EXHIBIT 1
CREDIT AGREEMENT
by and among
RENT-WAY, INC. and
RENT-WAY OF TTIG, L.P.
and
THE LENDERS PARTY HERETO
and
NATIONAL CITY BANK OF PENNSYLVANIA, as Administrative Agent
and
BANK OF AMERICA, N.A. as Documentation Agent
and
XXXXXX TRUST
AND SAVINGS BANK, as Syndication Agent
Dated as of September 23, 1999
As Amended by Amendment No. 1 dated as of November 17, 1999,
As Amended by Amendment No. 2 dated as of December 6, 1999,
As Amended by Amendment No. 3 dated as of December 7, 1999,
As Amended by Amendment No. 4 dated as of June 28, 2000,
As Amended by Amendment No. 5 dated as of November 16, 2000, and
As Amended by Amendment No. 6 dated as of October 5, 2001, and
TABLE OF CONTENTS
Section Page
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1. CERTAIN DEFINITIONS.....................................................1
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1.1 Certain Definitions..................................................1
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1.2 Construction........................................................20
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1.2.1 Number; Inclusion.............................................20
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1.2.2 Determination.................................................20
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1.2.3 Administrative Agent's Discretion and Consent.................20
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1.2.4 Documents Taken as a Whole....................................20
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1.2.5 Headings......................................................20
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1.2.6 Implied References to this Agreement..........................20
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1.2.7 Persons.......................................................21
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1.2.8 Modifications to Documents....................................21
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1.2.9 From, To and Through..........................................21
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1.2.10 Shall; Will...................................................21
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1.3 Accounting Principles...............................................21
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2. REVOLVING CREDIT FACILITIES............................................21
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2.1 Revolving Credit Commitments........................................21
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2.1.1 Revolving Credit Loans........................................21
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2.1.2 [Intentionally Omitted].......................................22
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2.2 Nature of Lenders' Obligations with
Respect to Revolving Credit Loans...................................22
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2.3 Commitment Fees.....................................................23
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2.4 [Intentionally Omitted].......... ..................................23
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2.5 Revolving Credit Loan Requests......................................23
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2.5.1 Revolving Credit Loan Requests................................23
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2.5.2 [Intentionally Omitted].......................................24
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2.6 Making Revolving Credit Loans.......................................24
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2.6.1 Making Revolving Credit Loans.................................24
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2.6.2 [Intentionally Omitted].......................................24
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2.7 Revolving Credit Notes..............................................24
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2.7.1 Revolving Credit Notes........................................24
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2.7.2 [Intentionally Omitted].......................................24
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2.8 Use of Proceeds.....................................................24
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2.9 Letter of Credit Subfacility........................................25
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2.9.1 Issuance of Letters of Credit.................................25
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2.9.2 Letter of Credit Fees.........................................25
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2.9.3 Disbursements, Reimbursement..................................25
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2.9.4 Repayment of Participation Advances...........................27
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2.9.5 Documentation.................................................27
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2.9.6 Determinations to Honor Drawing Requests......................27
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2.9.7 Nature of Participation and Reimbursement Obligations.........28
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2.9.8 Indemnity.....................................................29
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2.9.9 Liability for Acts and Omissions..............................29
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3. TERM LOANS.............................................................30
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3.1 Term Loan Commitments...............................................30
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3.1.1 Term Loan A Commitments.......................................30
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3.1.2 Term Loan B Commitments.......................................30
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3.2 Nature of Lenders' Obligations with Respect to Term Loans...........30
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3.3 Term Loan Notes.....................................................31
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3.4 Use of Proceeds.....................................................32
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4. INTEREST RATES.........................................................32
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4.1 Interest Rate Options...............................................32
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4.1.1 Revolving Credit Interest Rate Options........................32
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4.1.2 Term Loan A Interest Rate Options.............................32
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4.1.3 Term Loan B Interest Rate Options.............................33
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4.1.4 Rate Quotations...............................................33
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4.2 Interest Periods....................................................33
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4.2.1 Ending Date and Business Day..................................33
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4.2.2 Amount of Borrowing Tranche...................................34
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4.2.3 Termination Before Expiration Date............................34
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4.2.4 Renewals......................................................34
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4.3 Interest After Default..............................................34
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4.3.1 Letter of Credit Fees, Interest Rate..........................34
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4.3.2 Other Obligations.............................................34
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4.3.3 Acknowledgment................................................34
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4.4 Euro-Rate Unascertainable; Illegality; Increased Costs;
Deposits Not Available..............................................35
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4.4.1 Unascertainable...............................................35
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4.4.2 Illegality; Increased Costs; Deposits Not Available...........35
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4.4.3 Administrative Agent's and Lender's Rights....................35
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4.5 Selection of Interest Rate Options..................................36
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5. PAYMENTS...............................................................36
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5.1 Payments............................................................36
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5.2 Pro Rata Treatment of Lenders.......................................37
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5.3 Interest Payment Dates..............................................37
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5.4 Voluntary Repayments................................................37
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5.4.1 Right to Repay................................................37
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5.4.2 Commitment Reductions.........................................38
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5.4.3 Replacement of a Lender.......................................39
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5.4.4 Change of Lending Office......................................39
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5.5 Mandatory Prepayments...............................................40
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5.5.1 Excess Cash Flow..............................................40
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5.5.2 Sale of Assets; Issuance of Stock;
Incurrence of Indebtedness; Casualty Events ..................40
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5.5.3 Application Among Interest Rate Options.......................41
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5.6 Additional Compensation in Certain Circumstances....................41
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5.6.1 Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc........41
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5.6.2 Indemnity.....................................................42
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6. REPRESENTATIONS AND WARRANTIES.........................................43
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6.1 Representations and Warranties......................................43
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6.1.1 Organization and Qualification................................43
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6.1.2 Capitalization and Ownership..................................43
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6.1.3 Subsidiaries..................................................43
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6.1.4 Power and Authority...........................................44
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6.1.5 Validity and Binding Effect......................... .........44
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6.1.6 No Conflict...................................................44
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6.1.7 Litigation....................................................44
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6.1.8 Title to Properties...........................................45
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6.1.9 Financial Statements..........................................45
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6.1.10 Use of Proceeds; Margin Stock.................................45
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6.1.11 Full Disclosure...............................................46
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6.1.12 Taxes.........................................................46
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6.1.13 Consents and Approvals........................................46
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6.1.14 No Event of Default; Compliance with Instruments..............47
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6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc................47
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6.1.16 Security Interests............................................47
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6.1.17 Mortgage Liens................................................48
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6.1.18 Status of the Pledge Collateral...............................48
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6.1.19 Insurance.....................................................48
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6.1.20 Compliance with Laws..........................................48
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6.1.21 Material Contracts; Burdensome Restrictions...................49
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6.1.22 Investment Companies; Regulated Entities......................49
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6.1.23 Plans and Benefit Arrangements................................49
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6.1.24 Employment Matters............................................50
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6.1.25 Environmental Matters.........................................51
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6.1.26 Senior Debt Status............................................53
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6.2 Updates to Schedules................................................53
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7. CONDITIONS OF LENDING..................................................53
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7.1 First Loans.........................................................53
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7.1.1 Officer's Certificate.........................................53
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7.1.2 Secretary's Certificate.......................................54
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7.1.3 Delivery of Loan Documents....................................54
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7.1.4 Opinion of Counsel............................................54
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7.1.5 Legal Details.................................................55
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7.1.6 Payment of Fees...............................................55
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7.1.7 Consents......................................................55
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7.1.8 Officer's Certificate Regarding MACs..........................55
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7.1.9 No Violation of Laws..........................................56
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7.1.10 No Actions or Proceedings.....................................56
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7.1.11 Insurance Policies; Certificates of Insurance; Endorsements...56
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7.1.12 Title Insurance...............................................56
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7.1.13 Filing Receipts...............................................56
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7.1.14 Amendment of Existing Credit Agreement........................57
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7.1.15 Blocked Account...............................................57
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7.1.16 Waiver of Events of Default...................................57
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7.2 Each Additional Loan................................................57
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8. COVENANTS..............................................................58
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8.1 Affirmative Covenants...............................................58
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8.1.1 Preservation of Existence, Etc................................58
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8.1.2 Payment of Liabilities, Including Taxes, Etc..................58
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8.1.3 Maintenance of Insurance......................................58
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8.1.4 Maintenance of Properties and Leases..........................59
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8.1.5 Maintenance of Patents, Trademarks, Etc.......................60
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8.1.6 Visitation Rights.............................................60
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8.1.7 Keeping of Records and Books of Account.......................60
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8.1.8 Plans and Benefit Arrangements................................60
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8.1.9 Compliance with Laws..........................................60
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8.1.10 Use of Proceeds...............................................61
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8.1.11 Further Assurances............................................61
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8.1.12 Subordination of Intercompany Loans...........................61
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8.1.13 Interest Rate Protection......................................62
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8.1.14 Rights of Lenders to Issuance of Warrants.....................62
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8.2 Negative Covenants..................................................62
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8.2.1 Indebtedness..................................................62
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8.2.2 Liens.........................................................63
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8.2.3 Guaranties....................................................63
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8.2.4 Loans and Investments.........................................63
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8.2.5 Dividends and Related Distributions...........................64
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8.2.6 Liquidations, Mergers, Consolidations, Acquisitions...........64
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8.2.7 Dispositions of Assets or Subsidiaries........................66
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8.2.8 Affiliate Transactions........................................67
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8.2.9 Subsidiaries, Partnerships and Joint Ventures.................67
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8.2.10 Continuation of or Change in Business.........................67
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8.2.11 Plans and Benefit Arrangements................................67
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8.2.12 Fiscal Year...................................................68
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8.2.13 Issuance of Stock.............................................68
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8.2.14 Changes in Organizational Documents...........................69
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8.2.15 Capital Expenditures and Leases...............................69
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8.2.16 Maximum Leverage Ratio (Total Funded Debt)....................69
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8.2.17 [Intentionally Omitted].......................................70
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8.2.18 Minimum Interest Coverage Ratio...............................70
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8.2.19 Minimum Net Worth.............................................70
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8.2.20 Fixed Charge Coverage Ratio...................................71
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8.2.21 Rental Merchandise Usage......................................71
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8.3 Reporting Requirements..............................................71
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8.3.1 Monthly Financial Statements..................................71
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8.3.2 Quarterly Financial Statements................................72
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8.3.3 Annual Financial Statements...................................72
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8.3.4 Certificate of the Borrower...................................73
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8.3.5 Weekly Cash Flow Forecast.....................................73
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8.3.6 Notice of Default.............................................73
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8.3.7 Notice of Litigation..........................................73
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8.3.8 Certain Events................................................74
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8.3.9 Budgets, Forecasts, Other Reports and Information.............74
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8.3.10 Notices Regarding Plans and Benefit Arrangements..............75
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9. DEFAULT................................................................76
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9.1 Events of Default...................................................76
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9.1.1 Payments Under Loan Documents.................................76
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9.1.2 Breach of Warranty............................................76
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9.1.3 Breach of Negative Covenants or Visitation Rights.............77
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9.1.4 Breach of Other Covenants.....................................77
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9.1.5 Defaults in Other Agreements or Indebtedness..................77
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9.1.6 Final Judgments or Orders.....................................77
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9.1.7 Loan Document Unenforceable...................................77
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9.1.8 Uninsured Losses; Proceedings Against Assets..................78
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9.1.9 Notice of Lien or Assessment..................................78
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9.1.10 Insolvency....................................................78
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9.1.11 Events Relating to Plans and Benefit Arrangements.............78
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9.1.12 Cessation of Business.........................................79
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9.1.13 Change of Control.............................................79
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9.1.14 Involuntary Proceedings.......................................79
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9.1.15 Voluntary Proceedings.........................................79
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9.2 Consequences of Event of Default....................................80
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9.2.1 Events of Default Other Than Bankruptcy, Insolvency
or Reorganization Proceeding................s.................80
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9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings..........80
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9.2.3 Set-off.......................................................80
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9.2.4 Suits, Actions, Proceedings...................................81
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9.2.5 Application of Proceeds.......................................81
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9.2.6 Other Rights and Remedies.....................................82
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9.3 Notice of Sale......................................................82
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10. THE AGENT..............................................................82
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10.1 Appointment.........................................................82
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10.2 Delegation of Duties................................................82
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10.3 Nature of Duties; Independent Credit Investigation..................83
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10.4 Actions in Discretion of Administrative Agent;
Instructions from the Lenders.......................................83
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10.5 Reimbursement and Indemnification of Administrative Agent...........84
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10.6 Exculpatory Provisions; Limitation of Liability.....................84
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10.7 Reimbursement and Indemnification of
Administrative Agent by Lenders.....................................85
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10.8 Reliance by Administrative Agent....................................86
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10.9 Notice of Default...................................................86
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10.10 Notices.............................................................86
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10.11 Lenders in Their Individual Capacities..............................86
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10.12 Holders of Notes....................................................87
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10.13 Equalization of Lenders.............................................87
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10.14 Successor Administrative Agent......................................87
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10.15 Availability of Funds...............................................88
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10.16 Calculations........................................................88
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10.17 Beneficiaries.......................................................89
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11. MISCELLANEOUS..........................................................89
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11.1 Modifications, Amendments or Waivers................................89
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11.1.1 Increase of Commitment; Extension or Expiration Date..........89
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11.1.2 Extension of Payment; Reduction of Principal Interest or Fees;
Modification of Terms of Payment..............................89
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11.1.3 Release of Collateral or Guarantor............................90
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11.1.4 Miscellaneous.................................................90
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11.2 No Implied Waivers; Cumulative Remedies; Writing Required...........90
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11.3 Reimbursement and Indemnification of Lenders; Taxes.................91
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11.4 Holidays............................................................91
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11.5 Funding by Branch, Subsidiary or Affiliate..........................92
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11.5.1 Notional Funding..............................................92
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11.5.2 Actual Funding................................................92
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11.6 Notices.............................................................92
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11.7 Severability........................................................93
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11.8 Governing Law.......................................................93
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11.9 Prior Understanding.................................................93
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11.10 Duration; Survival..................................................93
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11.11 Successors and Assigns..............................................94
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11.12 Confidentiality.....................................................95
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11.13 Counterparts........................................................96
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11.14 Administrative Agent's or Lender's Consent..........................97
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11.15 Exceptions..........................................................97
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11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL..............................97
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11.17 Tax Withholding Clause..............................................97
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11.18 Joinder of Guarantors...............................................98
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11.19 Joint and Several Liability of Borrower and Co-Borrower.............98
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE 1.1(A) - PRICING GRID
SCHEDULE 1.1(B) - COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES
SCHEDULE 1.1(P) - PERMITTED LIENS
SCHEDULE 6.1.1 - QUALIFICATIONS TO DO BUSINESS
SCHEDULE 6.1.3 - SUBSIDIARIES
SCHEDULE 6.1.7 - LITIGATION
SCHEDULE 6.1.8 - OWNED AND LEASED REAL PROPERTY
SCHEDULE 6.1.13 - CONSENTS AND APPROVALS
SCHEDULE 6.1.15 - PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.
SCHEDULE 6.1.18 - PARTNERSHIP AGREEMENTS; LLC AGREEMENTS
SCHEDULE 6.1.19 - INSURANCE POLICIES
SCHEDULE 6.1.21 - MATERIAL CONTRACTS
SCHEDULE 6.1.23 - EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 6.1.25 - ENVIRONMENTAL DISCLOSURES
SCHEDULE 7.1.16 - EVENTS OF DEFAULT
SCHEDULE 8.2.1 - PERMITTED INDEBTEDNESS
EXHIBITS
EXHIBIT 1.1(A) - ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(C)(1) - COLLATERAL ASSIGNMENT
EXHIBIT 1.1(G)(1) - GUARANTOR JOINDER
EXHIBIT 1.1(G)(2) - GUARANTY AGREEMENT
EXHIBIT 1.1(I)(1) - INDEMNITY AGREEMENT
EXHIBIT 1.1(I)(2) - INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(M) - MORTGAGE
EXHIBIT 1.1(P)(1) - PATENT, TRADEMARK AND COPYRIGHT SECURITY AGREEMENT
EXHIBIT 1.1(P)(2) - PLEDGE AGREEMENT
EXHIBIT 1.1(R) - REVOLVING CREDIT NOTE
EXHIBIT 1.1(S)(1) - AMENDED AND RESTATED SECURITY AGREEMENT
EXHIBIT 1.1(T)(1) - TERM NOTE A
EXHIBIT 1.1(T)(2) - TERM NOTE B
EXHIBIT 2.5 - LOAN REQUEST
EXHIBIT 7.1.4 - OPINION OF COUNSEL
EXHIBIT 8.1.14 - WARRANT AGREEMENT
EXHIBIT 8.3.4 - QUARTERLY COMPLIANCE CERTIFICATE
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of September 23, 1999 and is
made by and among RENT-WAY, INC., a Pennsylvania corporation (the "Borrower")
for itself and as successor by merger to Rentavision, Inc., a New York
Corporation, and RENT-WAY OF TTIG, L.P., an Indiana Limited Partnership,
(Rent-Way of TTIG, L.P. is referred to herein as the "Co-Borrower"), each of the
Guarantors (as hereinafter defined), the LENDERS (as hereinafter defined),
NATIONAL CITY BANK OF PENNSYLVANIA, in its capacity as administrative agent for
the Lenders under this Agreement (hereinafter referred to in such capacity as
the "Administrative Agent"), BANK OF AMERICA, N.A. in its capacity as
documentation agent for the Lenders, and XXXXXX TRUST AND SAVINGS BANK, in its
capacity as syndication agent.
WITNESSETH:
WHEREAS, the Borrower and the Co-Borrower have requested the
Administrative Agent and the Lenders to continue to provide (i) a revolving
credit facility in an aggregate principal amount not to exceed $75,000,000.00,
(ii) a term loan in the amount of $117,567,083.30 ("Term Loan A") and (iii) a
term loan in the amount of $170,980,650.64 ("Term Loan B").
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants and agreements hereinafter set forth and intending to be
legally bound hereby, covenant and agree as follows:
1. CERTAIN DEFINITIONS
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1.1 Certain Definitions.
