such Subsidiary of the issuance of such Indebtedness or equity, as applicable. Any such prepayment shall be applied to the Term Loans in the manner specified in clause (i) of subsection 3.3.1.
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3.3.3 [Intentionally Omitted].
3.3.4 Excess Cash Flow. No later than the earlier of (i) 100 days after the end of the period beginning July 1, 2004 and ending December 31, 2005 and each fiscal year of Borrower thereafter and (ii) 10 days following the date on which the financial statements with respect to such period are delivered pursuant to subsection 8.1.3(ii)(A), if, and to the extent that, at the time that a prepayment of Term Loans or other Obligations would be otherwise required under this subsection 3.3.4, the Available Liquidity is greater than or equal to $50,000,000 after giving effect to such prepayment, then Borrower shall, to the extent it does not apply such Excess Cash Flow to the obligations under the First Lien Debt Documents through the optional or mandatory prepayment of the principal amount of such obligations (and, if such prepayment is in respect of an amount that can, by its terms, be reborrowed, a corresponding permanent reduction of commitments) pursuant to the terms thereof, pay to Administrative Agent for the ratable benefit of Lenders an amount equal to 50% of Excess Cash Flow for the period or fiscal year, as applicable, then ended; provided that any Lender may elect, by notice to Administrative Agent at least five (5) Business Days prior to the applicable prepayment date, to decline all or any portion of any prepayment of its Term Loans pursuant to this subsection 3.3.4 with respect to the prepayment to be made for the period ending December 31, 2005, in which case the amount of such prepayment that would have been applied to prepay Term Loans but was so declined may be retained by Borrower to be used for any other purpose permitted by this Agreement. Borrower agrees to notify Administrative Agent of the amount of any prepayment to be offered to the Lenders pursuant to this subsection 3.3.4 at least seven (7) Business Days prior to the applicable prepayment date. Any such prepayment shall be applied to the Term Loans in the manner specified in clause (i) of subsection 3.3.1 until the payment thereof in full.
3.3.5 Optional Prepayments. Borrower may, at its option from time to time upon not less than one (1) Business Day’s prior written notice in the case of a Base Rate Portion or three (3) Business Days’ prior written notice in the case of a LIBOR Portion to Administrative Agent (such notice to be in the form of Exhibit 3.3.5), prepay installments of the Term Loans, provided that the amount of any such prepayment is at least $500,000 and in integral multiples of $100,000 above $500,000, and that such prepayments are made ratably amongst Lenders with respect to all Term Loans. Each optional prepayment of Term Loans shall be applied to ratably reduce each scheduled installment of principal thereof set forth in subsection 3.2.1(ii).
3.3.6 Call Premiums. In addition to charges under subsection 3.2.5 applicable to prepayments of LIBOR Portions, if applicable, in the event that the Term Loans are prepaid under subsections 3.3.1, 3.3.2 or 3.3.5 in whole or in part prior to the second anniversary of the Closing Date, Borrower shall pay to the Lenders a prepayment premium on the amount so prepaid as follows:
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Relevant Period |
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Prepayment Premium as a |
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On or prior
to the first anniversary of the |
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2.0 |
% |
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On or prior
to the second anniversary of |
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1.0 |
% |
3.4 Application of Payments and Collections.
3.4.1 Collections. All items of payment received by Administrative Agent by 12:00 noon, New York City time, on any Business Day shall be deemed received on that Business Day. All items of payment received after 12:00 noon, New York City time, on any Business Day shall be deemed received on the following Business Day. Except as otherwise expressly provided herein, all payments by Credit Parties hereunder shall be made to Administrative Agent for the account of the respective Lenders to which such payment is owed, at Administrative Agent’s office in dollars and United States dollars. Administrative Agent will promptly distribute to each Lender its Aggregate Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s lending office.
3.4.2 Apportionment, Application and Reversal of Payments. Principal and interest payments shall be apportioned ratably among Lenders (according to the unpaid principal balance of the Term Loans to which such payments relate held by each Lender). All payments shall be remitted to Administrative Agent and all such payments not relating to principal or interest in respect of specific Term Loans, or not constituting payment of specific fees, and all proceeds of Accounts and Inventory, or, except as provided in subsection 3.3.1, other Collateral received by Administrative Agent, shall be applied, ratably, subject to the provisions of this Agreement, first, to pay any fees, indemnities, or expense reimbursements then due to Administrative Agent or Lenders from Borrower; second, to pay interest due from Borrower in respect of all Term Loans; third, to pay or prepay principal of all Term Loans; and fourth, to the payment of any other Obligation due to Administrative Agent or any Lender by Borrower. After the occurrence and during the continuance of an Event of Default, Administrative Agent shall have the continuing exclusive right to apply and reapply any and all such payments and collections received at any time or times hereafter by Administrative Agent or its agent against the Obligations, in such manner as Administrative Agent may deem advisable, notwithstanding any entry by Administrative Agent or any Lender upon any of its books and records, provided that such application or reapplication shall be consistent with the terms of this subsection 3.4.2.
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3.5 All Term Loans to Constitute One Obligation. The Term Loans shall constitute one general Obligation of Borrower and shall be secured by Administrative Agent’s Lien upon all of the Collateral.
3.6 Loan Account. Administrative Agent shall enter all Term Loans as debits to a loan account (the “Loan Account”) and shall also record in the Loan Account all payments made by Borrower on any Obligations and all proceeds of Collateral which are finally paid to Administrative Agent, and may record therein, in accordance with customary accounting practice, other debits and credits, including interest and all charges and expenses properly chargeable to Borrower pursuant to this Agreement or any other Loan Document.
3.7 [Intentionally Omitted]
3.8 Increased Costs. If any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) adopted or implemented after the date of this Agreement and having general applicability to all banks or finance companies within the jurisdiction in which any Lender operates (excluding, for the avoidance of doubt, the effect of and phasing in of capital requirements or other regulations or guidelines passed prior to the date of this Agreement), or any interpretation or application thereof by any governmental authority charged with the interpretation or application thereof, or the compliance of such Lender therewith, shall:
(i) (1) subject such Lender to any tax with respect to this Agreement (other than (a) any tax based on or measured by net income or otherwise in the nature of a net income tax, including, without limitation, any franchise tax or any similar tax based on capital, net worth or comparable basis for measurement and (b) any tax collected by a withholding on payments and which neither is computed by reference to the net income of the payee nor is in the nature of an advance collection of a tax based on or measured by the net income of the payee) or (2) change the basis of taxation of payments to such Lender of principal, fees, interest or any other amount payable hereunder or under any Loan Documents (other than in respect of (a) any tax based on or measured by net income or otherwise in the nature of a net income tax, including, without limitation, any franchise tax or any similar tax based on capital, net worth or comparable basis for measurement and (b) any tax collected by a withholding on payments and which neither is computed by reference to the net income of the payee nor is in the nature of an advance collection of a tax based on or measured by the net income of the payee);
(ii) impose, modify or hold applicable any reserve (except any reserve taken into account in the determination of the applicable LIBOR), special deposit, assessment or similar requirement against assets held by, or deposits in or for the account of, loans by, or other credit extended by, any office of such Lender, including (without limitation) pursuant to Regulation D of the Board of Governors of the Federal Reserve System; or
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(iii) impose on such Lender or the London interbank market any other condition with respect to any Loan Document;
and the result of any of the foregoing is to increase the cost to such Lender of making, renewing or maintaining Term Loans hereunder or the result of any of the foregoing is to reduce the rate of return on such Lender’s capital as a consequence of its obligations hereunder, or the result of any of the foregoing is to reduce the amount of any payment (whether of principal, interest or otherwise) in respect of any of the Term Loans, then, in any such case, Borrower shall pay such Lender, upon written demand therefor not later than thirty (30) days following its receipt of notice of the imposition of such increased costs, such additional amount as will compensate such Lender for such additional cost or such reduction, as the case may be, to the extent such Lender has not otherwise been compensated, with respect to a particular Term Loan, for such increased cost as a result of an increase in the Base Rate or the LIBOR. An officer of the applicable Lender shall determine the amount of such additional cost or reduced amount using reasonable averaging and attribution methods and deliver to Borrower a written statement setting forth the amount of such additional cost or reduced amount, including an explanation of such additional cost or reduction. Such written statement shall be conclusive absent demonstrable error. Failure or delay on the part of any Lender to demand compensation pursuant to this subsection 3.8 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that Borrower shall not be required to compensate a Lender pursuant to this subsection 3.8 for any increased costs or reductions incurred more than 180 days prior to the date that such Lender notifies Borrower of its intention to claim compensation under this subsection; provided, further that, if the circumstances giving rise to such claim are retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. If a Lender claims any additional cost or reduced amount pursuant to this subsection 3.8, then (a) such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to designate a different lending office or to file any statement or document reasonably requested by Borrower if the making of such designation or filing would avoid the need for, or reduce the amount of, any such additional cost or reduced amount and would not, in the sole discretion of such Lender, be otherwise disadvantageous to such Lender and (b) at Borrower’s request, Administrative Agent or an Eligible Assignee reasonably acceptable to Administrative Agent and Borrower shall have the right (but not the obligation) to purchase from such Lender, and each such Lender shall, upon such request, sell and assign to Administrative Agent or such Eligible Assignee, all of such Lender’s outstanding Term Loans hereunder. Such sale and assignment shall be consummated promptly after Administrative Agent has arranged for a purchase by Administrative Agent or an Eligible Assignee pursuant to an Assignment and Acceptance Agreement, at a price equal to the outstanding principal balance of such Lender’s Term Loans, plus accrued interest and fees, without premium or discount.
3.9 Basis for Determining Interest Rate Inadequate. In the event that Administrative Agent or any Lender shall have determined that:
(i) reasonable means do not exist for ascertaining the LIBOR for any Interest Period; or
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(ii) Dollar deposits in the relevant amount and for the relevant maturity are not available in the London interbank market with respect to a proposed LIBOR Portion, or a proposed conversion of a Base Rate Portion into a LIBOR Portion; then
Administrative Agent or such Lender shall give Borrower prompt written, telephonic or electronic notice of the determination of such effect. If such notice is given and until Administrative Agent or such Lender shall notify Borrower that the circumstance giving rise to such notice no longer exists, (i) any such requested LIBOR Portion shall be made as a Base Rate Portion, unless Borrower shall notify Administrative Agent no later than 10:00 a.m. (New York City time) three (3) Business Days’ prior to the date of such proposed borrowing that the request for such borrowing shall be canceled or made as an unaffected type of LIBOR Portion, and (ii) any Base Rate Portion which was to have been converted to an affected type of LIBOR Portion shall be continued as or converted into a Base Rate Portion, or, if Borrower shall notify Administrative Agent, no later than 10:00 a.m. (New York City time) three (3) Business Days prior to the proposed conversion, shall be maintained as an unaffected type of LIBOR Portion. Administrative Agent or the relevant Lender (as applicable) will endeavor to give Borrower prompt notice of the cessation of the circumstances giving rise to the suspension of LIBOR availability, provided that the failure to give any such notice shall not result in any liability of Administrative Agent or any Lender hereunder or in the modification, alteration, impairment, or waiver of the rights of Administrative Agent or any Lender hereunder.
3.10 Sharing of Payments, Etc. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on account of any Term Loan made by it (other than any payment (x) pursuant to subsection 2.11 or subsection 3.8, (y) in connection with an assignment of its interest hereunder pursuant to subsection 11.9 or (z) in connection with any amendment or waiver as contemplated by the last sentence of subsection 11.10) in excess of its ratable share of payments on account of Term Loans made by all Lenders, such Lender shall forthwith purchase from each other Lender such participation in such Term Loan as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each other Lender; provided, that, if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lenders the purchase price to the extent of such recovery, together with an amount equal to such Lender’s ratable share (according to the proportion of (i) the amount of such Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this subsection 3.10 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if such Lender were the direct creditor of Borrower in the amount of such participation. Notwithstanding anything to the contrary contained herein, all purchases and repayments to be made under this subsection 3.10 shall be made through Administrative Agent.
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SECTION 4. TERM AND TERMINATION
4.1 Term of Agreement. This Agreement shall be in effect for a period of 6 years from the date hereof, through and including August 17, 2010 (the “Term”), unless terminated as provided in subsection 4.2 hereof.
4.2 Termination.
4.2.1 Termination by Lenders. Administrative Agent may, and at the direction of Majority Lenders shall, accelerate the Obligations, all without notice upon or after the occurrence and during the continuance of an Event of Default in accordance with subsection 10.2.
4.2.2 Termination by Borrower. Upon at least three (3) Business Days prior written notice to Administrative Agent and Lenders, Borrower may, at its option, terminate this Agreement; provided, however, that (i) no such termination shall be effective until Borrower has paid to Administrative Agent’s satisfaction all of the Obligations (other than unasserted contingent indemnification obligations that are not then due and payable, whether by acceleration, termination or otherwise), in immediately available funds, and (ii) any such termination occurring prior to the second anniversary of the date hereof shall be accompanied by the prepayment premium on the amount prepaid set forth in subsection 3.3.6. Any notice of termination given by Borrower shall be irrevocable unless all Lenders otherwise agree in writing (provided that a notice of a refinancing of the entirety of the Term Loans delivered by Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by Borrower (by notice to Administrative Agent on or prior to the effective date) if such condition is not satisfied). Borrower may elect to terminate this Agreement in its entirety only. No section of this Agreement may be terminated singly.
4.2.3 Effect of Termination. All of the Obligations (other than unasserted contingent indemnification obligations that are not then due and payable, whether by acceleration, termination or otherwise) shall be immediately due and payable upon the termination date stated in any notice of termination of this Agreement. All undertakings, agreements, covenants, warranties and representations of any Credit Party contained in the Loan Documents shall survive any such termination and the payment in full of the Obligations, and Administrative Agent shall retain its Liens in the Collateral and Administrative Agent and each Lender shall retain all of its rights and remedies under the Loan Documents notwithstanding such termination until all Obligations (other than unasserted contingent indemnification obligations that are not then due and payable, whether by acceleration, termination or otherwise) have been discharged or paid, in full, in immediately available funds, including, without limitation, all Obligations under subsection 3.2.5 or subsection 3.3.6, if any, resulting from such termination. Notwithstanding the foregoing or the payment in full of the Obligations, (i) Administrative Agent shall not be required to terminate its Liens in the Collateral unless, with respect to any loss or damage Administrative Agent or any Lender may incur as a result of dishonored checks or other items of payment received by Administrative Agent from Borrower or any Account Debtor and applied to the Obligations, Administrative
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Agent shall, at its option, (A) have received a written agreement reasonably satisfactory to Administrative Agent, executed by Borrower and by any Person whose loans or other advances to Borrower are used in whole or in part to satisfy the Obligations, indemnifying Administrative Agent or such Lender (as applicable) from any such loss or damage or (B) have retained cash Collateral or other Collateral for such period of time as Administrative Agent or such Lender (as applicable), in its reasonable discretion, may deem necessary to protect Administrative Agent or such Lender (as applicable) from any such loss or damage and (ii) the indemnification obligations of each Credit Party under subsection 13.2 shall survive the payment in full of the Obligations and the termination of this Agreement.
SECTION 5. SECURITY INTERESTS
5.1 Security Interest in Collateral
5.1.1 Grant of Security Interest. To secure the prompt payment and performance to Administrative Agent and each Lender of the Obligations, each Credit Party hereby grants to Administrative Agent for the benefit of itself and each Lender a continuing Lien upon all of the following Property and interests in Property of such Credit Party, whether now owned or existing or hereafter created, acquired or arising and wheresoever located:
(i) Accounts;
(ii) Certificated Securities;
(iii) Chattel Paper;
(iv) Computer Hardware and Software and all rights with respect thereto, including, any and all licenses, options, warranties, service contracts, program services, test rights, maintenance rights, support rights, improvement rights, renewal rights and indemnifications, and any substitutions, replacements, additions or model conversions of any of the foregoing;
(v) Deposit Accounts;
(vi) Documents;
(vii) Equipment;
(viii) Financial Assets;
(ix) Fixtures;
(x) General Intangibles, including Payment Intangibles and Software;
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(xi) Goods (including all of its Equipment, Fixtures and Inventory), and all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor;
(xii) Instruments;
(xiii) Intellectual Property;
(xiv) Inventory;
(xv) Investment Property;
(xvi) Money;
(xvii) Letter-of-Credit Rights;
(xviii) Payment Intangibles;
(xix) Security Entitlements;
(xx) Software;
(xxi) Supporting Obligations;
(xxii) Uncertificated Securities; and
(xxiii) To the extent not included in the foregoing, all other personal property of any kind or description;
together with all books, records, writings, data bases, information and other property relating to, used or useful in connection with, or evidencing, embodying, incorporating or referring to any of the foregoing, and all Proceeds, products, offspring, rents, issues, profits and returns of and from any of the foregoing; provided, however, that in no event shall Collateral include Investment Property or General Intangibles consisting of equity securities of an issuer that is a Subsidiary of a Credit Party organized under the laws of a jurisdiction other than the United States or a state thereof (a “Foreign Subsidiary”) in excess of 65% of the total combined voting power of all equity securities of such Foreign Subsidiary; provided, further, that Collateral shall not include any lease, license or permit if, to the extent that and for as long as (a) the grant of a security interest therein constitutes or would result in the termination of, breach of or a default under the lease, instrument or agreement by which such lease, license or permit is governed and (b) such termination, breach or default is not rendered ineffective pursuant to Sections 9-406, 9-407, 9 408 or 9-409 of the UCC, provided, that (1) such lease, license or permit will be excluded from the Collateral only to the extent and for as long as the conditions set forth in the foregoing clauses (a) and (b) are and remain satisfied and to the extent such assets otherwise constitute Collateral, will cease to be excluded, and will become subject to the Liens hereunder, immediately and automatically at such time as such conditions cease to exist, including by reason of any waiver or consent under the applicable lease, instrument
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or agreement, and (2) the Proceeds of any sale, lease or other disposition of any such lease, license or permit shall not be excluded from the Collateral and shall at all times be and remain subject to the Liens hereunder.
5.1.2 Second Lien. Notwithstanding anything herein to the contrary, the lien and security interest granted to Administrative Agent pursuant to this Agreement and the exercise of any right or remedy in respect of the Collateral by Administrative Agent hereunder are subject to the provisions of the Intercreditor Agreement, including the rights of the First Lien Debt Agent to exercise control with respect to such Collateral as and to the extent set forth in the Intercreditor Agreement. In the event of any conflict between the terms of the Intercreditor Agreement and the provisions of Section 5 or 6 of this Agreement relating to the Collateral, the terms of the Intercreditor Agreement shall govern.
5.2 Other Collateral.
5.2.1 Commercial Tort Claims. Each Credit Party shall promptly notify Administrative Agent in writing upon any Credit Party obtaining knowledge that it has incurred or otherwise obtained a Commercial Tort Claim after the Closing Date against any third party and, upon request of Administrative Agent, promptly enter into an amendment to this Agreement and do such other acts or things deemed appropriate by Administrative Agent to grant to Administrative Agent a security interest in any such Commercial Tort Claim. Each Credit Party represents and warrants that as of the date of this Agreement, to their knowledge, no Credit Party possesses any Commercial Tort Claims.
5.2.2 Motor Vehicles. Upon the acquisition after Closing Date by any Credit Party of any Motor Vehicle, such Credit Party shall promptly notify Administrative Agent of such acquisition in writing, setting forth a description of the Motor Vehicle acquired and a good faith estimate of the current value of such Motor Vehicle. In addition, each Credit Party shall (a) cause all Motor Vehicles, now owned or hereafter acquired by any Credit Party, which under applicable law are required to be registered, to be properly registered in the name of such Credit Party, (b) cause all Motor Vehicles, now owned or hereafter acquired by any Credit Party, to be properly titled in the name of such Credit Party and (c) cause Administrative Agent’s Lien in such Motor Vehicles to be a perfected security interest by noting Administrative Agent’s Lien therein on such certificates or through any other security arrangement acceptable to Administrative Agent in its sole discretion, and deliver to Administrative Agent evidence of their compliance with the foregoing provisions of this subsection 5.2.2, including, without limitation, if requested by Administrative Agent, originals of all such certificates of title or ownership for such Motor Vehicles, subject in terms of priority only to the Lien of the First Lien Debt Agent for so long as any First Lien Debt remains outstanding, and thereafter a first priority Lien. Notwithstanding the foregoing, Credit Parties shall have until the date that is 180 days after the Closing Date (as such date may be extended by the First Lien Debt Agent in its sole discretion up to 270 days after the Closing Date) to complete the actions in the foregoing clause (c) with respect to Motor Vehicles owned by any Credit Party as of the Closing Date. Any certificates of title or ownership delivered
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pursuant to the terms hereof shall be accompanied by odometer statements for each Motor Vehicle covered thereby.
5.2.3 Other Collateral. Each Credit Party shall: (i) notify Administrative Agent in writing promptly upon (or in the case of Deposit Accounts prior to) acquiring or otherwise obtaining any Collateral after the date hereof consisting of Deposit Accounts, Investment Property, Letter-of-Credit Rights or Electronic Chattel Paper; (ii) except with regard to Excluded Deposit Accounts (unless otherwise requested by the First Lien Debt Agent) promptly execute such other documents, and do such other acts or things necessary to perfect the Lien of Administrative Agent with respect to such Collateral by “control” (within the meaning of the applicable section of the UCC), subject to the rights of the First Lien Debt Agent to exercise control with respect to such Collateral to the extent required by the Intercreditor Agreement; (iii) promptly notify Administrative Agent in writing upon acquiring or otherwise obtaining any Collateral after the date hereof consisting of Documents or Instruments and will promptly execute such other documents, and do such other acts or things necessary to perfect the Lien of Administrative Agent by possession (within the meaning of Section 9-313 of the UCC) of such Documents which are negotiable and Instruments, and, with respect to nonnegotiable Documents, subject to the terms of the Intercreditor Agreement, to have such nonnegotiable Documents issued in the name of Administrative Agent; and (iv) with respect to Collateral in the possession of a third party, other than Certificated Securities and Goods covered by a Document, obtain an acknowledgement from the third party that it is holding the Collateral for the benefit of Administrative Agent.
5.3 Lien Perfection; Further Assurances. Each Credit Party shall execute such instruments, assignments or documents as are necessary to perfect Administrative Agent’s Lien upon any of the Collateral and shall take such other action as may be required to perfect or to continue the perfection of Administrative Agent’s Lien upon the Collateral and shall take such other actions as may be reasonably requested by Administrative Agent to ensure priority (subject to the Lien of the First Lien Debt Agent) of such Lien. Each Credit Party hereby authorizes Administrative Agent to file financing statements that indicate the Collateral (i) as “all assets” of such Credit Party or words of similar effect, or (ii) as being of an equal or lesser scope, or with greater or lesser detail, than as set forth in subsection 5.1, on such Credit Party’s behalf. Each Credit Party also hereby ratifies its authorization for Administrative Agent to have filed in any jurisdiction any like financing statements or amendments thereto if filed prior to the date hereof. In addition, each Credit Party hereby appoints Administrative Agent as its attorney-in-fact, effective the date hereof and terminating upon the termination of this Agreement, for the purpose of (A) executing on behalf of such Credit Party title or ownership applications for filing with appropriate state agencies to enable Motor Vehicles now owned or hereafter acquired by such Credit Party to be re-titled and Administrative Agent listed as lienholder thereof, and (B) filing such applications with such state agencies. This appointment as attorney-in-fact is coupled with an interest and is irrevocable until the date on which all of the Obligations have been paid in full in cash. At Administrative Agent’s request, each Credit Party shall also promptly execute or cause to be executed and shall deliver to Administrative Agent any and all documents, instruments and
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agreements deemed necessary by Administrative Agent, to give effect to or carry out the terms or intent of the Loan Documents.
5.4 Lien on Realty. The due and punctual payment and performance of the Obligations shall also be secured by the Lien created by the Mortgages upon all owned real Property of Credit Parties described therein. If any Credit Party shall acquire at any time or times hereafter any fee simple interest or leasehold interest in other real Property (other than leasehold interests in sales offices or warehouses), such Credit Party agrees promptly to execute and deliver to Administrative Agent, for its benefit and the ratable benefit of Lenders, as additional security and Collateral for the Obligations, deeds of trust, security deeds, mortgages or other collateral assignments reasonably satisfactory in form and substance to Administrative Agent and its counsel (herein collectively referred to as “New Mortgages”) covering such real Property. The Mortgages and each New Mortgage shall be duly recorded (at Borrower’s expense) in each office where such recording is required to constitute a valid Lien on the owned real Property covered thereby. With respect to any Mortgage or any New Mortgage, the relevant Credit Parties shall deliver to Administrative Agent, at such Credit Party’s expense, mortgagee title insurance policies issued by a title insurance company reasonably satisfactory to Administrative Agent, which policies shall be in form and substance reasonably satisfactory to Administrative Agent and shall insure a valid Lien in favor of Administrative Agent for the benefit of itself and each Lender on the Property covered thereby, subject only to Permitted Liens and those other exceptions reasonably acceptable to Administrative Agent and its counsel. The relevant Credit Party shall also deliver to Administrative Agent Phase I Environmental Site Assessments by a consultant satisfactory to Administrative Agent reasonably necessary to determine compliance with or liabilities under Environmental Laws of the Property subject to such New Mortgage and such other usual and customary documents, including, without limitation, ALTA Surveys of the real Property described in the Mortgages or any New Mortgage, as Administrative Agent and its counsel may reasonably request relating to the real Property subject to the Mortgages or the New Mortgages.
SECTION 6. COLLATERAL ADMINISTRATION
6.1 General.
6.1.1 Location of Collateral. All Collateral, other than (a) Inventory being leased or rented to third parties by Credit Parties in the ordinary course of business, (b) Inventory in transit, (c) Inventory in the possession of a third party for the purpose of repair or maintenance and (d) Motor Vehicles, will at all times be kept by Credit Parties and their Subsidiaries at one or more of the business locations set forth in Exhibit 6.1.1 hereto, as updated by Borrower from time to time, and if any such locations are locations of third parties, such Exhibit so indicates.
6.1.2 Insurance of Collateral. Each Credit Party shall maintain and pay for insurance upon all Collateral wherever located and with respect to the business of such Credit Party and each of its Subsidiaries, covering casualty, hazard, public liability, workers’ compensation and such other risks in such amounts as is customary for
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companies similarly situated and with the insurance companies used by Credit Parties on the Closing Date or such other insurance companies as are reasonably satisfactory to Administrative Agent. Borrower shall deliver certified copies of such policies to Administrative Agent as promptly as practicable, with reasonably satisfactory lender’s loss payable endorsements, naming the First Lien Debt Agent for so long as any First Lien Debt remains outstanding and thereafter naming Administrative Agent and Lenders as loss payees, assignees or additional insureds, as appropriate, as its interest may appear, and showing only such other loss payees, assignees and additional insureds as are reasonably satisfactory to Administrative Agent. Each policy of insurance or endorsement shall contain a clause requiring the insurer to give not less than 10 days’ prior written notice to Administrative Agent in the event of cancellation of the policy for nonpayment of premium and not less than 30 days’ prior written notice to Administrative Agent in the event of cancellation of the policy for any other reason whatsoever and a clause specifying that the interest of Administrative Agent shall not be impaired or invalidated by any act or neglect of any Credit Party, any of its Subsidiaries or the owner of the Property or by the occupation of the premises for purposes more hazardous than are permitted by said policy. Borrower agrees to deliver to Administrative Agent, promptly as rendered, true copies of all reports made in any reporting forms to insurance companies. All proceeds of business interruption insurance (if any) of each Credit Party and its Subsidiaries shall be remitted to Administrative Agent for application to the outstanding balance of the Term Loans unless required to be applied to the obligations under the First Lien Debt Documents.
Unless Borrower provides Administrative Agent with evidence of the insurance coverage required by this Agreement, Administrative Agent may purchase insurance at Borrower’s expense to protect Administrative Agent’s interests in the Properties of Credit Parties and their Subsidiaries. This insurance may, but need not, protect the interests of Credit Parties and their Subsidiaries. The coverage that Administrative Agent purchases may not pay any claim that any Credit Party or any of its Subsidiaries makes or any claim that is made against any Credit Party or any such Subsidiary in connection with said Property. Credit Parties may later cancel any insurance purchased by Administrative Agent, but only after providing Administrative Agent with evidence that Credit Parties and their Subsidiaries have obtained insurance as required by this Agreement. If Administrative Agent purchases insurance, Borrower will be responsible for the reasonable costs of that insurance, including interest and any other charges Administrative Agent may impose in connection with the placement of insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to the Obligations. The costs of the insurance may be more than the cost of insurance that Credit Parties and their Subsidiaries may be able to obtain on their own.
6.1.3 Protection of Collateral. Neither Administrative Agent nor any Lender shall be liable or responsible in any way for the safekeeping of any of the Collateral or for any loss or damage thereto (except for reasonable care in the custody thereof while any Collateral is in Administrative Agent’s or any Lender’s actual possession) or for any diminution in the value thereof, or for any act or default of any
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warehouseman, carrier, forwarding agency or other person whomsoever, but the same shall be at Credit Parties’ sole risk.
6.2 Administration of Accounts.
6.2.1 Records, Schedules and Assignments of Accounts. Each Credit Party shall keep accurate and complete records of its Accounts and all payments and collections thereon and shall submit to Administrative Agent on such periodic basis as Administrative Agent shall reasonably request at any time that an Event of Default shall have occurred and be continuing a sales and collections report for the preceding period, in form reasonably acceptable to Administrative Agent.
6.2.2 [Intentionally Omitted].
6.2.3 Account Verification. Any of Administrative Agent’s officers, employees or agents shall have the right, at any time or times hereafter that an Event of Default shall have occurred and be continuing, in the name of Administrative Agent, any designee of Administrative Agent or any Credit Party, to verify the validity, amount or any other matter relating to any Accounts by mail, telephone, electronic communication or otherwise. Credit Parties shall cooperate with Administrative Agent in an effort to facilitate and promptly conclude any such verification process.
6.2.4 Collection Accounts. Each deposit account (other than Excluded Deposit Accounts, unless otherwise requested by the First Lien Debt Agent) which receives any proceeds of Collateral shall be maintained by Credit Parties pursuant to lockbox and blocked account arrangements acceptable to Administrative Agent (each such account, a “Collection Account” and collectively, the “Collection Accounts”) with BofA or such other banks as may be selected by Credit Parties and be acceptable to Administrative Agent (each bank maintaining a Collection Account, a “Collection Bank” and collectively, the “Collection Banks”). Subject to the terms of the Intercreditor Agreement, all such blocked account arrangements shall provide for the Administrative Agent’s and the First Lien Debt’s Agent’s “control” (within the meaning of the Uniform Commercial Code) of the relevant Collection Accounts, and if an Event of Default occurs and is continuing, dominion by Administrative Agent and the First Lien Debt Agent over all cash or other assets deposited into such accounts. Subject to the terms of the Intercreditor Agreement, upon the occurrence of an Event of Default, Administrative Agent shall be entitled to deliver notice to each Collection Bank instructing such Collection Bank to comply only with the instructions of Administrative Agent relating to each Collection Account maintained by such Collection Bank (each such notice, a “Dominion Notice”). On or prior to the date hereof, Borrower shall deliver to Administrative Agent a control agreement for each Collection Account maintained as of the Closing Date to provide for control and springing dominion by Administrative Agent over all assets deposited therein as described above, each such control agreement to be in form and substance acceptable to Administrative Agent. Subject to the terms of the Intercreditor Agreement, after the occurrence and during the continuance of an Event of Default, all funds deposited in any Collection Account shall immediately become the property of Administrative Agent, for the ratable benefit of
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Lenders, and Borrower shall obtain the agreement by each Collection Bank in favor of Administrative Agent to waive any recoupment, setoff rights, and any security interest in, or against, the funds so deposited. Administrative Agent assumes no responsibility for lockbox and blocked account arrangements, including, without limitation, any claim of accord and satisfaction or release with respect to deposits accepted by any bank thereunder.
6.2.5 Collection of Accounts, Proceeds of Collateral. Each Credit Party agrees that all invoices rendered and other requests made by any Credit Party for payment in respect of Accounts shall contain a written statement directing payment in respect of such Accounts to be paid to a lockbox or Collection Account established pursuant to subsection 6.2.4. To expedite collection, each Credit Party shall endeavor in the first instance to make collection of its Accounts for Administrative Agent. All remittances received by any Credit Party on account of Accounts, together with the proceeds of any other Collateral, shall be held as Administrative Agent’s property, for its benefit and the benefit of Lenders, by such Credit Party as trustee of an express trust for Administrative Agent’s benefit and such Credit Party shall immediately deposit same in kind to a Collection Account. Administrative Agent retains the right at all times after the occurrence and during the continuance of an Event of Default to notify Account Debtors that Credit Parties’ Accounts have been assigned to Administrative Agent and, subject to the terms of the Intercreditor Agreement, to collect Credit Parties’ Accounts directly in its own name, or in the name of Administrative Agent’s agent, and to charge the collection costs and expenses, including attorneys’ fees, to any Credit Party.
6.2.6 Taxes. If an Account includes a charge for any tax payable to any governmental taxing authority, Administrative Agent is authorized, in its sole discretion, to pay the amount thereof to the proper taxing authority for the account of the relevant Credit Party and to charge any Credit Party therefor, except for taxes (i) that are being actively contested in good faith and by appropriate proceedings and with respect to which the relevant Credit Party maintains reasonable reserves on its books therefor and (ii) as to which the imposition of any Lien in respect thereof is stayed during the pendency of such proceedings. In no event shall Administrative Agent or any Lender be liable for any taxes to any governmental taxing authority that may be due by any Credit Party.
6.3 Administration of Inventory. Credit Parties shall keep records of their Inventory (including, without limitation, Rental Equipment Inventory) which records shall be accurate and complete in all material respects. Credit Parties’ records of all Rental Equipment Inventory shall be itemized and describe the kind, type, quality, quantity and book value of such Rental Equipment Inventory and shall list all dispositions made in accordance with subsection 8.2.8.
6.4 Payment of Charges. All amounts chargeable to any Credit Party under Section 6 hereof shall be Obligations secured by all of the Collateral, shall be payable by any Credit Party on demand and shall bear interest from the date such advance was made until paid in full at the rate applicable to Base Rate Portions from time to time.
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SECTION 7. REPRESENTATIONS AND WARRANTIES
7.1 General Representations and Warranties. To induce Administrative Agent and each Lender to enter into this Agreement and to make loans, advances and other extensions of credit hereunder, each Credit Party warrants, represents and covenants to Administrative Agent and each Lender, on a joint and several basis, that:
7.1.1 Qualification. Each Credit Party and each of its Subsidiaries is a corporation, limited partnership or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization. No Credit Party or any Subsidiary thereof is organized under the laws of more than one jurisdiction. Each Credit Party and each of its Subsidiaries is duly qualified and is authorized to do business and is in good standing as a foreign limited liability company, limited partnership or corporation, as applicable, in each state or jurisdiction listed on Exhibit 7.1.1 hereto and in all other states and jurisdictions in which the failure of any Credit Party or any of its Subsidiaries to be so qualified could reasonably be expected to have a Material Adverse Effect.
7.1.2 Power and Authority. Each Credit Party and each of its Subsidiaries is duly authorized and empowered to enter into, execute, deliver and perform this Agreement and each of the other Loan Documents to which it is a party. The execution, delivery and performance of this Agreement and each of the other Loan Documents have been duly authorized by all necessary corporate, limited partnership or limited liability company action, as applicable, and do not and will not: (i) require any consent or approval of the partners, shareholders or members (as applicable) of any Credit Party or any of the shareholders, partners or members, as the case may be, of any Subsidiary of any Credit Party; (ii) contravene any Credit Party’s or any of its Subsidiaries’ charter, articles or certificate of incorporation, partnership agreement, certificate of formation, by laws, limited liability agreement, operating agreement or other organizational documents (as the case may be); (iii) violate, or cause any Credit Party or any of its Subsidiaries to be in default under, any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award in effect having applicability to such Credit Party or any of its Subsidiaries, other than any such violation as could not reasonably be expected to have a Material Adverse Effect; (iv) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which any Credit Party or any of its Subsidiaries is a party or by which it or its Properties may be bound or affected, the breach of or default under which could reasonably be expected to have a Material Adverse Effect; or (v) result in, or require, the creation or imposition of any Lien (other than Permitted Liens) upon or with respect to any of the Properties now owned or hereafter acquired by any Credit Party or any of its Subsidiaries.
7.1.3 Legally Enforceable Agreement. This Agreement, and each of the other Loan Documents, has been duly executed and delivered by each Credit Party and each of its Subsidiaries party thereto and is a legal, valid and binding obligation of each such Credit Party and each such Subsidiary, enforceable against it in accordance with its respective terms, except as enforcement may be limited by (i) the effect of any applicable
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bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity.
7.1.4 Capital Structure. Exhibit 7.1.4 hereto states, as of the date hereof, (i) the correct name of each of the Subsidiaries of each Credit Party, its jurisdiction of incorporation or organization and the percentage of its Voting Stock owned by the applicable Credit Party, (ii) the name of each Credit Party’s and each of its Subsidiaries’ corporate or joint venture relationships and the nature of the relationship, (iii) the number, nature and holder of all outstanding Securities of each Credit Party and the holder of Securities of each Subsidiary of each Credit Party and (iv) the number of authorized, issued and treasury Securities of each Credit Party. Each Subsidiary of Borrower that is not a Foreign Subsidiary as of the Closing Date is party to this Agreement as a Subsidiary Guarantor. Each Credit Party has good title to all of the Securities it purports to own of each of such Subsidiaries, free and clear in each case of any Lien other than Permitted Liens. All such Securities have been duly authorized and issued and are fully paid and non-assessable to the extent such concepts are applicable to such types of Securities. There are no outstanding options to purchase, or any rights or warrants to subscribe for, or any commitments or agreements to issue or sell any Securities or obligations convertible into, or any powers of attorney relating to any Securities of any Credit Party or any of its Subsidiaries. Except as set forth on Exhibit 7.1.4, there are no outstanding agreements or instruments binding upon any of any Credit Party’s or any of its Subsidiaries’ partners, members or shareholders, as the case may be, relating to the ownership of its Securities.
7.1.5 Names; Organization. Neither any Credit Party nor any of its Subsidiaries has been known as or has used any legal, fictitious or trade names within 5 years prior to the Closing Date, except those listed on Exhibit 7.1.5 hereto. Except as set forth on Exhibit 7.1.5, within the 5 years prior to the Closing Date, neither any Credit Party nor any of its Subsidiaries has been the surviving entity of a merger or consolidation or has acquired all or substantially all of the assets of any Person. Each of each Credit Party’s and each of its Subsidiaries’ state(s) of incorporation or organization, Type of Organization and Organizational I.D. Number is set forth on Exhibit 7.1.5. The exact legal name of each Credit Party and each of its Subsidiaries is set forth on Exhibit 7.1.5.
7.1.6 Business Locations; Administrative Agent for Process. Each of each Credit Party’s and each of its Subsidiaries’ chief executive office, location of books and records and other places of business are as listed on Exhibit 6.1.1 hereto, as updated from time to time by Borrower in accordance with the provisions of subsection 6.1.1. Except as shown on Exhibit 6.1.1, as updated from time to time by Borrower in accordance with the provisions of subsection 6.1.1, no Inventory is stored with a bailee, distributor, warehouseman or similar party, nor is any Inventory consigned to any Person.
7.1.7 Title to Properties; Priority of Liens.
(i) Each Credit Party and each of its Subsidiaries has good, indefeasible and marketable title to and fee simple ownership of, or valid and subsisting
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leasehold interests in, all of its real Property, and good title to all of the Collateral and all of its other Property, in each case, free and clear of all Liens except Permitted Liens. Each Credit Party and each of its Subsidiaries has paid or discharged all lawful claims which, if unpaid, might become a Lien against any of such Credit Party’s or such Subsidiary’s Properties that is not a Permitted Lien. The Liens granted to Administrative Agent under Section 5 hereof are second priority Liens, subject only to Permitted Liens.
(ii) Exhibit 7.1.7 sets forth, as of the Closing Date, a correct and complete list of all real Property owned by each Credit Party and each of its Subsidiaries and all leases (including capitalized leases) and subleases of real or personal property held by each Credit Party and each of its Subsidiaries as lessee or sublessee, or as lessor, or sublessor. Each of such leases and subleases is valid and enforceable in accordance with its terms and is in full force and effect, and no default by any Credit Party or any of its Subsidiaries nor, to any Credit Party’s knowledge, any other party to any such lease or sublease, exists.
7.1.8 Accounts.
With respect to each of Credit Parties’ Accounts, unless otherwise disclosed to Administrative Agent in writing:
(i) It is genuine and in all respects what it purports to be, and it is not evidenced by a judgment;
(ii) It arises out of a completed, bona fide sale and delivery of goods or rendition of services by a Credit Party, in the ordinary course of its business and in accordance with the terms and conditions of all purchase orders, contracts or other documents relating thereto and forming a part of the contract between a Credit Party and the Account Debtor;
(iii) It is for a liquidated amount maturing as stated in the duplicate invoice covering such sale or rendition of services, a copy of which has been furnished or is available to Administrative Agent;
(iv) To Borrowers’ knowledge, there are no facts, events or occurrences which in any way impair the validity or enforceability of any Accounts or tend to reduce the amount payable thereunder from the face amount of the invoice and statements delivered or made available to Administrative Agent with respect thereto;
(v) To Credit Parties’ knowledge, the Account Debtor thereunder (1) had the capacity to contract at the time any contract or other document giving rise to the Account was executed and (2) such Account Debtor is Solvent; and
(vi) To Credit Parties’ knowledge, there are no proceedings or actions which are threatened or pending against the Account Debtor thereunder which might result in any material adverse change in such Account Debtor’s financial condition or the collectibility of such Account.
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7.1.9 Nonrental Equipment and Rental Equipment Inventory. The Nonrental Equipment and Rental Equipment Inventory of each Credit Party and its Subsidiaries is in good operating condition and repair, and all necessary replacements of and repairs thereto shall be made so that the operating efficiency thereof shall be maintained and preserved, reasonable wear and tear and casualty events excepted. Neither any Credit Party nor any of its Subsidiaries will permit any Nonrental Equipment or Rental Equipment Inventory to become affixed to any real Property leased to any Credit Party or any of its Subsidiaries so that an interest arises therein under the real estate laws of the applicable jurisdiction unless the landlord of such real Property has executed a landlord waiver or leasehold mortgage in favor of and in form reasonably acceptable to Administrative Agent, and no Credit Party will permit any of the Nonrental Equipment or Rental Equipment Inventory of any Credit Party or any of its Subsidiaries to become an accession to any personal Property other than Nonrental Equipment and Rental Equipment Inventory that is subject to second priority (except for Permitted Liens) Liens in favor of Administrative Agent.
7.1.10 Financial Statements; Fiscal Year. The Consolidated and consolidating balance sheets of Borrower and its Subsidiaries (including the accounts of all Subsidiaries of Borrower and their respective Subsidiaries for the respective periods during which a Subsidiary relationship existed) as of March 31, 2004, and the related statements of income, cash flow, changes in shareholder’s equity, and changes in financial position for the periods ended on such dates, have been prepared in accordance with GAAP, and present fairly in all material respects the financial positions of Borrower and such Persons, taken as a whole, at such dates and the results of Borrower’s and such Persons’ operations, taken as a whole, for such periods. Since March 31, 2004, there has been no material adverse change in the business, assets, liabilities (actual or contingent), operations or financial condition of Borrower and such other Persons, taken as a whole, as reflected in the Consolidated balance sheet as of such date. As of the date hereof, the fiscal year of each Credit Party and each of its Subsidiaries ends on December 31 of each year.
7.1.11 Full Disclosure. The financial statements referred to in subsection 7.1.10 hereof do not, nor does this Agreement or any other written statement of any Credit Party to Administrative Agent or any Lender, contain any untrue statement of a material fact or omit a material fact necessary to make the statements contained therein or herein, in light of the circumstances under which they are made, not misleading as of the time made or delivered. There is no fact which any Credit Party has failed to disclose to Administrative Agent or any Lender in writing which could reasonably be expected to have a Material Adverse Effect.
7.1.12 Solvent Financial Condition. Giving effect to subsection 12.2, each Credit Party and each of its Subsidiaries is, and after giving effect to the Term Loans to be made hereunder and all related transactions will be, Solvent.
7.1.13 Surety Obligations. Except as set forth on Exhibit 7.1.13, as of the date hereof, neither any Credit Party nor any of its Subsidiaries is obligated as surety or indemnitor under any surety or similar bond or other contract or has issued or entered
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into any agreement to assure payment, performance or completion of performance of any undertaking or obligation of any Person other than payment, performance or completion of performance by itself or any Credit Party.
7.1.14 Taxes. The federal or other applicable tax identification number of each Credit Party and each of its Subsidiaries is shown on Exhibit 7.1.14 hereto. Each Credit Party and each of its Subsidiaries has filed all federal, state, local and foreign income and other material tax returns and other reports relating to taxes it is required by law to file, and has paid, or made provision for the payment of, all federal, state, local and foreign income and other material taxes, assessments, fees, levies and other governmental charges upon it, its income and Properties as and when such taxes, assessments, fees, levies and charges are due and payable, unless and to the extent any thereof are being actively contested in good faith and by appropriate proceedings, and the applicable Credit Party or the relevant Subsidiary maintains reasonable reserves on its books therefor. The provision for taxes on the books of each Credit Party and its Subsidiaries is adequate for all years not closed by applicable statutes, and for the current fiscal year.
7.1.15 Brokers. Except as shown on Exhibit 7.1.15 hereto and except as may be payable to Administrative Agent or the Joint Lead Arrangers, there are no claims for brokerage commissions, finder’s fees or investment banking fees in connection with the transactions contemplated by this Agreement.
7.1.16 Patents, Trademarks, Copyrights and Licenses. Each Credit Party and each of its Subsidiaries owns, possesses or licenses or has the right to use all the patents, trademarks, service marks, trade names, copyrights, licenses and other Intellectual Property necessary for the present and planned future conduct of its business without any known conflict with the rights of others, except for such conflicts as could not reasonably be expected to have a Material Adverse Effect. All such patents, trademarks, service marks, trade names, copyrights, licenses and other similar rights are listed on Exhibit 7.1.16 hereto. No claim has been asserted to any Credit Party or any Subsidiary of any Credit Party which is currently pending that its use of its Intellectual Property or the conduct of its business does or may infringe upon the Intellectual Property rights of any third party. To the knowledge of each Credit Party and except as set forth on Exhibit 7.1.16 hereto, as of the date hereof, no Person is engaging in any activity that infringes in any material respect upon any Credit Party’s or any of its Subsidiaries’ material Intellectual Property. Except as set forth on Exhibit 7.1.16, each Credit Party’s and each of its Subsidiaries’ (i) material trademarks, service marks and copyrights are registered with the U.S. Patent and Trademark Office or in the U.S. Copyright Office, as applicable and (ii) material license agreements and similar arrangements relating to its Inventory (1) permit, and do not restrict, the assignment by any Credit Party or any of its Subsidiaries to Administrative Agent, or any other Person designated by Administrative Agent, of all of such Credit Party’s or such Subsidiary’s, as applicable, rights, title and interest pertaining to such license agreement or such similar arrangement and (2) would permit the continued use by such Credit Party or such Subsidiary, or Administrative Agent or its assignee, of such license agreement or such similar arrangement and the right to sell Inventory subject to such license agreement for a period of no less than 6 months after a default or breach of such agreement or
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arrangement. The consummation and performance of the transactions and actions contemplated by this Agreement and the other Loan Documents, including, without limitation, the exercise by Administrative Agent of any of its rights or remedies under Section 10, will not result in the termination or impairment of any of such Credit Party’s or any of its Subsidiaries’ ownership or rights relating to its Intellectual Property. Except as listed on Exhibit 7.1.16, and except as could not reasonably be expected to have a Material Adverse Effect, (i) neither any Credit Party nor any of its Subsidiaries is in breach of, or default under, any term of any license or sublicense with respect to any of its Intellectual Property and (ii) to the knowledge of each Credit Party, no other party to such license or sublicense is in breach thereof or default thereunder, and such license is valid and enforceable.
7.1.17 Governmental Consents. Each Credit Party and each of its Subsidiaries has, and is in good standing with respect to, all governmental consents, approvals, licenses, authorizations, permits, certificates, inspections and franchises necessary to continue to conduct its business as heretofore or proposed to be conducted by it and to own or lease and operate its Properties as now owned or leased by it, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
7.1.18 Compliance with Laws. Each Credit Party and each of its Subsidiaries has duly complied, and its Properties, business operations and leaseholds are in compliance with, the provisions of all federal, state and local laws, rules and regulations applicable to such Credit Party or such Subsidiary, as applicable, its Properties or the conduct of its business, except for such non-compliance as could not reasonably be expected to have a Material Adverse Effect, and there have been no citations, notices or orders of noncompliance issued to any Credit Party or any of its Subsidiaries under any such law, rule or regulation, except where such noncompliance could not reasonably be expected to have a Material Adverse Effect. No Inventory has been produced in violation of the Fair Labor Standards Act (29 U.S.C. §201 et seq.), as amended.
7.1.19 Restrictions. Neither any Credit Party nor any of its Subsidiaries is a party or subject to any contract or agreement which restricts its right or ability to incur Indebtedness, other than as set forth on Exhibit 7.1.19 hereto, none of which prohibit the execution of or compliance with this Agreement or the other Loan Documents by any Credit Party or any of its Subsidiaries, as applicable.
7.1.20 Litigation. Except as set forth on Exhibit 7.1.20 hereto, there are no actions, suits, proceedings or investigations pending, or to the knowledge of any Credit Party, threatened, against or affecting any Credit Party or any of its Subsidiaries, or the business, operations, Properties, prospects, profits or condition of any Credit Party or any of its Subsidiaries which, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Neither any Credit Party nor any of its Subsidiaries is in default with respect to any order, writ, injunction, judgment, decree or rule of any court, governmental authority or arbitration board or tribunal, which, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
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7.1.21 No Defaults. No event has occurred and no condition exists which would, upon or after the execution and delivery of this Agreement or any Credit Party’s performance hereunder, constitute a Default or an Event of Default. Neither any Credit Party nor any of its Subsidiaries is in default (and no event has occurred and no condition exists which constitutes, or which with the passage of time or the giving of notice or both would constitute, a default) under any Material Contract.
7.1.22 Distributions. Except as disclosed on Exhibit 7.1.22 and except for Distributions of cash paid to another Credit Party or pursuant to the Reorganization Plan, as of the Closing Date, no Distribution of cash has been declared, paid, or made upon or in respect of any Securities of any Credit Party or any of its Subsidiaries since February 12, 2004.
7.1.23 ERISA Compliance. Except as specifically disclosed in Exhibit 7.1.23:
(i) Each Plan and Foreign Plan is in compliance with applicable Requirements of Law including, but not limited to ERISA and the Code, except for such non-compliance as could not reasonably be expected to have a Material Adverse Effect. Each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS and to the knowledge of each Credit Party, nothing has occurred which would cause the loss of such qualification. Each Credit Party and each ERISA Affiliate has made all required contributions to any Pension Plan, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Pension Plan.
(ii) There are no pending or, to the knowledge of any Credit Party, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan, Multiemployer Plan or Foreign Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan, Multiemployer Plan or Foreign Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect.
(iii) Except as could not reasonably be expected to have a Material Adverse Effect, (A) no ERISA Event has occurred or is reasonably expected to occur; (B) no Pension Plan has any Unfunded Pension Liability; (C) no Credit Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (D) no Credit Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; or (E) assets of all Foreign Plans equal or exceed any liabilities accrued thereunder in accordance with applicable Requirements of Law. No Credit Party nor any ERISA
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Affiliate has engaged in a transaction that could reasonably be expected to be subject to Section 4069 or 4212(c) of ERISA.
(iv) No Credit Party nor any ERISA Affiliate sponsors or is otherwise required to contribute to any retiree medical plan, arrangement, contract or policy other than (A) coverage mandated by Requirement of Law, (B) death benefits or retirement benefits under any Pension Plan or (C) benefits, the full direct cost of which is borne by the participating employee or former employee (or beneficiary thereof).
7.1.24 Trade Relations. There exists no actual or, to any Credit Party’s knowledge, threatened termination, cancellation or limitation of, or any modification or change in, the business relationship between any Credit Party or any of its Subsidiaries and any customer or any group of customers whose purchases individually or in the aggregate are material to the business of Credit Parties and their Subsidiaries, or with any material supplier, except, in each case, where the same could not reasonably be expected to have a Material Adverse Effect, and, to any Credit Party’s knowledge, there exists no present condition or state of facts or circumstances which would prevent any Credit Party or any of its Subsidiaries from conducting such business after the consummation of the transactions contemplated by this Agreement in substantially the same manner in which it has heretofore been conducted, which prevention could reasonably be expected to have a Material Adverse Effect.
7.1.25 Labor Relations. Except as described on Exhibit 7.1.25 hereto, as of the date hereof, neither any Credit Party nor any of its Subsidiaries is a party to any collective bargaining agreement. There are no asserted pending demands for collective bargaining by any union or organization of any Credit Party’s or any of its Subsidiaries’ employees, or, to any Credit Party’s knowledge, any material grievances, disputes or controversies with any such union or other organization, or any threats of strikes or work stoppages, except those that could not reasonably be expected to have a Material Adverse Effect.
7.1.26 Related Businesses. As of the Closing Date, Credit Parties are engaged in the businesses of renting general and specialty equipment to industrial and construction end-users, as well as selling used equipment and complementary parts, supplies and merchandise and providing repair and maintenance services to their customers. Borrower has requested the Lenders to make credit available hereunder for the purposes set forth in subsection 1.1.2. Each Credit Party and each Subsidiary of each Credit Party expects to derive benefit (and the Board of Directors of each Credit Party and each Subsidiary of each Credit Party has determined that such Credit Party or Subsidiary may reasonably be expected to derive benefit), directly or indirectly, from the credit extended by Lenders hereunder to Borrower, both in its separate capacity and as a member of the group of companies, since the successful operation and condition of each Credit Party and each Subsidiary of each Credit Party is dependent on the continued successful performance of the functions of the group as a whole. Each Credit Party acknowledges that, but for the agreement of each of the other Credit Parties to execute and deliver this Agreement, Administrative Agent and Lenders would not have made available the credit facilities established hereby on the terms set forth herein.