In addition to words and terms defined elsewhere in this
Agreement, the following words and terms shall have the following meanings,
respectively, unless the context hereof clearly requires otherwise:
Acquiring Person shall mean any Person or group
of two or more Persons(excluding the Management Group) acting as a partnership,
limited partnership,syndicate, or other group for the purpose of acquiring,
holding or disposing of Voting Stock of the Borrower, together with all
affiliates and associates (as defined in Rule 12b-2 under the Securities
and Exchange Act of 1934, as amended)of such Person or Persons.
Administrative Agent shall mean National City Bank of
Pennsylvania, and its successors and assigns.
Affiliate as to any Person shall mean any other Person
(i) which directly or indirectly controls, is controlled by, or is under common
control with such Person, (ii) which beneficially owns or holds 5% or more of
any class of the voting or other equity interests of such Person, or (iii) 5% or
more of any class of voting interests or other equity interests of which is
beneficially owned or held, directly or indirectly, by such Person. Control, as
used in this definition, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, including the power to elect a majority of the directors or trustees
of a corporation or trust, as the case may be. Notwithstanding the foregoing, no
Lender shall be deemed to be an Affiliate of the Borrower or any other Loan
Party based upon any warrants issued to such Lender pursuant to Section 8.1.14
or any capital stock of the Borrower received in exchange for such warrants
issued to such Lender.
Agreement shall mean this Credit Agreement, as the
same may be supplemented or amended from time to time,
including all schedules and exhibits.
Annual Statements shall have the meaning assigned to
that term in Section 6.1.9(i).
Applicable Commitment Fee Rate shall mean a
percentage rate per annum equal to three-fourths of one percent
(.75%).
Applicable Margin shall mean, as applicable:
(A) the percentage spread set forth on the pricing
grid attached hereto as Schedule 1.1(A) to be added to the Base Rate under the
Base Rate Option.
(B) the percentage spread set forth on the pricing
grid attached hereto as Schedule 1.1(A) to be added to the Euro-Rate under the
Euro-Rate Option.
Assignment and Assumption Agreement shall mean an
Assignment and Assumption Agreement by and among a Purchasing Lender, a Transfer
or Lender and the Administrative Agent, as Administrative Agent and on
behalf of the remaining Lenders, substantially in the form of Exhibit 1.1(A).
Authorized Officer shall mean those individuals,
designated by written notice to the Administrative Agent from the Borrower and
the Co-Borrower, authorized to execute notices, reports and other documents on
behalf of the Loan Parties required hereunder. The Borrower and the Co-Borrower
may amend such list of individuals from time to time by giving written notice of
such amendment to the Administrative Agent.
Base Net Worth shall mean the sum of $185,000,000
plus the amounts set forth in (i) (ii) and(iii) below which occur during the
period from the Closing Date through the date of determination: (i) 75% of
consolidated net income of the Borrower and its Subsidiaries for each fiscal
year in which net income was earned (as opposed to a net loss) commencing with
the fiscal year ended September 30, 2002, (ii) 90% of any increase in the
Consolidated Net Worth resulting from a Permitted Acquisition and (iii) 90% of
the amount of the cash net proceeds received by the Loan Parties from any
offering consummated with respect to equity securities of the Borrower.
Base Rate shall mean the greater of (i) the interest
rate per annum announced from time to time by the Administrative Agent at its
Principal Office as its then prime rate, which rate may not be the lowest rate
then being charged commercial borrowers by the Administrative Agent, or (ii) the
Federal Funds Effective Rate plus one half percent (1/2%) per annum.
Base Rate Option shall mean either the Revolving
Credit Base Rate Option, the Term Loan A Base Rate Option or the Term Loan B
Base Rate Option.
Benefit Arrangement shall mean at any time an
"employee benefit plan," within the meaning of Section 3(3) of ERISA, which is
neither a Plan nor a Multiemployer Plan and which is maintained, sponsored or
otherwise contributed to by any member of the ERISA Group.
Borrower shall mean Rent-Way, Inc., a corporation
organized and existing under the laws of the Commonwealth of Pennsylvania.
Borrowing Date shall mean, with respect to any Loan,
the date for the making thereof or the renewal or conversion thereof at or to
the same or a different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean specified portions of
Loans outstanding as follows: (i) any Loans to which a Euro-Rate Option applies
which become subject to the same Interest Rate Option under the same Loan
Request and which have the same Interest Period shall constitute one Borrowing
Tranche, and (ii) all Loans to which the Base Rate Option applies shall
constitute one Borrowing Tranche.
Business Day shall mean any day other than a Saturday
or Sunday or a legal holiday on which commercial banks are authorized or
required to be closed for business in Pittsburgh, Pennsylvania.
Cash Equivalents shall mean cash and all investments
permitted by the Loan Parties described in items (i) through (v) in the
definition of Permitted Investments.
Co-Borrower shall mean Rent-Way of TTIG, L.P., a
limited partnership organized and existing under the laws of the State of
Indiana.
Closing Date shall mean October 5, 2001.
Collateral shall mean the Pledge Collateral, the UCC
Collateral, the Intellectual Property Collateral and the Real Property.
Collateral Assignments shall mean the Collateral
Assignments in the form of Exhibit 1.1(C).
Commitment shall mean as to any Lender the aggregate
of its Revolving Credit Commitments, Term Loan A Commitments and Term Loan B
Commitments, and Commitments shall mean the aggregate of the Revolving Credit
Commitments, Term Loan A Commitments and Term Loan B Commitments of all of the
Lenders.
Commitment Fee shall have the meaning assigned to
that term in Section 2.3.
Consideration shall mean with respect to any
Permitted Acquisition, the aggregate of (i) the cash paid by any of the Loan
Parties, directly or indirectly, to the seller in connection therewith, (ii) the
capital stock of the Borrower or any Loan Party issued to the seller in
connection therewith, (iii) the Indebtedness incurred or assumed by any of the
Loan Parties, whether in favor of the seller or otherwise and whether fixed or
contingent, (iv) any Guaranty given or incurred by any Loan Party in connection
therewith, and (v) any other consideration given or obligation incurred by any
of the Loan Parties in connection therewith.
Consolidated Adjusted Cash Flow from Operations for
any period of determination shall mean (i) the sum of net income, amortization,
interest expense and income tax expense minus (ii) non-cash credits to net
income, in each case of the Borrower and its Subsidiaries for such period
determined and consolidated in accordance with GAAP. If the Borrower or any Loan
Party shall have made one or more Permitted Acquisitions as permitted under
Section 8.2.6(2) during the period of determination, Consolidated Adjusted Cash
Flow from Operations for such period shall be adjusted on a pro forma basis
reasonably acceptable to the Administrative Agent and based upon the historical
financial statements reasonably acceptable to the Administrative Agent of the
Person or assets acquired to give effect to such Permitted Acquisitions as if
they had occurred at the beginning of such period. The pro forma adjustment
shall include any income or loss attributable to the ownership interests or
assets purchased, excluding in the case of a stock acquisition of the Person
acquired any income on the historical financial statements attributable to stock
or asset dispositions made prior to the time of the Permitted Acquisition. The
pro forma adjustment shall exclude any income on the historical financial
statements attributable to stock or assets acquired under the Permitted
Acquisition which the Borrower or the Loan Party contemplate disposing of
following the Permitted Acquisition. The pro forma adjustment shall not include
any projected cost savings, cost reductions or similar synergistic adjustments
forecasted by the Borrower based upon the Permitted Acquisition.
Consolidated Cash Flow from Operations for any period
of determination shall mean (i) the sum of net income, depreciation (excluding
depreciation of Rental Merchandise), amortization, other non-cash charges to net
income, interest expense and income tax expense minus (ii) non-cash credits to
net income, in each case of the Borrower and its Subsidiaries for such period
determined and consolidated in accordance with GAAP. If the Borrower or any Loan
Party shall have made one or more Permitted Acquisitions as permitted under
Section 8.2.6(2) during the period of determination, Consolidated Cash Flow from
Operations for such period shall be adjusted on a pro forma basis reasonably
acceptable to the Administrative Agent and based upon the historical financial
statements reasonably acceptable to the Administrative Agent of the Person or
assets acquired to give effect to such Permitted Acquisitions as if they had
occurred at the beginning of such period. The pro forma adjustment shall include
any income or loss attributable to the ownership interests or assets purchased,
excluding in the case of a stock acquisition of the Person acquired any income
on the historical financial statements attributable to stock or asset
dispositions made prior to the time of the Permitted Acquisition. The pro forma
adjustment shall exclude any income on the historical financial statements
attributable to stock or assets acquired under the Permitted Acquisition which
the Borrower or the Loan Party contemplate disposing of following the Permitted
Acquisition. The pro forma adjustment shall not include any projected cost
savings, cost reductions or similar synergistic adjustments forecasted by the
Borrower based upon the Permitted Acquisition.
Consolidated Funded Debt shall mean as of any date of
determination, the sum of Indebtedness for borrowed money (including capitalized
leases) and Letters of Credit Outstanding, in each case of the Borrower and its
Subsidiaries determined and consolidated in accordance with GAAP, minus any
Payment-in-Kind Interest included in the foregoing calculation.
Consolidated Net Worth shall mean as of any date of
determination, total stockholders' equity plus preferred stock (to the extent it
is not already included in the stockholders' equity), of the Borrower and its
Subsidiaries as of such date determined and consolidated in accordance with
GAAP.
Dollar, Dollars, U.S. Dollars and the symbol $ shall
mean lawful money of the United States of America.
Drawing Date shall have the meaning assigned to that
term in Section 2.9.3.2.
Environmental Complaint shall mean any written
complaint setting forth a cause of action for personal or property damage or
natural resource damage or equitable relief, order, notice of violation,
citation, request for information issued pursuant to any Environmental Laws by
an Official Body, subpoena or other written notice of any type relating to,
arising out of, or issued pursuant to, any of the Environmental Laws or any
Environmental Conditions, as the case may be.
Environmental Conditions shall mean any conditions of
the environment, including the workplace, the ocean, natural resources
(including flora or fauna), soil, surface water, groundwater, any actual or
potential drinking water supply sources, substrata or the ambient air, relating
to or arising out of, or caused by, the use, handling, storage, treatment,
recycling, generation, transportation, release, spilling, leaking, pumping,
emptying, discharging, injecting, escaping, leaching, disposal, dumping,
threatened release or other management or mismanagement of Regulated Substances
resulting from the use of, or operations on, any Property.
Environmental Laws shall mean all federal, state,
local and foreign Laws and regulations, including permits, licenses,
authorizations, bonds, orders, judgments, and consent decrees issued, or entered
into, pursuant thereto, relating to pollution or protection of human health or
the environment or employee safety in the workplace.
ERISA shall mean the Employee Retirement Income
Security Act of 1974, as the same may be amended or supplemented from time to
time, and any successor statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.
ERISA Group shall mean, at any time, the Borrower and
all members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other entities which,
together with the Borrower, are treated as a single employer under Section 414
of the Internal Revenue Code.
Euro-Rate shall mean, with respect to any Loan
comprising any Borrowing Tranche to which the Euro-Rate Option applies for any
Interest Period, the interest rate per annum determined by the Administrative
Agent by dividing (i) the rate of interest determined by the Administrative
Agent in accordance with its usual procedures (which determination shall be
conclusive absent manifest error) to be the eurodollar rate at 11:00 a.m.
Pittsburgh time two (2) Business Days prior to the first day of such Interest
Period for an amount comparable to such Loan and having a borrowing date and a
maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus
the Euro-Rate Reserve Percentage. The Euro-Rate shall be adjusted with respect
to any Euro-Rate Option outstanding on the effective date of any change in the
Euro-Rate Reserve Percentage as of such effective date. The Administrative Agent
shall give prompt notice to the Borrower, the Co-Borrower and the Lenders of the
Euro-Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error.
Euro-Rate Option shall mean either the Revolving
Credit Euro-Rate Option, the Term Loan A Euro-Rate Option
or the Term Loan B Euro-Rate Option.
Euro-Rate Reserve Percentage shall mean the maximum
percentage (expressed as a decimal rounded upward to the nearest 1/100 of 1%) as
determined by the Administrative Agent which is in effect during any relevant
period, as prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for determining the reserve requirements (including
supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as "Eurocurrency Liabilities") of a
member bank in such System.
Event of Default shall mean any of the events
described in Section 9.1 and referred to therein as an "Event of Default."
Excess Cash Flow shall be computed as of the close of
each fiscal year by taking the difference between Consolidated Cash Flow from
Operations plus depreciation of Rental Merchandise for such fiscal year and the
sum of (i) Fixed Charges, (ii) capital expenditures and (iii) expenditures in
connection with the purchase of Rental Merchandise, each as calculated for such
fiscal year. All determinations of Excess Cash Flow shall be based on the
immediately preceding fiscal year and shall be made following the delivery by
the Borrower to the Administrative Agent of the Borrower's audited financial
statements for such preceding year.
Expiration Date shall mean, with respect to the
Revolving Credit Commitments, December 31, 2003.
Federal Funds Effective Rate for any day shall mean
the rate per annum (based on a year of 360 days and actual days elapsed and
rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank
of New York (or any successor) on such day as being the weighted average of the
rates on overnight federal funds transactions arranged by federal funds brokers
on the previous trading day, as computed and announced by such Federal Reserve
Bank (or any successor) in substantially the same manner as such Federal Reserve
Bank computes and announces the weighted average it refers to as the "Federal
Funds Effective Rate" as of the date of this Agreement; provided, if such
Federal Reserve Bank (or its successor) does not announce such rate on any day,
the "Federal Funds Effective Rate" for such day shall be the Federal Funds
Effective Rate for the last day on which such rate was announced.
Financial Projections shall have the meaning assigned
to that term in Section 6.1.9(ii).
Fixed Charge Coverage Ratio shall mean, for any
period of determination, the ratio of (i) Consolidated Cash Flow from Operations
minus capital expenditures (excluding Rental Merchandise) to (ii) Fixed Charges,
in each case of the Borrower and its Subsidiaries for such period determined and
consolidated in accordance with GAAP.
Fixed Charges shall mean, for any period of
determination, the sum of cash interest expense, income taxes, and the current
portion of long term Indebtedness (including capitalized leases), in each case
of the Borrower and its Subsidiaries for such period determined and consolidated
in accordance with GAAP.
GAAP shall mean generally accepted accounting
principles as are in effect from time to time, subject to the provisions of
Section 1.3, and applied on a consistent basis both as to classification of
items and amounts.
Governmental Acts shall have the meaning assigned to
that term in Section 2.9.8.
Guarantor shall mean each of the parties to this
Agreement which is designated as a "Guarantor" on the signature page hereof and
each other Person which joins this Agreement as a Guarantor after the date
hereof pursuant to Section 11.18.
Guarantor Joinder shall mean a joinder by a Person as
a Guarantor under this Agreement, the Guaranty Agreement and the other Loan
Documents in the form of Exhibit 1.1(G)(1).
Guaranty of any Person shall mean any obligation of
such Person guaranteeing or in effect guaranteeing any liability or obligation
of any other Person in any manner, whether directly or indirectly, including any
agreement to indemnify or hold harmless any other Person, any performance bond
or other suretyship arrangement and any other form of assurance against loss,
except endorsement of negotiable or other instruments for deposit or collection
in the ordinary course of business.
Guaranty Agreement shall mean the Guaranty and
Suretyship Agreement dated as of September 23, 1999, executed and delivered by
each of the Guarantors to the Administrative Agent for the benefit of the
Lenders and the Joinders pursuant to which Subsidiaries of the Borrower joined
into the Guaranty Agreement subsequent to September 23, 1999.
Historical Statements shall have the meaning assigned
to that term in Section 6.1.9(i).
Indebtedness shall mean, as to any Person at any
time, any and all indebtedness, obligations or liabilities (whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, or joint or several) of such Person for or in respect of: (i)
borrowed money, (ii) amounts raised under or liabilities in respect of any note
purchase or acceptance credit facility, (iii) reimbursement obligations
(contingent or otherwise) under any letter of credit, currency swap agreement,
interest rate swap, cap, collar or floor agreement or other interest rate
management device, (iv) any other transaction (including forward sale or
purchase agreements, capitalized leases and conditional sales agreements) having
the commercial effect of a borrowing of money entered into by such Person to
finance its operations or capital requirements (but not including trade payables
and accrued expenses incurred in the ordinary course of business which are not
represented by a promissory note or other evidence of indebtedness and which are
not more than thirty (30) days past due), or (v) any Guaranty of Indebtedness
for borrowed money.
Indemnity Agreement shall mean the Indemnity
Agreement dated as of September 23, 1999, among the Lenders, the Administrative
Agent and the Loan Parties relating to possible environmental liabilities
associated with any of the Property.
Ineligible Security shall mean any security which may
not be underwritten or dealt in by member banks of the Federal Reserve System
under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
Insolvency Proceeding shall mean, with respect to any
Person, (a) case, action or proceeding with respect to such Person (i) before
any court or any other Official Body under any bankruptcy, insolvency,
reorganization or other similar Law now or hereafter in effect, or (ii) for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official) of any Loan Party or otherwise
relating to liquidation, dissolution, winding-up or relief of such Person, or
(b) any general assignment for the benefit of creditors, composition, marshaling
of assets for creditors, or other, similar arrangement in respect of such
Person's creditors generally or any substantial portion of its creditors;
undertaken under any Law.
Intellectual Property Collateral shall mean all of
the property described in the Patent, Trademark and Copyright Security
Agreement.
Intercompany Subordination Agreement shall mean a
Subordination Agreement dated as of September 23, 1999, among the Loan Parties
in favor of the Agent and the Lenders.
Interest Coverage Ratio for any period of
determination shall mean the ratio of Consolidated Adjusted Cash Flow from
Operations to cash interest expense, in each case of the Borrower and its
Subsidiaries for such period determined and consolidated in accordance with
GAAP.
Interest Period shall have the meaning assigned to
such term in Section 4.2.
Interest Rate Option shall mean any Euro-Rate Option
or the Base Rate Option.
Interest Rate Protection Agreements shall have the
meaning set forth in Section 8.1.13.
Interim Statements shall have the meaning assigned to
that term in Section 6.1.9(i).
Internal Revenue Code shall mean the Internal Revenue
Code of 1986, as the same may be amended or supplemented from time to time, and
any successor statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.