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7.1.27 Margin Regulations. No Credit Party nor any Subsidiary of any Credit Party is engaged in the business of purchasing or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock.
7.1.28 Regulated Entities. No Credit Party, no Person controlling any Credit Party, nor any Subsidiary of any Credit Party, is an “Investment Company” within the meaning of the Investment Company Act of 1940. No Credit Party is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, any state public utilities code or law, or any other federal or state statute or regulation limiting its ability to incur indebtedness.
7.1.29 Environmental Laws. Except as otherwise disclosed on Exhibit 7.1.29 and except for any of the following as could not reasonably be expected to have a Material Adverse Effect:
(i) Each Credit Party and its Subsidiaries have complied with all Environmental Laws and neither any Credit Party nor any of its Subsidiaries nor any of its presently owned real property or presently conducted operations, nor its previously owned real property or prior operations, is subject to any pending or threatened Environmental Claim or any enforcement order from or liability agreement with any Governmental Authority or private Person respecting (A) compliance with any Environmental Law or (B) any potential liabilities and costs or remedial action arising from the Release or threatened Release of a Contaminant.
(ii) Each Credit Party and its Subsidiaries have obtained all permits necessary for their current operations under Environmental Laws, and all such permits are in good standing and each Credit Party and its Subsidiaries are in compliance with all material terms and conditions of such permits.
(iii) Neither any Credit Party nor any of its Subsidiaries, nor, to the best of such Credit Party’s knowledge, any of its predecessors in interest, has in violation of applicable law stored, treated or disposed of any hazardous waste.
(iv) Neither any Credit Party nor any of its Subsidiaries has received any summons, complaint, order or similar written notice indicating that it is not currently in compliance with, or that any Governmental Authority is investigating its compliance with, any Environmental Laws or that it is or may be liable to any other Person as a result of a Release or threatened Release of a Contaminant.
(v) To the best of each Credit Party’s knowledge, none of the present or past operations or Properties of any Credit Party or its Subsidiaries is the subject of any investigation by any Governmental Authority evaluating whether any remedial action is needed to respond to a Release or threatened Release of a Contaminant, and to the best of each Credit Party’s knowledge, there are no facts or circumstances at any such Property that would warrant such remedial action.
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(vi) There is not now, nor to the best of any Credit Party’s knowledge has there ever been on or in the real Properties of any Credit Party or its Subsidiaries:
(A) any underground storage tanks or surface impoundments,
(B) any asbestos-containing material, or
(C) any polychlorinated biphenyls (PCBs) used in hydraulic oils, electrical transformers or other equipment.
(vii) Neither any Credit Party nor any of its Subsidiaries has filed any notice under any requirement of Environmental Law reporting a spill or accidental and unpermitted Release or discharge of a Contaminant into the environment.
(viii) Neither any Credit Party nor any of its Subsidiaries has entered into any negotiations or settlement agreements with any Person (including the prior owner of its property) imposing material obligations or liabilities on such Credit Party or any of its Subsidiaries with respect to any remedial action in response to the Release of a Contaminant or environmentally related claim.
(ix) None of the products manufactured, distributed or sold by any Credit Party or any of its Subsidiaries contain asbestos containing material.
(x) No Environmental Lien has attached to any of the real Properties of any Credit Party or its Subsidiaries.
7.1.30 Motor Vehicles. As of the Closing Date, Exhibit 7.1.30 sets forth a complete and accurate list of all Motor Vehicles owned by any Credit Party or any of its Subsidiaries, together with a good faith estimate of the current value of such Motor Vehicles.
7.1.31 Anti-Terrorism Laws.
(i) General. None of the Credit Parties, nor any of their Subsidiaries or Affiliates is in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any Anti-Terrorism Law.
(ii) Executive Order No. 13224. None of the Credit Parties, nor any of their Subsidiaries or Affiliates is any of the following (each a “Blocked Person”):
(A) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224;
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(B) a Person or entity with which any bank or other financial institution is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;
(C) a Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224;
(D) a Person or entity that is named as a “specially designed national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list; or
(E) a Person or entity who is affiliated with a Person or entity listed above.
None of the Credit Parties, nor any of their Subsidiaries or Affiliates (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person or (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224.
7.1.32 Deposit and Brokerage Accounts. Exhibit 7.1.32 sets forth as of the Closing Date a complete and accurate list of all deposit, checking and other bank accounts, all securities and other accounts maintained with any securities intermediary or broker dealer and all other similar accounts maintained by each Credit Party and its Subsidiaries, together with a description thereof (i.e., the bank, securities intermediary or broker dealer at which such deposit or other account is maintained and the account number and the purpose thereof). No Credit Party or any of its Subsidiaries maintains any other bank, securities or other similar accounts other than those set forth on Exhibit 7.1.32.
7.2 [Intentionally Omitted].
7.3 Survival of Representations and Warranties. All representations and warranties of Credit Parties contained in this Agreement or any of the other Loan Documents shall survive the execution, delivery and acceptance thereof by Administrative Agent and each Lender and the parties thereto and the closing of the transactions described therein or related thereto.
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS
8.1 Affirmative Covenants. During the Term, and thereafter for so long as there are any Obligations (other than unasserted contingent indemnification obligations that are not then due and payable, whether by acceleration, termination or otherwise) outstanding, each Credit Party covenants that it shall, and shall cause each of its Subsidiaries to:
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8.1.1 Visits and Inspections; Appraisals of Rental Equipment Inventory; Lender Meeting.
(i) Permit (A) representatives of Administrative Agent, from time to time, as often as may be reasonably requested, but only during normal business hours, to conduct Audits (not to exceed four (4) times per year if such Audit is to be at the expense of Borrower, unless an Event of Default has occurred and is continuing) and (B) appraisers engaged pursuant to subsection 2.9 and clause (ii) of this subsection 8.1.1 (whether or not personnel of Administrative Agent), from time to time, as provided in such subsection and clause, but only during normal business hours, to visit and inspect the Properties of each Credit Party and each of its Subsidiaries, for the purpose of completing appraisals pursuant to subsection 2.9 and clause (ii) of this subsection 8.1.1. Administrative Agent, if no Default or Event of Default then exists, shall give Credit Parties reasonable prior notice of any such Audit or appraisals. Without limiting the foregoing, upon the request of Administrative Agent, Credit Parties will participate and will cause their key management personnel to participate in meetings with Administrative Agent and Lenders periodically during each year during regular business hours and upon reasonable prior notice, which meeting(s) shall be held at such times and such places as may be reasonably requested by Administrative Agent. All Audits and appraisals conducted pursuant to this clause (i) shall (except as expressly provided above) be at Borrower’s expense.
(ii) On or before the 60th day after the end of each of Borrower’s fiscal quarters, commencing with the fiscal quarter ending September 30, 2004, deliver to Administrative Agent an appraisal of each type of Rental Equipment Inventory (both serialized and non-serialized) performed by an appraiser selected by Borrower (or, if a similar report is then required to be delivered pursuant to the First Lien Loan and Security Agreement, by the First Lien Debt Agent), which appraisal shall state the Gross Orderly Liquidation Value of all such Rental Equipment Inventory. All inventory appraisals conducted pursuant to this clause (ii) shall be at Borrower’s expense.
8.1.2 Notices. Furnish to Administrative Agent,
(i) promptly after the occurrence thereof, written notice of (A) the occurrence of any event or the existence of any fact which renders any representation or warranty in this Agreement or any of the other Loan Documents inaccurate, incomplete or misleading in any material respect as of the date made and (B) any change in the information disclosed in any Exhibit hereto, in each case after giving effect to the materiality limits and Material Adverse Effect qualifications contained therein;
(ii) promptly, and in any event within three (3) Business Days after a Responsible Officer of any Credit Party has knowledge of the occurrence of an Event of Default or Default that is continuing or the occurrence of any event or development that could reasonably be expected have a Material Adverse Effect, the written statement of a Responsible Officer of Borrower setting forth the details of such Event of Default or Default or other event or development having a Material Adverse Effect and the action which the affected Person proposes to take with respect thereto;
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(iii) promptly after the sending or filing thereof, as the case may be, copies of any proxy statements, financial statements or reports which Borrower has made generally available to its Securities holders and copies of any regular, periodic and special reports or registration statements which Borrower or any of its Subsidiaries files with the Securities and Exchange Commission or any Governmental Authority which may be substituted therefor or any national securities exchange;
(iv) promptly after receipt thereof, copies of any material notice or communication received by any Credit Party or any of its Subsidiaries from any Governmental Authority (including the Securities and Exchange Commission), and promptly after the commencement thereof but in any event not later than five (5) Business Days after service of process with respect thereto, or the obtaining of knowledge thereof by, any Credit Party or any of its Subsidiaries, notice of each action, suit or proceeding before any court or other Governmental Authority or other regulatory body or any arbitrator which, if adversely determined, could reasonably be expected to have a Material Adverse Effect;
(v) within five (5) Business Days after any Credit Party or any ERISA Affiliate knows or has reason to know, that an ERISA Event or a non-exempt prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has occurred, notice thereof and, when known, any action taken or threatened by the IRS, the DOL or the PBGC with respect thereto;
(vi) upon request, or, in the event that such filing reflects a significant change with respect to the matters covered thereby, within five (5) Business Days after the filing thereof with the PBGC, the DOL or the IRS, as applicable, copies of the following: (A) each annual report (Form 5500 series), including Schedule B thereto, filed with the PBGC, the DOL or the IRS with respect to each Pension Plan and (B) a copy of each funding waiver request filed with the PBGC, the DOL or the IRS with respect to any Pension Plan and all communications received by any Credit Party or any ERISA Affiliate from the PBGC, the DOL or the IRS with respect to such request;
(vii) upon request, copies of each actuarial report for any Pension Plan; and within five (5) Business Days after receipt thereof by any Credit Party or any ERISA Affiliate, copies of the following: (A) any notices of the PBGC’s intention to terminate a Pension Plan or to have a trustee appointed to administer such Pension Plan; (B) any unfavorable determination letter from the IRS regarding the qualification of a Pension Plan under Section 401(a) of the Code; (C) any notice from a Multiemployer Plan regarding the imposition of withdrawal liability; or (D) any notice from a Governmental Authority regarding the termination, registration or other event affecting a Foreign Plan which could reasonably be expected to have a Material Adverse Effect;
(viii) within five (5) Business Days after the occurrence thereof, notice of: (A) any changes in the benefits or funding of any existing Pension Plan or Foreign Plan which increase any Credit Party’s annual costs with respect thereto by an amount in excess of $250,000; or (B) any failure by any Credit Party or any ERISA
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Affiliate to make a required installment or any other required payment under Section 412 of the Code on or before the due date for such installment or payment;
(ix) within five (5) Business Days after any Credit Party or any ERISA Affiliate knows or has reason to know that any of the following events has or will occur, notice thereof: (A) a Multiemployer Plan has been or will be terminated; (B) the administrator or plan sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan; or (C) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan;
(x) promptly after the receipt or delivery thereof, copies of all statements, reports and other information any Credit Party or any of its Subsidiaries sends to or receives from any holder of the First Lien Debt or any agent or other representative in respect thereof;
(xi) promptly after receiving any notice of any violation by any Credit Party or any of its Subsidiaries of any Environmental Law which could reasonably be expected to have a Material Adverse Effect or that any Governmental Authority has asserted in writing that any Credit Party or any Subsidiary is not in compliance with any Environmental Law or is investigating any Credit Party’s or such Subsidiary’s compliance therewith, copies thereof;
(xii) promptly after receiving any written notice that any Credit Party or any of its Subsidiaries is or may be liable to any Person as a result of the Release or threatened Release of any Contaminant or that any Credit Party or any Subsidiary is subject to investigation by any Governmental Authority evaluating whether any remedial action is needed to respond to the Release or threatened Release of any Contaminant which, in either case, could reasonably be expected to have a Material Adverse Effect, copies of such notice;
(xiii) promptly after receiving any written notice of the imposition of any Environmental Lien against any property of any Credit Party or any of its Subsidiaries, copies of such notice;
(xiv) at least 10 days prior to the consummation of any sale or other disposition of any Inventory of any Credit Party or any of its Subsidiaries (or the consummation of any related series of sales or dispositions, including any sale or other disposition at auction or pursuant to a trade package with an original equipment manufacturer) which has an aggregate book value or fair market value (whichever is greater) in excess of $5,000,000, notice thereof, which notice shall identify the Inventory to be sold, the proposed buyer and the details of such transaction; and
(xv) such other data and information (financial and otherwise) as Administrative Agent or any Lender, from time to time, may reasonably request, bearing upon or related to the Collateral or Credit Parties’ or any of their Subsidiaries’ financial condition or results of operations.
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8.1.3 Financial Statements and Financial Information.
(i) Keep and maintain (A) adequate records and books of account with respect to its business activities in which proper entries are made in accordance with customary accounting practices reflecting all its financial transactions so as to provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP; and (B) effective disclosure controls and procedures designed to ensure that material information relating to the Credit Parties and their Subsidiaries is made known to Borrower and its officers in a timely manner; and
(ii) cause to be prepared and furnished to Administrative Agent and each Lender the following, all to be prepared in accordance with GAAP applied on a consistent basis, unless Borrower’s certified public accountants concur in any change therein and such change is disclosed to Administrative Agent and is consistent with GAAP:
(A) not later than 90 days after the close of each fiscal year of Borrower, unqualified (except for a qualification for a change in accounting principles with which the accountant concurs) audited Consolidated and consolidating (on a line of business basis) balance sheets of Borrower and its Subsidiaries (including the accounts of all Subsidiaries of Borrower and their respective Subsidiaries for the respective periods during which a Subsidiary relationship existed) as of the end of such year, together with the related statements of income, cash flow, changes in shareholder’s equity, and changes in financial position for the periods ended on such date, which do not contain any paragraph of emphasis or explanatory note relating to the ability of Borrower and its Subsidiaries to continue business as a going concern, and are certified by KPMG, LLP or another firm of independent certified public accountants of recognized national standing and, within a reasonable time thereafter a copy of any management letter issued in connection therewith;
(B) not later than 45 days after the end of each fiscal quarter of Borrower occurring after the Closing Date, including the last fiscal quarter of Borrower’s fiscal year, unaudited interim Consolidated and consolidating (on a line of business basis) balance sheets of Borrower and its Subsidiaries (including the accounts of all Subsidiaries of Borrower and their respective Subsidiaries for the respective periods during which a Subsidiary relationship existed) as of the end of such quarter, together with the related statements of income, cash flow, changes in shareholder’s equity, and changes in financial position for the periods ended on such date and for the portion of the fiscal year then elapsed, certified by the chief financial officer of Borrower, in such officer’s capacity as such, as prepared in accordance with GAAP applied consistently with the
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audited financial statements required to be delivered pursuant to subsection 8.1.3(ii)(A) and fairly presenting in all material respects the financial position and results of operations of Borrower and its Subsidiaries for such quarter and period subject only to changes from audit and year-end adjustments and except that such statements need not contain notes;
(C) not later than 30 days after the end of each fiscal month of Borrower occurring after the Closing Date, including the last fiscal month of Borrower’s fiscal year, unaudited interim Consolidated balance sheets of Borrower and its Subsidiaries (including the accounts of all Subsidiaries of Borrower and their respective Subsidiaries for the respective periods during which a Subsidiary relationship existed) as of the end of such month, together with the related statements of income and cash flow setting forth, in each case, in comparative form the figures for the corresponding date or period of the immediately preceding fiscal year and of the Projections, certified by the chief financial officer of Borrower, in such officer’s capacity as such, as prepared in accordance with GAAP applied consistently with the audited financial statements required to be delivered pursuant to subsection 8.1.3(ii)(A) and fairly presenting in all material respects the financial position and results of operations of Borrower and its Subsidiaries for such month subject only to changes from audit, quarterly and year-end adjustments and except that such statements need not contain notes;
(D) together with each delivery of financial statements (1) pursuant to the foregoing clauses (A), (B) and (C), a compliance certificate in the form of Exhibit 8.1.3(iv) hereto executed by the chief financial officer of Borrower (a “Compliance Certificate”); and (2) together with the financial information delivered pursuant to the forgoing clause (B) (or upon Administrative Agent’s request from time to time) a list of all contracts entered into by any Credit Party or any of its Subsidiaries with surety, bonding, indemnity or similar entities since the date that the last Compliance Certificate was delivered pursuant hereto, pursuant to which any performance, surety or similar bonds have been issued for the account of any Credit Party or any of its Subsidiaries, which list identifies any portion thereof that is cash collateralized. In addition, upon Administrative Agent’s request, each Credit Party shall deliver to Administrative Agent copies of any bonds issued pursuant to such agreements set forth in clause (2); and
(E) together with the delivery of the financial statements described in subsection 8.1.3(ii)(A), Borrower shall forward to Administrative Agent a copy of the accountants’ letter
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to Borrower’s management that is prepared in connection with such financial statements.
8.1.4 Collateral Coverage Certificates. On or before any date on which any Credit Party creates, incurs or assumes any First Lien Debt (other than as a result of any borrowing of revolving credit loans or any issuance of letters of credit), Borrower shall deliver to Administrative Agent a certificate in the form of Exhibit 8.1.4 hereto executed by the chief financial officer of the Borrower and dated as of the date of such creation, incurrence or assumption, together with any supporting documentation Administrative Agent may reasonably request (which may include information delivered to the First Lien Debt Agent in connection with the First Lien Loan and Security Agreement).
8.1.5 Landlord, Processor and Storage Agreements. Provide Administrative Agent with copies of all agreements between any Credit Party or any of its Subsidiaries and any landlord, warehouseman, processor, distributor or consignee which owns or is the lessee of any premises at which any Collateral may, from time to time, be kept. With respect to any lease (other than leases for sales offices), warehousing agreement or any processing agreement in any case entered into after the Closing Date, Credit Parties shall provide Administrative Agent with landlord waivers, bailee letters or processor letters with respect to such premises. Such landlord waivers, bailee letters or processor letters shall be in a form supplied by Administrative Agent to Credit Parties with such reasonable revisions as are customarily accepted by Administrative Agent or by similar financial institutions in similar financial transactions.
8.1.6 Projections. No later than 30 days prior to the end of the last day of each fiscal year of Borrower, deliver to Administrative Agent Projections of Borrower and each of its Subsidiaries on a Consolidated basis (including on a line of business basis) for the forthcoming fiscal year, month by month.
8.1.7 Additional Credit Parties. Upon any Person becoming a direct or indirect Subsidiary of any Credit Party (or upon any Person ceasing to be a Foreign Subsidiary of any Credit Party while remaining a Subsidiary of any Credit Party), (a) cause such Person (excluding any Foreign Subsidiary) to become a “Subsidiary Guarantor” and “Credit Party” hereunder, jointly and severally with the other Subsidiary Guarantors, pursuant to a joinder agreement or other supplement hereto in form and substance reasonably satisfactory to Administrative Agent, (b) cause such Person (excluding any Foreign Subsidiary) to pledge all of its assets to Administrative Agent on a second priority basis (subject only to Permitted Liens) pursuant to this Agreement or a separate security agreement in form and substance reasonably satisfactory to Administrative Agent, (c) cause all of such Person’s Securities (or in the case of any Foreign Subsidiary, sixty-five percent (65%) of its Securities entitled to vote and 100% of its non-voting Securities) to be pledged and delivered to Administrative Agent pursuant to a pledge agreement in form and substance reasonably satisfactory to Administrative Agent (together with undated stock powers signed in blank), (d) cause such Person (excluding any Foreign Subsidiary) to grant a mortgage in and to all of such Person’s owned real Property in accordance with subsection 5.4, and (e) deliver such other
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documentation as Administrative Agent may reasonably request in connection with the foregoing, including, without limitation, certified resolutions and other organizational and authorizing documents of such Person and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to above), all in form, content and scope reasonably satisfactory to Administrative Agent.
8.1.8 ERISA. (i) Maintain, and cause each of its ERISA Affiliates to maintain, each Pension Plan and Foreign Plan in compliance in all material respects with the Requirement of Law, including, but not limited to ERISA, the Code and other federal or state law; (ii) cause, and cause each of its ERISA Affiliates to cause, each Plan which is qualified under Section 401(a) of the Code to maintain such qualification; (iii) make, and cause each of its ERISA Affiliates to make, all required contributions to any Plan subject to Section 412 of the Code; (iv) not engage, and cause each of its ERISA Affiliates not to engage, in a prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan or Foreign Plan and (v) not engage, and cause each of its ERISA Affiliates not to engage, in a transaction that could be subject to Section 4069 or 4212(c) of ERISA.
8.1.9 Environmental Laws.
(i) Conduct, and cause each Credit Party to conduct, its business in compliance with all Environmental Laws applicable to it, including those relating to the generation, handling, use, storage, and disposal of any Contaminant; take, and cause each of its Subsidiaries to take, prompt and appropriate action to respond to any non-compliance with Environmental Laws (or any Release), and regularly report to Administrative Agent on such response.
(ii) Without limiting the generality of the foregoing, submit to Administrative Agent and Lenders annually, commencing on the first anniversary of the Closing Date, and on each anniversary thereof thereafter, an update of the status of each environmental compliance or liability issue. Administrative Agent or any Lender may request copies of technical reports prepared by any Credit Party and its communications with any Governmental Authority to determine whether any Credit Party or any of its Subsidiaries is proceeding reasonably to correct, cure or contest in good faith any alleged non-compliance or environmental liability. Credit Parties shall, at Administrative Agent’s or Majority Lenders’ request and at Credit Parties’ expense, (A) retain an independent environmental engineer acceptable to Administrative Agent to evaluate the site, including tests if appropriate, where the non-compliance or alleged non-compliance with Environmental Laws has occurred and prepare and deliver to Administrative Agent, in sufficient quantity for distribution by Administrative Agent to Lenders, a report setting forth the results of such evaluation, a proposed plan for responding to any environmental problems described therein, and an estimate of the costs thereof, and (B) provide to Administrative Agent and Lenders a supplemental report of such engineer whenever the scope of the environmental problems, or the response thereto or the estimated costs thereof, shall increase in any material respect.
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(iii) Administrative Agent and its representatives will have the right at any reasonable time to enter and visit the real Properties and any other place where any property of any Credit Party is located for the purposes of observing the real Property, taking and removing soil or groundwater samples, and conducting tests on any part of the real Property. Administrative Agent is under no duty, however, to visit or observe the real Properties or to conduct tests, and any such acts by Administrative Agent will be solely for the purposes of protecting Administrative Agent’s Liens in the Collateral and preserving Administrative Agent’s and Lenders’ rights under the Loan Documents. No site visit, observation or testing by Administrative Agent and Lenders will result in a waiver of any default of any Credit Party or impose any liability on Administrative Agent or Lenders. In no event will any site visit, observation or testing by Administrative Agent be a representation that hazardous substances are or are not present in, on or under the real Properties, or that there has been or will be compliance with any Environmental Law. Neither any Credit Party nor any other party is entitled to rely on any site visit, observation or testing by Administrative Agent. Administrative Agent and Lenders owe no duty of care to protect any Credit Party or any other party against, or to inform any Credit Party or any other party of, any hazardous substances or any other adverse condition affecting the real Properties. Administrative Agent may in its sole discretion disclose to any Credit Party or to any other party if so required by law any report or findings made as a result of, or in connection with, any site visit, observation or testing by Administrative Agent. Each Credit Party understands and agrees that Administrative Agent makes no warranty or representation to any Credit Party or any other party regarding the truth, accuracy or completeness of any such report or findings that may be disclosed. Each Credit Party also understands that depending on the results of any site visit, observation or testing by Administrative Agent and disclosed to any Credit Party, such Credit Party may have a legal obligation to notify one or more environmental agencies of the results, that such reporting requirements are site-specific, and are to be evaluated by such Credit Party without advice or assistance from Administrative Agent. In each instance, Administrative Agent will give Borrower or the other applicable Credit Party reasonable notice before entering the real Properties or any other place Administrative Agent is permitted to enter under this subsection 8.1.9. Administrative Agent will make reasonable efforts to avoid interfering with any Credit Party’s use of the real Properties or any other property in exercising any rights provided hereunder.
8.2 Negative Covenants. During the Term, and thereafter for so long as there are any Obligations (other than unasserted contingent indemnification obligations that are not then due and payable, whether by acceleration, termination or otherwise) outstanding, each Credit Party covenants that it shall not, and shall not permit any of its Subsidiaries to:
8.2.1 Mergers; Consolidations; Acquisitions; Structural Changes. Merge or consolidate with any Person; nor change its or any of its Subsidiaries’ state of incorporation or organization, Type of Organization or Organizational I.D. Number; nor change its or any of its Subsidiaries’ legal name; nor acquire all or any substantial part of the Properties of any Person, except for:
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(i) (A) mergers of any Subsidiary of a Credit Party that is not a Subsidiary Guarantor into any Credit Party that is not a Subsidiary Guarantor and (B) mergers of any Subsidiary Guarantor into any other Subsidiary Guarantor or into Borrower; and
(ii) acquisitions of assets that constitute Capital Expenditures.
8.2.2 Loans. Make any loans or other advances of money to any Person, other than (i) for salary, travel advances, advances against commissions and other similar advances to employees in the ordinary course of business, (ii) extensions of trade credit in the ordinary course of business, (iii) deposits with financial institutions permitted under this Agreement, (iv) prepaid expenses, (v) intercompany loans between any Credit Party and any other Credit Party, (vi) deposits permitted to be made by subsection 8.2.5(vi), (vii) promissory notes received as consideration in connection with the asset dispositions permitted under subsection 8.2.8(viii) and (viii) to the extent constituting a loan or advance, rental agreements that contain options granted to customers of Credit Parties to the extent such rental agreements are entered into in the ordinary course of business and consistent with past practices, and so long as (x) customers may purchase the Rental Equipment Inventory rented by such customers at the expiration of the applicable rental term at a purchase price not less than the fair market value of such Rental Equipment Inventory and (y) at all times prior to the payment of such purchase price, the applicable Credit Party retains full legal and beneficial ownership of the applicable Rental Equipment Inventory.