Labor Contracts shall mean all employment agreements,
employment contracts, collective bargaining agreements and other agreements
among any Loan Party or Subsidiary of a Loan Party and its employees.
Law shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance, opinion, release,
ruling, order, injunction, writ, decree or award of any Official Body.
Lenders shall mean the financial institutions named
on Schedule 1.1(B) and their respective successors and assigns as permitted
hereunder, each of which is referred to herein as a Lender.
Letter of Credit shall have the meaning assigned to
that term in Section 2.9.1.
Letter of Credit Borrowing shall mean an extension of
credit resulting from a drawing under any Letter of Credit which shall not have
been reimbursed on the date when made and shall not have been converted into a
Loan under Section 2.9.3.2.
Letter of Credit Fee shall have the meaning assigned
to that term in Section 2.9.2.
Letters of Credit Outstanding shall mean at any time
the sum of (i) the aggregate undrawn face amount of outstanding Letters of
Credit and (ii) the aggregate amount of all unpaid and outstanding Reimbursement
Obligations (including Letter of Credit Borrowings).
Leverage Ratio shall mean the ratio of (i) the sum of
Consolidated Funded Debt plus three times the Occupancy Expense, as measured at
the end of each fiscal quarter of the Borrower for the four quarters then ended,
to (ii) Consolidated Cash Flow from Operations plus Occupancy Expense, as
measured at the end of each fiscal quarter of the Borrower for the four quarters
then ended.
Lien shall mean any mortgage, deed of trust, pledge,
lien, security interest, charge or other encumbrance or security arrangement of
any nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).
Line of Business shall mean the rent-to-own business,
the rental purchase business, the rental business, related lines of business and
other complementary or compatible business activities intended to service the
Borrower's and Co-Borrower's marketing demographics.
LLC Interests shall have the meaning given to such
term in Section 6.1.3.
Loan Documents shall mean this Credit Agreement, the
Administrative Agent's Fee Letter, the Collateral Assignment, the Guaranty
Agreement, the Indemnity Agreement, the Intercompany Subordination Agreement,
the Mortgages, the Notes, the Patent, Trademark and Copyright Security
Agreement, the Pledge Agreement, the Security Agreement, the Warrant Agreement,
all Interest Rate Protection Agreements between any Loan Party and any Lender or
an Affiliate of any Lender, and any other instruments, certificates or documents
delivered or contemplated to be delivered hereunder or thereunder or in
connection herewith or therewith, as the same may be supplemented or amended
from time to time in accordance herewith or therewith, and Loan Document shall
mean any of the Loan Documents.
Loan Parties shall mean the Borrower, the Co-Borrower
and the Guarantors.
Loan Request shall have the meaning given to such
term in Section 2.5.
Loans shall mean collectively and Loan shall mean
separately all Revolving Credit Loans, the Term Loans A and the Term Loans B, or
any Revolving Credit Loan, Term Loan A or Term Loan B.
Management Group shall mean Xxxxxxx X. Xxxxxxxxxxx
and all other members of the board of directors of the Borrower and their
respective Spouses, descendants, Spouses of descendants and trustees of trusts
established for the benefit of such Persons, and the executors of estates of
such Persons. "Spouses" shall include widows and widowers until first remarried.
Mass Mutual Warrants shall mean the warrants dated
July 15, 1995, and all modifications and replacements thereof, issued by the
Borrower to Massachusetts Mutual Life Insurance Company and its Affiliates to
purchase Common Stock of the Borrower.
Managing Agents shall mean National City, in its
capacity as Administrative Agent, Bank of America, N.A., in its capacity as
Documentation Agent, and Xxxxxx Trust and Savings Bank, in its capacity as
Syndication Agent.
Material Adverse Change shall mean any set of
circumstances or events which (a) has or could reasonably be expected to have
any material adverse effect whatsoever upon the validity or enforceability of
this Agreement or any other Loan Document, (b) is or could reasonably be
expected to be material and adverse to the business, properties, assets,
financial condition, results of operations or prospects of the Loan Parties
taken as a whole, (c) impairs materially or could reasonably be expected to
impair materially the ability of the Loan Parties taken as a whole to duly and
punctually pay or perform its Indebtedness, or (d) impairs materially or could
reasonably be expected to impair materially the ability of the Administrative
Agent or any of the Lenders, to the extent permitted, to enforce their legal
remedies pursuant to this Agreement or any other Loan Document.
Month, with respect to an Interest Period under the
Euro-Rate Option, shall mean the interval between the days in consecutive
calendar months numerically corresponding to the first day of such Interest
Period. If any Euro-Rate Interest Period begins on a day of a calendar month for
which there is no numerically corresponding day in the month in which such
Interest Period is to end, the final month of such Interest Period shall be
deemed to end on the last Business Day of such final month.
Mortgage shall mean the Amended and Restated Open-End
Mortgage and Security Agreement made as of September 22, 1999, as modified from
time to time, by the Borrower in favor of the Agent for the benefit of the
Lenders with respect to the Real Property, recorded with the Erie County
Recorder of Deeds on September 27, 1999, at Book 0664, Page 0796.
Multiemployer Plan shall mean any employee benefit plan
which is a "multiemployer plan" within the meaning of Section 4001(a)(3) of
ERISA and to which the Borrower or any member of the ERISA Group is then making
or accruing an obligation to make contributions or, within the preceding five
Plan years, has made or had an obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has two
or more contributing sponsors (including the Borrower or any member of the ERISA
Group) at least two of whom are not under common control, as such a plan is
described in Sections 4063 and 4064 of ERISA.
National City shall mean National City Bank of
Pennsylvania, a national banking association, its successors and assigns. Notes
shall mean the Revolving Credit Notes and the Term Notes. -----
Notices shall have the meaning assigned to that term in
Section 11.6.
Obligations shall mean collectively and Obligation
shall mean separately any obligation or liability of any of the Loan Parties to
the Administrative Agent or any of the Lenders or their Affiliates, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, under or in
connection with this Agreement, the Notes, the Letters of Credit, the
Administrative Agent's Letter or any other Loan Document.
Occupancy Expense for any period of determination shall
mean the consolidated rental expense under operating leases for the retail store
sites (including common area maintenance charges, taxes and other amounts
payable under lease agreements) of the Borrower and its Subsidiaries as lessees,
determined and consolidated in accordance with GAAP. If the Borrower or any Loan
Party shall have made one or more Permitted Acquisitions as permitted under
Section 8.2.6(2) during the period of determination, the Occupancy Expense for
such period shall be adjusted on a pro forma basis acceptable to the
Administrative Agent and based upon the historical financial statements of the
Person or assets acquired to give effect to such Permitted Acquisitions as if
they had occurred at the beginning of such period.
Official Body shall mean any national, federal, state,
local or other government or political subdivision or any agency, authority,
bureau, central bank, commission, department or instrumentality of either, or
any court, tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.
Participation Advance shall mean, with respect to any
Lender, such Lender's payment in respect of its participation in a Letter of
Credit Borrowing according to its Ratable Share pursuant to Section 2.9.4.
Partnership Interests shall have the meaning given to
such term in Section 6.1.3.
Payment-in-Kind Interest shall have the meaning
assigned to that term in Section 5.3.
Patent, Trademark and Copyright Security Agreement
shall mean the Patent, Trademark and Copyright Security Agreement in
substantially the form of Exhibit 1.1(P)(1) executed and delivered by each of
the Loan Parties to the Administrative Agent for the benefit of the Lenders.
PBGC shall mean the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA or any
successor.
Permitted Acquisitions shall have the meaning assigned
to such term in Section 8.2.6.
Permitted Investments shall mean:
(i) direct obligations of the United States of
America or any agency or instrumentality thereof or obligations backed by the
full faith and credit of the United States of America maturing in twelve (12)
months or less from the date of acquisition;
(ii) commercial paper maturing in 180 days or less
rated not lower than A-1 by Standard & Poor's or P-1 by Xxxxx'x Investors
Service, Inc. on the date of acquisition;
(iii) demand deposits, time deposits or certificates
of deposit maturing within one year in commercial banks whose obligations are
rated A-1, A or the equivalent or better by Standard & Poor's on the date of
acquisition;
(iv) repurchase agreements collaterized by securities
described in (i) above with any registered broker/dealer or any commercial bank
described in (iii) above; and
(v) investments in money market funds registered
under the Investment Company Act of 1940 whose shares are registered under the
Securities Act of 1933 and rated AAAm or AAAm-G by Standard & Poor's on the date
of acquisition.
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due and
payable;
(ii) Pledges or deposits made in the ordinary course
of business to secure payment of workmen's compensation, or to participate in
any fund in connection with workmen's compensation, unemployment insurance,
old-age pensions or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and payable or
in default;
(iv) Good-faith pledges or deposits made in the
ordinary course of business to secure performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or leases, not in excess of the
aggregate amount due thereunder, or to secure statutory obligations, or surety,
appeal, indemnity, performance or other similar bonds required in the ordinary
course of business;
(v) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of which
materially impairs the use of such property or the value thereof, and none of
which is violated in any material respect by existing or proposed structures or
land use;
(vi) Liens, security interests and mortgages in favor
of the Administrative Agent for the benefit of the Lenders;
(vii) Liens on property leased by any Loan Party or
Subsidiary of a Loan Party under capital and operating leases permitted in
Section 8.2.15 securing obligations of such Loan Party or Subsidiary to the
lessor under such leases;
(viii) Any Lien existing on the date of this
Agreement and described on Schedule 1.1(P), provided that the principal amount
secured thereby is not hereafter increased, and no additional assets become
subject to such Lien;
(ix) Purchase Money Security Interests, provided that
the aggregate amount of loans and deferred payments secured by such Purchase
Money Security Interests shall not exceed $100,000 (excluding for the purpose of
this computation any loans or deferred payments secured by Liens described on
Schedule 1.1(P)); and
(x) The following, (A) if the validity or amount
thereof is being contested in good faith by appropriate and lawful proceedings
diligently conducted so long as levy and execution thereon have been stayed and
continue to be stayed or (B) if a final judgment is entered and such judgment is
discharged within thirty (30) days of entry, and in either case they do not
affect the Collateral or, in the aggregate, materially impair the ability of any
Loan Party to perform its Obligations hereunder or under the other Loan
Documents:
(1) Claims or Liens for taxes, assessments or
charges due and payable and subject to interest or penalty,
provided that the applicable Loan Party maintains such
reserves or other appropriate provisions as shall be required
by GAAP and pays all such taxes, assessments or charges
forthwith upon the commencement of proceedings to foreclose
any such Lien;
(2) Claims, Liens or encumbrances upon, and
defects of title to, real or personal property other than the
Collateral, including any attachment of personal or real
property or other legal process prior to adjudication of a
dispute on the merits; or
(3) Claims or Liens of mechanics, materialmen,
warehousemen, carriers,or other statutory nonconsensual Liens.
(4) Liens resulting from final judgments or
orders described in Section 9.1.6.
(xi) Liens in favor of the Administrative Agent for
the benefit of the Lenders to secure Interest Rate Protection Agreements entered
into by the Borrower with the Lenders.
Person shall mean any individual, corporation,
partnership, limited liability company, association, joint-stock company, trust,
unincorporated organization, joint venture, government or political subdivision
or agency thereof, or any other entity.
Plan shall mean at any time an employee pension benefit
plan (including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) has at any time within the preceding five years been maintained by any
entity which was at such time a member of the ERISA Group for employees of any
entity which was at such time a member of the ERISA Group.
Pledge Agreement shall mean the Pledge Agreement dated
as of September 23, 1999, as amended from time to time, executed and delivered
by the Loan Parties to the Administrative Agent for the benefit of the Lenders.
Pledge Collateral shall mean the property of the Loan
Parties in which security interests are to be granted under the Pledge Agreement
or the Collateral Assignment.
Potential Default shall mean any event or condition
which with notice, passage of time or a determination by the Administrative
Agent or the Required Lenders, or any combination of the foregoing, would
constitute an Event of Default.
Principal Office shall mean the main banking office of
the Administrative Agent in Pittsburgh, Pennsylvania.
Prior Security Interest shall mean a valid and
enforceable perfected first-priority security interest under the Uniform
Commercial Code in the UCC Collateral and the Pledge Collateral which is subject
only to Liens for taxes not yet due and payable to the extent such prospective
tax payments are given priority by statute or Purchase Money Security Interests
as permitted hereunder.
Prohibited Transaction shall mean any prohibited
transaction as defined in Section 4975 of the Internal Revenue Code or Section
406 of ERISA for which neither an individual nor a class exemption has been
issued by the United States Department of Labor.
Property shall mean all real property, both owned and
leased, of any Loan Party or Subsidiary of a Loan Party.
Purchase Money Security Interest shall mean Liens upon
tangible personal property securing loans to any Loan Party or Subsidiary of a
Loan Party or deferred payments by such Loan Party or Subsidiary for the
purchase of such tangible personal property, provided that the Liens are limited
to the property acquired with the proceeds of the loan.
Purchasing Lender shall mean a Lender which becomes a
party to this Agreement by executing an Assignment and Assumption Agreement.
Ratable Share shall mean the proportion that a Lender's
Commitment bears to the Commitments of all of the Lenders.
Real Property shall mean the real estate owned by the
Borrower and located in the City of Erie, Erie County, Pennsylvania, which is
encumbered by the Mortgage.
Regulated Substances shall mean any substance,
including any solid, liquid, semisolid, gaseous, thermal, thoriated or
radioactive material, refuse, garbage, wastes, chemicals, petroleum products,
by-products, coproducts, impurities, dust, scrap, heavy metals, defined as a
"hazardous substance," "pollutant," "pollution," "contaminant," "hazardous or
toxic substance," "extremely hazardous substance," "toxic chemical," "toxic
waste," "hazardous waste," "industrial waste," "residual waste," "solid waste,"
"municipal waste," "mixed waste," "infectious waste," "chemotherapeutic waste,"
"medical waste," or "regulated substance" or any related materials, substances
or wastes as now or hereafter defined pursuant to any Environmental Laws,
ordinances, rules, regulations or other directives of any Official Body, the
generation, manufacture, extraction, processing, distribution, treatment,
storage, disposal, transport, recycling, reclamation, use, reuse, spilling,
leaking, dumping, injection, pumping, leaching, emptying, discharge, escape,
release or other management or mismanagement of which is regulated by the
Environmental Laws.
Regulation U shall mean Regulation U, T, or X as
promulgated by the Board of Governors of the Federal Reserve System, as amended
from time to time.
Reimbursement Obligation shall have the meaning
assigned to such term in Section 2.9.3.2.
Rental Contracts shall mean all rental and
rental-purchase contracts of the Loan Parties made in the ordinary course of
business providing for the rental to customers of Rental Merchandise.
Rental Merchandise shall mean the furniture,
appliances, electronic equipment and other personal property of the Loan Parties
acquired for the purpose of lease or sale under the Rental Contracts.
Reportable Event shall mean a reportable event
described in Section 4043 of ERISA and regulations thereunder with respect to a
Plan or Multiemployer Plan.
Required Lenders shall mean
(i) if there are no Loans, Reimbursement Obligations or
Letter of Credit Borrowings outstanding, Lenders whose Revolving Credit
Commitments aggregate at least 51% of the Commitments of all of the Lenders, or
(ii) if there are Loans, Reimbursement Obligations, or
Letter of Credit Borrowings outstanding, any Lender or group of Lenders if both
(i) the sum of the Revolving Credit Loans, Term Loans A, Reimbursement
Obligations and Letter of Credit Borrowings of such Lenders then outstanding
aggregates at least 51% of the total principal amount of all of such Revolving
Credit Loans, Term Loans A, Reimbursement Obligations and Letter of Credit
Borrowings then outstanding and (ii) the sum of the Term Loans B of such Lenders
then outstanding aggregates at least 51% of the total principal amount of all of
Term Loans B then outstanding. Reimbursement Obligations and Letter of Credit
Borrowings shall be deemed, for purposes of this definition, to be in favor of
the Administrative Agent and not a participating Lender if such Lender has not
made its Participation Advance in respect thereof and shall be deemed to be in
favor of such Lender to the extent of its Participation Advance if it has made
its Participation Advance in respect thereof.
Revolving Credit Base Rate Option shall mean the option
of the Borrower and the Co-Borrower to have Revolving Credit Loans bear interest
at the rate and under the terms and conditions set forth in Section 4.1.1(i).
Revolving Credit Commitment shall mean, as to any
Lender at any time, the amount initially set forth opposite its name on Schedule
1.1(B) in the column labeled "Amount of Commitment for Revolving Credit Loans,"
and thereafter on Schedule I to the most recent Assignment and Assumption
Agreement, and Revolving Credit Commitments shall mean the aggregate Revolving
Credit Commitments of all of the Lenders.
Revolving Credit Euro-Rate Option shall mean the option
of the Borrower and the Co-Borrower to have Revolving Credit Loans bear interest
at the rate and under the terms and conditions set forth in Section 4.1.1(ii).
Revolving Credit Loans shall mean collectively and
Revolving Credit Loan shall mean separately all Revolving Credit Loans or any
Revolving Credit Loan made by the Lenders or one of the Lenders to the Borrower
or the Co-Borrower pursuant to Section 2.1 or 2.9.3.
Revolving Credit Notes shall mean collectively and
Revolving Credit Note shall mean separately all the Revolving Credit Notes of
the Borrower and the Co-Borrower in the form of Exhibit 1.1(R) evidencing the
Revolving Credit Loans together with all amendments, extensions, renewals,
replacements, refinancings or refundings thereof in whole or in part.
Revolving Credit Ratable Share shall mean the
proportion that a Lender's Revolving Credit Commitment bears to the Revolving
Credit Commitments of all of the Lenders.
Revolving Facility Usage shall mean at any time the sum
of the Revolving Credit Loans outstanding and the Letters of Credit Outstanding.
Section 20 Subsidiary shall mean the Subsidiary of the
bank holding company controlling any Lender, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain
Ineligible Securities.
Security Agreement shall mean the Amended and Restated
Security Agreement in substantially the form of Exhibit 1.1(S)(1) attached
hereto, which Security Agreement amends and restates those certain security
agreements dated as of September 23, 1999, as amended, executed and delivered by
each of the Loan Parties to the Administrative Agent for the benefit of the
Lenders.
Shares shall have the meaning assigned to that term in
Section 6.1.2.
Standard & Poor's shall mean Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc.
Standby Letter of Credit shall mean a Letter of Credit
issued to support obligations of one or more of the Loan Parties, contingent or
otherwise, which finance the working capital and business needs of the Loan
Parties incurred in the ordinary course of business.
Subsidiary of any Person at any time shall mean (i) any
corporation or trust of which 50% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person's Subsidiaries, (ii) any partnership of which such Person is
a general partner or of which 50% or more of the partnership interests is at the
time directly or indirectly owned by such Person or one or more of such Person's
Subsidiaries, (iii) any limited liability company of which such Person is a
member or of which 50% or more of the limited liability company interests is at
the time directly or indirectly owned by such Person or one or more of such
Person's Subsidiaries or (iv) any corporation, trust, partnership, limited
liability company or other entity which is controlled or capable of being
controlled by such Person or one or more of such Person's Subsidiaries.
Subsidiary Shares shall have the meaning assigned to
that term in Section 6.1.3.
Syndication Agent shall mean Xxxxxx Trust and Savings
Bank.
Term Loan A shall have the meaning given to such term
in Section 3.1; Term Loans A shall mean collectively all of the Term Loans A.
Term Loan A Base Rate Option shall mean the option of
the Borrower and the Co-Borrower to have Term Loans A bear interest at the rate
and under the terms and conditions set forth in Section 4.1.2(i).
Term Loan A Commitment shall mean, as to any Lender at
any time, the amount initially set forth opposite its name on Schedule 1.1(B) in
the column labeled "Amount of Commitment for Term Loans A" and thereafter on
Schedule I to the most recent Assignment and Assumption Agreement, and Term Loan
A Commitments shall mean the aggregate Term Loan A Commitments of all of the
Lenders.
Term Loan A Euro-Rate Option shall mean the option of
the Borrower and the Co-Borrower to have Term Loans A bear interest at the rate
and under the terms and conditions set forth in Section 4.1.2(ii).
Term Loan A Maturity Date shall mean December 31, 2003.
Term Notes A shall mean collectively and Term Note A
shall mean separately all of the Term Notes of the Borrower and the Co-Borrower
in the form of Exhibit 1.1(T)(1) evidencing the Term Loans A, together with all
amendments, extensions, renewals, replacements, refinancings or refunds thereof
in whole or in part.
Term Loan B shall have the meaning given to such term
in Section 3.1; Term Loans B shall mean collectively all of the Term Loans B.
Term Loan B Base Rate Option shall mean the option of
the Borrower and the Co-Borrower to have Term Loans B bear interest at the rate
and under the terms and conditions set forth in Section 4.1.3(i).
Term Loan B Commitment shall mean, as to any Lender at
any time, the amount initially set forth opposite its name on Schedule 1.1(B) in
the column labeled "Amount of Commitment for Term Loans B" and thereafter on
Schedule I to the most recent Assignment and Assumption Agreement, and Term Loan
B Commitments shall mean the aggregate Term Loan B Commitments of all of the
Lenders.
Term Loan B Euro-Rate Option shall mean the option of
the Borrower and the Co-Borrower to have Term Loans B bear interest at the rate
and under the terms and conditions set forth in Section 4.1.3(ii).
Term Loan B Maturity Date shall mean December 31, 2003.
Term Notes B shall mean collectively and Term Note B
shall mean separately all of the Term Notes B of the Borrower and the
Co-Borrower in the form of Exhibit 1.1(T)(2) evidencing the Term Loans B,
together with all amendments, extensions, renewals, replacements, refinancings
or refunds thereof in whole or in part.
Term Notes shall mean collectively and Term Note shall
mean separately all of the Term Notes A and Term Notes B and each Term Note A
and Term Note B.
Transferor Lender shall mean the selling Lender
pursuant to an Assignment and Assumption Agreement.
UCC Collateral shall mean the property of the Loan
Parties in which security interests are to be granted under the Security
Agreement.
Uniform Commercial Code shall have the meaning assigned
to that term in Section 6.1.16.
Voting Stock shall mean any class or classes the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or persons performing similar
functions).
1.2 Construction.
------------
Unless the context of this Agreement otherwise
clearly requires, the following rules of construction shall apply to this
Agreement and each of the other Loan Documents:
1.2.1 Number; Inclusion.
-----------------
references to the plural include the singular, the
plural, the part and the whole; "or" has the inclusive meaning represented by
the phrase "and/or," and "including" has the meaning represented by the phrase
"including without limitation";
1.2.2 Determination.
-------------
references to "determination" of or by the
Administrative Agent or the Lenders shall be deemed to include good-faith
estimates by the Administrative Agent or the Lenders (in the case of
quantitative determinations) and good-faith beliefs by the Administrative Agent
or the Lenders (in the case of qualitative determinations) and such
determination shall be conclusive absent manifest error;
1.2.3 Administrative Agent's Discretion and Consent.
---------------------------------------------
whenever the Administrative Agent or the Lenders are
granted the right herein to act in its or their sole discretion or to grant or
withhold consent such right shall be exercised in good faith;
1.2.4 Documents Taken as a Whole.
--------------------------
the words "hereof," "herein," "hereunder," "hereto" and
similar terms in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document as a whole and not to any particular
provision of this Agreement or such other Loan Document;
1.2.5 Headings.
--------
the section and other headings contained in this
Agreement or such other Loan Document and the Table of Contents (if any),
preceding this Agreement or such other Loan Document are for reference purposes
only and shall not control or affect the construction of this Agreement or such
other Loan Document or the interpretation thereof in any respect;
1.2.6 Implied References to this Agreement.
------------------------------------
article, section, subsection, clause, schedule and
exhibit references are to this Agreement or other Loan Document, as the case may
be, unless otherwise specified;
1.2.7 Persons.
-------
reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and assigns
are permitted by this Agreement or such other Loan Document, as the case may be,
and reference to a Person in a particular capacity excludes such Person in any
other capacity;
1.2.8 Modifications to Documents.
--------------------------
reference to any agreement (including this Agreement and
any other Loan Document together with the schedules and exhibits hereto or
thereto), document or instrument means such agreement, document or instrument as
amended, modified, replaced, substituted for, superseded or restated;
1.2.9 From, To and Through.
--------------------
relative to the determination of any period of time,
"from" means "from and including," "to" means "to but excluding," and "through"
means "through and including"; and
1.2.10 Shall; Will.
-----------
references to "shall" and "will" are intended to have
the same meaning.
1.3 Accounting Principles.
---------------------
Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall be made
and prepared in accordance with GAAP (including principles of consolidation
where appropriate), and all accounting or financial terms shall have the
meanings ascribed to such terms by GAAP; provided, however, that all accounting
terms used in Section 8.2 (and all defined terms used in the definition of any
accounting term used in Section 8.2) shall have the meaning given to such terms
(and defined terms) under GAAP as in effect on the date hereof applied on a
basis consistent with those used in preparing the Annual Statements referred to
in Section 6.1.9((i)).
2. REVOLVING CREDIT FACILITIES
---------------------------
2.1 Revolving Credit Commitments.
----------------------------
2.1.1 Revolving Credit Loans.
----------------------
Subject to the terms and conditions hereof and relying
upon the representations and warranties herein set forth, each Lender with
Revolving Credit Commitments severally agrees to make Revolving Credit Loans to
the Borrower and the Co-Borrower at any time or from time to time on or after
the date hereof to the Expiration Date, provided that after giving effect to
such Revolving Credit Loan:
(i) the aggregate amount of all the Revolving
Credit Loans from such Lender plus such Lender's Revolving Credit Ratable Share
of the Letters of Credit Outstanding shall not exceed such Lender's Revolving
Credit Ratable Share of the following amounts during the following applicable
period of time,
Maximum Available for Revolving
Applicable Period Credit Loans and Letters of Credit
Closing Date through 12/24/01 $61,127,778.00
12/25/01 through 2/28/02 $75,000,000.00
3/1/02 through 6/30/02 $61,127,778.00
7/1/02 through 9/30/02 $55,000,000.00
10/01/02 through Expiration Date $50,000,000.00;
(ii) at all times the aggregate amount of
Revolving Credit Loans from such Lender shall not exceed such Lender's
Revolving Credit Commitment minus such Lender's Revolving Credit Ratable Share
of the Letters of Credit Outstanding, and
(iii) the Borrower shall not be in default of
the covenant set forth in Section 8.2.16 of this Agreement,as evidenced pursuant
to the Loan Request delivered pursuant to Section 2.5 hereof.
Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrower and the Co-Borrower may borrow, repay
and reborrow pursuant to this Section 2.1.
2.1.2 [Intentionally Omitted].
-----------------------
2.2 Nature of Lenders' Obligations with Respect to
Revolving Credit Loans.
----------------------------------------------
Each Lender with Revolving Credit Commitments shall be
obligated to participate in each request for Revolving Credit Loans pursuant to
Section 2.5 in accordance with its Revolving Credit Ratable Share of the
Revolving Credit Loans. The aggregate of each Lender's Revolving Credit Loans
outstanding hereunder to the Borrower and the Co-Borrower at any time shall
never exceed its Revolving Credit Commitment minus its Revolving Credit Ratable
Share of the Letter of Credit Outstandings. The obligations of each Lender
hereunder are several. The failure of any Lender to perform its obligations
hereunder shall not affect the Obligations of the Borrower and the Co-Borrower
to any other party nor shall any other party be liable for the failure of such
Lender to perform its obligations hereunder. The Lenders shall have no
obligation to make Revolving Credit Loans hereunder on or after the Expiration
Date.
2.3 Commitment Fees.
---------------
Accruing from the date hereof until the Expiration Date, the
Borrower and the Co-Borrower agree to pay to the Administrative Agent for the
account of each Lender which makes a Revolving Credit Commitment, as
consideration for such Lender's Revolving Credit Commitment hereunder, a
nonrefundable commitment fee (the "Commitment Fee") equal to the Applicable
Commitment Fee Rate (computed on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed) on the average daily difference between
the amount of (i) such Lender's Revolving Credit Commitment, as the same may be
constituted from time to time, and (ii) the principal amount of such Lender's
Revolving Credit Ratable Share of Revolving Credit Loans and Letters of Credit
Outstanding. All Commitment Fees shall be payable in arrears on the first
Business Day of each October, January, April and July after the date hereof and
on the Expiration Date or upon acceleration of the Notes.
2.4 [Intentionally Omitted].
-----------------------
2.5 Revolving Credit Loan Requests.
------------------------------
2.5.1 Revolving Credit Loan Requests.
------------------------------
Except as otherwise provided herein, the Borrower and
the Co-Borrower may from time to time prior to the Expiration Date request the
Lenders to make Revolving Credit Loans, or renew or convert the Interest Rate
Option applicable to existing Revolving Credit Loans or Term Loans pursuant to
Section 4.2, by delivering to the Administrative Agent, not later than 10:00
a.m., Pittsburgh time, (i) three (3) Business Days prior to the proposed
Borrowing Date with respect to the making of Revolving Credit Loans to which the
Euro-Rate Option applies or the conversion to or the renewal of the Euro-Rate
Option for any Loans; and (ii) one (1) Business Day prior to either the proposed
Borrowing Date with respect to the making of Revolving Credit Loans to which the
Base Rate Option applies or the last day of the preceding Interest Period with
respect to the conversion to the Base Rate Option for any Loan, of a duly
completed request therefor substantially in the form of Exhibit 2.5 (each, a
"Loan Request"), which includes a representation that the Borrower is in
compliance with Sections 8.2.16 after giving effect to the Loans subject to such
Loan Request. Each Loan Request shall be irrevocable and shall specify (i) the
proposed Borrowing Date; (ii) the aggregate amount of the proposed Loans
comprising each Borrowing Tranche, which shall be in integral multiples of
$1,000,000 and not less than $1,000,000 for each Borrowing Tranche to which the
Euro-Rate Option applies and not less than the lesser of $1,000,000 or the
maximum amount available for Borrowing Tranches to which the Base Rate Option
applies; (iii) whether the Euro-Rate Option or Base Rate Option shall apply to
the proposed Loans comprising the applicable Borrowing Tranche; and (iv) in the
case of a Borrowing Tranche to which the Euro-Rate Option applies, an
appropriate Interest Period for the Loans comprising such Borrowing Tranche.
2.5.2 [Intentionally Omitted].
-----------------------
2.6 Making Revolving Credit Loans.
-----------------------------
2.6.1 Making Revolving Credit Loans.
-----------------------------
The Administrative Agent shall, promptly after receipt by it
of a Loan Request pursuant to Section 2.5, notify the Lenders which have
Commitments which are the subject of the Loan Request of its receipt of such
Loan Request specifying: (i) the proposed Borrowing Date and the time and method
of disbursement of the Loans requested thereby; (ii) the amount and type of each
such Loan and the applicable Interest Period (if any); and (iii) in the case of
the a Loan Request for Revolving Credit Loans, the apportionment among the
Lenders of such Loans as determined by the Administrative Agent in accordance
with Section 2.2. In the case of the Revolving Credit Loans, each Lender shall
remit the principal amount of each Revolving Credit Loan to the Administrative
Agent such that the Administrative Agent is able to, and the Administrative
Agent shall, to the extent the Lenders have made funds available to it for such
purpose and subject to Section 7.2, fund such Revolving Credit Loans to the
Borrower and the Co-Borrower in U.S. Dollars and immediately available funds at
the Principal Office prior to 2:00 p.m., Pittsburgh time, on the applicable
Borrowing Date, provided that if any Lender fails to remit such funds to the
Administrative Agent in a timely manner, the Administrative Agent may elect in
its sole discretion to fund with its own funds the Revolving Credit Loans of
such Lender on such Borrowing Date, and such Lender shall be subject to the
repayment obligation in Section 10.15.
2.6.2 [Intentionally Omitted].
-----------------------
2.7 Revolving Credit Notes.
----------------------
2.7.1 Revolving Credit Notes.
----------------------
The Obligation of the Borrower and the Co-Borrower to
repay the aggregate unpaid principal amount of the Revolving Credit Loans made
to the Borrower and the Co-Borrower by each Lender with Revolving Credit Loan
Commitments, together with interest thereon, shall be evidenced by a Revolving
Credit Note dated either September 23, 1999, or June 28, 2000, (or if such
Lender was not a party to this Agreement on the effective date of Amendment No.
4 to this Agreement, then the date that such Lender joined in this Agreement),
payable to the order of such Lender in a face amount equal to the Revolving
Credit Commitment of such Lender.
2.7.2 [Intentionally Omitted].
---------------------
2.8 Use of Proceeds.
---------------
The proceeds of the Revolving Credit Loans shall be used for
working capital and general corporate purposes of the Borrower, the Co-Borrower
and the other Loan Parties, all in accordance with Section 8.1.10.
2.9 Letter of Credit Subfacility.
----------------------------
2.9.1 Issuance of Letters of Credit.
-----------------------------
Borrower and Co-Borrower may request the issuance of
one or more letters of credit (each a "Letter of Credit") on behalf of the
Borrower, either Co-Borrower or another Loan Party by delivering to the
Administrative Agent (i) a completed application and agreement for letters of
credit in such form as the Administrative Agent may specify from time to time by
no later than 10:00 a.m., Pittsburgh time, at least three (3) Business Days, or
such shorter period as may be agreed to by the Administrative Agent, in advance
of the proposed date of issuance and (ii) a Loan Request which includes the
calculations showing compliance with Sections 8.2.16 after giving effect to the
issuance of the Letter of Credit or Letters of Credit. Each Letter of Credit
shall be a Standby Letter of Credit. Subject to the terms and conditions hereof
and in reliance on the agreements of the other Lenders set forth in this Section
2.9, the Administrative Agent will issue a Letter of Credit provided that each
Letter of Credit shall (A) have a maximum maturity of twelve (12) months from
the date of issuance, and (B) in no event expire later than one Business Day
prior to the Expiration Date and providing that in no event shall (i) the
Letters of Credit Outstanding exceed, at any one time, $10,000,000 or (ii) the
Revolving Facility Usage exceed, at any one time, the Revolving Credit
Commitments.
2.9.2 Letter of Credit Fees.
---------------------
The Borrower and the Co-Borrower shall pay (i) to the
Administrative Agent for the ratable account of the Lenders with Revolving
Credit Commitments a fee (the "Letter of Credit Fee") equal to the Applicable
Margin for the Revolving Credit Euro-Rate Option per annum (excluding the
Payment-in-Kind portion of the Applicable Margin), and (ii) to the
Administrative Agent for its own account a fronting fee equal to one-eighth
percent (1/8%) per annum, which fees shall be computed on the daily Letters of
Credit Outstanding and shall be payable quarterly in arrears commencing with the
first Business Day of each October, January, April and July following issuance
of each Letter of Credit and on the Expiration Date. The Borrower and the
Co-Borrower shall also pay to the Administrative Agent for the Administrative
Agent's sole account the Administrative Agent's then in effect customary fees
and administrative expenses payable with respect to the Letters of Credit as the
Administrative Agent may generally charge or incur from time to time in
connection with the issuance, maintenance, modification (if any), assignment or
transfer (if any), negotiation, and administration of Letters of Credit.
2.9.3 Disbursements, Reimbursement.
----------------------------
2.9.3.1 Immediately upon the Issuance of each
Letter of Credit, each Lender with Revolving Credit Commitments shall be deemed
to, and hereby irrevocably and unconditionally agrees to, purchase from the
Administrative Agent a participation in such Letter of Credit and each drawing
thereunder in an amount equal to such Lender's Revolving Credit Ratable Share of
the maximum amount available to be drawn under such Letter of Credit and the
amount of such drawing, respectively.
2.9.3.2 In the event of any request for a
drawing under a Letter of Credit by the beneficiary or transferee thereof, the
Administrative Agent will promptly notify the Borrower and the Co-Borrower.