8.2.3 Total Indebtedness. Create, incur, assume, or suffer to exist, any Indebtedness, except:
(i) Obligations owing to Administrative Agent or any Lender under this Agreement or any of the other Loan Documents;
(ii) Indebtedness existing on the date of this Agreement and listed on Exhibit 8.2.3;
(iii) Permitted Purchase Money Indebtedness;
(iv) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(v) guaranties of any Indebtedness permitted hereunder;
(vi) Indebtedness in respect of intercompany loans permitted under subsection 8.2.2(v);
(vii) obligations to pay Rentals permitted by subsection 8.2.17;
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(viii) to the extent not included above, trade payables, accruals and accounts payable in the ordinary course of business (in each case to the extent not overdue) not for Money Borrowed;
(ix) the First Lien Debt, and extensions of maturity, refinancing or modification of the terms thereof, but only to the extent permitted by subsection 8.2.6; provided that (A) the aggregate outstanding principal amount of First Lien Debt (with letters of credit issued thereunder being deemed to have a principal amount equal to the maximum potential liability of Borrower or any of its Subsidiaries thereunder) at any time outstanding shall not exceed $350,000,000 less the aggregate amount of (x) all Net Cash Proceeds of asset sales or other dispositions or casualty or condemnation events, incurrences or issuances of additional Indebtedness (other than any Indebtedness that refinances the First Lien Debt outstanding on such date in its entirety) or issuances of additional equity and (y) amounts resulting from an excess cash flow sweep or similar concept, in the case of each of clauses (x) and (y), that are applied by Borrower or any of its Subsidiaries after the Closing Date to repay, whether optionally or mandatorily, any term First Lien Debt or to repay, whether optional or mandatorily, any revolving credit First Lien Debt and effect a corresponding commitment reduction with respect thereto, and (B) Borrower shall not create, incur or assume First Lien Debt (other than Permitted Overadvances) if, after giving effect to such creation, incurrence or assumption, the Collateral Coverage Ratio would exceed 1.00 to 1.00;
(x) Indebtedness arising under performance and surety bonds in the ordinary course of business;
(xi) Indebtedness incurred to finance the unpaid portion of annual insurance premiums payable by Credit Parties and their Subsidiaries in the ordinary course of business, provided, that the aggregate principal amount of such Indebtedness does not exceed at any time $4,000,000;
(xii) Indebtedness in respect of Derivative Obligations and other Product Obligations, in each case, incurred in the ordinary course of business and not for speculative purposes; and
(xiii) Indebtedness not included in clauses (i) through (xii) above which does not exceed at any time $7,500,000 in aggregate principal amount.
8.2.4 Affiliate Transactions. Enter into, or be a party to, any transaction with any Affiliate of any Credit Party or any holder of any Securities of any Credit Party or any Subsidiary of any Credit Party (other than any other Credit Party), including without limitation in respect of any management, consulting or similar fees, unless such transaction meets each of the following conditions: (i) such transaction is in the ordinary course of and pursuant to the reasonable requirements of such Credit Party’s or such Subsidiary’s business and upon fair and reasonable terms which are no less favorable to such Credit Party or such Subsidiary than would be obtained in a comparable arms-length transaction with a Person not an Affiliate or Security holder of any Credit Party, provided that if such transaction involves consideration in excess of $7,500,000 and a Credit Party
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has knowledge that the other party or parties to such transaction are Affiliates of Credit Parties or their Subsidiaries, Credit Parties shall fully disclose the terms of such transaction to Administrative Agent prior to the consummation thereof and (ii) such transaction is otherwise permitted under Section 8 of this Agreement.
8.2.5 Limitation on Liens. Create or suffer to exist any Lien upon any of its Property, income or profits, whether now owned or hereafter acquired, except:
(i) Liens at any time granted in favor of Administrative Agent for the benefit of Administrative Agent and Lenders;
(ii) Liens for taxes, assessments or governmental charges (excluding any Lien imposed pursuant to any of the provisions of ERISA and any Environmental Lien) not yet due, or being contested in the manner described in subsection 7.1.14 hereto, but only if in Administrative Agent’s judgment such Lien would not reasonably be expected to adversely effect Administrative Agent’s rights or the priority of Administrative Agent’s Lien on any Collateral;
(iii) Liens arising in the ordinary course of the business of any Credit Party or any of its Subsidiaries by operation of law or regulation, but only if payment in respect of any such Lien is not at the time required and such Liens do not, in the aggregate, materially detract from the value of the Property of such Credit Party or any of its Subsidiaries or materially impair the use thereof in the operation of the business of such Credit Party or any of its Subsidiaries;
(iv) Purchase Money Liens securing Permitted Purchase Money Indebtedness;
(v) such other Liens existing on the Closing Date and as appear on Exhibit 8.2.5 hereto;
(vi) Liens incurred or deposits made in the ordinary course of business in connection with (1) worker’s compensation, social security, unemployment insurance and other like laws or (2) sales contracts, leases, statutory obligations, work in progress advances and other similar obligations not incurred in connection with the borrowing of money or the payment of the deferred purchase price of property;
(vii) reservations, covenants, zoning and other land use regulations, title exceptions or encumbrances granted in the ordinary course of business, affecting real Property owned or leased by a Credit Party or one of its Subsidiaries; provided that such exceptions do not in the aggregate materially interfere with the use of such Property in the ordinary course of any Credit Party’s or such Subsidiary’s business;
(viii) judgment Liens that do not give rise to an Event of Default under subsection 10.1.12;
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(ix) Liens securing Indebtedness permitted by subsection 8.2.3(ix), but only so long as the Intercreditor Agreement shall be in full force and effect and applicable to all Indebtedness secured by such Liens;
(x) deposits to secure surety and appeal bonds, performance bonds and other obligations of like nature, in each case incurred in the ordinary course of business;
(xi) Liens on proceeds payable under any insurance policy (whether arising by statute or contract) to the extent securing the payment of the unpaid portion of annual insurance premiums payable by Credit Parties and their Subsidiaries in respect of such insurance policy, provided that the aggregate amount so secured shall not at any time exceed $2,500,000;
(xii) Liens securing Product Obligations incurred in the ordinary course of business and not for speculative purposes;
(xiii) Liens of a collection bank arising under Section 4-208 of the Uniform Commercial Code on items in the course of collection; and
(xiv) Liens in favor of New Holland Credit Company and its parent entities, Daewoo Heavy Industries America Corporation, Stihl Incorporated and Mitsui Machinery Distribution, Inc. (the “Specified Vendors”), to the extent and only to the extent such Liens encumber property sold or leased to Credit Parties by such Specified Vendors which has not been paid in full, and only to the extent that the principal amount of the obligations secured by such Liens does not exceed $2,500,000 in the aggregate at any one time outstanding.
8.2.6 Payments and Amendments of Certain Debt.
(i) make any payment of any part or all of any Subordinated Debt or take any other action or omit to take any other action in respect of any Subordinated Debt, except in accordance with the subordination agreement relative thereto or the subordination provisions thereof; or
(ii) amend or modify any agreement, instrument or document evidencing or relating to any Subordinated Debt; or
(iii) amend, modify, replace or refinance any First Lien Debt Document if such amendment, modification, replacement or refinancing would (A) modify (or have the effect of modifying) the provisions therein in respect of the repayment, prepayment, amendment or refinancing of (or any like concept with respect to) the Obligations or the documents evidencing the Obligations or otherwise relating thereto), in each case, in a manner that would be materially adverse to Lenders as compared to those in effect on the Closing Date or (B) increase the applicable margin used in determining the interest rate for the Indebtedness under the First Lien Debt Documents (or, if the amended First Lien Debt Documents provide for a fixed interest rate, increase the effective interest rate) from the applicable margin used in determining
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the interest rate thereunder that would apply on the Closing Date if “Level I” on the pricing grid in the definition of “Applicable Margin” in the First Lien Loan and Security Agreement were to apply (or, if the amended First Lien Debt Documents provide for a fixed interest rate, the interest rate that would be applicable to the First Lien Debt on the date of such amendment or modification if such rate were determined by adding the applicable margin that would apply on the Closing Date if “Level I” on the pricing grid in the definition of “Applicable Margin” in the First Lien Loan and Security Agreement were to apply to 9 month LIBOR as of the day of such amendment or modification) by an amount in excess of the sum of (1) 2.0% plus (2) the amount, if any, by which the interest rate applicable to any portion of the Term Loans has been increased over (A) 8.0% with respect to LIBOR Portions and (B) 7.0% with respect to Base Rate Portions; provided that this subsection 8.2.6(iii) shall not prohibit any First Lien Debt Document from providing that the Indebtedness thereunder shall bear interest at a default rate of up to 2% in excess of the then stated rate at any time an event of default has occurred and is continuing thereunder.
8.2.7 Distributions. Declare or make any Distributions, except for:
(i) Distributions by any Subsidiary of a Credit Party to a Credit Party;
(ii) Distributions paid solely in Securities (other than Disqualified Capital Stock) of a Credit Party or any of its Subsidiaries (and solely as permitted under Section 8.2.9); and
(iii) Distributions by a Credit Party in amounts necessary to permit such Credit Party to repurchase Securities of a Credit Party from employees of any Credit Party or any of its Subsidiaries upon the termination of their employment, so long as no Default or Event of Default exists at the time of or would be caused by the making of such Distributions and the aggregate cash amount of all such Distributions, measured at the time when made, does not exceed $500,000 in any fiscal year of Credit Parties.
8.2.8 Disposition of Assets. Sell, lease, license or otherwise dispose of any of its Properties, including any disposition of Property as part of a sale and leaseback transaction, to or in favor of any Person, except for:
(i) leases of Serialized Rental Equipment Inventory and other Inventory in the ordinary course of business;
(ii) sales or other dispositions of Serialized Rental Equipment Inventory in the ordinary course of business (including by way of exchange of such Serialized Rental Equipment Inventory for other Serialized Rental Equipment Inventory of an equal or greater fair market value pursuant to original equipment manufacturers’ trade packages in the ordinary course of business), provided that if the Net Cash Proceeds of any single disposition or series of related dispositions of such Property exceed $5,000,000 and such Net Cash Proceeds are not reinvested within 180 days after receipt of such Net Cash Proceeds, such proceeds shall, if and to the extent required by
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subsection 3.3.1, be remitted to Administrative Agent for application to the Term Loans and other Obligations as provided in subsection 3.3.1;
(iii) sales of Inventory (other than Serialized Rental Equipment Inventory) in the ordinary course of business;
(iv) sales of Property (other than Accounts or Inventory) with a fair market value or a net book value (whichever is greater) not exceeding $6,000,000 in the aggregate during any consecutive twelve-month period;
(v) transfers of Property to a Credit Party by another Credit Party or to a Credit Party by a Subsidiary of a Credit Party;
(vi) dispositions of Property that is worn, damaged, uneconomic or obsolete or no longer used or useful, provided that either (A) (1) such Property is replaced with Property which is used or useful in the business of a Credit Party or one of its Subsidiaries (other than a Foreign Subsidiary), (2) the replacement Property is acquired or committed to be purchased within 180 days prior to or following the disposition of the Property that is to be replaced and (3) the replacement Property shall be free and clear of Liens other than Liens securing Permitted Purchase Money Indebtedness or (B) the Net Cash Proceeds of such disposition, if and to the extent required by subsection 3.3.1, are remitted to Administrative Agent for application to the Term Loans as provided in subsection 3.3.1;
(vii) dispositions in the ordinary course of business of investments described in paragraphs (iv), (v), (vi) and (vii) of the definition of the term “Restricted Investments”; and voluntary terminations of Derivative Obligations in the ordinary course of business;
(viii) the sale of all or part of the assets or business constituting the Studio Business Unit and the Hoist Business Unit of Credit Parties in one or more transactions, provided that (A) each such transaction is for a sales price of not less than $10,000,000, (B) the consideration received consists solely of (x) cash or (y) a combination of cash and promissory notes issued by the purchaser of such business (provided that in the case of consideration consisting of promissory notes, (1) such consideration shall not exceed 35% of the aggregate sales price in the case of the Hoist business and 35% of the aggregate sales price in the case of the Studio business, (2) such promissory notes shall be pledged to Administrative Agent, for the benefit of the Lenders, pursuant to a pledge agreement in form and substance reasonably satisfactory to Administrative Agent, (3) all payments of principal, interest and other amounts payable under such promissory notes and that are received by Credit Parties or their Subsidiaries shall be remitted to Administrative Agent for application in accordance with subsection 3.3.1 and (4) the aggregate principal amount of all promissory notes received as consideration for all asset sales permitted under this subsection 8.2.8(viii) shall not exceed $7,500,000 at any one time outstanding) and (C) if Borrower shall have given Administrative Agent written notice prior to the consummation of such sale of Borrower’s intention to use the Net Cash Proceeds thereof to reinvest in the business of
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Borrower and its Subsidiaries (other than Foreign Subsidiaries) through the purchase of assets used or useful in the business of Borrower and its Subsidiaries (other than Foreign Subsidiaries), then the Net Cash Proceeds of such sale shall not be required to prepay the Term Loans; provided, further, that if (a) any Default or Event of Default shall have occurred and be continuing on the date such Net Cash Proceeds are received by Borrower or such applicable Subsidiary or at the time of such reinvestment or (b) Borrower or such applicable Subsidiary shall have failed to complete such reinvestment within 180 days after consummation of the sale of the applicable business unit, then such portion of the Net Cash Proceeds as has not been reinvested at such time shall, if and to the extent required by subsection 3.3.1, be remitted to Administrative Agent for application in accordance with subsection 3.3.1; and
(ix) the sale of assets comprising a division or business unit in one or more transactions, provided that (A) the consideration received in connection with all such sale or sales (x) shall consist solely of cash and (y) shall not exceed $100,000,000 in the aggregate, (B) the consideration received in connection with each such sale shall, at the time of execution of definitive documentation with respect to such sale, represent no less than the greater of (1) the Total Funded Senior Leverage Ratio as of the last day of the most recently ended fiscal quarter of Borrower and (2) four (4) times the amount of Adjusted Consolidated EBITDA for the twelve consecutive month period ending as of the last day of the most recently ended fiscal quarter of Borrower that is attributable to the corresponding assets sold, (C) the consideration received in connection with each such sale shall be in an amount at least equal to the orderly liquidation value of the assets sold as set forth in the most recent appraisal relating thereto delivered to Administrative Agent in accordance with the terms of the Agreement and (D) if Borrower shall have given Administrative Agent written notice prior to the consummation of such sale of Borrower’s intention to use the Net Cash Proceeds thereof to reinvest in the business of Borrower and its Subsidiaries (other than Foreign Subsidiaries) through the purchase of assets used or useful in the business of Borrower and its Subsidiaries (other than Foreign Subsidiaries), then the Net Cash Proceeds of such sale shall not be required to prepay the Term Loans; provided, further, that if (a) any Default or Event of Default shall have occurred and be continuing on the date such Net Cash Proceeds are received by Borrower or such applicable Subsidiary or at the time of such reinvestment or (b) Borrower or such applicable Subsidiary shall have failed to complete such reinvestment within 180 days after consummation of the sale of the applicable division or business unit, then such portion of the Net Cash Proceeds as has not been reinvested at such time shall, if and to the extent required by subsection 3.3.1, be remitted to Administrative Agent for application in accordance with subsection 3.3.1
provided, that sales or other dispositions pursuant to the foregoing clauses (iv), (vi), (viii) and (ix) shall only be permitted so long as no Default or Event of Default exists at the time of such sale or disposition; and provided, further, that if Administrative Agent shall have delivered a Dominion Notice in accordance with subsection 6.2.4, the Net Cash Proceeds of any sale or disposition pursuant to this subsection 8.2.8 shall be, if and to the extent required by subsection 3.3.1, remitted to Administrative Agent for application to the Term Loans and other Obligations as provided in subsection 3.3.1.
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8.2.9 Issuance of Securities. Issue any additional Securities, except for issuances (i) of Securities of a Credit Party (other than Borrower) to another Credit Party, (ii) of Securities of Borrower to management and employees of any Credit Party, (iii) of Securities of Borrower to Persons that are holders of Securities of Borrower on the Closing Date, (iv) of Securities of Borrower, the Net Cash Proceeds of which are used to purchase Collateral or (v) of Securities of Borrower, the Net Cash Proceeds of which are used to repay the Term Loans as and to the extent provided in subsection 3.3.2; provided, however, that no Credit Party or any of its Subsidiaries may issue Securities consisting of Disqualified Capital Stock; and provided, further, that no issuance shall be permitted pursuant to this subsection if such issuance would result in a Change of Control.
8.2.10 Xxxx-and-Hold Sales, Etc. Make a sale to any customer on a xxxx-and-hold, guaranteed sale, sale and return, sale on approval, repurchase or return or consignment basis, provided that Credit Parties may provide rental purchase options to their customers in the ordinary course of business and consistent with past practices, pursuant to which customers may purchase the Rental Equipment Inventory rented by such customers at the expiration of the applicable rental term for a purchase price not less than the fair market value of such Rental Equipment Inventory.
8.2.11 Restricted Investment. Make or have any Restricted Investment.
8.2.12 Subsidiaries and Joint Ventures. Create, acquire or otherwise suffer to exist any Subsidiary (other than any Subsidiary organized under the laws of Canada) or joint venture arrangement, in each case, not in existence as of the date hereof, except that Credit Parties and their Subsidiaries may enter into any joint venture arrangement after the Closing Date so long as (A) such arrangement will not involve, require or result in or otherwise obligate any cash or cash consideration made or to be made by any Credit Party or any of its Subsidiaries in an aggregate amount in excess of $5,000,000 and no Default or Event of Default shall have occurred and be continuing immediately before or after entering into such arrangement or (B) if such arrangement will involve, require or result in or otherwise obligate any cash or cash consideration made or to be made by any Credit Party or any of its Subsidiaries in an aggregate amount in excess of $5,000,000, (x) immediately before and after entering into such arrangement, no Default or Event of Default shall have occurred and be continuing and (y) Borrower shall submit a certificate of the chief financial officer of Borrower, in such officer’s capacity as such, certifying that the conditions set forth in this clause (B) have been satisfied; and provided, further, that in no event shall any joint venture arrangements entered into pursuant to this subsection 8.2.12 involve, require or result in or otherwise obligate any cash or cash consideration made or to be made by any Credit Parties or any of its Subsidiaries in an aggregate amount in excess of $15,000,000.
8.2.13 Tax Consolidation. File or consent to the filing of any consolidated income tax return with any Person other than Borrower, another Credit Party and Credit Parties’ Subsidiaries.
8.2.14 Organizational Documents. Agree to, or suffer to occur, any amendment, supplement or addition to its or any of its Subsidiaries’ charter, articles or
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certificate of incorporation, certificate of formation, limited partnership agreement, bylaws, limited liability agreement, operating agreement or other organizational documents (as the case may be), that, in each case, would reasonably be expected to have a Material Adverse Effect.
8.2.15 Fiscal Year End. Change its fiscal year end.
8.2.16 Negative Pledges. Enter into or suffer to exist any agreement limiting the ability of any Credit Party or any of its Subsidiaries (i) to voluntarily create Liens upon any of its Property, (ii) to pay dividends or to make any other distribution on any Securities of any Credit Party or any of its Subsidiaries, (iii) to pay or prepay or to subordinate any Indebtedness owed to any Credit Party or any of its Subsidiaries, (iv) to make loans or advances to any Credit Party or any of its Subsidiaries or (v) to transfer any of its property or assets to any Credit Party or any of its Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing, except for the First Lien Debt Documents as in effect on the Closing Date and any replacements or refinancings thereof (as long as such replacement or refinancing documents contain provisions with respect to the forgoing that are not more restrictive than those contained in the First Lien Debt Documents as in effect on the Closing Date).
8.2.17 Leases. Become a lessee under any operating lease (other than a lease under which a Credit Party or any of its Subsidiaries is lessor) of Property if the aggregate Rentals payable during any current or future period of twelve (12) consecutive months under the lease in question and all other leases under which Credit Parties or any of their Subsidiaries are then lessees would exceed $40,000,000. The term “Rentals” means, as of the date of determination, all payments which the lessee is required to make by the terms of any lease.
8.2.18 Anti-Terrorism Laws. (i) Conduct any business or engage in any transaction or dealing with any Blocked Person, including the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked Person; (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224; or (iii) engage in or conspire to engage in, nor permit any of their Subsidiaries to engage in or conspire to engage in, any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or the USA Patriot Act. Each of the Credit Parties shall deliver to Administrative Agent and Lenders any certification or other evidence requested from time to time by Administrative Agent or any Lender, in Administrative Agent’s sole discretion, confirming such Person’s compliance with this subsection 8.2.18.
8.2.19 Change in Nature of Business. Engage in any material line of business substantially different from those lines of business generally conducted by the Credit Parties on the date hereof or any business substantially related or incidental thereto or reasonable extensions thereof.
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8.2.20 Location of Personal Property. Have at any time personal property at any single location having a value in excess of the applicable amount payable per occurrence by the Credit Parties’ insurance with respect to any loss of such property.
8.3 Specific Financial Covenants.During the Term, and thereafter for so long as there are any Obligations outstanding, Borrower covenants that it shall comply with all of the financial covenants set forth in Exhibit 8.3 hereto. If GAAP changes from the basis used in preparing the audited financial statements delivered to Administrative Agent by Borrower on or before the Closing Date, Borrower will provide Administrative Agent with certificates demonstrating compliance with such financial covenants and will include, at the election of Borrower or upon the request of Administrative Agent, calculations setting forth the adjustments necessary to demonstrate how Borrower is also in compliance with such financial covenants based upon GAAP as in effect on the Closing Date.
SECTION 9. CONDITIONS PRECEDENT
9.1 Conditions to Term Loans. Notwithstanding any other provision of this Agreement or any of the other Loan Documents, and without affecting in any manner the rights of Administrative Agent or any Lender under the other sections of this Agreement, no Lender shall be required to make the Term Loans unless and until each of the following conditions has been satisfied on or prior to the Closing Date:
9.1.1 Documentation. Administrative Agent shall have received, in form and substance satisfactory to Administrative Agent, Syndication Agent and their respective counsel, a duly executed copy of this Agreement and the other Loan Documents, together with such additional documents, instruments, opinions and certificates as Administrative Agent, Syndication Agent and their respective counsel shall require, all in form and substance satisfactory to Administrative Agent, Syndication Agent and their respective counsel.
9.1.2 Real Property. Administrative Agent shall have received ALTA title policies, in form and substance reasonably acceptable to Administrative Agent, with respect to the Mortgages for the properties set forth on Exhibit 7.17.
9.1.3 Security Interest Matters. Administrative Agent shall have received:
(i) certified copies of lien search reports for the jurisdictions reasonably requested by Administrative Agent (including UCC, tax and judgment liens and intellectual property filings) listing all effective financing statements or other filings which name as debtor any Credit Party or any of its Subsidiaries, together with copies of such financing statements (or similar filings in any foreign jurisdiction), none of which, except as otherwise agreed in writing by Administrative Agent, shall cover any of the Collateral or show any Liens other than Permitted Liens; and
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(ii) duly executed UCC-3 Termination Statements, mortgage releases and such other instruments, in form and substance satisfactory to Administrative Agent, as shall be necessary to terminate and satisfy all Liens on the Property of the Credit Parties except Permitted Liens.
9.1.4 Insurance. Administrative Agent shall have received evidence, in form, scope, and substance, satisfactory to Administrative Agent, of all insurance coverage as required by this Agreement (including, without limitation a loss payable endorsement naming Administrative Agent and Lenders as loss payees and as additional insureds).
9.1.5 Solvency. Administrative Agent and Syndication Agent shall have determined to their satisfaction that (1) Adjusted Consolidated EBITDA (as defined in Exhibit 8.3) for Borrower and its Subsidiaries for Borrower’s fiscal year ended December 31, 2003 shall be equal to or greater than $125,000,000, (2) each Credit Party is adequately capitalized, (3) the fair saleable value of each Credit Party’s assets exceeds its liabilities on the Closing Date and (4) each Credit Party will have sufficient working capital to pay its debts as they become due.
9.1.6 Payoff of Prior Indebtedness. Administrative Agent shall have received satisfactory evidence that, after giving effect to the making of the Term Loans and the receipt of the proceeds of the First Lien Debt to be funded on the Closing Date, the Prior Indebtedness shall be fully and finally paid.
9.1.7 Consents. Administrative Agent shall have received evidence that all governmental, shareholder and third party consents and approvals necessary in connection with the transactions and related financings contemplated hereby and by the Loan Documents were obtained by Credit Parties and all applicable waiting periods have expired without any action being taken by any authority that could restrain, prevent or impose any material adverse conditions on such transactions or that could seek or threaten any of the foregoing, and no law or regulation shall be applicable which in the judgment of Administrative Agent could have such effect.
9.1.8 Financial Statements. Administrative Agent shall have received, each in form and substance satisfactory to Administrative Agent and Syndication Agent, (a) a pro forma balance sheet of Borrower dated as at the Closing Date which balance sheet shall reflect no material adverse changes from the most recent pro forma balance sheet of Borrower previously delivered to Administrative Agent and (b) interim monthly financial statements for Borrower as at June 30, 2004.
9.1.9 Payment of Fees. Administrative Agent shall have received, for its account or the account of Syndication Agent, the Joint Lead Arrangers or Lenders, as applicable, payment in full of the fees required to be paid to Administrative Agent, Syndication Agent or Lenders under or in connection with this Agreement on the Closing Date, and Administrative Agent shall have received evidence satisfactory to Administrative Agent that the reasonable fees and expenses of Administrative Agent’s, Syndication Agent’s (subject to the limitations set forth herein) and Lenders’ counsel,
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financial advisors, appraisers, commercial finance examiners and other advisers incurred or accrued through the Closing Date have been paid.
9.1.10 Issuance of First Lien Debt. (i) Borrower shall have incurred the term loan portion of the First Lien Debt on terms and conditions satisfactory to Administrative Agent and Syndication Agent and (ii) Administrative Agent shall have received (A) evidence satisfactory to it that Borrower has received gross proceeds of at least $200,000,000 from the incurrence of the term portion of the First Lien Debt (and shall have received revolving credit commitments with respect to an additional $100,000,000 of the First Lien Debt), (B) copies of all of the First Lien Debt Documents as in effect on the Closing Date, certified as true and correct copies thereof by a Responsible Officer of Borrower, in such officer’s capacity as such, together with a certificate of a Responsible Officer of Borrower stating that such agreements remain in full force and effect, have not been otherwise amended or modified, and that, to the knowledge of such Responsible Officer, none of the Credit Parties is in breach or default in any of its obligations under such agreements, other than breaches or defaults that, individually and in the aggregate, are of immaterial obligations thereunder, and (C) a duly executed copy of the Intercreditor Agreement.
9.1.11 [Intentionally Omitted].
9.1.12 Material Adverse Change. As of the Closing Date, since March 31, 2004, there shall not have been any material adverse change, in the reasonable opinion of Administrative Agent and Syndication Agent, in the business, assets, liabilities (actual or contingent), results of operations or financial condition of Borrower and its Subsidiaries taken as a whole and no event or condition exists which would be reasonably likely to result in any Material Adverse Effect.
9.1.13 Appraisals. Administrative Agent and Syndication Agent shall have received an appraisal, satisfactory to Administrative Agent and Syndication Agent in form and substance, of all of the Serialized Rental Equipment Inventory of Credit Parties as of May 31, 2004 and performed by Xxxxx Asset Services which shall state the orderly liquidation value (expressed as a percentage of net book value) of all such Serialized Rental Equipment Inventory.
9.1.14 USA Patriot Act Certificate. Administrative Agent shall have received, at least five (5) Business Days prior to the Closing Date, a certificate of a Responsible Officer of Borrower, in such officer’s capacity as such, reasonably satisfactory thereto, for the benefit of Administrative Agent and the Lenders, that sets forth information required by the USA Patriot Act including, without limitation, the identity of Credit Parties, the names and addresses of the Credit Parties and other information that will allow Administrative Agent or any Lender, as applicable, to identify the Credit Parties in accordance with the USA Patriot Act.