Provided that they shall have received such notice, the Borrower and the
Co-Borrower shall reimburse (such obligation to reimburse the Administrative
Agent shall sometimes be referred to as a "Reimbursement Obligation") the
Administrative Agent prior to 11:00 a.m., Pittsburgh time on each date that an
amount is paid by the Administrative Agent under any Letter of Credit (each such
date, an "Drawing Date") in an amount equal to the amount so paid by the
Administrative Agent. In the event the Borrower and the Co-Borrower fail to
reimburse the Administrative Agent for the full amount of any drawing under any
Letter of Credit by 11:00 a.m., Pittsburgh time, on the Drawing Date,
the Administrative Agent will promptly notify each Lender with Revolving Credit
Commitments thereof, and the Borrower and the Co-Borrower shall be deemed to
have requested that Revolving Credit Loans be made by the Lenders under the Base
Rate Option to be disbursed on the Drawing Date under such Letter of Credit,
subject to the amount of the unutilized portion of the Revolving Credit
Commitment and subject to the conditions set forth in Section 7.2 other than any
notice requirements. Any notice given by the Administrative Agent pursuant to
this Section 2.9.3.2 may be oral if immediately confirmed in writing; provided
that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.
2.9.3.3 Each Lender shall upon any notice
pursuant to Section 2.9.3.2 make available to the Administrative Agent an amount
in immediately available funds equal to its Revolving Credit Ratable Share of
the amount of the drawing, whereupon the participating Lenders shall (subject to
Section 2.9.3.4) each be deemed to have made a Revolving Credit Loan under the
Base Rate Option to the Borrower and the Co-Borrower in that amount. If any
Lender so notified fails to make available to the Administrative Agent for the
account of the Administrative Agent the amount of such Lender's Revolving Credit
Ratable Share of such amount by no later than 3:30 p.m., Pittsburgh time on the
Drawing Date, then interest shall accrue on such Lender's obligation to make
such payment, from the Drawing Date to the date on which such Lender makes such
payment, at a rate per annum equal to the Federal Funds Effective Rate in effect
from time to time during such period. The Administrative Agent will promptly
give notice of the occurrence of the Drawing Date, but failure of the
Administrative Agent to give any such notice on the Drawing Date or in
sufficient time to enable any Lender to effect such payment on such date shall
not relieve such Lender from its obligation under this Section 2.9.3.3.
2.9.3.4 With respect to any unreimbursed
drawing that is not converted into Loans under the Base Rate Option to the
Borrower and the Co-Borrower in whole or in part as contemplated by Section
2.9.3.2, because of the Borrower's and the Co-Borrower' failure to satisfy the
conditions set forth in Section 7.2 other than any notice requirements or for
any other reason, the Borrower and the Co-Borrower shall be deemed to have
incurred from the Administrative Agent a Letter of Credit Borrowing in the
amount of such drawing. Such Letter of Credit Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the rate per annum
applicable to the Revolving Credit Loans under the Base Rate Option. Each
Lender's payment to the Administrative Agent pursuant to Section 2.9.3.3 shall
be deemed to be a payment in respect of its participation in such Letter of
Credit Borrowing and shall constitute a Participation Advance from such Lender
in satisfaction of its participation obligation under this Section 2.9.3.
2.9.4 Repayment of Participation Advances.
-----------------------------------
2.9.4.1 Upon (and only upon) receipt by the
Administrative Agent for its account of immediately available funds from the
Borrower and the Co-Borrower (i) in reimbursement of any payment made by the
Administrative Agent under the Letter of Credit with respect to which any Lender
has made a Participation Advance to the Administrative Agent, or (ii) in payment
of interest on such a payment made by the Administrative Agent under such a
Letter of Credit, the Administrative Agent will pay to each Lender, in the same
funds as those received by the Administrative Agent, the amount of such Lender's
Revolving Credit Ratable Share of such funds, except the Administrative Agent
shall retain the amount of the Revolving Credit Ratable Share of such funds of
any Lender that did not make a Participation Advance in respect of such payment
by Administrative Agent.
2.9.4.2 If the Administrative Agent is required
at any time to return to any Loan Party, or to a trustee, receiver, liquidator,
custodian, or any official in any Insolvency Proceeding, any portion of the
payments made by any Loan Party to the Administrative Agent pursuant to Section
2.9.4.1 in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Lender with Revolving Credit Commitments shall, on
demand of and one day's notice by the Administrative Agent, forthwith return to
the Administrative Agent the amount of its Revolving Credit Ratable Share of any
amounts so returned by the Administrative Agent plus interest thereon from the
date such demand is made to the date such amounts are returned by such Lender to
the Administrative Agent, at a rate per annum equal to the Federal Funds
Effective Rate in effect from time to time.
2.9.5 Documentation.
-------------
Each Loan Party agrees to be bound by the terms of the
Administrative Agent's application and agreement for letters of credit and the
Administrative Agent's written regulations and customary practices relating to
letters of credit, though such interpretation may be different from the such
Loan Party's own. In the event of a conflict between such application or
agreement and this Agreement, this Agreement shall govern. It is understood and
agreed that, except in the case of gross negligence or willful misconduct, the
Administrative Agent shall not be liable for any error, negligence and/or
mistakes, whether of omission or commission, in following any Loan Party's
instructions or those contained in the Letters of Credit or any modifications,
amendments or supplements thereto.
2.9.6 Determinations to Honor Drawing Requests.
----------------------------------------
In determining whether to honor any request for drawing
under any Letter of Credit by the beneficiary thereof, the Administrative Agent
shall be responsible only to determine that the documents and certificates
required to be delivered under such Letter of Credit have been delivered and
that they comply on their face with the requirements of such Letter of Credit.
2.9.7 Nature of Participation and Reimbursement
Obligations.
-----------------------------------------
Each Lender's obligation in accordance with this
Agreement to make the Loans or Participation Advances, as contemplated by
Section 2.9.3, as a result of a drawing under a Letter of Credit, and the
Obligations of the Borrower and the Co-Borrower to reimburse the Administrative
Agent upon a draw under a Letter of Credit, shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Section 2.9 under all circumstances, including the following circumstances:
(i) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the Administrative
Agent, the Borrower, the Co-Borrower or any other Person for any reason
whatsoever;
(ii) the failure of any Loan Party or any other
Person to comply, in connection with a Letter of Credit Borrowing, with the
conditions set forth in Section 2.1, 2.5, 2.6 or 7.2 or as otherwise set forth
in this Agreement for the making of a Loan, it being acknowledged that such
conditions are not required for the making of a Letter of Credit Borrowing and
the obligation of the Lenders to make Participation Advances under Section
2.9.3;
(iii) any lack of validity or enforceability of
any Letter of Credit;
(iv) the existence of any claim, set-off,
defense or other right which any Loan Party or any Lender may have at any time
against a beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), the Administrative Agent or any
Lender or any other Person or, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction (including any
underlying transaction between any Loan Party or Subsidiaries of a Loan Party
and the beneficiary for which any Letter of Credit was procured);
(v) any draft, demand, certificate or other
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect even if the Administrative Agent has been notified
thereof;
(vi) payment by the Administrative Agent under
any Letter of Credit against presentation of a demand, draft or certificate or
other document which does not comply with the terms of such Letter of Credit;
(vii) any adverse change in the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of any Loan Party or Subsidiaries of a Loan Party;
(viii) any breach of this Agreement or any other
Loan Document by any party thereto;
(ix) the occurrence or continuance of an
Insolvency Proceeding with respect to any Loan Party;
(x) the fact that an Event of Default or a
Potential Default shall have occurred and be continuing;
(xi) the fact that the Expiration Date shall
have passed or this Agreement or the Commitments hereunder shall have been
terminated; and
(xii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing; provided that each
Lender's obligation to make Loans under Section 2.9.3.3 is subject to the
conditions set forth in Section 7.2.
2.9.8 Indemnity.
---------
In addition to amounts payable as provided in Section
10.5, the Borrower and the Co-Borrower hereby agree to protect, indemnify, pay
and save harmless the Administrative Agent from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable fees, expenses and disbursements of counsel and allocated costs of
internal counsel) which the Administrative Agent may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit,
other than as a result of (A) the gross negligence or willful misconduct of the
Administrative Agent as determined by a final judgment of a court of competent
jurisdiction or (B) subject to the following clause (ii), the wrongful dishonor
by the Administrative Agent of a proper demand for payment made under any Letter
of Credit, or (ii) the failure of the Administrative Agent to honor a drawing
under any such Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions herein called "Governmental
Acts").
2.9.9 Liability for Acts and Omissions.
--------------------------------
As between any Loan Party and the Administrative Agent,
such Loan Party assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Administrative Agent
shall not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for an issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged (even if the Administrative Agent shall have
been notified thereof); (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) the
failure of the beneficiary of any such Letter of Credit, or any other party to
which such Letter of Credit may be transferred, to comply fully with any
conditions required in order to draw upon such Letter of Credit or any other
claim of any Loan Party against any beneficiary of such Letter of Credit, or any
such transferee, or any dispute between or among any Loan Party and any
beneficiary of any Letter of Credit or any such transferee; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of the Administrative Agent, including any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of the Administrative Agent's rights or powers hereunder.
In furtherance and extension and not in limitation of
the specific provisions set forth above, any action taken or omitted by the
Administrative Agent under or in connection with the Letters of Credit issued by
it or any documents and certificates delivered thereunder, if taken or omitted
in good faith, shall not put the Administrative Agent under any resulting
liability to the Borrower, the Co-Borrower or any Lender.
3. TERM LOANS
----------
3.1 Term Loan Commitments.
---------------------
3.1.1 Term Loan A Commitments.
-----------------------
Subject to the terms and conditions hereof, and relying
upon the representations and warranties herein set forth, each Lender with a
Term Loan A Commitment severally agrees to continue the advance of a term loan
(the "Term Loan A") to the Borrower and the Co-Borrower on the Closing Date in
an amount equal to such Lender's Term Loan A Commitment, which amount represents
the then current outstanding principal balance of such Term Loan A as of the
Closing Date.
3.1.2 Term Loan B Commitments.
-----------------------
Subject to the terms and conditions hereof, and relying
upon the representations and warranties herein set forth, each Lender with a
Term Loan B Commitment severally agrees to continue the advance of a term loan
(the "Term Loan B") to the Borrower and the Co-Borrower in an amount equal to
such Lender's Term Loan B Commitment, which amount represents the then current
outstanding principal balance of such Term Loan B as of the Closing Date.
3.2 Nature of Lenders' Obligations with Respect to
Term Loans.
----------------------------------------------
Each Lender's Term Loans to the Borrower and the
Co-Borrower shall never exceed its Term Loan Commitments. The Term Loan
Commitments are not revolving credit commitments, and the Borrower and the
Co-Borrower shall not have the right to borrow, repay and reborrow under Section
3.1.
3.3 Term Loan Notes.
---------------
The Obligation of the Borrower and the Co-Borrower to
repay the unpaid principal amount of the Term Loans made to the Borrower and the
Co-Borrower by each Lender, together with interest thereon, shall continue to be
evidenced by a Term Note dated either September 23, 1999, or June 28, 2000 (or
if such Lender was not a party to this Agreement on the effective date of
Amendment No. 4 to this Agreement, then the date that such Lender joined in this
Agreement), payable to the order of each Lender in a face amount equal to the
Term Loan of such Lender prior to the amortization of the Term Loan which has
occurred prior to the Closing Date.
The principal amount of the Term Notes A shall continue
to be payable in quarterly payments due on the last day of each December, March,
June and September, beginning with the quarter ending December 31, 2001, and as
follows:
Amount of Principal Payment
Quarters Ending on Following Date Due on Payment Date
December 31, 2001 $ 5,722,222.22
March 31, 2002 $ 5,722,222.22
June 30, 2002 $ 5,722,222.22
September 30, 2002 $ 7,152,777.78
December 31, 2002 $ 7,152,777.78
March 31, 2003 $ 7,152,777.78
June 30, 2003 $ 7,152,777.78
September 30, 2003 $ 8,583,333.33
December 31, 2003 remaining principal balance outstanding
The principal amount of the Term Notes B shall continue
to be payable in quarterly payments due on the last day of each December, March,
June and September, beginning with the quarter ending December 31, 2001, and as
follows:
Amount of Principal Payment
Quarters Ending on Following Date Due on Payment Date
December 31, 2001 $ 443,750.00
March 31, 2002 $ 443,750.00
June 30, 2002 $ 443,750.00
September 30, 2002 $ 443,750.00
December 31, 2002 $ 443,750.00
March 31, 2003 $ 443,750.00
June 30, 2003 $ 443,750.00
September 30, 2003 $ 443,750.00
December 31, 2003 remaining principal balance outstanding
3.4 Use of Proceeds.
---------------
The proceeds of the Term Loans shall be used in
accordance with Section 8.1.10.
4. INTEREST RATES
--------------
4.1 Interest Rate Options.
---------------------
The Borrower and the Co-Borrower shall pay interest in
respect of the outstanding unpaid principal amount of the Loans as selected by
it from the Base Rate Option or Euro-Rate Option set forth below applicable to
the Loans, it being understood that, subject to the provisions of this
Agreement, the Borrower and the Co-Borrower may select different Interest Rate
Options and different Interest Periods to apply simultaneously to the Loans
comprising different Borrowing Tranches and may convert to or renew one or more
Interest Rate Options with respect to all or any portion of the Loans comprising
any Borrowing Tranche, provided that there shall not be at any one time
outstanding more than seven (7) Borrowing Tranches in the aggregate among all of
the Loans accruing interest at a Euro-Rate Option. If at any time the designated
rate applicable to any Loan made by any Lender exceeds such Lender's highest
lawful rate, the rate of interest on such Lender's Loan shall be limited to such
Lender's highest lawful rate.
4.1.1 Revolving Credit Interest Rate Options.
--------------------------------------
The Borrower and the Co-Borrower shall have the right
to select from the following Interest Rate Options applicable to the Revolving
Credit Loans:
(i) Base Rate Option: A fluctuating rate per
annum (computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed) equal to the Base Rate plus the Applicable Margin, such
interest rate to change automatically from time to time effective as of the
effective date of each change in the Base Rate or Applicable Margin; or
(ii) Euro-Rate Option: A rate per annum
(computed on the basis of a year of 360 days and actual days elapsed) equal to
the Euro-Rate plus the Applicable Margin, such interest rate to change
automatically from time to time effective as of the effective date of each
change in the Applicable Margin.
4.1.2 Term Loan A Interest Rate Options.
---------------------------------
The Borrower and the Co-Borrower shall have the right
to select from the following Interest Rate Options applicable to the
Term Loans A:
(i) Term Loan A Base Rate Option: A fluctuating
rate per annum (computed on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed)equal to the Base Rate plus the Applicable
Margin, such interest rate to change automatically from time to time effective
as of the effective date of each change in the Base Rate or Applicable Margin;
or
(ii) Term Loan A Euro-Rate Option: A rate per
annum (computed on the basis of a year of 360 days and actual days elapsed)
equal to the Euro-Rate plus the Applicable Margin, such interest rate to change
automatically from time to time effective as of the effective date of each
change in the Applicable Margin.
4.1.3 Term Loan B Interest Rate Options.
---------------------------------
The Borrower and the Co-Borrower shall have the right
to select from the following Interest Rate Options applicable to the
Term Loans B:
(i) Term Loan B Base Rate Option: A fluctuating
rate per annum (computed on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed) equal to the Base Rate plus the Applicable
Margin, such interest rate to change automatically from time to time effective
as of the effective date of each change in the Base Rate or Applicable Margin;
or
(ii) Term Loan B Euro-Rate Option: A rate per
annum (computed on the basis of a year of 360 days and actual days elapsed)
equal to the Euro-Rate plus the Applicable Margin, such interest rate to change
automatically from time to time effective as of the effective date of each
change in the Applicable Margin.
4.1.4 Rate Quotations.
---------------
The Borrower and the Co-Borrower may call the
Administrative Agent on or before the date on which a Loan Request is to be
delivered to receive an indication of the rates then in effect, but it is
acknowledged that such projection shall not be binding on the Administrative
Agent or the Lenders nor affect the rate of interest which thereafter is
actually in effect when the election is made.
4.2 Interest Periods.
----------------
At any time when the Borrower and the Co-Borrower shall
select, convert to or renew a Euro-Rate Option, the Borrower and the Co-Borrower
shall notify the Administrative Agent thereof at least three (3) Business Days
prior to the effective date of such Euro-Rate Option by delivering a Loan
Request. The notice shall specify an interest period (the "Interest Period")
during which such Interest Rate Option shall apply, such Interest Period to be
one, two, three or six Months. Notwithstanding the preceding sentence, the
following provisions shall apply to any selection of, renewal of, or conversion
to a Euro-Rate Option:
4.2.1 Ending Date and Business Day.
----------------------------
any Interest Period which would otherwise end on a date
which is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day;
4.2.2 Amount of Borrowing Tranche.
---------------------------
each Borrowing Tranche of Euro-Rate Loans shall be in
integral multiples of $1,000,000;
4.2.3 Termination Before Expiration Date.
----------------------------------
the Borrower and the Co-Borrower shall not select,
convert to or renew an Interest Period for any portion of the Revolving Credit
Loans that would end after the Expiration Date, any portion of the Term Loans A
that would end after the Term Loan A Maturity Date, or any portion of the Term
Loans B that would end after the Term Loan B Maturity Date; and
4.2.4 Renewals.
--------
in the case of the renewal of a Euro-Rate Option at the
end of an Interest Period, the first day of the new Interest Period shall be the
last day of the preceding Interest Period, without duplication in payment of
interest for such day.
4.3 Interest After Default.
----------------------
To the extent permitted by Law, upon the occurrence of
an Event of Default and until such time such Event of Default shall have been
cured or waived:
4.3.1 Letter of Credit Fees, Interest Rate.
------------------------------------
the Letter of Credit Fees and the rate of interest for
each Loan otherwise applicable pursuant to Section 2.9.2 or Section 4.1,
respectively, shall be increased by two percent (2%) per annum; and
4.3.2 Other Obligations.
-----------------
each other Obligation hereunder if not paid when due
shall bear interest at a rate per annum equal to the sum of the rate of interest
applicable under the Base Rate Option plus an additional two percent (2%) per
annum from the time such Obligation becomes due and payable and until it is paid
in full.
4.3.3 Acknowledgment.
--------------
The Borrower and the Co-Borrower acknowledge that the
increase in rates referred to in this Section 4.3 reflects, among other things,
the fact that such Loans or other amounts have become a substantially greater
risk given their default status and that the Lenders are entitled to additional
compensation for such risk; and all such interest shall be payable by Borrower
and the Co-Borrower upon demand by Administrative Agent.
4.4 Euro-Rate Unascertainable; Illegality; Increased Costs;
Deposits Not Available
-------------------------------------------------------
4.4.1 Unascertainable.
---------------
If on any date on which a Euro-Rate would otherwise be
determined, the Administrative Agent shall have determined that:
(i) adequate and reasonable means do not exist
for ascertaining such Euro-Rate, or
(ii) a contingency has occurred which materially
and adversely affects the London interbank eurodollar market relating to the
Euro-Rate, the Administrative Agent shall have the rights specified in
Section 4.4.3.
4.4.2 Illegality; Increased Costs; Deposits
Not Available.
-------------------------------------
If at any time any Lender shall have determined that:
(i) the making, maintenance or funding of any
Loan to which a Euro-Rate Option applies has been made impracticable or unlawful
by compliance by such Lender in good faith with any Law or any interpretation or
application thereof by any Official Body or with any request or directive of any
such Official Body (whether or not having the force of Law), or
(ii) such Euro-Rate Option will not adequately
and fairly reflect the cost to such Lender of the establishment or maintenance
of any such Loan, or
(iii) after making all reasonable efforts,
deposits of the relevant amount in Dollars for the relevant Interest Period for
a Loan to which a Euro-Rate Option applies are not available to such Lender in
the London interbank market,
then the Administrative Agent shall have the rights
specified in Section 4.4.3.
4.4.3 Administrative Agent's and Lender's Rights.
------------------------------------------
In the case of any event specified in Section 4.4.1
above, the Administrative Agent shall promptly so notify the Lenders, the
Borrower and the Co-Borrower thereof, and in the case of an event specified in
Section 4.4.2 above, such Lender shall promptly so notify the Administrative
Agent and endorse a certificate to such notice as to the specific circumstances
of such notice, and the Administrative Agent shall promptly send copies of such
notice and certificate to the other Lenders, the Borrower and the Co-Borrower.
Upon such date as shall be specified in such notice (which shall not be earlier
than the date such notice is given), the obligation of (A) the Lenders, in the
case of such notice given by the Administrative Agent, or (B) such Lender, in
the case of such notice given by such Lender, to allow the Borrower and the
Co-Borrower to select, convert to or renew a Euro-Rate Option shall be suspended
until the Administrative Agent shall have later notified the Borrower and the
Co-Borrower, or such Lender shall have later notified the Administrative Agent,
of the Administrative Agent's or such Lender's, as the case may be,
determination that the circumstances giving rise to such previous determination
no longer exist. If at any time the Administrative Agent makes a determination
under Section 4.4.1 and the Borrower and the Co-Borrower have previously
notified the Administrative Agent of its selection of, conversion to or renewal
of a Euro-Rate Option and such Interest Rate Option has not yet gone into
effect, such notification shall be deemed to provide for selection of,
conversion to or renewal of the Base Rate Option otherwise available with
respect to such Loans. If any Lender notifies the Administrative Agent of a
determination under Section 4.4.2, the Borrower and the Co-Borrower shall,
subject to the Borrower's and the Co-Borrower' indemnification Obligations under
Section 5.6.2, as to any Loan of the Lender to which a Euro-Rate Option applies,
on the date specified in such notice either convert such Loan to the Base Rate
Option otherwise available with respect to such Loan or prepay such Loan in
accordance with Section 5.4. Absent due notice from the Borrower and the
Co-Borrower of conversion or prepayment, such Loan shall automatically be
converted to the Base Rate Option otherwise available with respect to such Loan
upon such specified date.
4.5 Selection of Interest Rate Options.
----------------------------------
If the Borrower and the Co-Borrower fail to select a new
Interest Period to apply to any Borrowing Tranche of Loans under the Euro-Rate
Option at the expiration of an existing Interest Period applicable to such
Borrowing Tranche in accordance with the provisions of Section 4.2, the Borrower
and the Co-Borrower shall be deemed to have converted such Borrowing Tranche to
the Revolving Credit Base Rate Option, the Term Loan A Base Rate Option or the
Term Loan B Base Rate Option, as applicable, commencing upon the last day of the
existing Interest Period.
5. PAYMENTS
5.1 Payments.
--------
All payments and prepayments to be made in respect of
principal, interest, Commitment Fees, Letter of Credit Fees, Administrative
Agent's Fee or other fees or amounts due from the Borrower and the Co-Borrower
hereunder shall be payable prior to 11:00 a.m., Pittsburgh time, on the date
when due without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived by the Borrower and the Co-Borrower, and
without set-off, counterclaim or other deduction of any nature, and an action
therefor shall immediately accrue. Such payments shall be made to the
Administrative Agent at the Principal Office for the ratable accounts of the
Lenders with respect to the Revolving Credit Loans and the Term Loans in U.S.
Dollars and in immediately available funds, and the Administrative Agent shall
promptly distribute such amounts to the Lenders in immediately available funds,
provided that in the event payments are received by 11:00 a.m., Pittsburgh time,
by the Administrative Agent with respect to the Loans and such payments are not
distributed to the Lenders on the same day received by the Administrative Agent,
the Administrative Agent shall pay the Lenders the Federal Funds Effective Rate
with respect to the amount of such payments for each day held by the
Administrative Agent and not distributed to the Lenders. The Administrative
Agent's and each Lender's statement of account, ledger or other relevant record
shall, in the absence of manifest error, be conclusive as the statement of the
amount of principal of and interest on the Loans and other amounts owing under
this Agreement and shall be deemed an "account stated."
5.2 Pro Rata Treatment of Lenders.
-----------------------------
Each borrowing shall be allocated to each Lender according
to its Ratable Share as such Ratable Share relates specifically to the Revolving
Credit Commitments, the Term Loan A Commitments and the Term Loan B Commitments
of all Lenders having such Commitments, and each selection of, conversion to or
renewal of any Interest Rate Option and each payment or prepayment by the
Borrower and the Co-Borrower with respect to principal, interest, Commitment
Fees, Letter of Credit Fees, or other fees (except for the fees of the Managing
Agents or amounts due from the Borrower and the Co-Borrower hereunder to the
Lenders with respect to the Loans, shall (except as provided in Section 4.4.3 in
the case of an event specified in Section 4.4 [Euro-Rate Unascertainable;
Illegality; Increased Costs; Deposits Not Available], 5.4.3 [Voluntary
Prepayments] or 5.4 [Additional Compensation in Certain Circumstances]) be made
in proportion to the applicable Loans outstanding from each Lender and, if no
such Loans are then outstanding, in proportion to the Revolving Credit Ratable
Share of each Lender.
5.3 Interest Payment Dates.
----------------------
With the exception of that portion of the interest which is
payment-in-kind interest in the amount of 450 basis points or 500 basis points,
as the case may be, per annum, subject to adjustment as set forth on Exhibit
1.1(A) (the "Payment-in-Kind Interest"), interest on Loans to which the Base
Rate Option applies shall be due and payable in arrears on the first Business
Day of each January, April, July and October after the date hereof and on the
Expiration Date or upon acceleration of the Notes. With the exception of that
portion of the interest which is Payment-in-Kind Interest, interest on Loans to
which the Euro-Rate Option applies shall be due and payable on the last day of
each Interest Period for those Loans and, if such Interest Period is longer than
three (3) Months, also on the 90th day of such Interest Period. Payment-in-Kind
Interest shall be due and payable in cash on the Expiration Date, the Term Loan
A Maturity Date or the Term Loan B Maturity Date, as the case may be, or upon
acceleration of the Notes. Interest on the principal amount of each Loan or
other monetary Obligations shall be due and payable on demand after such
principal amount or other monetary Obligations become due and payable (whether
on the stated maturity date, upon acceleration or otherwise).
5.4 Voluntary Repayments.
--------------------
5.4.1 Right to Repay.
--------------
The Borrower and the Co-Borrower shall have the right
at their option from time to time to pay the Loans in whole or part without
premium or penalty, except for such premiums, penalties and other payments
provided for in Section 5.4.3 below or in Section 5.6:
(i) at any time with respect to any Loan to
which the Base Rate Option or Euro-Rate Option applies;
(ii) on the date specified in a notice by any
Lender pursuant to Section 4.4 [Euro-Rate Unascertainable] with respect to any
Loan to which a Euro-Rate Option applies. Whenever the Borrower and the
Co-Borrower desire to repay any part of the Loans, they shall provide a
repayment notice to the Administrative Agent at least one (1) Business Day prior
to the date of repayment of the Revolving Credit Loans or the Term Loans setting
forth the following information:
(x) the date, which shall be a Business Day, on
which the proposed prepayment is to be made;
(y) a statement indicating the application of
the prepayment between the Revolving Credit Loans and Term Loans, provided
however, that all prepayments which relate to the Term Loans shall be applied by
the Administrative Agent to the outstanding principal balance of the Term Loans
A and Term Loans B based upon the Ratable Share of such Term Loan to all the
Term Loans, and provided further, each Lender with principal outstanding under
its Term Loan B shall have the right to refuse such prepayment in accordance
with the term of Section 5.5.1[Excess Cash Flow]; and
(z) the total principal amount of such
repayment, which shall not be less than $1,000,000 for any Revolving Credit
Loans or Term Loans.
All repayment notices shall be irrevocable. The
principal amount of the Loans for which a repayment notice is given, together
with interest (excluding Payment-in-Kind Interest) on such principal amount
except with respect to Loans to which the Base Rate Option applies, shall be due
and payable on the date specified in such repayment notice as the date on which
the proposed repayment is to be made. All Term Loan prepayments permitted
pursuant to this Section 5.4.1 shall be applied to the unpaid installments of
principal of the Term Loans in the inverse order of scheduled maturities. Except
as provided in Section 4.4.3, if the Borrower and the Co-Borrower repay a Loan
but fails to specify the applicable Borrowing Tranche which the Borrower and the
Co-Borrower are repaying, the repayment shall be applied (i) first to Revolving
Credit Loans and then to Term Loans, as provided in Section 5.5.1; and (ii)
after giving effect to the allocations in clause (i) above and in the preceding
sentence, first to Loans to which the Base Rate Option applies, then to Loans to
which the Euro-Rate the Option applies. Any repayment hereunder shall be subject
to the Borrower's and the Co-Borrower' Obligation to indemnify the Lenders under
Section 5.6.2.
5.4.2 Commitment Reductions.
---------------------
The Borrower and the Co-Borrower may at any time and
from time to time terminate in whole or reduce in part the Revolving Credit
Commitments by giving the Administrative Agent and the Lenders not less than
seven (7) days prior written notice to such effect. Notice of termination or
reduction, having once been given by the Borrower and the Co-Borrower, shall be
irrevocable on the part of the Borrower and the Co-Borrower. Each reduction of
the Commitments shall be in the aggregate amount of at least $5,000,000 and in
multiples of $500,000. After each such reduction of the Revolving Credit
Commitments, the fee payable pursuant to Section 2.3 shall be calculated upon
the Revolving Credit Commitments as so reduced. Upon any such reduction, the
Revolving Credit Commitments of the Lenders shall be reduced proportionately
based upon each Lender's Revolving Credit Ratable Share.
5.4.3 Replacement of a Lender.
-----------------------
In the event any Lender (i) gives notice under Section
4.4 or Section 5.6.1, (ii) does not fund Loans because the making of such Loans
would contravene any Law applicable to such Lender, (iii) does not approve any
action as to which consent of the Required Lenders is requested by the Borrower
and the Co-Borrower and obtained hereunder, or (iv) becomes subject to the
control of an Official Body (other than normal and customary supervision), then
the Borrower and the Co-Borrower shall have the right at their option, with the
consent of the Administrative Agent, which shall not be unreasonably withheld,
to prepay the Loans of such Lender in whole, together with all interest accrued
thereon, and terminate such Lender's Commitment within ninety (90) days after
(w) receipt of such Lender's notice under Section 4.4 or 5.6.1, (x) the date
such Lender has failed to fund Loans because the making of such Loans would
contravene Law applicable to such Lender, (y) the date of obtaining the consent
which such Lender has not approved, or (z) the date such Lender became subject
to the control of an Official Body, as applicable; provided that the Borrower
and the Co-Borrower shall also pay to such Lender at the time of such prepayment
any amounts required under Section 5.6 and any accrued interest due on such
amount and any related fees; provided, however, that the Commitment and any Term
Loan of such Lender shall be provided by one or more of the remaining Lenders or
a replacement lender acceptable to the Administrative Agent; provided, further,
the remaining Lenders shall have no obligation hereunder to increase their
Commitments. Notwithstanding the foregoing, the Administrative Agent may only be
replaced subject to the requirements of Section 10.14 and provided that all
Letters of Credit have expired or been terminated or replaced.
5.4.4 Change of Lending Office.
------------------------
Each Lender agrees that upon the occurrence of any
event giving rise to increased costs or other special payments under Section
4.4.2 [Illegality, etc.] or 5.6.1 [Increased Costs, etc.] with respect to such
Lender, it will if requested by the Borrower and the Co-Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans or Letters of Credit affected by such
event, provided that such designation is made on such terms that such Lender and
its lending office suffer no economic, legal or regulatory disadvantage, with
the object of avoiding the consequence of the event giving rise to the operation
of such Section. Nothing is this Section 5.4.4 shall affect or postpone any of
the Obligations of the Borrower, the Co-Borrower or any other Loan Party or the
rights of the Administrative Agent or any Lender provided in this Agreement.
5.5 Mandatory Prepayments.
---------------------
5.5.1 Excess Cash Flow.
----------------
Within five (5) Business Days of the delivery of the
Borrower's annual financial statements pursuant to Section 8.3.3 [Annual
Financial Statements] commencing with the financial statements for the fiscal
year ended September 30, 2002, but in any event1 no later than January 5 of each
year commencing January 5, 2003 (each, a "Mandatory Prepayment Date"), the
Borrower and the Co-Borrower shall make a mandatory prepayment of principal on
the Term Loans equal to 75% of Excess Cash Flow for the immediately preceding
fiscal year, subject to a credit for voluntary prepayments made pursuant to
Section 5.4 [Voluntary Prepayments] during the immediately preceding fiscal
year, together with accrued interest (excluding Payment-in-Kind Interest) on
such principal amount (each, a "Mandatory Prepayment of Excess Cash Flow"). Each
Mandatory Prepayment of Excess Cash Flow shall be applied by the Administrative
Agent to the outstanding principal balance of the Term Loans A and Term Loans B
based upon the Ratable Share of such Term Loan to all the Term Loans, in each
case by application to the unpaid installments of principal in the inverse order
of scheduled maturities. Upon its receipt of the annual financial statements of
the Borrower and receipt of payment by the Borrower and the Co-Borrower of the
Mandatory Prepayment of Excess Cash Flow, the Administrative Agent shall give
the Lenders with outstanding principal on the Term Loans B notice of the amount
of the Mandatory Prepayment of Excess Cash Flow. In the event that any one or
more Lender with Term Loans B outstanding elects not to receive its pro rata
share of such prepayment, such Lender shall provide written notice of the amount
it elects not to receive in prepayment of its Term Loan B, and such amount shall
be reallocated to payment of the Term Loans A based upon the Ratable Share of
the Lenders with Term Loans A, to be applied by the Lenders with Term Loans A in
the inverse order of scheduled maturities. To the extent that a Mandatory
Prepayment of Excess Cash Flow exceeds the outstanding principal amount of the
Term Loans, such prepayment shall be limited to the amount necessary to prepay
the Term Loans in full."
5.5.2 Sale of Assets; Issuance of Stock; Incurrence of
Indebtedness; Casualty Events.
------------------------------------------------
Within five (5) Business Days of any sale of assets
authorized by Section 8.2.7(ii), (iv) or (v), and if the net after-tax cash
proceeds of such sale, when aggregated with all such prior asset sales in the
same fiscal year of the Borrower, is equal to or greater than $250,000, the
Borrower and the Co-Borrower shall make a mandatory prepayment of principal
equal to the net after-tax cash proceeds of such sale to the extent the
aggregate net after-tax cash proceeds of such sale and all prior such assets
sales in the fiscal year exceed $250,000 (as estimated in good faith by the
Borrower and the Co-Borrower). At the time of any issuance of equity by the
Borrower authorized by Section 8.2.13(iv), then simultaneously with the issuance
of such capital stock by the Borrower, the Borrower shall make a mandatory
prepayment of principal equal to the net after-tax cash proceeds of such
issuance. In the event that the Required Lenders permit the incurrence of
Indebtedness other than as permitted under Section 8.2.1, the Borrower shall
make a mandatory prepayment of principal equal to the net cash proceeds of such
Indebtedness. In the event that the Administrative Agent does not disburse
insurance proceeds in excess of $250,000 to the Loan Parties pursuant to Section
8.1.3, such proceeds shall be applied as a mandatory prepayment of principal
equal to the amount of such insurance proceeds. All prepayments pursuant to this
Section 5.5.2 shall be applied in accordance with the provisions of Section
5.5.1, and upon payment in full of the Term Loans, then as a permanent reduction
to the Revolving Credit Commitments. In the event that any one or more Lenders
with Term Loans B outstanding elects not to receive its pro rata share of such
prepayments, such Lender shall provide written notice of the amount it elects
not to receive in prepayment of its Term Loan B, and such amount shall be
reallocated to payment of the Term Loans A based upon the Ratable Share of the
Lenders with Term Loans A, to be applied by the Lenders with Term Loans A in the
inverse order of scheduled maturities.
5.5.3 Application Among Interest Rate Options.
---------------------------------------
All prepayments required pursuant to this Section 5.5
shall first be applied among the Interest Rate Options to the principal amount
of the Loans subject to the Base Rate Option, then to Loans subject to a
Euro-Rate Option. In accordance with Section 5.6.2, the Borrower and the
Co-Borrower shall indemnify the Lenders for any loss or expense, including loss
of margin, incurred with respect to any such prepayments applied against Loans
subject to a Euro-Rate Option on any day other than the last day of the
applicable Interest Period.
5.6 Additional Compensation in Certain Circumstances.
------------------------------------------------
5.6.1 Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements,
Expenses, Etc.