9.1.15 Representations and Warranties; No Default. At the time of and after giving effect to the making of the Term Loans and the application of the proceeds thereof, (i) the representations and warranties contained in Section 7 and in each other
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Loan Document delivered to Administrative Agent or any Lender pursuant hereto or thereto shall be true and correct in all material respects on and as of such date as though made on and as of such date and (ii) no Default or Event of Default shall have occurred and be continuing.
9.1.16 First Lien Debt Documents. The making of such Term Loan shall not contravene, violate or result in a default under the First Lien Debt Documents.
Without limiting the generality of the provisions of this Section 9, for purposes of determining compliance with the conditions specified in this Section 9, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Administrative Agent, the Syndication Agent or a Lender unless Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
10.1 Events of Default. The occurrence of one or more of the following events shall constitute an “Event of Default”:
10.1.1 Payment of Obligations. Credit Parties or any of their Subsidiaries shall fail to pay (a) any principal of any Term Loan hereunder or under any Term Note on the due date thereof (whether due at stated maturity, on demand, upon acceleration or otherwise) or (b) any of the Obligations (other than the amount referred to in clause (a)) hereunder or under any Term Note or under any other Loan Document on the due date thereof (whether due at stated maturity, on demand, upon acceleration or otherwise) and, in the case of clause (b) only, such default shall continue unremedied for a period of three (3) Business Days.
10.1.2 Misrepresentations. Any representation, warranty or other statement made or furnished to Administrative Agent or any Lender by or on behalf of any Credit Party or any Subsidiary of any Credit Party in this Agreement or any of the other Loan Documents proves to have been false or misleading in any material respect when made or furnished.
10.1.3 Breach of Specific Covenants. Any Credit Party shall fail or neglect to perform, keep or observe any covenant contained in Section or subsection 5.2, 5.3, 5.4, 6.1.1, 6.1.2, 6.2.4, 6.2.5, 8.1.1, 8.1.2, 8.1.4, 8.2 or 8.3 hereof on the date that Credit Parties are required to perform, keep or observe such covenant or shall fail or neglect to perform, keep or observe any covenant contained in subsection 8.1.3 or 8.1.6 hereof within 10 days following the date on which Credit Parties are required to perform, keep or observe such covenant.
10.1.4 Breach of Other Covenants. Any Credit Party or any of its Subsidiaries shall fail or neglect to perform, keep or observe any covenant contained in this Agreement (other than a covenant which is dealt with specifically elsewhere in
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subsection 10.1 hereof) or any of the other Loan Documents and the breach of such other covenant is not cured within 15 days.
10.1.5 Other Defaults. There shall occur any default or event of default on the part of any Credit Party or any Subsidiary of any Credit Party under any agreement, document or instrument to which such Credit Party or such Subsidiary of such Credit Party is a party or by which such Credit Party or such Subsidiary of such Credit Party or any of its Property is bound, evidencing or relating to (a) any Indebtedness (other than the Obligations or the First Lien Debt) with an outstanding principal balance in excess of $5,000,000, if the payment or maturity of such Indebtedness is or could be accelerated in consequence of such event of default or demand for payment of such Indebtedness is made or could be made in accordance with the terms thereof or (b) the First Lien Debt; provided that with respect to any default or event of default under the First Lien Debt Documents, such default or event of default shall constitute an Event of Default under this Agreement if either (i) such default or event of default is a payment default or (ii) such default or event of default is other than as described in clause (i) and such default or event of default occurs and is not cured or waived within thirty (30) days after the occurrence of such default or event of default.
10.1.6 Insolvency and Related Proceedings.
(i) Any Credit Party or any Subsidiary of any Credit Party shall (A) be unable generally to pay its debts as they become due; (B) make any offer of settlement, extension or composition to their respective unsecured creditors generally; (C) file a voluntary petition in bankruptcy or file a voluntary petition or an answer or otherwise commence any action or proceeding seeking reorganization, arrangement or readjustment of its debts or for any other relief under the U.S. federal bankruptcy laws, or under any other bankruptcy or insolvency act or law, state or federal, now or hereafter existing, or consent to, approve of, or acquiesce in, any such petition, action or proceeding; (D) apply for or acquiesce in the appointment of a receiver, assignee, liquidator, sequestrator, custodian, monitor, trustee or similar officer for it or for all or any part of its property; or (E) make an assignment for the benefit of creditors;
(ii) an involuntary petition shall be filed or an action or proceeding otherwise commenced seeking reorganization, arrangement, consolidation or readjustment of the debts of any Credit Party or any Subsidiary of any Credit Party or for any other relief under the U.S. bankruptcy laws or under any other bankruptcy or insolvency act or law, state or federal, now or hereafter existing and such petition or proceeding shall not be dismissed within thirty (30) days after the filing or commencement thereof or an order of relief shall be entered with respect thereto;
(iii) a receiver, assignee, liquidator, sequestrator, custodian, monitor, trustee or similar officer for any Credit Party or any Subsidiary of any Credit Party or for all or any part of its property shall be appointed or a warrant of attachment, execution or similar process shall be issued against any part of the property of any Credit Party or any Subsidiary of any Credit Party;
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(iv) any Credit Party or any Subsidiary of any Credit Party (other than any Inactive Subsidiary) shall file a certificate of dissolution under applicable state law or shall be liquidated, dissolved or wound-up or shall commence or have commenced against it any action or proceeding for dissolution, winding-up or liquidation;
(v) any Credit Party or any Subsidiary of any Credit Party shall take any corporate action in furtherance of any of the matters described in the foregoing clauses (i) through (iv).
10.1.7 Business Disruption; Condemnation. (i) There shall occur a cessation of a substantial part of the business of any Credit Party or any Subsidiary of any Credit Party for a period which materially adversely affects Credit Parties’ and their Subsidiaries’ capacity, taken as a whole, to continue their business on a profitable basis; or (ii) any Credit Party or any Subsidiary of any Credit Party shall suffer the loss or revocation of any material license or permit now held or hereafter acquired by any Credit Party or any Subsidiary of any Credit Party which is necessary to the continued or lawful operation of its business if such loss or revocation could reasonably be expected to have a Material Adverse Effect; or (iii) any Credit Party or any Subsidiary of any Credit Party shall be enjoined, restrained or in any way prevented by court, governmental or administrative order from conducting all or any material part of its business affairs which injunction, restraint or prevention materially adversely affects Credit Parties’ and their Subsidiaries’ capacity, taken as a whole, to continue their business on a profitable basis; or (iv) any material lease or agreement pursuant to which any Credit Party or any Subsidiary of any Credit Party, uses or occupies any Property shall be canceled or terminated prior to the expiration of its stated term, except any such lease or agreement the cancellation or termination of which could not reasonably be expected to have a Material Adverse Effect; or (v) any material portion of the Collateral shall be taken through condemnation or the value of such material portion of the Collateral shall be impaired through condemnation.
10.1.8 Change of Control. A Change of Control shall occur.
10.1.9 ERISA Event. An ERISA Event shall occur with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of any Credit Party or any ERISA Affiliate under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $1,000,000; (ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans at any time exceeds $1,000,000; (iii) any Credit Party or any ERISA Affiliate shall fail to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan; or (iv) a Lien is reasonably expected to arise in accordance with the provisions of ERISA against the assets of any Credit Party, any Subsidiary thereof or any ERISA Affiliate.
10.1.10 Challenge to Agreement. Any Credit Party or any Subsidiary of any Credit Party, or any Affiliate of any of them, shall challenge or contest in any action, suit or proceeding the validity or enforceability of this Agreement or any of the other
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Loan Documents, the legality or enforceability of any of the Obligations or the perfection or priority of any Lien granted to Administrative Agent.
10.1.11 Criminal Forfeiture. Any Credit Party or any Subsidiary of any Credit Party shall be criminally indicted or convicted under any law that could reasonably be expected to lead to a forfeiture of any material portion of the Collateral, and in the case of any indictment, such indictment is not dismissed within one hundred twenty (120) days.
10.1.12 Judgments. Any money judgment, writ of attachment or similar processes (collectively, “Judgments”) are issued or rendered against any Credit Party or any Subsidiary of any Credit Party, or any of their respective Property (i) in the case of money judgments, in an amount of $3,000,000 or more for any single judgment, attachment or process or $9,000,000 or more for all such judgments, attachments or processes in the aggregate, in each case in excess of any applicable insurance with respect to which the insurer has admitted liability, and (ii) in the case of non-monetary Judgments, such Judgment or Judgments (in the aggregate) could reasonably be expected to have a Material Adverse Effect, in each case which Judgment is not stayed, released or discharged within 60 days.
10.1.13 Material Adverse Effect. Any event occurs which reasonably could be expected to have a Material Adverse Effect.
10.1.14 Intercreditor Arrangements. (i) Any of the Obligations of any Credit Party under the Loan Documents for any reason shall cease to be permitted under the First Lien Debt Documents or in any agreement evidencing any refinancing thereof as permitted under the terms of the Loan Documents, other than as a result, directly or indirectly, of any acts or omissions of Administrative Agents or Lenders or (ii) the Intercreditor Agreement shall, in whole or in part, cease to be effective or cease to be legally valid, binding and enforceable against the holders of the First Lien Debt or any refinanced Indebtedness thereof as permitted under the terms of the Loan Documents other than as a result, directly or indirectly, of any acts or omissions of Administrative Agent or the Discharge of the First Lien Obligations (as defined in the Intercreditor Agreement).
10.1.15 Loan Documents; Liens. Any Loan Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against any Credit Party intended to be a party thereto; or any Security Document shall for any reason fail or cease to create a valid and perfected Lien (subject only to Permitted Liens) in favor of Administrative Agent for the benefit of Administrative Agent and Lenders on any material portion of the Collateral purported to be covered thereby.
10.2 Acceleration of the Obligations. Upon or at any time after the occurrence and during the continuance of an Event of Default, Administrative Agent or Majority Lenders may declare all or any portion of the Obligations at once due and payable without presentment, demand protest or further notice by Administrative Agent or any Lender,
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and Credit Parties shall forthwith pay to Administrative Agent, the full amount of such Obligations, provided, that upon the occurrence of an Event of Default specified in subsection 10.1.6 hereof, all of the Obligations shall become automatically due and payable, in each case without declaration, notice or demand by Administrative Agent or any Lender.
10.3 Other Remedies. Upon the occurrence and during the continuance of an Event of Default, Administrative Agent shall have and may exercise from time to time the following other rights and remedies, which rights and remedies, when in respect of the Collateral, shall be subject to the Intercreditor Agreement:
10.3.1 All of the rights and remedies of a secured party under the UCC or under other applicable law, and all other legal and equitable rights to which Administrative Agent or Lenders may be entitled, all of which rights and remedies shall be cumulative and shall be in addition to any other rights or remedies contained in this Agreement or any of the other Loan Documents, and none of which shall be exclusive.
10.3.2 The right to take immediate possession of the Collateral, and to (i) require each Credit Party and each of its Subsidiaries to assemble the Collateral, at Credit Parties’ expense, and make it available to Administrative Agent at a place designated by Administrative Agent which is reasonably convenient to both parties, and (ii) enter any premises where any of the Collateral shall be located and to keep and store the Collateral on said premises until sold (and if said premises be the Property of any Credit Party or any Subsidiary of any Credit Party, Credit Parties agree not to charge, or permit any of its Subsidiaries to charge, Administrative Agent for storage thereof).
10.3.3 The right to sell or otherwise dispose of all or any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale or sales, with only such notice, if any, as may be required by law, in lots or in bulk, for cash or on credit, all as Administrative Agent, in its sole discretion, may deem advisable. Administrative Agent may, at Administrative Agent’s option, disclaim any and all warranties regarding the Collateral in connection with any such sale. Credit Parties agree that, if any notice is required, 10 days’ written notice to Credit Parties or any of their Subsidiaries of any public or private sale or other disposition of Collateral shall be reasonable notice thereof, and such sale shall be at such locations as Administrative Agent may designate in said notice. Administrative Agent shall have the right to conduct such sales on any Credit Party’s or any of its Subsidiaries’ premises, without charge therefor, and such sales may be adjourned from time to time in accordance with applicable law. Administrative Agent shall have the right to sell, lease or otherwise dispose of the Collateral, or any part thereof, for cash, credit or any combination thereof, and Administrative Agent, on behalf of Lenders, may purchase all or any part of the Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of such purchase price, may set off the amount of such price against the Obligations. The proceeds realized from the sale of any Collateral may be applied: first to the costs, expenses and attorneys’ fees incurred by Administrative Agent in collecting the Obligations, in enforcing the rights of Administrative Agent and Lenders under the Loan Documents and in collecting, retaking, completing, protecting, removing, storing,
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advertising for sale, selling and delivering any Collateral; second to the interest due upon any of the Obligations; and third, to the principal of the Obligations. If any deficiency shall arise, each Credit Party shall remain jointly and severally liable to Administrative Agent and Lenders therefor.
10.3.4 Administrative Agent is hereby granted a license or other right to use, without charge, each Credit Party’s and each of its Subsidiaries’ labels, patents, copyrights, licenses, rights of use of any name, trade secrets, trade names, trademarks and advertising matter, or any Property of a similar nature, as it pertains to the Collateral, in completing, advertising for sale and selling any Collateral and each Credit Party’s and each of its Subsidiaries’ rights under all licenses and all franchise agreements shall inure to Administrative Agent’s benefit.
10.3.5 [Intentionally Omitted].
10.4 Setoff and Sharing of Payments. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, during the continuance of any Event of Default, each Lender is hereby authorized by Credit Parties at any time or from time to time and with reasonably prompt subsequent notice to Credit Parties (any prior or contemporaneous notice to Credit Parties being hereby expressly waived) to set off and to appropriate and to apply any and all (i) balances held by such Lender at any of its offices for the account of any Credit Party or any of its Subsidiaries (regardless of whether such balances are then due to a Credit Party or its Subsidiaries) and (ii) other property at any time held or owing by such Lender to or for the credit or for the account of any Credit Party or any of its Subsidiaries, against and on account of any of the Obligations. Any Lender exercising a right to set off shall purchase for cash (and the other Lenders shall sell) interests in each such other Lender’s pro rata share of the Obligations as would be necessary to cause such Lender to share such excess with each other Lender in accordance with their respective Aggregate Percentages. Each Credit Party agrees, to the fullest extent permitted by law, that any Lender may exercise its right to set off with respect to amounts in excess of its pro rata share of the Obligations and upon doing so shall deliver such excess to Administrative Agent for the benefit of all Lenders in accordance with the Aggregate Percentages.
10.5 Remedies Cumulative; No Waiver. All covenants, conditions, provisions, warranties, guaranties, indemnities, and other undertakings of Credit Parties contained in this Agreement and the other Loan Documents, or in any document referred to herein or contained in any agreement supplementary hereto or in any schedule given to Administrative Agent or any Lender or contained in any other agreement between any Lender and Credit Parties or between Administrative Agent and Credit Parties heretofore, concurrently, or hereafter entered into, shall be deemed cumulative to and not in derogation or substitution of any of the terms, covenants, conditions, or agreements of Credit Parties herein contained. The failure or delay of Administrative Agent or any Lender to require strict performance by Credit Parties of any provision of this Agreement or to exercise or enforce any rights, Liens, powers, or remedies hereunder or under any of the aforesaid agreements or other documents or security or Collateral shall not operate as a waiver of such performance, Liens, rights, powers and remedies, but all such
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requirements, Liens, rights, powers, and remedies shall continue in full force and effect until all Term Loans and other Obligations owing or to become owing from Credit Parties to Administrative Agent and each Lender have been fully satisfied. None of the undertakings, agreements, warranties, covenants and representations of any Credit Party contained in this Agreement or any of the other Loan Documents and no Default or Event of Default by any Credit Party under this Agreement or any other Loan Documents shall be deemed to have been suspended or waived by Lenders, unless such suspension or waiver is by an instrument in writing specifying such suspension or waiver and is signed by a duly authorized representative of Administrative Agent and directed to such Credit Party.
SECTION 11. ADMINISTRATIVE AGENT
11.1 Authorization and Action. Each Lender hereby appoints and authorizes Administrative Agent to take such action on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Administrative Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. Each Lender hereby acknowledges that Administrative Agent shall not have by reason of this Agreement assumed a fiduciary relationship in respect of any Lender. In performing its functions and duties under this Agreement, Administrative Agent shall act solely as agent of Lenders and shall not assume, or be deemed to have assumed, any obligation toward, or relationship of agency or trust with or for, any Credit Party. As to any matters not expressly provided for by this Agreement and the other Loan Documents (including without limitation enforcement and collection of the Term Notes), Administrative Agent may, but shall not be required to, exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Lenders, whenever such instruction shall be requested by Administrative Agent or required hereunder, or a greater or lesser number of Lenders if so required hereunder, and such instructions shall be binding upon all Lenders; provided, that Administrative Agent shall be fully justified in failing or refusing to take any action which exposes Administrative Agent to any liability or which is contrary to this Agreement, the other Loan Documents or applicable law, unless Administrative Agent is indemnified to its satisfaction by the other Lenders against any and all liability and expense which it may incur by reason of taking or continuing to take any such action. If Administrative Agent seeks the consent or approval of the Majority Lenders (or a greater or lesser number of Lenders as required in this Agreement), with respect to any action hereunder, Administrative Agent shall send notice thereof to each Lender and shall notify each Lender at any time that the Majority Lenders (or such greater or lesser number of Lenders) have instructed Administrative Agent to act or refrain from acting pursuant hereto.
11.2 Administrative Agent’s and Syndication Agent’s Reliance, Etc. Neither Administrative Agent, Syndication Agent, any Affiliate of Administrative Agent or Syndication Agent, nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or the other Loan Documents, except (x) for its or their
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own gross negligence or willful misconduct, as determined by a final non-appealable (or the time for appeal for which has run) judgment of a court of competent jurisdiction or (y) to the extent resulting from a claim brought by Borrower against it for breach in bad faith of its obligations hereunder, if Borrower has obtained a final non-appealable (or the time to appeal for which has run) judgment in its favor on such claim as determined by a court of competent jurisdiction. Without limitation of the generality of the foregoing, each of Administrative Agent and Syndication Agent: (i) may treat each Lender party hereto as the holder of Obligations until Administrative Agent receives written notice of the assignment or transfer or such lender’s portion of the Obligations signed by such Lender and in form reasonably satisfactory to Administrative Agent; (ii) may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (iii) makes no warranties or representations to any Lender and shall not be responsible to any Lender for any recitals, statements, warranties or representations made in or in connection with this Agreement or any other Loan Documents; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or the other Loan Documents on the part of Credit Parties, to inspect the property (including the books and records) of Credit Parties, to monitor the financial condition of Credit Parties or to ascertain the existence or possible existence or continuation of any Default or Event of Default; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; (vi) shall not be liable to any Lender for any action taken, or inaction, by Administrative Agent upon the instructions of Majority Lenders pursuant to subsection 11.1 hereof or refraining to take any action pending such instructions; (vii) shall not be liable for any apportionment or distributions of payments made by it in good faith pursuant to Section 3 hereof; (viii) shall incur no liability under or in respect of this Agreement or the other Loan Documents by acting upon any notice, consent, certificate, message or other instrument or writing (which may be by telephone, facsimile, telegram, cable or telex) believed in good faith by it to be genuine and signed or sent by the proper party or parties; and (ix) may assume that no Event of Default has occurred and is continuing, unless Administrative Agent has actual knowledge of the Event of Default, has received notice from Borrower or Borrower’s independent certified public accountants stating the nature of the Event of Default, or has received notice from a Lender stating the nature of the Event of Default and that such Lender considers the Event of Default to have occurred and to be continuing. In the event any apportionment or distribution described in clause (vii) above is determined to have been made in error, the sole recourse of any Person to whom payment was due but not made shall be to recover from the recipients of such payments any payment in excess of the amount to which they are determined to have been entitled.
11.3 BofA and Affiliates. With respect to its commitment hereunder to make Term Loans, BofA shall have the same rights and powers under this Agreement and the other Loan Documents as any other Lender and may exercise the same as though it were not Administrative Agent; and the terms “Lender,” “Lenders” or “Majority Lenders” shall, unless otherwise expressly indicated, include BofA in its individual capacity as a
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Lender. BofA and its Affiliates may lend money to, and generally engage in any kind of business with, any Credit Party, and any Person who may do business with or own Securities of any Credit Party, all as if BofA were not Administrative Agent and without any duty to account therefor to any other Lender.
11.4 Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon Administrative Agent or any other Lender and based on the financial statements referred to herein and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement. Administrative Agent shall not have any duty or responsibility, either initially or on an ongoing basis, to provide any Lender with any credit or other similar information regarding any Credit Party.
11.5 Indemnification. Lenders agree to indemnify Administrative Agent (to the extent not reimbursed by Credit Parties), in accordance with their respective Aggregate Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against Administrative Agent in any way relating to or arising out of this Agreement or any other Loan Document or any action taken or omitted by Administrative Agent under this Agreement; provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from Administrative Agent’s gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse Administrative Agent promptly upon demand for its ratable share, as set forth above, of any out-of-pocket expenses (including attorneys’ fees) incurred by Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiation, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement and each other Loan Document, to the extent that Administrative Agent is not reimbursed for such expenses by Credit Parties. The obligations of Lenders under this subsection 11.5 shall survive the payment in full of all Obligations and the termination of this Agreement. If after payment and distribution of any amount by Administrative Agent to Lenders, any Lender or any other Person, including Credit Parties, any creditor of any Credit Party, a liquidator, administrator or trustee in bankruptcy, recovers from Administrative Agent any amount found to have been wrongfully paid to Administrative Agent or disbursed by Administrative Agent to Lenders, then Lenders, in accordance with their respective Aggregate Percentages, shall reimburse Administrative Agent for all such amounts.
11.6 Rights and Remedies to Be Exercised by Administrative Agent Only. Each Lender agrees that, except as set forth in subsection 10.4, no Lender shall have any right individually (i) to realize upon the security created by this Agreement or any other Loan
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Document, (ii) to enforce any provision of this Agreement or any other Loan Document, or (iii) to make demand under this Agreement or any other Loan Document.
11.7 Agency Provisions Relating to Collateral. Each Lender authorizes and ratifies Administrative Agent’s entry into this Agreement, the Security Documents and the other Loan Documents for the benefit of Lenders. Each Lender agrees that any action taken by Administrative Agent with respect to the Collateral in accordance with the provisions of this Agreement, the Security Documents or the other Loan Documents, and the exercise by Administrative Agent of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all Lenders. Administrative Agent is hereby authorized on behalf of all Lenders, without the necessity of any notice to or further consent from any Lender to take any action with respect to any Collateral or the Loan Documents which may be necessary to perfect and maintain perfected Administrative Agent’s Liens upon the Collateral, for its benefit and the ratable benefit of Lenders. Lenders hereby irrevocably authorize Administrative Agent, at its option and in its sole discretion, to release (or to authorize the release of) any Lien granted to or held by Administrative Agent upon any Collateral (i) upon termination of the Agreement and payment and satisfaction of all Obligations; or (ii) constituting property being sold or disposed of if Credit Parties certify to Administrative Agent that the sale or disposition is made in compliance with subsection 8.2.8 hereof (and Administrative Agent may rely conclusively on any such certificate, without further inquiry); or (iii) constituting property in which no Credit Party owned any interest at the time the Lien was granted or at any time thereafter; or (iv) in connection with any foreclosure sale or other disposition of Collateral after the occurrence and during the continuation of an Event of Default; or (v) if approved, authorized or ratified in writing by Administrative Agent at the direction of all Lenders; or (vi) if such release is permitted by the terms of the Intercreditor Agreement. Upon request by Administrative Agent at any time, Lenders will confirm in writing Administrative Agent’s authority to release particular types or items of Collateral pursuant hereto. Administrative Agent shall have no obligation whatsoever to any Lender or to any other Person to assure that the Collateral exists or is owned by any Credit Party or is cared for, protected or insured or has been encumbered or that the Liens granted to Administrative Agent herein or pursuant to the Security Documents have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of its rights, authorities and powers granted or available to Administrative Agent in this subsection 11.7 or in any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, Administrative Agent may act in any manner it may deem appropriate, in its sole discretion, but consistent with the provisions of this Agreement, including given Administrative Agent’s own interest in the Collateral as a Lender and that Administrative Agent shall have no duty or liability whatsoever to any Lender.
11.8 Right to Assign Commitments of Non-Consenting Lenders. Each Lender grants to Borrower the right to cause the assignment of all (but not less than all) of such Lender’s Term Loans and all of its rights and obligations hereunder and under the other Loan Documents (with the assignment fee to be paid by Borrower in such instance) to
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one or more Eligible Assignees procured by Borrower, which right may be exercised by Borrower at any time during which no Default shall exist, if such Lender refuses to execute any amendment, modification, waiver or consent which requires the written consent of Lenders other than the Majority Lenders and to which Lenders holding more than 75% of the outstanding Term Loans, Administrative Agent and Borrower have otherwise agreed; provided that (a) Borrower shall also replace each other Lender that refuses to consent to such amendment, modification, waiver or consent, (b) the applicable amendment, modification, waiver or consent shall become effective upon giving effect to such assignment and any related assignment required to be effected in connection therewith and (c) on the effective day of any such assignment Borrower shall pay to the assigning Lender an amount equal to (i) the aggregate amount of outstanding Term Loans owed to such Lender, together with all accrued and unpaid interest, fees and other amounts (other than contingent indemnities) owed to such Lender and (ii) if at least one other Lender (other than an Affiliate of or an Approved Fund in respect of such assigning Lender) is being replaced under the same circumstances giving rise to such assignment in accordance with the requirements of this subsection, the prepayment premium that would be payable to such Lender if such assignment were deemed to be a voluntary prepayment of the Term Loans of such Lender for purposes of subsection 3.3.6. Each Lender agrees that if Borrower exercises its option under this subsection, it shall promptly execute and deliver all agreements and documentation necessary to effectuate such assignment as set forth in subsection 11.9. Borrower shall be entitled (but not obligated) to execute and deliver such agreements and documentation on behalf of such non-consenting Lender and any such agreements and documentation so executed by Borrower shall be effective for all purposes of documenting an assignment pursuant to subsection 11.9.
11.9 Right of Sale, Assignment, Participations. Each Credit Party hereby consents to any Lender’s participation, sale, assignment, transfer or other disposition, at any time or times hereafter, of this Agreement and any of the other Loan Documents, or of any portion hereof or thereof, including, without limitation, such Lender’s rights, title, interests, remedies, powers and duties hereunder or thereunder subject to the terms and conditions set forth below:
11.9.1 Sales, Assignments. Each Lender hereby agrees that, with respect to any sale or assignment (i) except in the case of a sale or assignment of the entire remaining amount of the assigning Lender’s Commitments and the Term Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, no such sale or assignment shall be for an amount of less than $1,000,000, (ii) Administrative Agent and, in the absence of a Default or Event of Default, Borrower, must consent, such consent not to be unreasonably withheld, delayed or conditioned, to each such assignment to a Person that is not an original signatory to this Agreement; provided that no such consent of Administrative Agent or Borrower shall be required with respect to an assignment to a Lender, any Affiliate of any Lender or any Approved Fund, (iii) the assigning Lender shall pay to Administrative Agent a processing and recordation fee of $3,500, provided that no such fee shall be payable in the case of an assignment to another Lender, an Affiliate of a Lender or an Approved Fund with respect to a Lender, (iv) Administrative Agent, the assigning Lender and the assignee Lender shall each have executed and
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delivered an Assignment and Acceptance Agreement and (v) such sale or assignment shall be to an Eligible Assignee. From and after the effective date specified in each Assignment and Acceptance Agreement, the assignee Lender thereupon shall become a “Lender” for all purposes of this Agreement. Notwithstanding the foregoing, (i) except with respect to the preceding sentence, the provisions of this subsection 11.9.1 shall not apply to sales or assignments pursuant to subsection 11.8 and (ii) any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR §203.14, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.
11.9.2 Participations. Any Lender may grant participations in its extensions of credit hereunder to any other Person (a “Participant”), provided that (i) no Participant shall thereby acquire any direct rights under this Agreement, (ii) no Participant shall be granted any right to consent to any amendment, except to the extent any of the same pertain to (1) reducing the aggregate principal amount of, or interest rate on, or fees applicable to, any Term Loan, (2) extending the final stated maturity of any Term Loan or the stated maturity of any portion of any payment of principal of, or interest or fees applicable to, any of the Term Loans; provided that the rights described in this subclause (2) shall not be deemed to include the right to consent to any amendment with respect to or which has the effect of requiring any mandatory prepayment of any portion of any Term Loan or any amendment or waiver of any Default or Event of Default, (3) releasing all or substantially all of the Collateral or (4) releasing all or substantially all of the Subsidiary Guarantors from their obligations under their guarantees hereof, (iii) no sale of a participation in extensions of credit shall in any manner relieve such Lender of its obligations hereunder, (iv) such Lender shall remain solely responsible for the performance of such obligations, (v) Credit Parties and Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents and (vi) all amounts payable by Credit Parties hereunder shall be determined as if such Lender had not sold any such participation.
11.9.3 Certain Agreements of Credit Parties. Credit Parties agree that (i) they will assist and cooperate with each Lender in any manner reasonably requested by such Lender to effect the sale of participation in or assignments of any of the Loan Documents or any portion thereof or interest therein, including, without limitation, assisting in the preparation of appropriate disclosure documents and making members of management available at reasonable times to meet with and answer questions of potential assignees and Participants; (ii) subject to the provisions of subsection 13.13 hereof, such Lender may disclose credit information regarding Credit Parties to any potential Participant or assignee; and (iii) upon request, Borrower (at its expense) shall execute and deliver a Term Note to the assignee Lender.
11.9.4 Non U.S. Resident Transferees. If, pursuant to this subsection 11.9, any interest in this Agreement or any Term Loans is transferred to any transferee which is organized under the laws of any jurisdiction other than the United States or any state or
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political subdivision thereof, the transferor Lender shall cause such transferee (other than any Participant), and may cause any Participant, concurrently with and as a condition precedent to the effectiveness of such transfer, to (i) represent to the transferor Lender (for the benefit of the transferor Lender, Administrative Agent, and Borrower) that under applicable law and treaties no taxes will be required to be withheld by Administrative Agent, Borrower or the transferor Lender with respect to any payments to be made to such transferee in respect of the interest so transferred, (ii) furnish to the transferor Lender, Administrative Agent and Borrower either United States Internal Revenue Service Form W-8BEN or United States Internal Revenue Service Form W-8ECI (wherein such transferee claims entitlement to complete exemption from United States federal withholding tax on all payments made hereunder or under any other Loan Document), and (iii) agree (for the benefit of the transferor Lender, Administrative Agent and Borrower) to provide the transferor Lender, Administrative Agent and Borrower a new Form W-8BEN or Form W-8ECI upon the obsolescence of any previously delivered form and comparable statements in accordance with applicable United States laws and regulations and amendments duly executed and completed by such transferee, and to comply from time to time with all applicable United States laws and regulations with regard to such withholding tax exemption.
11.9.5 Register. Administrative Agent shall maintain, on behalf of Borrower, a “register” for recording the name, address, Obligations and principal and interest owing to each Lender (which register may be the Loan Account), as well as a copy of each Assignment and Acceptance Agreement received. Upon receipt and acceptance of a fully executed Assignment and Acceptance Agreement, the payment of the processing and recordation fee specified in subsection 11.9.1 and compliance with the other provisions set forth in this Agreement, Administrative Agent shall record in the register each Eligible Assignee party to an Assignment and Acceptance Agreement as a Lender under this Agreement, subject to the terms thereunder. The entries in such register shall be presumptive evidence of the amounts due and owing to each Lender in the absence of manifest error. Borrower, Administrative Agent and each Lender shall treat each Person whose name is recorded in such register pursuant to the terms hereof as a Lender for all purposes of this Agreement. The Obligations are registered and the right, title and interest of any Lender and its assignees in and to such Obligations shall be transferable only upon notation of such transfer in the register (and each Term Note shall expressly so provide). This subsection 11.9.5 shall be construed so that the Obligations are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related regulations. The register described herein shall be available for inspection by Borrower or any Lender, at any reasonable time upon reasonable prior notice.
11.10 Amendment. No amendment or waiver of any provision of this Agreement or any other Loan Document (including without limitation any Term Note), nor consent to any departure by any Credit Party therefrom, shall in any event be effective unless the same shall be approved in writing and signed by the Majority Lenders (or signed by Administrative Agent with the written consent of the Majority Lenders) and Borrower and acknowledged in writing by Administrative Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which
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given; provided, that no amendment, waiver or consent shall be effective, unless (i) approved in writing and signed by each Lender, to do any of the following: (1) increase the aggregate Term Loan Commitment, (2) reduce the principal of, or interest on, any amount payable hereunder (including any fees) or under any Term Note, other than those payable only to BofA in its capacity as Administrative Agent, which may be reduced by BofA unilaterally, (3) decrease any interest rate or amount of interest payable hereunder, (4) extend the maturity of the Term or postpone any date fixed for any payment of principal of, or interest on, any amounts payable hereunder (including any fees) or under any Term Note, other than those payable only to BofA in its capacity as Administrative Agent, which may be postponed by BofA unilaterally, (5) reduce the number of Lenders that shall be required for Lenders or any of them to take any action hereunder, (6) release or discharge Borrower from the Obligations or release or discharge any Person liable for the performance of any obligations of any Credit Party hereunder or under any of the Loan Documents, (7) amend any provision of this Agreement that requires the consent of all Lenders or consent to or waive any breach thereof, (8) amend the definition of the term Majority Lenders, (9) amend subsection 3.4.2 or this subsection 11.10, (10) release any substantial portion of the Collateral, unless otherwise permitted pursuant to subsection 11.7 hereof or the Intercreditor Agreement, (11) permit the sale, assignment or transfer by any Credit Party of its interest in this Agreement or any of the Obligations, or any portion thereof, including, without limitation, such Credit Party’s rights, title, interests, remedies, powers and duties hereunder or (12) subordinate any Lien of Administrative Agent in any material portion of the Collateral to the Lien of any other Person (other than the holders of the First Lien Debt); or (ii) approved in writing and signed by Administrative Agent in addition to the Lenders required above to affect the rights or duties of Administrative Agent under this Agreement, any Term Note or any other Loan Document. If a fee is to be paid by any Credit Party in connection with any waiver or amendment hereunder, the agreement evidencing such amendment or waiver may, at the sole discretion of Administrative Agent (but shall not be required to), provide that only Lenders executing such agreement by a specified date may share in such fee (and in such case, such fee shall be divided among the applicable Lenders on a pro rata basis without including the interests of any Lenders who have not timely executed such agreement).
11.11 Resignation of Administrative Agent; Appointment of Successor. Administrative Agent may resign as Administrative Agent by giving not less than thirty (30) days’ prior written notice to Lenders and Borrower. If Administrative Agent shall resign under this Agreement, then, subject to the consent of Borrower (which consent shall not be unreasonably withheld and which consent shall not be required during any period in which a Default or an Event of Default exists), Majority Lenders shall appoint from among Lenders a successor agent for Lenders or (ii) if a successor agent shall not be so appointed and approved within the thirty (30) day period following Administrative Agent’s notice to Lenders and Borrower of its resignation, then Administrative Agent shall appoint a successor agent who shall serve as Administrative Agent until such time as Majority Lenders appoint a successor agent, subject to Borrower’s consent as set forth above, provided that if Administrative Agent shall notify Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring
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Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any Collateral held by the Administrative Agent on behalf of the Lenders under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such Collateral until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through Administrative Agent shall instead be made by or to each Lender directly, until such time as the Majority Lenders appoint a successor Administrative Agent as provided for above in this subsection 11.11. Upon its appointment, such successor agent shall succeed to the rights, powers and duties of Administrative Agent and the term “Administrative Agent” shall mean such successor effective upon its appointment, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement. After the resignation of any Administrative Agent hereunder, the provisions of this Section 11 shall inure to the benefit of such former Administrative Agent and such former Administrative Agent shall not by reason of such resignation be deemed to be released from liability for any actions taken or not taken by it while it was an Administrative Agent under this Agreement.
11.12 Audit and Examination Reports; Disclaimer by Lenders. By signing this Agreement, each Lender:
(i) is deemed to have requested that Administrative Agent furnish such Lender, promptly after it becomes available, a copy of each audit or examination report (each a “Report” and collectively, “Reports”) prepared by or on behalf of Administrative Agent;
(ii) expressly agrees and acknowledges that Administrative Agent (i) does not make any representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any information contained in any Report;
(iii) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Administrative Agent or other party performing any audit or examination will inspect only specific information regarding Credit Parties and will rely significantly upon Credit Parties’ books and records, as well as on representations of Credit Parties’ personnel;
(iv) agrees to keep all Reports confidential and strictly for its internal use and not to distribute Reports, in each case except in accordance with the provisions of subsection 13.13; and
(v) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold Administrative Agent and any such other Lender preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Credit Parties, or the indemnifying Lender’s participation in, or
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the indemnifying Lender’s purchase of, a loan or loans of Credit Parties; and (ii) to pay and protect, and indemnify, defend and hold Administrative Agent and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses and other amounts (including attorneys’ fees and expenses) incurred by Administrative Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.
11.13 Syndication Agent. Each Lender hereby designates Bear, Xxxxxxx & Co. Inc. as the Syndication Agent. Except as expressly set forth in subsection 9.1 and this Section 11, Syndication Agent, in its capacity as such, shall have no rights, powers, duties or responsibilities and no rights, powers, duties or responsibilities shall be read into this Agreement or any other Loan Document or otherwise exist on behalf of or against such entity, in its capacity as such. If the Syndication Agent resigns as such agent, no successor syndication agent shall be appointed.
11.14 No Reliance on Administrative Agent’s Customer Identification Program. Each Lender acknowledges and agrees that neither such Lender, nor any of its affiliates, participants or assignees, may rely on Administrative Agent to carry out such Lender’s, affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA Patriot Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with the Credit Parties, their affiliates or agents, the Loan Documents or the transactions hereunder: (1) any identity verification procedures, (2) any record keeping, (3) any comparisons with government lists, (4) any customer notices or (5) any other procedures required under the CIP Regulations or such other laws.
11.15 USA Patriot Act. Each Lender or assignee or participant of a Lender that is not organized under the laws of the United States of America or a state thereof (and is not excepted from the certification requirement contained in Section 313 of the USA Patriot Act and the applicable regulations because it is both (i) an affiliate of a depository institution or foreign bank that maintains a physical presence in the United States or foreign country, and (ii) subject to supervision by a banking authority regulating such affiliated depository institution or foreign bank) shall deliver to Administrative Agent the certification, or, if applicable, recertification, certifying that such Lender is not a “shell” and certifying to other matters as required by Section 313 of the USA Patriot Act and the applicable regulations: (1) within ten (10) days after the Closing Date and (2) at such other times as are required under the USA Patriot Act.
11.16 Withholding. To the extent required by any applicable law, Administrative Agent may withhold from any interest payment to any Lender an amount equivalent to any applicable withholding tax. If the IRS or any other Governmental Authority asserts a claim that Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender because the appropriate form was not delivered or was not properly executed or because such Lender failed to notify Administrative Agent of a
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change in circumstance which rendered the exemption from, or reduction of, withholding tax ineffective or for any other reason, such Lender shall indemnify Administrative Agent fully for all amounts paid, directly or indirectly, by Administrative Agent as tax or otherwise, including any penalties or interest and together with all expenses (including legal expenses, allocated internal costs and out-of-pocket expenses) incurred.
12.1 Guaranty
12.1.1 Each of the Subsidiary Guarantors hereby, jointly and severally, unconditionally and irrevocably, guaranties to the Administrative Agent, for the ratable benefit of the Secured Parties and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations of the Borrower and each other Subsidiary Guarantor.
12.1.2 If and to the extent required in order for the Obligations of any Subsidiary Guarantor to be enforceable under applicable federal, state and other laws relating to the insolvency of debtors, the maximum liability of such Subsidiary Guarantor hereunder shall be limited to the greatest amount which can lawfully be guaranteed by such Subsidiary Guarantor under such laws, after giving effect to any rights of contribution, reimbursement and subrogation arising under Section 12.2. Each Subsidiary Guarantor acknowledges and agrees that, to the extent not prohibited by applicable law, (i) such Subsidiary Guarantor (as opposed to its creditors, representatives of creditors or bankruptcy trustee, including such Subsidiary Guarantor in its capacity as debtor in possession exercising any powers of a bankruptcy trustee) has no personal right under such laws to reduce, or request any judicial relief that has the effect of reducing, the amount of its liability under this Agreement, (ii) such Subsidiary Guarantor (as opposed to its creditors, representatives of creditors or bankruptcy trustee, including such Subsidiary Guarantor in its capacity as debtor in possession exercising any powers of a bankruptcy trustee) has no personal right to enforce the limitation set forth in this Section 12.1.2 or to reduce, or request judicial relief reducing, the amount of its liability under this Agreement, and (iii) the limitation set forth in this Section 12.1.2 may be enforced only to the extent required under such laws in order for the obligations of such Subsidiary Guarantor under this Agreement to be enforceable under such laws and only by or for the benefit of a creditor, representative of creditors or bankruptcy trustee of such Subsidiary Guarantor or other person entitled, under such laws, to enforce the provisions thereof.
12.1.3 Each Subsidiary Guarantor agrees that the Obligations may at any time and from time to time be incurred or permitted in an amount exceeding the maximum liability of such Subsidiary Guarantor under Section 12.1.2 without impairing the guaranty contained in this Section 12 or affecting the rights and remedies of any Secured Party hereunder.
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12.1.4 The guaranty contained in this Section 12 shall remain in full force and effect until payment in full in cash of the Obligations (other than contingent indemnification obligations not yet due and payable), notwithstanding that from time to time during the term of this Agreement and the other Loan Documents the Borrower may be free from any Obligations.
12.1.5 No payment made by the Borrower, any of the Subsidiary Guarantors, any other guarantor or any other person or received or collected by any Secured Party from the Borrower, any of the Subsidiary Guarantors, any other guarantor or any other person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Subsidiary Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Subsidiary Guarantor in respect of the Obligations or any payment received or collected from such Subsidiary Guarantor in respect of the Obligations), remain liable for the Obligations up to the maximum liability of such Subsidiary Guarantor hereunder until the Obligations are paid in full in cash and this Agreement has terminated.
12.2 Rights of Reimbursement, Contribution and Subrogation. In case any payment is made on account of the Obligations by any Credit Party or is received or collected on account of the Obligations from any Credit Party or its property:
12.2.1 If such payment is made by the Borrower or from its property, then, if and to the extent such payment is made on account of Obligations arising from or relating to a Term Loan, the Borrower shall not be entitled (i) to demand or enforce reimbursement or contribution in respect of such payment from any other Credit Party or (ii) to be subrogated to any claim, interest, right or remedy of any Secured Party against any other person, including any other Credit Party or its property.
12.2.2 If such payment is made by a Subsidiary Guarantor or from its property, such Subsidiary Guarantor shall be entitled, subject to and upon payment in full of the Obligations (other than contingent indemnification obligations not yet due and payable), (i) to demand and enforce reimbursement for the full amount of such payment from the Borrower and (ii) to demand and enforce contribution in respect of such payment from each other Subsidiary Guarantor that has not paid its fair share of such payment, as necessary to ensure that (after giving effect to any enforcement of reimbursement rights provided hereby) each Subsidiary Guarantor pays its fair share of the unreimbursed portion of such payment. For this purpose, the fair share of each Subsidiary Guarantor as to any unreimbursed payment shall be determined based on an equitable apportionment of such unreimbursed payment among all Subsidiary Guarantors based on the relative value of their assets and any other equitable considerations deemed appropriate by a court of competent jurisdiction.
12.2.3 If and whenever (after payment in full of the Obligations) any right of reimbursement or contribution becomes enforceable by any Credit Party against any other Credit Party under Sections 12.2.1 or 12.2.2, such Credit Party shall be entitled,
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subject to and upon payment in full of the Obligations (other than contingent indemnification obligations not yet due and payable), to be subrogated (equally and ratably with all other Credit Parties entitled to reimbursement or contribution from any other Credit Party as set forth in this Section 12.2) to any security interest that may then be held by the Administrative Agent upon any Collateral granted to it in this Agreement. Such right of subrogation shall be enforceable solely against the Credit Parties, and not against the Secured Parties, and neither the Administrative Agent nor any other Secured Party shall have any duty whatsoever to warrant, ensure or protect any such right of subrogation or to obtain, perfect, maintain, hold, enforce or retain any Collateral for any purpose related to any such right of subrogation. If subrogation is demanded by any Credit Party, then (after payment in full of the Obligations (other than contingent indemnification obligations not yet due and payable)) the Administrative Agent shall deliver to the Credit Parties making such demand, or to a representative of such Credit Parties or of the Credit Parties generally, an instrument satisfactory to the Administrative Agent transferring, on a quitclaim basis without any recourse, representation, warranty or obligation whatsoever, whatever security interest the Administrative Agent then may hold in whatever Collateral may then exist that was not previously released or disposed of by the Administrative Agent.
12.2.4 All rights and claims arising under this Section 12.2 or based upon or relating to any other right of reimbursement, indemnification, contribution or subrogation that may at any time arise or exist in favor of any Credit Party as to any payment on account of the Obligations made by it or received or collected from its property shall be fully subordinated in all respects to the prior payment in full of all of the Obligations (other than contingent indemnification obligations not yet due and payable). Until payment in full of the Obligations (other than contingent indemnification obligations not yet due and payable), no Credit Party shall demand or receive any collateral security, payment or distribution whatsoever (whether in cash, property or securities or otherwise) on account of any such right or claim. If any such payment or distribution is made or becomes available to any Credit Party in any bankruptcy case or receivership, insolvency or liquidation proceeding, such payment or distribution shall be delivered by the person making such payment or distribution directly to the Administrative Agent, for application to the payment of the Obligations. If any such payment or distribution is received by any Credit Party, it shall be held by such Credit Party in trust, as trustee of an express trust for the benefit of the Secured Parties, and shall forthwith be transferred and delivered by such Credit Party to the Administrative Agent, in the exact form received and, if necessary, duly endorsed.
12.2.5 The obligations of the Credit Parties under the Loan Documents, including their liability for the Obligations and the enforceability of the security interests granted thereby, are not contingent upon the validity, legality, enforceability, collectibility or sufficiency of any right of reimbursement, contribution or subrogation arising under this Section 12.2. The invalidity, insufficiency, unenforceability or uncollectibility of any such right shall not in any respect diminish, affect or impair any such obligation or any other claim, interest, right or remedy at any time held by any Secured Party against any Credit Party or its property. The Secured Parties make no
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representations or warranties in respect of any such right and shall have no duty to assure, protect, enforce or ensure any such right or otherwise relating to any such right.
12.2.6 Each Credit Party reserves any and all other rights of reimbursement, contribution or subrogation at any time available to it as against any other Credit Party, but (i) the exercise and enforcement of such rights shall be subject to Section 12.2.4 and (ii) neither the Administrative Agent nor any other Secured Party shall ever have any duty or liability whatsoever in respect of any such right, except as provided in Section 12.2.3.
12.2.7 The undertaking by each Credit Party to repay the Obligations and each representation, warranty or covenant of each Credit Party are and shall be joint and several. This subsection 12.2 is intended only to define the relative rights of Credit Parties, and nothing set forth in subsection 12.2 is intended or shall impair the obligations of each Credit Party, jointly and severally, to pay to Administrative Agent and Lenders the Obligations as and when the same shall become due and payable in accordance with the terms hereof. Notwithstanding anything to the contrary set forth in this subsection 12.2 or any other provisions of this Agreement, it is the intent of the parties hereto that the liability incurred by each Credit Party in respect of the Obligations of the other Credit Parties (and any Lien granted by each Credit Party to secure such Obligations), not constitute a fraudulent conveyance or fraudulent transfer under the provisions of any applicable law of any state or other governmental unit (“Fraudulent Conveyance”). Consequently, each Credit Party, Administrative Agent and each Lender hereby agree that if a court of competent jurisdiction determines that the incurrence of liability by any Credit Party in respect of the Obligations of any other Credit Party (or any Liens granted by such Credit Party to secure such Obligations) would, but for the application of this sentence, constitute a Fraudulent Conveyance, such liability (and such Liens) shall be valid and enforceable only to the maximum extent that would not cause the same to constitute a Fraudulent Conveyance, and this Agreement and the other Loan Documents shall automatically be deemed to have been amended accordingly, nunc pro tunc.
12.3 Amendments, etc. with respect to the Obligations. Each Subsidiary Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Subsidiary Guarantor and without notice to or further assent by any Subsidiary Guarantor, any demand for payment of any of the Obligations made by any Secured Party may be rescinded by such Secured Party and any of the Obligations continued, and the Obligations, or the liability of any other person upon or for any part thereof, or any collateral security or guaranty therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, increased, extended, amended, modified, accelerated, compromised, waived, surrendered or released by any Secured Party, and this Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the parties thereto may deem advisable from time to time, and any collateral security, guaranty or right of offset at any time held by any Secured Party for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. No Secured Party shall have any obligation
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to protect, secure, perfect or insure any Lien at any time held by it as security for the Obligations or for the guaranty contained in this Section 12 or any property subject thereto.
12.4 Guaranty Absolute and Unconditional Each Subsidiary Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by any Secured Party upon the guaranty contained in this Section 12 or acceptance of the guaranty contained in this Section 12; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guaranty contained in this Section 12; and all dealings between the Borrower and any of the Subsidiary Guarantors, on the one hand, and the Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guaranty contained in this Section 12. Each Subsidiary Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the Subsidiary Guarantors with respect to the Obligations. Each Subsidiary Guarantor understands and agrees that the guaranty contained in this Section 12 shall be construed as a continuing, absolute and unconditional guaranty of payment and performance without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Obligations or any other collateral security therefor or guaranty or right of offset with respect thereto at any time or from time to time held by any Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance hereunder) which may at any time be available to or be asserted by the Borrower or any other person against any Secured Party, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or such Subsidiary Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Obligations, or of such Subsidiary Guarantor under the guaranty contained in this Section 12, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Subsidiary Guarantor, any Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Subsidiary Guarantor or any other person or against any collateral security or guaranty for the Obligations or any right of offset with respect thereto, and any failure by any Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Subsidiary Guarantor or any other person or to realize upon any such collateral security or guaranty or to exercise any such right of offset, or any release of the Borrower, any other Subsidiary Guarantor or any other person or any such collateral security, guaranty or right of offset, shall not relieve any Subsidiary Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any Secured Party against any Subsidiary Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.
12.5 Payments. Each Subsidiary Guarantor hereby guaranties that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in
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United States dollars in immediately available funds at the office of the Administrative Agent as specified herein.
13.1 Power of Attorney. Each Credit Party hereby irrevocably designates, makes, constitutes and appoints Administrative Agent (and all Persons designated by Administrative Agent) as such Credit Party’s true and lawful attorney (and agent-in-fact), solely with respect to the matters set forth in this subsection 13.1, and Administrative Agent, or Administrative Agent’s agent, may, without notice to any Credit Party and in any Credit Party’s or Administrative Agent’s name, but at the cost and expense of Borrower:
13.1.1 At such time or times as Administrative Agent or said agent, in its sole discretion, may determine, endorse any Credit Party’s name on any checks, notes, acceptances, drafts, money orders or any other evidence of payment or proceeds of the Collateral which come into the possession of Administrative Agent or under Administrative Agent’s control.
13.1.2 At such time or times upon or after the occurrence and during the continuance of an Event of Default (provided that the occurrence of an Event of Default shall not be required with respect to clauses (iv), (vi), (viii), and (ix) below), as Administrative Agent or its agent in its sole discretion may determine: (i) demand payment of the Accounts from the Account Debtors, enforce payment of the Accounts by legal proceedings or otherwise, and generally exercise all of any Credit Party’s rights and remedies with respect to the collection of the Accounts; (ii) settle, adjust, compromise, discharge or release any of the Accounts or other Collateral or any legal proceedings brought to collect any of the Accounts or other Collateral; (iii) sell or assign any of the Accounts and other Collateral upon such terms, for such amounts and at such time or times as Administrative Agent deems advisable, and at Administrative Agent’s option, with all warranties regarding the Collateral disclaimed; (iv) take control, in any manner, of any item of payment or proceeds relating to any Collateral; (v) prepare, file and sign any Credit Party’s name to a proof of claim in bankruptcy or similar document against any Account Debtor or to any notice of lien, assignment or satisfaction of lien or similar document in connection with any of the Collateral; (vi) receive, open and dispose of all mail addressed to any Credit Party and notify postal authorities to change the address for delivery thereof to such address as Administrative Agent may designate; (vii) endorse the name of any Credit Party upon any of the items of payment or proceeds relating to any Collateral and deposit the same to the account of Administrative Agent on account of the Obligations; (viii) endorse the name of any Credit Party upon any chattel paper, document, instrument, invoice, freight xxxx, xxxx of lading or similar document or agreement relating to the Accounts, Inventory and any other Collateral; (ix) use any Credit Party’s stationery and sign the name of any Credit Party to verifications of the Accounts and notices thereof to Account Debtors; (x) use the information recorded on or contained in any data processing equipment and Computer Hardware and Software
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relating to the Accounts, Inventory, Equipment and any other Collateral; (xi) make and adjust claims under policies of insurance; and (xii) do all other acts and things necessary, in Administrative Agent’s determination, to fulfill any Credit Party’s obligations under this Agreement.
The power of attorney granted hereby shall constitute a power coupled with an interest and shall be irrevocable.