------------------------------------------------
If any Law, guideline or interpretation or any change
in any Law, guideline or interpretation or application thereof by any Official
Body charged with the interpretation or administration thereof or compliance
with any request or directive (whether or not having the force of Law) of any
central bank or other Official Body:
(i) subjects any Lender to any tax or changes
the basis of taxation with respect to this Agreement, the Notes, the Loans or
payments by the Borrower and the Co-Borrower of principal, interest, Commitment
Fees, or other amounts due from the Borrower and the Co-Borrower hereunder or
under the Notes (except for taxes on the overall net income of such Lender),
(ii) imposes, modifies or deems applicable any
reserve, special deposit or similar requirement against credits or commitments
to extend credit extended by, or assets (funded or contingent) of, deposits with
or for the account of, or other acquisitions of funds by, any Lender, or
(iii) imposes, modifies or deems applicable any
capital adequacy or similar requirement (A) against assets (funded or
contingent) of, or letters of credit, other credits or commitments to extend
credit extended by, any Lender, or (B) otherwise applicable to the obligations
of any Lender under this Agreement,
and the result of any of the foregoing is to increase
the cost to, reduce the income receivable by, or impose any expense (including
loss of margin) upon any Lender with respect to this Agreement, the Notes or the
making, maintenance or funding of any part of the Loans (or, in the case of any
capital adequacy or similar requirement, to have the effect of reducing the rate
of return on any Lender's capital, taking into consideration such Lender's
customary policies with respect to capital adequacy) by an amount which such
Lender in its sole discretion deems to be material, such Lender shall from time
to time notify the Borrower, the Co-Borrower and the Administrative Agent of the
amount determined in good faith (using any averaging and attribution methods
employed in good faith) by such Lender to be necessary to compensate such Lender
for such increase in cost, reduction of income, additional expense or reduced
rate of return. Such notice shall set forth in reasonable detail the basis for
such determination. Such amount shall be due and payable by the Borrower and the
Co-Borrower to such Lender ten (10) Business Days after such notice is given.
5.6.2 Indemnity.
---------
In addition to the compensation required by Section
5.6.1, the Borrower and the Co-Borrower shall indemnify each Lender against all
liabilities, losses or expenses (including loss of margin, any loss or expense
incurred in liquidating or employing deposits from third parties and any loss or
expense incurred in connection with funds acquired by a Lender to fund or
maintain Loans subject to a Euro-Rate Option) which such Lender sustains or
incurs as a consequence of any
(i) payment, prepayment, conversion or renewal
of any Loan to which a Euro-Rate Option applies on a day other than the last day
of the corresponding Interest Period (whether or not such payment or prepayment
is mandatory, voluntary or automatic and whether or not such payment or
prepayment is then due),
(ii) attempt by the Borrower or the Co-Borrower
to revoke (expressly, by later inconsistent notices or otherwise) in whole or
part any Loan Requests under Section 2.5 or Section 4.2 or notice relating to
prepayments under Section 5.4, or
(iii) default by the Borrower or the Co-Borrower
in the performance or observance of any covenant or condition contained in this
Agreement or any other Loan Document, including any failure of the Borrower and
the Co-Borrower to pay when due (by acceleration or otherwise) any principal,
interest, Commitment Fee or any other amount due hereunder.
If any Lender sustains or incurs any such loss or
expense, it shall from time to time notify the Borrower and the Co-Borrower of
the amount determined in good faith by such Lender (which determination may
include such assumptions, allocations of costs and expenses and averaging or
attribution methods as such Lender shall deem reasonable) to be necessary to
indemnify such Lender for such loss or expense. Such notice shall set forth in
reasonable detail the basis for such determination. Such amount shall be due and
payable by the Borrower and the Co-Borrower to such Lender ten (10) Business
Days after such notice is given.
6. REPRESENTATIONS AND WARRANTIES
------------------------------
6.1 Representations and Warranties.
------------------------------
The Loan Parties, jointly and severally, represent and
warrant to the Administrative Agent and each of the Lenders as follows:
6.1.1 Organization and Qualification.
------------------------------
Each Loan Party and each Subsidiary of each Loan Party
is a corporation, partnership or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization. Each Loan Party and each Subsidiary of each Loan Party has the
lawful power to own or lease its properties and to engage in the business it
presently conducts or proposes to conduct. Each Loan Party and each Subsidiary
of each Loan Party is duly licensed or qualified and in good standing in each
jurisdiction listed on Schedule 6.1.1 and, except as indicated on Schedule
6.1.1, in all other jurisdictions where the property owned or leased by it or
the nature of the business transacted by it or both makes such licensing or
qualification necessary.
6.1.2 Capitalization and Ownership.
----------------------------
The authorized capital stock of the Borrower consists
of 50,000,000 shares of common stock (the "Common Stock") and 1,000,000 shares
of preferred stock (the "Preferred Stock"), of which 24,509,979 shares of Common
Stock were issued and outstanding as of September 26, 2001, and no shares of
Preferred Stock (the Common Stock and the Preferred Stock are collectively
referred to herein as the "Shares") are issued and outstanding.
6.1.3 Subsidiaries.
------------
Schedule 6.1.3 states the name of each of the
Borrower's Subsidiaries, its jurisdiction of incorporation, its authorized
capital stock, the issued and outstanding shares (referred to herein as the
"Subsidiary Shares") and the owners thereof if it is a corporation, its
outstanding partnership interests (the "Partnership Interests") if it is a
partnership and its outstanding limited liability company interests, interests
assigned to managers thereof and the voting rights associated therewith (the
"LLC Interests") if it is a limited liability company. The Borrower and each
Subsidiary of the Borrower has good and marketable title to all of the
Subsidiary Shares, Partnership Interests and LLC Interests it purports to own,
free and clear in each case of any Lien. All Subsidiary Shares, Partnership
Interests and LLC Interests have been validly issued, and all Subsidiary Shares
are fully paid and nonassessable. All capital contributions and other
consideration required to be made or paid in connection with the issuance of the
Partnership Interests and LLC Interests have been made or paid, as the case may
be. There are no options, warrants or other rights outstanding to purchase any
such Subsidiary Shares, Partnership Interests or LLC Interests except as
indicated on Schedule 6.1.3.
6.1.4 Power and Authority.
-------------------
Each Loan Party has full power to enter into, execute,
deliver and carry out this Agreement and the other Loan Documents to which it is
a party, to incur the Indebtedness contemplated by the Loan Documents and to
perform its Obligations under the Loan Documents to which it is a party, and all
such actions have been duly authorized by all necessary proceedings on its part.
6.1.5 Validity and Binding Effect.
---------------------------
This Agreement has been duly and validly executed and
delivered by each Loan Party, and each other Loan Document which any Loan Party
is required to execute and deliver on or after the date hereof will have been
duly executed and delivered by such Loan Party on the required date of delivery
of such Loan Document. This Agreement and each other Loan Document constitutes,
or will constitute, legal, valid and binding obligations of each Loan Party
which is or will be a party thereto on and after its date of delivery thereof,
enforceable against such Loan Party in accordance with its terms, except to the
extent that enforceability of any of such Loan Document may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting the
right of specific performance.
6.1.6 No Conflict.
-----------
Neither the execution and delivery of this Agreement or
the other Loan Documents by any Loan Party nor the consummation of the
transactions herein or therein contemplated or compliance with the terms and
provisions hereof or thereof by any of them will conflict with, constitute a
default under or result in any breach of (i) the terms and conditions of the
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents of any Loan Party or (ii) any Law or
any material agreement or instrument or order, writ, judgment, injunction or
decree to which any Loan Party or any of its Subsidiaries is a party or by which
it or any of its Subsidiaries is bound or to which it is subject, or result in
the creation or enforcement of any Lien, charge or encumbrance whatsoever upon
any property (now or hereafter acquired) of any Loan Party or any of its
Subsidiaries (other than Liens granted under the Loan Documents).
6.1.7 Litigation.
----------
Except as set forth in Schedule 6.1.7, there are no
actions, suits, proceedings or investigations pending or, to the knowledge of
any Loan Party, threatened against such Loan Party or any Subsidiary of such
Loan Party at law or equity before any Official Body. Except as set forth in
Schedule 6.1.7, none of such actions, suits, proceedings or investigations, if
determined adversely to the Loan Parties, would individually or in the aggregate
result in any Material Adverse Change. Except as set forth on Schedule 6.1.7
none of the Loan Parties or any Subsidiaries of any Loan Party is in violation
of any order, writ, injunction or any decree of any Official Body. No such
violations may result in any Material Adverse Change.
6.1.8 Title to Properties.
-------------------
The real property owned or leased by each Loan Party
and each Subsidiary of each Loan Party is described on Schedule 6.1.8. Each Loan
Party and each Subsidiary of each Loan Party has good and marketable title to or
valid leasehold interest in all properties, assets and other rights which it
purports to own or lease or which are reflected as owned or leased on its books
and records, free and clear of all Liens and encumbrances except Permitted
Liens, and subject to the terms and conditions of the applicable leases. All
leases of property are in full force and effect without the necessity for any
consent which has not previously been obtained upon consummation of the
transactions contemplated hereby.
6.1.9 Financial Statements.
--------------------
(i) Historical Statements. The Borrower has delivered
to the Administrative Agent copies of its audited consolidated year-end
financial statements, and to the extent restated, as restated, for and as of the
end of the four fiscal years ended September 30, 2000 (the "Annual Statements").
In addition, the Borrower has delivered to the Administrative Agent copies of
its unaudited consolidated interim financial statements for the fiscal year to
date and as of the end of the fiscal quarter ended June 30, 2001 (the "Interim
Statements"), (the Annual and Interim Statements being collectively referred to
as the "Historical Statements"). The Historical Statements were compiled from
the books and records maintained by the Borrower's management, are correct and
complete and fairly represent the consolidated financial condition of the
Borrower and its Subsidiaries as of their dates and the results of operations
for the fiscal periods then ended and have been prepared in accordance with GAAP
consistently applied, subject (in the case of the Interim Statements) to normal
year-end audit adjustments.
(ii) Financial Projections. The Borrower has delivered
to the Administrative Agent financial projections of the Borrower and its
Subsidiaries for the two fiscal years ended September 30, 2001 and 2002 derived
from various assumptions of the Borrower's management (the "Financial
Projections"). The Financial Projections represent a reasonable range of
possible results in light of the history of the business, present and
foreseeable conditions and the intentions of the Borrower's management. The
Financial Projections accurately reflect the liabilities of the Borrower and its
Subsidiaries upon consummation of the transactions contemplated hereby as of the
Closing Date.
(iii) Accuracy of Financial Statements. Neither the
Borrower nor any Subsidiary of the Borrower has any liabilities, contingent or
otherwise, or forward or long-term commitments that are not disclosed in the
Historical Statements or in the notes thereto, and except as disclosed therein
there are no unrealized or anticipated losses from any commitments of the
Borrower or any Subsidiary of the Borrower which may cause a Material Adverse
Change. Since June 30, 2001, no Material Adverse Change has occurred.
6.1.10 Use of Proceeds; Margin Stock.
-----------------------------
The Loan Parties intend to use the proceeds of the
Loans in accordance with Sections 2.8, 3.4 and 8.1.10. None of the Loan Parties
or any Subsidiaries of any Loan Party engages or intends to engage principally,
or as one of its important activities, in the business of extending credit for
the purpose, immediately, incidentally or ultimately, of purchasing or carrying
margin stock (within the meaning of Regulation U). No part of the proceeds of
any Loan has been or will be used, immediately, incidentally or ultimately, to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock or to refund Indebtedness originally
incurred for such purpose, or for any purpose which entails a violation of or
which is inconsistent with the provisions of the regulations of the Board of
Governors of the Federal Reserve System. None of the Loan Parties or any
Subsidiary of any Loan Party holds or intends to hold margin stock in such
amounts that more than 25% of the reasonable value of the assets of any Loan
Party or Subsidiary of any Loan Party are or will be represented by margin
stock.
6.1.11 Full Disclosure.
---------------
Neither this Agreement nor any other Loan Document, nor
any certificate, statement, agreement or other documents furnished to the
Administrative Agent or any Lender in connection herewith or therewith, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and therein, in light
of the circumstances under which they were made, not misleading. There is no
fact known to any Loan Party which materially adversely affects the business,
property, assets, financial condition, results of operations or prospects of any
Loan Party or Subsidiary of any Loan Party which has not been set forth in this
Agreement or in the certificates, statements, agreements or other documents
furnished in writing to the Administrative Agent and the Lenders prior to or at
the date hereof in connection with the transactions contemplated hereby.
6.1.12 Taxes.
-----
All federal, state, local and other tax returns
required to have been filed with respect to each Loan Party and each Subsidiary
of each Loan Party have been filed, and payment or adequate provision has been
made for the payment of all taxes, fees, assessments and other governmental
charges which have or may become due pursuant to said returns or to assessments
received, except to the extent that such taxes, fees, assessments and other
charges are being contested in good faith by appropriate proceedings diligently
conducted and for which such reserves or other appropriate provisions, if any,
as shall be required by GAAP shall have been made. There are no agreements or
waivers extending the statutory period of limitations applicable to any federal
income tax return of any Loan Party or Subsidiary of any Loan Party for any
period.
6.1.13 Consents and Approvals.
----------------------
Except for the filing of financing statements and the
Mortgage in the state and county filing offices, no consent, approval,
exemption, order or authorization of, or a registration or filing with, any
Official Body or any other Person is required by any Law or any agreement in
connection with the execution, delivery and carrying out of this Agreement and
the other Loan Documents by any Loan Party, except as listed on Schedule 6.1.13,
all of which shall have been obtained or made on or prior to the Closing Date
except as otherwise indicated on Schedule 6.1.13.
6.1.14 No Event of Default; Compliance with
Instruments.
------------------------------------
No event has occurred and is continuing and no
condition exists or will exist after giving effect to the borrowings or other
extensions of credit to be made on the Closing Date under or pursuant to the
Loan Documents which constitutes an Event of Default or Potential Default. None
of the Loan Parties or any Subsidiaries of any Loan Party is in violation of (i)
any term of its certificate of incorporation, bylaws, certificate of limited
partnership, partnership agreement, certificate of formation, limited liability
company agreement or other organizational documents or (ii) any material
agreement or instrument to which it is a party or by which it or any of its
properties may be subject or bound where such violation would constitute a
Material Adverse Change.
6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc.
----------------------------------------------
Each Loan Party and each Subsidiary of each Loan Party
owns or possesses all the material patents, trademarks, service marks, trade
names, copyrights, licenses, registrations, franchises, permits and rights
necessary to own and operate its properties and to carry on its business as
presently conducted and planned to be conducted by such Loan Party or
Subsidiary, without known possible, alleged or actual conflict with the rights
of others. All material patents, trademarks, service marks, trade names,
copyrights, licenses, registrations, franchises and permits of each Loan Party
and each Subsidiary of each Loan Party are listed and described on Schedule
6.1.15.
6.1.16 Security Interests.
------------------
The Liens and security interests granted to the
Administrative Agent for the benefit of the Lenders pursuant to the Collateral
Assignments, the Patent, Trademark and Copyright Security Agreement, the Pledge
Agreement and the Security Agreement in the Collateral (other than the Real
Property) constitute and will continue to constitute Prior Security Interests
under the Uniform Commercial Code as in effect in each applicable jurisdiction
(the "Uniform Commercial Code") or other applicable Law entitled to all the
rights, benefits and priorities provided by the Uniform Commercial Code or such
Law. Upon the filing of financing statements relating to said security interests
in each office and in each jurisdiction where required in order to perfect the
security interests described above, taking possession of any stock certificates
or other certificates evidencing the Pledge Collateral and recordation of the
Patent, Trademark and Copyright Security Agreement in the United States Patent
and Trademark Office and United States Copyright Office, as applicable, all such
action as is necessary or advisable to establish such rights of the
Administrative Agent will have been taken, and there will be upon execution and
delivery of the Collateral Assignments, the Patent, Trademark and Copyright
Security Agreement, the Pledge Agreement and the Security Agreement, such
filings and such taking of possession, no necessity for any further action in
order to preserve, protect and continue such rights, except the filing of
continuation statements with respect to such financing statements within six
months prior to each five-year anniversary of the filing of such financing
statements. All filing fees and other expenses in connection with each such
action have been or will be paid by the Borrower and the Co-Borrower.
6.1.17 Mortgage Liens.
--------------
The Liens granted to the Administrative Agent for the
benefit of the Lenders pursuant to the Mortgage constitute a valid first
priority Lien under applicable law subject only to Permitted Liens. All such
action as will be necessary or advisable to establish such Lien of the
Administrative Agent and its priority as described in the preceding sentence
will be taken at or prior to the time required for such purpose, and there will
be as of the date of execution and delivery of the Mortgage no necessity for any
further action in order to protect, preserve and continue such Lien and such
priority.
6.1.18 Status of the Pledge Collateral.
-------------------------------
All the shares of capital stock, Partnership Interests
or LLC Interests included in the Pledge Collateral to be pledged pursuant to the
Pledge Agreement or the Collateral Assignment are or will be upon issuance
validly issued and nonassessable and owned beneficially and of record by the
pledgor free and clear of any Lien or restriction on transfer, except as
otherwise provided by the Pledge Agreement or the Collateral Assignment and
except as the right of the Lenders to dispose of the Shares, Partnership
Interests or LLC Interests may be limited by the Securities Act of 1933, as
amended, and the regulations promulgated by the Securities and Exchange
Commission thereunder and by applicable state securities laws. There are no
shareholder, partnership, limited liability company or other agreements or
understandings with respect to the shares of capital stock, Partnership
Interests or LLC Interests included in the Pledge Collateral except for the
partnership agreements and limited liability company agreements described on
Schedule 6.1.18. The Loan Parties have delivered true and correct copies of such
partnership agreements and limited liability company agreements to the
Administrative Agent.
6.1.19 Insurance.
---------
Schedule 6.1.19 lists all insurance policies and other
bonds to which any Loan Party or Subsidiary of any Loan Party is a party, all of
which are valid and in full force and effect. No notice has been given or claim
made and no grounds exist to cancel or avoid any of such policies or bonds or to
reduce the coverage provided thereby. Such policies and bonds provide adequate
coverage from reputable and financially sound insurers in amounts sufficient to
insure the assets and risks of each Loan Party and each Subsidiary of each Loan
Party in accordance with prudent business practice in the industry of the Loan
Parties and their Subsidiaries.