13.2 Indemnity. Each Credit Party hereby agrees to defend, indemnify and hold Administrative Agent, Syndication Agent, the Joint Lead Arrangers and each Lender and each of its respective officers, directors, employees, counsel, representatives, agents, attorneys in fact and Affiliates (each, an “Indemnitee”) harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges, expenses and disbursements (including, without limitation, reasonable attorneys’ fees) of any kind or nature whatsoever which may at any time (including at any time following repayment of the Term Loans and the termination, resignation or replacement of Administrative Agent or replacement of any Lender) be imposed on, incurred by or asserted against any such Person in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including with respect to any investigation, litigation or proceeding (including any insolvency, bankruptcy or similar proceeding) related to or arising out of this Agreement, any other Loan Document, the Term Loans, or the use of the proceeds thereof, or the Collateral whether or not any Indemnified Person is a party thereto (all the foregoing, collectively, the “Indemnified Liabilities”); provided, that no Credit Party shall have any obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities resulting solely from (x) the gross negligence or willful misconduct of such Indemnitee as determined by a final non-appealable (or the time to appeal for which has run) judgment of a court of competent jurisdiction or (y) a claim brought by such Credit Party against such Indemnified Person for breach in bad faith of such Indemnified Person’s obligations hereunder, if such Credit Party has obtained a final non-appealable (or the time to appeal for which has run) judgment in its favor on such claim as determined by a court of competent jurisdiction. Without limiting the generality of the foregoing, these indemnities shall extend to any claims asserted against any Indemnitee by any Person under any Environmental Laws by reason of any Credit Party’s or any other Person’s failure to comply with laws applicable to solid or hazardous waste materials or other toxic substances. Notwithstanding any contrary provision in this Agreement, the obligation of each Credit Party under this subsection 13.2 shall survive the payment in full of the Obligations and the termination of this Agreement.
13.3 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
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13.4 Successors and Assigns. This Agreement, the Other Agreements and the Security Documents shall be binding upon and inure to the benefit of the successors and assigns of each Credit Party, Administrative Agent and each Lender permitted under subsection 11.9 hereof. Notwithstanding anything to the contrary herein, no Credit Party may sell, assign or otherwise transfer any of its interest in this Agreement or any of the Obligations, or any portion thereof, including, without limitation, such Credit Party’s rights, title, interests, remedies, powers and duties hereunder, unless such sale, assignment or other transfer is approved in a writing signed by each Lender and Administrative Agent; provided that this subsection shall not prohibit mergers of Credit Parties that are expressly permitted by subsection 8.2.1.
13.5 Cumulative Effect; Conflict of Terms. The provisions of the Other Agreements and the Security Documents are hereby made cumulative with the provisions of this Agreement. Except as otherwise provided in any of the other Loan Documents by specific reference to the applicable provision of this Agreement, if any provision contained in this Agreement is in direct conflict with, or inconsistent with, any provision in any of the other Loan Documents (other than, as it relates to the Collateral, the Intercreditor Agreement), the provision contained in this Agreement shall govern and control.
13.6 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument.
13.7 Notice. Except as otherwise provided herein, all notices, requests and demands to or upon a party hereto or pursuant to any other Loan Document, to be effective, shall be in writing, and shall be sent by certified or registered mail, return receipt requested, by personal delivery against receipt, by overnight courier or by facsimile and, unless otherwise expressly provided herein, shall be deemed to have been validly served, given, delivered or received immediately when delivered against receipt, three (3) Business Days’ after deposit in the mail, postage prepaid, one (1) Business Day after deposit with an overnight courier or, in the case of facsimile notice, when sent with respect to machine confirmed, addressed as follows:
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(A) If to Administrative Agent: |
Bank of America, N.A. |
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With a copy to: |
Bank of America, N.A. |
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Agency Management |
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Mail Code: NC1-007-13-06 |
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Attention: Xxxxx Xxxxx |
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Telephone: 000 000-0000 |
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Facsimile: 000 000-0000 |
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Email: xxxxx.x.xxxxx@xxxxxxxxxxxxx.xxx |
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Agency Management |
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And a copy to: |
Xxxxxx & Xxxxxxx LLP |
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000 Xxxxx Xxxxxx |
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Xxx Xxxx, Xxx Xxxx 00000 |
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Attention: Xxxxxxx Xxxxxx |
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Facsimile No.: (000) 000-0000 |
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(B) If to any Credit Party: |
c/o NES Rentals Holdings, Inc |
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0000 Xxxx Xxxx Xxxx |
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0xx Xxxxx |
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Xxxxxxx, Xxxxxxxx 00000 |
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Attention: Chief Financial Officer |
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Facsimile No.: (000) 000-0000 |
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With a copy to: |
Xxxxxxxx & Xxxxx LLP |
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000 Xxxx Xxxxxxxx Xxxxx |
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Xxxxxxx, Xxxxxxxx 00000 |
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Attention: H. Xxxx xxx Xxxxxx, P.C. |
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Facsimile No.: (000) 000-0000 |
(C) If to any Lender, at its address indicated on the signature pages hereof or in an Assignment and Acceptance Agreement,
or to such other address as each party may designate for itself by notice given in accordance with this subsection 13.7; provided, however, that any notice, request or demand to or upon Administrative Agent or a Lender pursuant to subsection 3.1.1 or 4.2.2 hereof shall not be effective until received by Administrative Agent or such Lender.
13.8 Consent. Whenever Administrative Agent’s, Majority Lenders’ or all Lenders’ consent is required to be obtained under this Agreement, any of the Other Agreements or any of the Security Documents as a condition to any action, inaction, condition or event, except as otherwise specifically provided herein, Administrative Agent, Majority Lenders or all Lenders, as applicable, shall be authorized to give or withhold such consent in its or their sole discretion and to condition its or their consent upon the giving of additional Collateral security for the Obligations, the payment of money or any other matter.
13.9 Credit Inquiries. Each Credit Party hereby authorizes and permits Administrative Agent and each Lender to respond to usual and customary credit inquiries from third parties concerning any Credit Party or any of its Subsidiaries.
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13.10 Time of Essence. Time is of the essence of this Agreement, the Other Agreements and the Security Documents.
13.11 Entire Agreement. This Agreement and the other Loan Documents, together with all other instruments, agreements and certificates executed by the parties in connection therewith or with reference thereto, embody the entire understanding and agreement between the parties hereto and thereto with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and inducements, whether express or implied, oral or written.
13.12 Interpretation. No provision of this Agreement or any of the other Loan Documents shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or dictated such provision.
13.13 Confidentiality. Administrative Agent and each Lender shall hold all nonpublic information obtained pursuant to the requirements of this Agreement in accordance with Administrative Agent’s and such Lender’s customary procedures for handling confidential information of this nature and in accordance with safe and sound banking practices and in any event may make disclosure (i) to its Affiliates, (ii) as reasonably required by a participant or assignee or prospective participant or assignee in connection with the participation or assignment or contemplated participation or assignment and shall require any such participant to agree to comply with this subsection 13.13 or (iii) as required or requested by any governmental authority or representative thereof or pursuant to legal process.
13.14 GOVERNING LAW; CONSENT TO FORUM. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF ANY CREDIT PARTY, ADMINISTRATIVE AGENT OR ANY LENDER, EACH CREDIT PARTY HEREBY CONSENTS AND AGREES THAT THE COURTS OF THE STATE OF NEW YORK, OR, AT ADMINISTRATIVE AGENT’S OPTION, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY CREDIT PARTY ON THE ONE HAND AND ADMINISTRATIVE AGENT OR ANY LENDER ON THE OTHER HAND PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION WHICH ANY CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE
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OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF ANY CREDIT PARTY’S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY AGENT OR ANY LENDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
13.15 WAIVERS BY CREDIT PARTIES. EACH CREDIT PARTY WAIVES (i) THE RIGHT TO TRIAL BY JURY (WHICH ADMINISTRATIVE AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL; (ii) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS , CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY ADMINISTRATIVE AGENT OR ANY LENDER ON WHICH ANY CREDIT PARTY MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER ADMINISTRATIVE AGENT OR ANY LENDER MAY DO IN THIS REGARD; (iii) NOTICE PRIOR TO ADMINISTRATIVE AGENT’S TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING ADMINISTRATIVE AGENT TO EXERCISE ANY OF ADMINISTRATIVE AGENT’S REMEDIES; (iv) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; (v) NOTICE OF ACCEPTANCE HEREOF; AND (vi) EXCEPT AS PROHIBITED BY LAW, ANY RIGHT TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH CREDIT PARTY ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT’S AND EACH LENDER’S ENTERING INTO THIS AGREEMENT AND THAT ADMINISTRATIVE AGENT AND EACH LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH EACH CREDIT PARTY. EACH CREDIT PARTY WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN
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THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
13.16 Advertisement. Each Credit Party hereby authorizes Administrative Agent to publish the name of Credit Parties and the amount of the credit facility provided hereunder in any “tombstone” or comparable advertisement which Administrative Agent elects to publish.
13.17 References to Intercreditor Agreement. References to the Intercreditor Agreement herein are intended to define the relative rights and obligations of Administrative Agent and Lenders vis-à-vis the holders of the First Lien Debt only and shall not impart any rights upon any Credit Party.
13.18 Recovery. To the extent any payment received by Administrative Agent or any Lender with respect to the Obligations (whether by or on behalf of any Credit Party or any other person, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to any Credit Party (a “Recovery”), then the Obligation or part thereof originally intended to be satisfied (and any guaranty in respect thereof pursuant to Section 12 or otherwise) shall be deemed to be reinstated and outstanding as if such payment had not occurred and, if this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of any Credit Party from such date of reinstatement.
(Signature Pages Follow)
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IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year specified at the beginning of this Agreement.
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S-3
APPENDIX A
GENERAL DEFINITIONS
When used in the Loan and Security Agreement dated as of August 17, 2004, by and among NES Rentals Holdings, Inc., as borrower, certain subsidiaries of NES Rentals Holdings, Inc., as subsidiary guarantors, the financial institutions party thereto, as lenders, Bear, Xxxxxxx & Co. Inc., as syndication agent and Bank of America, N.A., as administrative agent, (a) the terms Account, Certificated Security, Chattel Paper, Commercial Tort Claims, Deposit Account, Document, Electronic Chattel Paper, Equipment, Financial Asset, Fixture, General Intangibles, Goods, Instruments, Investment Property, Letter-of-Credit Rights, Money, Payment Intangibles, Proceeds, Securities Account, Security Entitlement, Software, Supporting Obligations, Tangible Chattel Paper and Uncertificated Security have the respective meanings assigned thereto under the UCC; (b) all terms reflecting Collateral having the meanings assigned thereto under the UCC shall be deemed to mean such Property, whether now owned or hereafter created or acquired by any Credit Party or in which such Credit Party now has or hereafter acquires any interest; (c) capitalized terms which are not otherwise defined in this Appendix A have the respective meanings assigned thereto in said Loan and Security Agreement; and (d) the following terms shall have the following meanings (terms defined in the singular to have the same meaning when used in the plural and vice versa):
Account Debtor - any Person who is or may become obligated under, or in connection with, or on account of, any Account, Contract Right, Chattel Paper, General Intangible or any Supporting Obligation in respect thereof.
Administrative Agent - as defined in the preamble to the Agreement, together with its successors and assigns.
Affiliate - a Person: (i) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, a Person; (ii) which beneficially owns or holds 10% or more of any class of the Voting Stock of a Person; or (iii) 10% or more of the Voting Stock (or in the case of a Person which is not a corporation, 10% or more of the equity interest) of which is beneficially owned or held by a Person or a Subsidiary of a Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
Aggregate Percentage - with respect to each Lender, the percentage equal to the quotient of (i) such Lender’s Term Loan Commitment divided by (ii) the aggregate of all Term Loan Commitments, provided, that, if the aggregate Term Loan Commitments have been reduced to zero, the numerator shall be the aggregate unpaid principal amount of such Lender’s Term Loans and the denominator shall be the aggregate unpaid principal amount of all Term Loans.
A-1
Agreement - the Loan and Security Agreement referred to in the first sentence of this Appendix A, all Exhibits and Schedules thereto and this Appendix A, as each of the same may be amended, restated, supplemented or otherwise modified from time to time.
ALTA Survey - a survey prepared in accordance with the standards adopted by the American Land Title Association and the American Congress on Surveying and Mapping in 1997, known as the “Minimum Standard Detail Requirements of Land Title Surveys”. The ALTA Survey shall be in sufficient form to satisfy the requirements of Chicago Title Insurance Company to provide extended coverage over survey defects and shall also show the location of all easements, utilities, and covenants of record, dimensions of all improvements, encroachments from any adjoining property, and certify as to the location of any flood plain area affecting the subject real estate. The ALTA Survey shall contain the following certification: “To [Name of Applicable Credit Party], Bank of America, N.A., as Administrative Agent, and Title Insurance Company. This is to certify that this map of plat and the survey on which it is based were made in accordance with the “Minimum Standard Detail Requirements for Land Title Surveys” jointly established and adopted by ALTA and ACSM in 1997. (signed (SEAL) License No. .”
Anti-Terrorism Law - the USA Patriot Act or any other statute, regulation, executive order, or other law pertaining to the prevention of future acts of terrorism, in each case as such law may be amended from time to time.
Applicable Margin – (i) with respect to the Base Rate Portion, 5.00% and (ii) with respect to the LIBOR Portion, 6.00%.
Approved Fund - any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.
Assignment and Acceptance Agreement - an assignment and acceptance agreement entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by subsection 11.9.1) and accepted by Administrative Agent in substantially the form of Exhibit 10 or any other form approved by Administrative Agent.
Audit – an audit, inspection, valuation or field examination of the Properties (including the books and records) of Credit Parties and their Subsidiaries or the Collateral performed by Administrative Agent or its representative, which may include making extracts from such books and records and discussing with the officers, employees and independent accounts of any Credit Party or its Subsidiary, the business, assets, liabilities, financial condition, business prospects and results of operations of such Credit Party or Subsidiary.
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Available Liquidity – the sum of Availability (as defined in the First Lien Debt Documents as in effect on the date hereof) plus cash in deposit accounts meeting either of the following conditions: (x) such deposit account is maintained at BofA and is subject to a first priority security interest in favor of the First Lien Debt Agent subject only to bankers liens (including those liens described in clause (xiii) of subsection 8.2.5) and liens junior to the lien of the First Lien Debt Agent that are permitted to be incurred under the First Lien Debt Documents (as in existence on the date hereof) or (y) such deposit account is maintained with any other bank or financial institution and is (i) subject to a first priority security interest in favor of the First Lien Debt Agent subject only to bankers liens (including those liens described in clause (xiii) of subsection 8.2.5) and liens junior to the lien of the First Lien Debt Agent that are permitted to be incurred under the First Lien Debt Documents (as in existence on the date hereof) and (ii) subject to a control agreement in favor of the First Lien Debt Agent.
Base Rate – as of any date of determination, the greater of (i) the Prime Rate and (ii) the Fed Funds Rate plus .50% per annum.
Base Rate Portion - that portion of the Term Loan that is not subject to a LIBOR Option.
Blocked Person – as defined in subsection 7.1.31(ii) of the Agreement.
BofA – as defined in the preamble to the Agreement.
Borrower – as defined in the preamble to the Agreement.
Business Day - any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of Wisconsin, the State of Illinois or the State of New York or is a day on which banking institutions located in any of such states are closed, provided that with respect to the borrowing, prepayment or continuation of, or determination of the interest rate on, any LIBOR Portion, Business Day shall include a London Banking Day.
Capital Expenditures – cash expenditures made for the acquisition or improvement of capital assets as determined in accordance with GAAP.
Capitalized Lease Obligation - any Indebtedness represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.
Cash Equivalents – those investments set forth in clauses (iv) through (vii) of the definition of “Restricted Investment”.
Change of Control – each occurrence of any of the following:
(a) the acquisition, directly or indirectly, by any Person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (other
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than any Permitted Holder) of beneficial ownership of more than 20% of the aggregate outstanding Voting Stock of Borrower;
(b) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of Borrower (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of Borrower was approved by a vote of at least a majority the directors of Borrower then still in office who were either directors at the beginning of such period, or whose election or nomination for election was previously approved) cease for any reason to constitute a majority of the Board of Directors of Borrower;
(c) Borrower shall cease to have beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 100% of the aggregate Voting Stock of each other Credit Party and its Subsidiaries, free and clear of all Liens (other than any Liens granted under the Loan Documents and Permitted Liens), except to the extent resulting from a transaction specifically permitted under subsection 8.2.1 of the Agreement; and
(d) any “Change of Control” (or similar term) as defined in the First Lien Debt Documents shall occur.
Closing Date – August 17, 2004.
Code -the Internal Revenue Code of 1986, as amended.
Collateral - all of the Property and interests in Property described in Section 5 of the Agreement, and all other Property and interests in Property that now or hereafter secure or purport to secure the payment and performance of any of the Obligations.
Collateral Asset Base – as at any date of determination thereof, solely to the extent that Administrative Agent has a perfected security interest in the following, an amount equal to the sum of (without duplication):
(i) the Gross Orderly Liquidation Value of Eligible Rental Equipment Inventory, plus
(ii) Accounts receivable appearing on the Consolidated balance sheet of the Borrower and its Subsidiaries less the amount of reserves in respect thereof set forth on such Consolidated balance sheet, plus
(iii) 75% of the value of Inventory (other than Rental Equipment Inventory) on the Consolidated balance sheet of the Borrower and its Subsidiaries less the amount of reserves in respect thereof set forth on such Consolidated balance sheet.
Collateral Coverage Ratio – at any date, the ratio of (i) aggregate Funded Senior Debt (as defined in Exhibit 8.3) of Borrower and its Subsidiaries on a Consolidated basis
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as of such date minus all cash of Credit Parties as of such date in which Administrative Agent holds a perfected security interest (subject only to Permitted Liens) to (ii) the Collateral Asset Base as of such date.
Collection Account – as defined in subsection 6.2.4 of the Agreement.
Collection Bank– as defined in subsection 6.2.4 of the Agreement.
Compliance Certificate - as defined in subsection 8.1.3 of the Agreement.
Computer Hardware and Software - all of any Credit Party’s rights (including rights as licensee and lessee) with respect to (i) computer and other electronic data processing hardware, including all integrated computer systems, central processing units, memory units, display terminals, printers, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related computer hardware; (ii) all Software and all software programs designed for use on the computers and electronic data processing hardware described in clause (i) above, including all operating system software, utilities and application programs in any form (source code and object code in magnetic tape, disk or hard copy format or any other listings whatsoever); (iii) any firmware associated with any of the foregoing; and (iv) any documentation for hardware, Software and firmware described in clauses (i), (ii) and (iii) above, including flow charts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes.
Consolidated - the consolidation in accordance with GAAP of the accounts or other items as to which such term applies.
Contaminant - any waste, pollutant, hazardous substance, toxic substance, hazardous waste, special waste, petroleum or petroleum-derived substance or waste, asbestos in any form or condition, polychlorinated biphenyls (“PCBs”), or any constituent of any such substance or waste.
Contingent Obligation - with respect to any Person, any obligation of such Person guaranteeing or intended to guaranty any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, (i) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of a primary obligor, (ii) the obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement, (iii) any obligation of such Person, whether or not contingent, (A) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (B) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (C) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make
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payment of such primary obligation or (D) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term “Contingent Obligation” shall not include any product warranties extended in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation with respect to which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto (assuming such Person is required to perform thereunder), as determined by such Person in good faith.
Contract Right - any right of any Credit Party to payment under a contract for the sale or lease of goods or the rendering of services, which right is at the time not yet earned by performance.
Credit Facility - means, with respect to any Credit Party or any Subsidiary of any Credit Party, one or more debt facilities, debt securities sales arrangements or commercial paper facilities, in each case with, or sold to, banks or other institutional lenders or investors providing for term loans or other Indebtedness, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions from time to time, and any agreement (and related documents and instruments) governing Indebtedness incurred to refinance, in whole or in part, the borrowings and commitments then outstanding or permitted to be outstanding under such debt or successor debt, whether by the same or any other lender or investor or group of lenders or investors.
Credit Party – each of Borrower and each Subsidiary Guarantor.
Current Assets - at any date means the amount at which all of the current assets of a Person would be properly classified as current assets shown on a balance sheet at such date in accordance with GAAP.
Default - an event or condition the occurrence of which would, with the lapse of time or the giving of notice, or both, become an Event of Default.
Default Rate - as defined in subsection 2.1.2 of the Agreement.
Derivative Obligations – every obligation of a Person under any forward contract, futures contract, exchange contract, swap, option or other financing agreement or arrangement (including, without limitation, caps, floors, collars and similar agreements), the value of which is dependent upon interest rates, currency exchange rates, commodity values, equity values or other indices.
Disqualified Capital Stock – shall mean any Security which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof,
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in whole or in part, on or prior to the first anniversary of the last day of the Term, (b) is convertible into or exchangeable for (i) debt securities or (ii) any Securities referred to in (a) above, in each case at any time prior to the first anniversary of the last day of the Term, (c) contains any repurchase obligation which may come into effect prior to payment in full of all Obligations, (d) requires cash Distributions prior to one year after the last day of the Term, (e) does not provide that any claims of any holder of such Security may have against any Credit Party (including any claims as a judgment creditor or other creditor in respect of claims for the breach of any covenants contained therein) shall be fully subordinated (including a full remedy bar) to the Obligations in a manner satisfactory to the Majority Lenders, (f) provides the holders of such Security thereof with any rights to receive any cash upon the occurrence of a change of control prior to the first anniversary of the date on which the Obligations have been paid in full in cash, unless the rights to receive such cash are contingent upon the prior payment in full in cash of the Obligations or (g) is prohibited by the terms of the Agreement.
Distribution - in respect of any Person means and includes: (i) the direct or indirect payment of any dividends or other distributions on Securities (except distributions in such Securities) and (ii) the repurchase, redemption, retirement, defeasance, sinking fund or similar payment or other purchase or acquisition for value of Securities of such Person, as the case may be.
DOL - the United States Department of Labor or any successor department or agency.
Dominion Notice – as defined in subsection 6.2.4 of the Agreement.
Eligible Assignee - (a) any Lender, any Affiliate of any Lender and any Approved Fund. (b) any other Person (i) which is a commercial bank, finance company, insurance company or other financial institution or fund and which, in the ordinary course of business, extends credit of the type contemplated herein; (ii) which is organized under the laws of the United States of America or any state thereof; and (iii) which has capital in excess of $500,000,000, provided, however, that “Eligible Assignee” shall not include any Credit Party or any of its Affiliates, financial sponsors or Subsidiaries or (c) any other Person consented to by Administrative Agent and, in the absence of a Default or Event of Default, Borrower (such consent not to be unreasonably withheld, delayed or conditioned).
Eligible Rental Equipment Inventory – Rental Equipment Inventory of any Credit Party (other than packaging materials and supplies, tooling, samples and literature). Without limiting the generality of the foregoing, no Rental Equipment Inventory shall be Eligible Rental Equipment Inventory if:
(i) it is not finished goods which meet the specifications of the purchase order or contract for such Rental Equipment Inventory, if any; or
(ii) it is not in good, new and saleable or leasable condition; or
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(iii) it is slow-moving, obsolete or unmerchantable; or
(iv) it does not meet all standards imposed by any governmental agency or authority; or
(v) it does not conform in all respects to any covenants, warranties and representations set forth in the Agreement; or
(vi) it is not at all times subject to Administrative Agent’s duly perfected security interest or is subject to a Lien that is not a Permitted Lien; or
(vii) it is not situated at a location in compliance with the Agreement, provided that Rental Equipment Inventory situated at a location not owned by a Credit Party will be Eligible Rental Equipment Inventory only if Administrative Agent has received a satisfactory landlord’s agreement or bailee letter, as applicable, with respect to such location; or
(viii) it is in transit; or
(ix) it is held on consignment; or
(x) it is not insured in accordance with the terms of the Agreement or other terms reasonably acceptable to Administrative Agent.
Environmental Claims - all complaint, summons, citation, notice of violation, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or other written communication from any Governmental Authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for a Release or injury to the environment.
Environmental Laws - all federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case relating to environmental, health, safety and land use matters.
Environmental Lien - a Lien in favor of any Governmental Authority for (a) any liability under Environmental Laws, or (b) damages arising from, or costs incurred by such Governmental Authority in response to, a Release or threatened Release of a Contaminant into the environment.
ERISA - the Employee Retirement Income Security Act of 1974, as amended, and any successor statute, and all rules and regulations from time to time promulgated thereunder.
ERISA Affiliate - any trade or business (whether or not incorporated) under common control with any Credit Party within the meaning of Section 414(b) or (c) of the
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Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
ERISA Event – means (a) a Reportable Event with respect to a Pension Plan, (b) a withdrawal by any Credit Party or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which is treated as such a withdrawal under Section 4062(e) of ERISA, (c) a complete or partial withdrawal by any Credit Party or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization, (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan, (e) the occurrence of an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan, or (f) the imposition of any material liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Credit Party or any ERISA Affiliate.
Event of Default - as defined in subsection 10.1 of the Agreement.
Excess Cash Flow - with respect to the period beginning July 1, 2004 and ending December 31, 2005 and each fiscal year of Borrower and its Subsidiaries thereafter, the amount equal to the sum of Consolidated Net Income (Loss) (as defined in Exhibit 8.3), plus depreciation, amortization and other non-cash charges deducted in determining Consolidated Net Income (Loss) and minus the sum of payments of principal on Indebtedness for Money Borrowed (excluding payments made on the Closing Date in respect of the Prior Indebtedness and repayments of revolving loans except to the extent the applicable revolving loan commitments are permanently reduced in connection with such repayments), non-cash income included in determining Consolidated Net Income (Loss) and Net Capital Expenditures for such period or fiscal year, as applicable, all determined for Borrower and its Subsidiaries on a Consolidated basis in accordance with GAAP.
Excluded Deposit Accounts – accounts which are solely used when and as needed for the purposes of making payroll, replenishing xxxxx cash, payment of specified amounts payable and other occasional corporate needs in the ordinary course of business, so long as the balance in any such account does not exceed $100,000 at any time and the aggregate balances in all such accounts do not exceed $200,000 at any time.
Fed Funds Rate - for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Fed Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next
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succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Fed Funds Rate for such day shall be the average rate charged to Administrative Agent on such day on such transactions as determined by Administrative Agent.
Fee Letter - as defined in subsection 2.3 of the Agreement.
First Lien Debt – any Indebtedness (to the extent permitted under subsection 8.2.3(ix) of the Agreement) under any Credit Facility of any Credit Party in respect of which the related First Lien Debt Agent has become a party to the Intercreditor Agreement on behalf of itself and the lenders or other debtholders under such Credit Facility, which Indebtedness is secured by Liens on all or any portion of the Collateral that are prior to the Liens securing the Obligations.
First Lien Debt Agent - at any time in respect of any Credit Facility, the Person serving at such time as the “Agent,” “Administrative Agent,” “Collateral Agent,” “Collateral Trustee” or “Trustee” under such Credit Facility or any other representative in a similar capacity then most recently designated in accordance with the applicable provisions of the Credit Facility, together with its successors in such capacity.
First Lien Debt Documents – any and all agreements, instruments and other documents pursuant to which the First Lien Debt has been or will be issued or otherwise setting forth the terms of the First Lien Debt, including the First Lien Debt Security Documents, any guaranty agreements, bank product agreements or hedging agreements related thereto, all ancillary agreements as to which the First Lien Agent or any lender is a party or a beneficiary and all other agreements, instruments, documents and certificates executed in connection with any of the foregoing, in each case as such agreement, instrument or other document may be amended, restated, supplemented, refunded, replaced or otherwise modified from time to time in accordance with the terms thereof, but only to the extent permitted under the terms of the Loan Documents.
First Lien Debt Security Documents - all security agreements, pledge agreements, collateral assignments, mortgages, collateral agency agreements, control agreements, deeds of trust or other grants or transfers for security executed and delivered by any Credit Party or any Subsidiary of any Credit Party or any guarantor of the First Lien Debt creating (or purporting to create) a Lien upon any assets or properties of such Person in favor of the First Lien Debt Agent, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms, but only to the extent permitted under the terms of the Loan Documents.
First Lien Loan and Security Agreement – that certain loan and security agreement, dated as of the date hereof, as amended, restated, supplemented, refunded, replaced or otherwise modified from time to time to the extent permitted under the terms of the Loan Documents, by and among (i) NES Rentals Holdings, Inc. and certain subsidiaries of NES Rentals Holdings, Inc., as borrowers, (ii) the financial institutions party thereto from time to time as lenders, (iii) Wachovia Bank, National Association as syndication agent and (iv) Bank of America, N.A. as administrative agent.
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Foreign Plan – any material pension, retirement, retiree benefit or similar plan, arrangement or policy sponsored or contributed to by any Credit Party in a jurisdiction other than the United States.
Foreign Subsidiary – as defined in subsection 5.1 of the Agreement.
GAAP - generally accepted accounting principles in the United States of America in effect from time to time.
Governmental Authority - any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any department, commission, board, bureau, instrumentality or agency thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.
Gross Orderly Liquidation Value - as to Rental Equipment Inventory, the orderly liquidation value of such Rental Equipment Inventory as set forth in the most recent inventory appraisal relating thereto delivered to and accepted by Administrative Agent in accordance with the terms of the Agreement.
Hoist Business Unit – the business of the Borrower of renting certain hoist equipment as currently conducted by NES Industrial Hoist.
Inactive Subsidiary – a Subsidiary of any Credit Party, which Subsidiary (x) does not conduct or engage in any business or operations, and (y) has assets and properties with an aggregate book value of not greater than $10,000, and liabilities in an aggregate amount not greater than $10,000 and (z) has aggregate revenues not greater than $10,000 during any twelve-month period.
Indebtedness - as applied to a Person means, without duplication:
(i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds (other than performance, surety or similar bonds), debentures, notes or similar instruments, or upon which interest payments are customarily made, (iii) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (iv) all obligations of such Person issued or assumed as the deferred purchase price of property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within 180 days of the incurrence thereof), (v) the principal portion of all obligations of such Person under Capitalized Lease Obligations, (vi) the maximum amount of all letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (vii) all preferred Securities issued by such Person and required by the terms thereof to be redeemed, or for which mandatory sinking fund payments are due, by a fixed date prior to 180 days following the applicable maturity date thereof, (viii) the principal portion of all
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obligations of such Person under off-balance sheet financing arrangements (other than leases which, in accordance with GAAP, would be classified as operating leases), (ix) all Contingent Obligations of such Person, (x) all Derivative Obligations of such Person, (xi) to the extent not included in the foregoing clauses (i) through (x), all items which in accordance with GAAP would be included in determining total liabilities as shown on the liability side of a balance sheet of such Person as at the date as of which Indebtedness is to be determined, (xii) all Indebtedness of another Person of the type referred to in clauses (i) through (xi) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, and (xii) Indebtedness of the type referred to in clauses (i) through (xi) above of any partnership or unincorporated joint venture in which such Person is legally obligated or has a reasonable expectation of being liable with respect thereto.
Indemnified Liabilities – as defined in subsection 13.2 of the Agreement.
Indemnitee – as defined in subsection 13.2 of the Agreement.
Intellectual Property - all past, present and future: trade secrets, know-how and other proprietary information; trademarks, internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and the goodwill of the business relating thereto and all registrations or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights (including copyrights for computer programs) and copyright registrations or applications for registrations which have heretofore been or may hereafter be issued throughout the world and all tangible property embodying the copyrights, unpatented inventions (whether or not patentable); patent applications and patents; industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom; books, records, writings, computer tapes or disks, flow diagrams, specification sheets, computer software, source codes, object codes, executable code, data, databases and other physical manifestations, embodiments or incorporations of any of the foregoing; the right to xxx for all past, present and future infringements of any of the foregoing; all other intellectual property; and all common law and other rights throughout the world in and to all of the foregoing.
Intercreditor Agreement - that certain Intercreditor Agreement by and between Administrative Agent and First Lien Debt Agent, as acknowledged by Credit Parties substantially in the form of Exhibit 8.4 attached hereto and otherwise in form and substance satisfactory to Majority Lenders, as amended, restated, supplemented or otherwise modified from time to time.
Interest Period - as applicable to any LIBOR Portion, a period commencing on the date such LIBOR Portion is advanced, continued or converted, and ending on the date which is one (1) month, two (2) months, three (3) months, or six (6) months later, as may
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then be requested by Borrower; provided that unless Administrative Agent notifies Borrower that the initial syndication of the Term Loan commitments have been completed, each Interest Period commencing (a) within the first 60 days after the Closing Date shall be a period of 1 month and (b) thereafter shall be a period of 7 days; and provided further that (i) any Interest Period which would otherwise end on a day which is not a Business Day shall end in the next preceding or succeeding Business Day as is Administrative Agent’s custom in the market to which such LIBOR Portion relates; (ii) there remains a minimum of one (1) month, two (2) months, three (3) months, or six (6) months (depending upon which Interest Period Borrower selects) in the Term, unless Credit Parties and Lenders have agreed to an extension of the Term beyond the expiration of the Interest Period in question; (iii) all Interest Periods of the same duration which commence on the same date shall end on the same date; and (iv) with respect to any LIBOR Term Portion, no applicable Interest Period shall extend beyond the scheduled installment payment date for such LIBOR Term Portion.
Inventory – as defined in the UCC and including, without limitation, all of each Credit Party’s Property which is rented by such Credit Party in the ordinary course of business or is held for rent by such Credit Party.
IRS - the Internal Revenue Service and any Governmental Authority succeeding to any of its principal functions under the Code.
Joint Lead Arrangers – each of Banc of America Securities LLC and Bear, Xxxxxxx & Co. Inc.
Lender – as defined in the preamble to the Agreement.
LIBOR - as applicable to any LIBOR Portion, for the applicable Interest Period, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, for deposits in U.S. dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then “LIBOR” for such Interest Period shall be the rate per annum determined by Administrative Agent to be the rate at which deposits in U.S. dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the LIBOR Portion being made, continued or converted by BofA and with a term equivalent to such Interest Period would be offered by BofA’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two (2) Business Days prior to the commencement of such Interest Period. In the event that the Board of Governors of the Federal Reserve System shall impose a Reserve Percentage with respect to LIBOR deposits of BofA, then for any period during which such Reserve Percentage shall apply, LIBOR shall be equal to the amount determined above divided by an amount equal to 1 minus the Reserve Percentage.
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LIBOR Interest Payment Date – with respect to a LIBOR Portion, the last day of the Term and the last day of each Interest Period applicable to such LIBOR Portion, provided, however, that if any Interest Period for a LIBOR Portion exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates.
LIBOR Option - the option granted pursuant to subsection 3.1 of the Agreement to have the interest on all or any portion of the principal amount of the Term Loan based on the LIBOR.
LIBOR Portion - that portion of the Term Loan specified in a LIBOR Request which, as of the date of the LIBOR Request specifying such LIBOR Term Portion, has met the conditions for basing interest on the LIBOR in subsection 3.1 of the Agreement and the Interest Period of which has not terminated.
LIBOR Request - a notice in writing (or by telephone confirmed electronically or by telecopy or other facsimile transmission on the same day as the telephone request) and in the Form of Exhibit 3.1.7) from Borrower to Administrative Agent requesting that interest on all or any portion of the Term Loan be based on the LIBOR, specifying: (i) the first day of the Interest Period (which shall be a Business Day); (ii) the length of the Interest Period; (iii) whether the LIBOR Portion is a new Term Loan, a conversion of a Base Rate Portion, or a continuation of a LIBOR Portion; and (iv) the dollar amount of the LIBOR Portion, which shall be in an amount not less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof.
Lien - any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on common law, statute or contract, including without limitation, any mortgage, deed of trust, pledge, lien (statutory or otherwise), security interest, charge or other encumbrance or security or preferential arrangement of any nature, any conditional sale or title retention arrangement, any capital lease, reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting Property and any assignment, deposit arrangement or financing lease intended as, or having the effect of, security. For the purpose of the Agreement, a Credit Party shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person for security purposes.
Loan Account - the loan account established on the books of Administrative Agent pursuant to subsection 3.6 of the Agreement.
Loan Documents - the Agreement, the Other Agreements and the Security Documents.
London Banking Day - any date on which commercial banks are open for business in London, England.
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Majority Lenders – as of any date, Lenders holding more than 50% of the outstanding Term Loans.
Margin Stock - “margin stock” as such term is defined in Regulation T, U or X of the Federal Reserve Board.
Material Adverse Effect - a material adverse effect on (i) the business, assets, liabilities (actual or contingent), results of operations or financial condition of Credit Parties and their Subsidiaries taken as a whole, (ii) the rights and remedies of Administrative Agent or Lenders under the Loan Documents, (iii) the ability of any Credit Party or any of its Subsidiaries to perform its obligations hereunder or under any Loan Document, (iv) the legality, validity or enforceability of the Agreement or any other Loan Document or (v) the validity, perfection or priority of any Lien in favor of Administrative Agent on any Collateral.
Material Contract - with respect to any Person, each contract or agreement to which any Credit Party is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.
Maximum Rate – as defined in subsection 2.1.3 of the Agreement.
Money Borrowed - (i) Indebtedness arising from the lending of money by any Person to any Credit Party or any of its Subsidiaries; (ii) Indebtedness, whether or not in any such case arising from the lending by any Person of money to any Credit Party or any of its Subsidiaries, (1) which is represented by notes payable or drafts accepted that evidence extensions of credit, (2) which constitutes obligations evidenced by bonds, debentures, notes or similar instruments, or (3) upon which interest charges are customarily paid (other than accounts payable) or that was issued or assumed as full or partial payment for Property; (iii) Indebtedness that constitutes a Capitalized Lease Obligation; (iv) reimbursement obligations with respect to letters of credit or guaranties of letters of credit and (v) Indebtedness of any Credit Party or any of its Subsidiaries under any guaranty of obligations that would constitute Indebtedness for Money Borrowed under clauses (i) through (iii) hereof, if owed directly by Borrower or any of its Subsidiaries. Money Borrowed shall not include trade payables or accrued expenses.
Mortgages – each mortgage or deed of trust executed by a Credit Party on or about the Closing Date in favor of Administrative Agent, for the benefit of itself and Lenders, by which such Credit Party has granted to Administrative Agent, as security for the Obligations, a Lien upon the real Property of such Credit Party described therein, together with all mortgages, deeds of trust and comparable documents now or at any time hereafter securing the whole or any part of the Obligations.
Motor Vehicle - any motor vehicle or other Property (including, without limitation, all trucks, trailers, tractors, service vehicles, automobiles and other mobile equipment and any Rental Equipment Inventory) for which the title to such motor vehicle or Property is governed by a certificate of title or ownership.
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Multiemployer Plan - a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA which is contributed to (or required to be contributed to) by any Credit Party or any ERISA Affiliate.
Net Capital Expenditures – with respect to any period, cash expenditures made for the acquisition or improvement of capital assets during such period, as determined in accordance with GAAP, net of (i) to the extent any asset sale proceeds were reinvested in the acquisition or improvement of capital assets during such period, the portion of such expenditures made with the proceeds of such asset sales up to a maximum amount equal to the sum of the net book value of the assets sold plus up to $15,000,000 of proceeds in excess of the net book value of the assets sold and (ii) to the extent any acquisition or improvement of capital assets during such period were financed with Indebtedness (other than the Obligations or the First Lien Debt), the portion of such expenditures made with the proceeds of such Indebtedness.
Net Cash Proceeds -with respect to (a) any sale, assignment, transfer or other disposition of any Property (an “Asset Disposition”) by any Credit Party or any of its Subsidiaries, all proceeds in the form of cash or cash equivalents received by such Credit Party or Subsidiary from or in respect of such Asset Disposition (including any cash proceeds received as income or other proceeds of any noncash proceeds of such Asset Disposition and including any insurance payment or condemnation award in respect of any assets of such Credit Party or Subsidiary), (b) any issuance of Securities or Indebtedness (a “Capital Issuance”) by any Credit Party or any of its Subsidiaries, all cash proceeds received in respect thereof and (c) any loss of, damage to or destruction of, or any condemnation or other taking for public use of, any Property of any Credit Party or any of its Subsidiaries (an “Involuntary Disposition”), all cash proceeds received by such Credit Party or Subsidiary in respect thereof, and in the case of the foregoing clauses (a), (b) and (c), net of (i) reasonable and customary expenses incurred or reasonably expected to be incurred in connection with such Asset Disposition, Capital Issuance or Involuntary Disposition, (ii) any income, franchise, transfer or other tax payable by such Credit Party or such Subsidiary in connection with such Asset Disposition, Capital Issuance or Involuntary Disposition and (iii) any Indebtedness secured by a Lien on such property or assets and required to be repaid as a result of such Asset Disposition, in each case with respect to the foregoing clauses (i), (ii) and (iii) to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash or cash equivalents, actually paid to a Person that is not an Affiliate and are properly attributable to such transaction or to the asset that is the subject thereof.
New Mortgages - as defined in subsection 5.4 of the Agreement.
Nonrental Equipment – Equipment as defined in the UCC and including, without limitation, all equipment of any Credit Party used or useful in the conduct of its business, but excluding any equipment which is rented by such Credit Party in the ordinary course of business or is held for rent by such Credit Party.
Obligations - all Term Loans and all other advances, debts, liabilities, obligations, covenants and duties, together with all interest (including, without limitation,
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all interest that accrues (or, but for the commencement of any bankruptcy, insolvency or similar proceeding, would accrue) after the commencement of any insolvency, bankruptcy or other similar proceeding of any Credit Party, whether or not a claim for post-filing interest is allowed in such proceeding), fees and other charges thereon, owing, arising, due or payable from any Credit Party to Administrative Agent, for its own benefit, from any Credit Party to Administrative Agent for the benefit of any Lender, from any Credit Party to any Lender or from any Credit Party to BofA or any other Affiliate of Administrative Agent, of any kind or nature, present or future, whether or not evidenced by any note, guaranty or other instrument, arising under the Agreement or any of the other Loan Documents, whether direct or indirect (including those acquired by assignment), absolute or contingent, primary or secondary, due or to become due, now existing or hereafter arising and however acquired.
Organizational I.D. Number - with respect to any Person, the organizational identification number assigned to such Person by the applicable governmental unit or agency of the jurisdiction of organization of such Person.
Other Agreements – the Fee Letter and any and all other agreements, instruments and documents (other than the Agreement, the Security Documents and any agreement evidencing any Derivative Obligation) heretofore, now or hereafter executed or delivered in connection with the Agreement or the transactions contemplated thereby.
Other Taxes – as defined in subsection 2.11.2 of the Agreement.
PBGC - the Pension Benefit Guaranty Corporation or any Governmental Authority succeeding to the functions thereof.
Pension Plan - a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA which any Credit Party or any ERISA Affiliate sponsors, maintains, or to which it makes, is making, or is obligated to make contributions.
Permitted Holder – each of the Persons identified on Exhibit 9.1 to the Agreement.
Permitted Indebtedness – any Indebtedness of any kind specified as permitted in subsection 8.2.3 of the Agreement.
Permitted Liens - any Lien of a kind specified as permitted in subsection 8.2.5 of the Agreement.
Permitted Overadvances – revolving credit loans representing First Lien Debt that are made in the form of overadvances, protective advances or administrative agent loans (or similar concepts) by the applicable lender or lenders in their sole discretion and the aggregate principal amount of which at any time outstanding does not exceed $10,000,000.
Permitted Purchase Money Indebtedness - Purchase Money Indebtedness of any Credit Party incurred after the date hereof which is secured by a Purchase Money
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Lien and the principal amount of which, when aggregated with the principal amount of all other such Indebtedness and Capitalized Lease Obligations of Credit Parties and their Subsidiaries at the time outstanding, does not exceed $15,000,000. For the purposes of this definition, the principal amount of any Purchase Money Indebtedness consisting of capitalized leases (as opposed to operating leases) shall be computed as a Capitalized Lease Obligation.
Person - an individual, partnership, corporation, limited liability company, association, joint stock company, trust, or unincorporated organization, or other enterprise or entity or a government or agency or political subdivision thereof.
Plan – an employee benefit plan (as defined in Section 3(3) of ERISA) which any Credit Party sponsors or maintains or to which any Credit Party makes, is making, or is obligated to make contributions and includes any Pension Plan.
Pledge Agreement – the Pledge Agreement, dated as of the Closing Date, by Credit Parties in favor of Administrative Agent, as amended, restated, supplemented or otherwise modified from time to time, and each other pledge or security agreement entered into from time to time by any Credit Party in favor of Administrative Agent, for the benefit of itself and Lenders, by which such Credit Party has granted to Administrative Agent, as security for the Obligations, a Lien upon the equity or debt interests held by such Credit Party.
Prime Rate - the rate of interest announced or quoted by BofA from time to time as its prime rate for commercial loans, whether or not such rate is the lowest rate charged by BofA to its most preferred borrowers; and, if such prime rate for commercial loans is discontinued by BofA as a standard, a comparable reference rate designated by BofA as a substitute therefor shall be the Prime Rate.
Prior Indebtedness - all Indebtedness and any other liabilities or obligations of any Credit Party owing pursuant to that certain Credit Agreement dated as of February 11, 2004 by and among National Equipment Services, Inc., the financial institutions party thereto as lenders and Wachovia Bank, National Association, as agent for such lenders, and those agreements, documents and instruments related thereto, as all of the same may have been amended, restated, supplemented or otherwise modified prior to the date hereof.
Product Obligations - every obligation of any Credit Party under and in respect of any one or more of the following types of services or facilities extended to such Credit Party by BofA, Administrative Agent, Wachovia Bank, National Association or any Affiliate of BofA, Administrative Agent or Wachovia Bank, National Association: (i) credit cards or stored value cards, (ii) cash management or related services including the automatic clearing house transfer of funds for the account of such Credit Party pursuant to agreement or overdraft, (iii) cash management, including controlled disbursement services and (iv) Derivative Obligations.
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Projections – Credit Parties’ forecasted Consolidated (including on a line of business basis) balance sheets, profit and loss statements and cash flow statements.
Property - any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
Purchase Money Indebtedness - (i) Indebtedness (other than the Obligations) for the payment of all or any part of the purchase price of any Rental Equipment Inventory, (ii) any Indebtedness (other than the Obligations) incurred at the time of or within 10 days prior to or after the acquisition of any fixed assets for the purpose of financing all or any part of the purchase price thereof, and (iii) any renewals, extensions or refinancings thereof, but not any increases in the principal amounts thereof outstanding at the time.
Purchase Money Lien - a Lien upon Rental Equipment Inventory which secures Purchase Money Indebtedness, but only if such Lien shall at all times be confined solely to the Rental Equipment Inventory the purchase price of which was financed through the incurrence of the Purchase Money Indebtedness secured by such Lien.
Release - a release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration of a Contaminant into the indoor or outdoor environment or into or out of any real Property or other Property, including the movement of Contaminants through or in the air, soil, surface water, groundwater or real Property or other Property.
Rental Equipment Inventory - all of each Credit Party’s Inventory consisting of Property which is rented by such Credit Party in the ordinary course of business or is held for rent by such Credit Party.
Rentals - as defined in subsection 8.2.17 of the Agreement.
Reorganization Plan –certain of Borrower’s Subsidiaries and Affiliates’ Fourth Amended Joint Plan of Reorganization Under Chapter 11 of the United States Bankruptcy Code dated January 23, 2004, including, without limitation, all exhibits, supplements, appendices, and schedules thereto.
Report – as defined in subsection 11.12 of the Agreement.
Reportable Event - any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30-day notice period has been waived.
Requirement of Law - as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject.
Reserve Percentage - the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed on member banks of
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the Federal Reserve System against “Euro-currency Liabilities” as defined in Regulation D.
Responsible Officer - the chief executive officer or the president of Borrower, or any other officer having substantially the same authority and responsibility; or, with respect to compliance with financial covenants and the preparation of the Collateral Coverage Certificate, the chief financial officer or the treasurer of Borrower, or any other Responsible Officer having substantially the same authority and responsibility.
Restricted Investment - any investment made in cash or by delivery of Property to any Person, whether by acquisition of stock, Indebtedness or other obligation or Security, or by loan, advance or capital contribution, or otherwise, or in any Property except the following:
(i) investments by a Credit Party, to the extent existing on the Closing Date, in one or more Subsidiaries of such Credit Party;
(ii) Property to be used in the ordinary course of business;
(iii) Current Assets arising from the sale of goods and services in the ordinary course of business of any Credit Party or any of its Subsidiaries;
(iv) investments in direct obligations of the United States of America, or any agency thereof or obligations guaranteed by the United States of America; provided that such obligations mature within one year from the date of acquisition thereof;
(v) investments in certificates of deposit maturing within one year from the date of acquisition and fully insured by the Federal Deposit Insurance Corporation;
(vi) investments in commercial paper given the highest rating by a national credit rating agency and maturing not more than 180 days from the date of creation thereof;
(vii) investments in money market, mutual or similar funds having assets in excess of $100,000,000 and the investments of which are limited to investment grade securities;
(viii) intercompany loans permitted under subsection 8.2.2(v) of the Agreement;
(ix) investments existing on the date hereof and listed on Exhibit 8.2.12 to the Agreement;
(x) investments consisting of Product Obligations that are Derivative Obligations, entered into in the ordinary course of business and not for speculative purposes; and
(xi) investments otherwise expressly permitted pursuant to subsection 8.2.2 of the Agreement.
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Schedule of Accounts – as defined in subsection 6.2.1 of the Agreement.
Secured Parties – Administrative Agent and the Lenders.
Security - all shares of stock, partnership interests, membership interests, membership units or other ownership interests in any other Person and all warrants, options or other rights to acquire the same and, for purposes only of Sections 5 and 6 and the Security Documents, shall include any other “Security” (as defined in the UCC).
Security Documents – the Intercreditor Agreement, the Pledge Agreement, the Mortgages and all other instruments and agreements now or at any time hereafter securing or guarantying the whole or any part of the Obligations.
Serialized Rental Equipment Inventory - Rental Equipment Inventory marked with and identifiable by serial number.
Solvent - as to any Person, that such Person (i) owns Property whose fair saleable value is greater than the amount required to pay all of such Person’s Indebtedness (including contingent debts), (ii) is able to pay all of its Indebtedness as such Indebtedness matures and (iii) has capital sufficient to carry on its business and transactions and all business and transactions in which it is about to engage.
Studio Business Unit – the business of Borrower of renting lift equipment to television or motion picture studios currently conducted by Rebel Studio Rentals, Inc.
Subordinated Debt - Indebtedness of any Credit Party or any Subsidiary of any Credit Party that is subordinated to the Obligations in a manner satisfactory to Administrative Agent, and contains terms, including without limitation, payment terms, satisfactory to Administrative Agent.
Subsidiary - any Person of which another Person owns, directly or indirectly through one or more intermediaries, more than 50% of the Voting Stock at the time of determination.
Subsidiary Guarantor – as defined in the preamble to the Agreement.
Syndication Agent – as defined in the preamble to the Agreement.
Tax Liabilities – as defined in subsection 2.11 of the Agreement.
Term - as defined in subsection 4.1 of the Agreement.
Term Loan - the Term Loan described in subsection 1.1.1 of the Agreement.
Term Loan Commitment - with respect to any Lender, the amount of such Lender’s Term Loan Commitment pursuant to subsection 1.1.1 of the Agreement, as set forth opposite such Lender’s name on Exhibit 1.0 to the Agreement or any Assignment
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and Acceptance Agreement executed by such Lender, minus all Term Loans made by such Lender.
Term Notes - the Secured Promissory Notes to be executed by Borrower on or about the Closing Date in favor of each applicable Lender who shall request the same to evidence its Term Loan, which shall be in the form of Exhibit 1.1 to the Agreement, together with any replacement or successor notes therefor.
Total Credit Facility - $275,000,000, as reduced from time to time pursuant to the terms of the Agreement.
Total Funded Senior Leverage Ratio – as defined in Exhibit 8.3 to the Agreement.
Type of Organization - with respect to any Person, the kind or type of entity as which such Person is organized, such as a corporation or limited liability company.
UCC - the Uniform Commercial Code as in effect in the State of New York on the date of the Agreement, as it may be amended or otherwise modified.
Unfunded Pension Liability - the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.
USA Patriot Act - the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, as in effect from time to time
Voting Stock - Securities of any class or classes of a corporation, limited partnership or limited liability company or any other entity the holders of which are ordinarily, in the absence of contingencies, entitled to vote with respect to the election of corporate directors (or Persons performing similar functions).
Other Terms
All other terms contained in the Agreement shall have, when the context so indicates, the meanings provided by the UCC to the extent the same are used or defined therein.
Certain Matters of Construction
The terms “herein”, “hereof” and “hereunder” and other words of similar import refer to the Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. The section titles, table of contents and list of exhibits appear as a matter of convenience only and shall not affect the interpretation of the Agreement. All references to statutes and related regulations shall include any amendments of same and any successor statutes and
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regulations. All references to any of the Loan Documents shall include any and all modifications thereto and any and all extensions or renewals thereof.
Accounting Terms and Determinations
Unless otherwise defined or specified herein, all accounting terms shall be construed herein and all accounting determinations for purposes of determining compliance with subsection 8.3 of the Agreement and otherwise to be made under the Agreement shall be made in accordance with GAAP applied on a basis consistent in all material respects with the financial statements delivered pursuant to subsection 8.1.3 of the Agreement (the “Financials”). All financial statements required to be delivered hereunder from and after the Closing Date and all financial records shall be maintained in accordance with GAAP and to the extent required or permitted under GAAP, shall give effect to changes from time to time required as a result of the application of fresh start accounting. If GAAP shall change from the basis used in preparing the Financials (or the application of fresh start accounting shall require such a change), the certificates required to be delivered pursuant to subsection 8.1.3 of the Agreement demonstrating compliance with the covenants contained herein shall include calculations setting forth the adjustments necessary to demonstrate how Borrower is in compliance with the financial covenants based upon GAAP as in effect on the Closing Date. If Borrower shall change its method of inventory accounting, all calculations necessary to determine compliance with the covenants contained herein shall be made as if such method of inventory accounting had not been so changed.
Credit Parties shall deliver to Administrative Agent and each Lender at the same time as the delivery of any annual financial statements given in accordance with the provisions of subsection 8.1.3 of the Agreement, (i) a description in reasonable detail of any material change in the application of accounting principles employed in the preparation of such financial statements from those applied in the most recently preceding annual financial statements and (ii) a reasonable estimate of the effect on the financial statements on account of such changes in application.
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***The Registrant will deliver exhibits to this agreement upon the request of the Securities and Exchange Commission***