6.1.20 Compliance with Laws.
--------------------
The Loan Parties and their Subsidiaries are in
compliance in all material respects with all applicable Laws (other than
Environmental Laws which are specifically addressed in Section 6.1.25) in all
jurisdictions in which any Loan Party or Subsidiary of any Loan Party is
presently or will be doing business except where the failure to do so would not
constitute a Material Adverse Change.
6.1.21 Material Contracts; Burdensome Restrictions.
-------------------------------------------
Schedule 6.1.21 lists all material contracts relating
to the business operations of each Loan Party and each Subsidiary of any Loan
Party, including all employee benefit plans and Labor Contracts. All such
material contracts are valid, binding and enforceable upon such Loan Party or
Subsidiary and each of the other parties thereto in accordance with their
respective terms, and there is no default thereunder, to the Loan Parties'
knowledge, with respect to parties other than such Loan Party or Subsidiary.
None of the Loan Parties or their Subsidiaries is bound by any contractual
obligation, or subject to any restriction in any organization document, or any
requirement of Law which could result in a Material Adverse Change.
6.1.22 Investment Companies; Regulated Entities.
----------------------------------------
None of the Loan Parties or any Subsidiaries of any
Loan Party is an "investment company" registered or required to be registered
under the Investment Company Act of 1940 or under the "control" of an
"investment company" as such terms are defined in the Investment Company Act of
1940 and shall not become such an "investment company" or under such "control."
None of the Loan Parties or any Subsidiaries of any Loan Party is subject to any
other Federal state statute or regulation limiting its ability to incur
Indebtedness for borrowed money.
6.1.23 Plans and Benefit Arrangements.
------------------------------
Except as set forth on Schedule 6.1.23:
(i) The Borrower and each other member of the
ERISA Group are in compliance in all material respects with any applicable
provisions of ERISA with respect to all Benefit Arrangements, Plans and
Multiemployer Plans. There has been no Prohibited Transaction with respect to
any Benefit Arrangement or any Plan or, to the best knowledge of the Borrower,
with respect to any Multiemployer Plan or Multiple Employer Plan, which could
result in any material liability of the Borrower or any other member of the
ERISA Group. The Borrower and all other members of the ERISA Group have made
when due any and all payments required to be made under any agreement relating
to a Multiemployer Plan or a Multiple Employer Plan or any Law pertaining
thereto. With respect to each Plan and Multiemployer Plan, the Borrower and each
other member of the ERISA Group (i) have fulfilled in all material respects
their obligations under the minimum funding standards of ERISA, (ii) have not
incurred any liability to the PBGC, and (iii) have not had asserted against them
any penalty for failure to fulfill the minimum funding requirements of ERISA.
(ii) To the best of the Borrower's and the
Co-Borrower's knowledge, each Multiemployer Plan and Multiple Employer Plan is
able to pay benefits thereunder when due.
(iii) Neither the Borrower nor any other member
of the ERISA Group has instituted or intends to institute proceedings to
terminate any Plan other than a Plan of an acquired entity that was not intended
to be continued after the acquisition date or a reasonable time thereafter.
(iv) No event requiring notice to the PBGC under
Section 302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur
with respect to any Plan, and no amendment with respect to which security is
required under Section 307 of ERISA has been made or is reasonably expected to
be made to any Plan.
(v) The aggregate actuarial present value of all
benefit liabilities (whether or not vested) under each Plan, determined on a
plan termination basis, as disclosed in, and as of the date of, the most recent
actuarial report for such Plan, does not exceed the aggregate fair market value
of the assets of such Plan.
(vi) Neither the Borrower nor any other member
of the ERISA Group has incurred or reasonably expects to incur any material
withdrawal liability under ERISA to any Multiemployer Plan or Multiple Employer
Plan. Neither the Borrower nor any other member of the ERISA Group has been
notified by any Multiemployer Plan or Multiple Employer Plan that such
Multiemployer Plan or Multiple Employer Plan has been terminated within the
meaning of Title IV of ERISA and, to the best knowledge of the Borrower, no
Multiemployer Plan or Multiple Employer Plan is reasonably expected to be
reorganized or terminated, within the meaning of Title IV of ERISA.
(vii) To the extent that any Benefit Arrangement
is insured, the Borrower and all other members of the ERISA Group have paid when
due all premiums required to be paid for all periods through the Closing Date.
To the extent that any Benefit Arrangement is funded other than with insurance,
the Borrower and all other members of the ERISA Group have made when due all
contributions required to be paid for all periods through the Closing Date.
(viii) All Plans, Benefit Arrangements and
Multiemployer Plans have been administered in accordance with their terms and
applicable Law in all material respects.
6.1.24 Employment Matters.
------------------
Each of the Loan Parties and each of their Subsidiaries
is in compliance with the Labor Contracts and all applicable federal, state and
local labor and employment Laws including those related to equal employment
opportunity and affirmative action, labor relations, minimum wage, overtime,
child labor, medical insurance continuation, worker adjustment and relocation
notices, immigration controls and worker and unemployment compensation, where
the failure to comply would constitute a Material Adverse Change. There are no
outstanding grievances, arbitration awards or appeals therefrom arising out of
the Labor Contracts or current or threatened strikes, picketing, handbilling or
other work stoppages or slowdowns at facilities of any of the Loan Parties or
any of their Subsidiaries which in any case would constitute a Material Adverse
Change. The Borrower has delivered to the Administrative Agent true and correct
copies of each of the Labor Contracts.
6.1.25 Environmental Matters.
---------------------
Except as disclosed on Schedule 6.1.25:
(i) None of the Loan Parties or any Subsidiaries
of any Loan Party has received any Environmental Complaint from any Official
Body or private Person alleging that such Loan Party or Subsidiary or any prior
or subsequent owner of any of the Property is a potentially responsible party
under the Comprehensive Environmental Response, Cleanup and Liability Act, 42
U.S.C. ss. 9601, et seq., and none of the Loan Parties has any reason to believe
that such an Environmental Complaint might be received. There are no pending or,
to any Loan Party's knowledge, threatened Environmental Complaints relating to
any Loan Party or Subsidiary of any Loan Party or, to any Loan Party's
knowledge, any prior or subsequent owner of any of the Property pertaining to,
or arising out of, any Environmental Conditions.
(ii) There are no circumstances at, on or under
any of the Property owned by any Loan Party that constitute a breach of or
non-compliance with any of the Environmental Laws where the failure to comply
would constitute or result in a Material Adverse Change, and there are no past
or present Environmental Conditions at, on or under any of the Property owned by
a Loan Party or, to any Loan Party's knowledge, at, on or under adjacent
property, that prevent compliance with the Environmental Laws at any of the
owned Property. There are no circumstances at, on or under any of the Property
leased by any Loan Party that constitute a breach of or non-compliance with any
of the Environmental Laws where the failure to comply would constitute a
Material Adverse Change. There are no past or present Environmental Conditions
at, on or under any of the Property leased by a Loan Party or, to any Loan
Party's knowledge, at, on or under adjacent property, that prevent compliance
with the Environmental Laws at any of the leased Property, where the failure to
comply would constitute a Material Adverse Change.
(iii) Neither any of the Property owned by any
Loan Party nor any structures, improvements, equipment, fixtures, activities or
facilities thereon or thereunder contain or use Regulated Substances except in
compliance with Environmental Laws, except where the failure to comply would not
constitute or result in a Material Adverse Change. There are no processes,
facilities, operations, equipment or other activities at, on or under any of the
owned Property, or, to any Loan Party's knowledge, at, on or under adjacent
property, that currently result in the release or threatened release of
Regulated Substances onto any of the owned Property, except to the extent that
such releases or threatened releases are not a breach of or otherwise not a
violation of the Environmental Laws. Neither any of the Property leased by any
Loan Party nor any structures, improvements, equipment, fixtures, activities or
facilities thereon or thereunder contain or use Regulated Substances except in
compliance with Environmental Laws where the failure to comply would constitute
a Material Adverse Change. There are no processes, facilities, operations,
equipment or other activities at, on or under any of the leased Property, or, to
any Loan Party's knowledge, at, on or under adjacent property, that currently
result in the release or threatened release of Regulated Substances onto any of
the leased Property, except to the extent that such releases or threatened
releases are not a breach of or otherwise not a violation of the Environmental
Laws where the failure to comply would constitute a Material Adverse Change.
(iv) There are no aboveground storage tanks,
underground storage tanks or underground piping associated with such tanks, used
for the management of Regulated Substances at, on or under any of the Property
owned by any Loan Party that (a) do not have, to the extent required by
Environmental Laws, a full operational secondary containment system in place,
and (b) are not otherwise in compliance with all Environmental Laws. There are
no abandoned underground storage tanks or underground piping associated with
such tanks, previously used for the management of Regulated Substances at, on or
under any of the owned Property that have not either been closed in place in
accordance with Environmental Laws or removed in compliance with all applicable
Environmental Laws and no contamination associated with the use of such tanks
exists on any of the owned Property that is not in compliance with Environmental
Laws. There are no aboveground storage tanks, underground storage tanks or
underground piping associated with such tanks, used for the management of
Regulated Substances at, on or under any of the Property leased by any Loan
Party that (a) do not have, to the extent required by Environmental Laws, a full
operational secondary containment system in place, and (b) are not otherwise in
compliance with all Environmental Laws, where in the case of (a) or (b), the
failure to comply with such Environmental Laws would constitute a Material
Adverse Change. There are no abandoned underground storage tanks or underground
piping associated with such tanks, previously used for the management of
Regulated Substances at, on or under any of the leased Property that have not
either been closed in place in accordance with Environmental Laws or removed in
compliance with all applicable Environmental Laws and no contamination
associated with the use of such tanks exists on any of the leased Property that
is not in compliance with Environmental Laws, where the failure to comply would
constitute a Material Adverse Change.
(v) Each Loan Party and each Subsidiary of any
Loan Party has all material permits, licenses, authorizations, plans and
approvals necessary under the Environmental Laws for the conduct of the business
of such Loan Party or Subsidiary as presently conducted, except where the
failure to do so would not constitute or result in a Material Adverse Change.
Each Loan Party and each Subsidiary of any Loan Party has submitted all material
notices, reports and other filings required by the Environmental Laws to be
submitted to an Official Body which pertain to past and current operations on
any of the Property.
(vi) All past and present on-site generation,
storage, processing, treatment, recycling, reclamation, disposal or other use or
management of Regulated Substances at, on, or under any of the Property owned by
any Loan Party and all off-site transportation, storage, processing, treatment,
recycling, reclamation, disposal or other use or management of Regulated
Substances have been done in accordance with the Environmental Laws, except
where the failure to do so would not constitute or result in a Material Adverse
Change. All past and present on-site generation, storage, processing, treatment,
recycling, reclamation, disposal or other use or management of Regulated
Substances at, on, or under any of the Property leased by any Loan Party and all
off-site transportation, storage, processing, treatment, recycling, reclamation,
disposal or other use or management of Regulated Substances have been done in
accordance with the Environmental Laws, except where to failure to comply with
such Environmental Laws would not constitute a Material Adverse Change.
6.1.26 Senior Debt Status.
------------------
The Obligations of each Loan Party under this
Agreement, the Notes, the Guaranty Agreement and each of the other Loan
Documents to which it is a party do rank and will rank at least pari passu in
priority of payment with all other Indebtedness of such Loan Party except
Indebtedness of such Loan Party to the extent secured by Permitted Liens. There
is no Lien upon or with respect to any of the properties or income of any Loan
Party or Subsidiary of any Loan Party which secures indebtedness or other
obligations of any Person except for Permitted Liens.
6.2 Updates to Schedules.
--------------------
Should any of the information or disclosures provided on any
of the Schedules attached hereto become outdated or incorrect in any material
respect, the Borrower and the Co-Borrower shall promptly provide the
Administrative Agent in writing with such revisions or updates to such Schedule
as may be necessary or appropriate to update or correct same; provided, however,
that no Schedule shall be deemed to have been amended, modified or superseded by
any such correction or update, nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured thereby, unless and until the Required
Lenders, in their sole and absolute discretion, shall have accepted in writing
such revisions or updates to such Schedule.
7. CONDITIONS OF LENDING
---------------------
The obligation of each Lender to make Loans and of the
Administrative Agent to issue Letters of Credit hereunder is subject to the
performance by each of the Loan Parties of its Obligations to be performed
hereunder at or prior to the making of any such Loans or issuance of such
Letters of Credit and to the satisfaction of the following further conditions:
7.1 First Loans.
-----------
On the Closing Date:
7.1.1 Officer's Certificate.
---------------------
The representations and warranties of each of the Loan
Parties contained in Section 6 and in each of the other Loan Documents shall be
true and accurate on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein), and each of the Loan Parties shall
have performed and complied with all covenants and conditions hereof and
thereof, no Event of Default or Potential Default shall have occurred and be
continuing or shall exist; and there shall be delivered to the Administrative
Agent for the benefit of each Lender a certificate of each of the Loan Parties,
dated the Closing Date and signed by the Chief Executive Officer, President or
Chief Financial Officer of each of the Loan Parties, to each such effect. The
certificate of the Loan Parties shall contain calculations in sufficient detail
to demonstrate compliance as of the Closing Date with all financial covenants
contained in Section 8.2.
7.1.2 Secretary's Certificate.
-----------------------
There shall be delivered to the Administrative Agent
for the benefit of each Lender a certificate dated the Closing Date and signed
by the Secretary or an Assistant Secretary of each of the Loan Parties,
certifying as appropriate as to:
(i) all action taken by each Loan Party in
connection with this Agreement and the other Loan Documents;
(ii) the names of the officer or officers
authorized to sign this Agreement and the other Loan Documents and the true
signatures of such officer or officers and specifying the Authorized Officers
permitted to act on behalf of each Loan Party for purposes of this Agreement and
the true signatures of such officers, on which the Administrative Agent and each
Lender may conclusively rely; and
(iii) copies of its organizational documents,
including its certificate or articles of incorporation, bylaws, certificate of
limited partnership, partnership agreement, certificate of formation, articles
of organization and operating agreement or regulations as in effect on the
Closing Date certified by the appropriate state official where such documents
are filed in a state office together with certificates from the appropriate
state officials as to the continued existence and good standing of each Loan
Party in each state where organized or qualified to do business.
7.1.3 Delivery of Loan Documents.
--------------------------
The Security Agreement shall have been duly executed
and delivered to the Administrative Agent for the benefit of the Lenders,
together with all appropriate financing statements, and the Collateral
Assignments, Indemnity Agreement, Mortgage, Notes, Patent, Trademark and
Copyright Security Agreement and Pledge Agreement shall have continued in full
force and effect to secure the Obligations.
7.1.4 Opinion of Counsel.
------------------
There shall be delivered to the Administrative Agent
for the benefit of each Lender a written opinion of Xxxxxxx Xxxx LLP, and Xxxxxx
X. XxXxxx, counsel and general counsel, respectively, for the Loan Parties (who
may rely on the opinions of such other counsel as may be acceptable to the
Administrative Agent), dated the Closing Date and in form and substance
satisfactory to the Administrative Agent and its counsel:
(i) as to the matters set forth in
Exhibit 7.1.4; and
(ii) as to such other matters incident to the
transactions contemplated herein as the Administrative Agent may reasonably
request.
7.1.5 Legal Details.
-------------
All legal details and proceedings in connection with
the transactions contemplated by this Agreement and the other Loan Documents
shall be in form and substance satisfactory to the Administrative Agent and
counsel for the Administrative Agent, and the Administrative Agent shall have
received all such other counterpart originals or certified or other copies of
such documents and proceedings in connection with such transactions, in form and
substance satisfactory to the Administrative Agent and said counsel, as the
Administrative Agent or said counsel may reasonably request.
7.1.6 Payment of Fees.
---------------
The Borrower shall have paid or caused to be paid to
the Administrative Agent, for itself and for the account of the Lenders to the
extent not previously paid, all other commitment and other fees accrued through
the Closing Date and the costs and expenses for which the Administrative Agent
and the Lenders are entitled to be reimbursed. In consideration of the waivers
granted by the Lenders pursuant to Section 7.1.16 and the modifications agreed
to by the Lenders under Amendment No. 6 to the Agreement, the Borrower and the
Co-Borrower agree to pay to the Agent an amendment and waiver fee in an amount
equal to one-half of one percent (1/2%) of the aggregate amount of the Revolving
Credit Commitments and the principal balance outstanding on the Term Loans A and
the Term Loans B as of the Closing Date of each Lender which has executed and
delivered to the Administrative Agent Amendment No. 6 to the Agreement on or
before 5:00 p.m. Pittsburgh time on October 4, 2001. The Agent shall remit such
amendment and waiver fee to such Lenders in an amount so that each such Lender
shall receive one-half of one percent (1/2%) on its Revolving Credit Commitment
and outstanding Term Loans.
7.1.7 Consents.
--------
All material consents required to effectuate the
transactions contemplated hereby as set forth on Schedule --------- 6.1.13 shall
have been obtained. ------
7.1.8 Officer's Certificate Regarding MACs.
------------------------------------
Since June 30, 2001, no Material Adverse Change shall
have occurred; prior to the Closing Date, there shall have been no material
change in the management of any Loan Party or Subsidiary of any Loan Party; and
there shall have been delivered to the Administrative Agent for the benefit of
each Lender a certificate dated the Closing Date and signed by the Chief
Executive Officer, President or Chief Financial Officer of each Loan Party to
each such effect.
7.1.9 No Violation of Laws.
--------------------
The making of the Loans and the issuance of the Letters
of Credit shall not contravene any Law applicable to any Loan Party or any of
the Lenders.
7.1.10 No Actions or Proceedings.
-------------------------
No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, this Agreement, the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby or which, in the
Administrative Agent's sole discretion, would make it inadvisable to consummate
the transactions contemplated by this Agreement or any of the other Loan
Documents.
7.1.11 Insurance Policies; Certificates of Insurance;
Endorsements.
-----------------------------------------------
The Loan Parties shall have delivered evidence
acceptable to the Administrative Agent that adequate insurance in compliance
with Section 8.1.3 is in full force and effect and that all premiums then due
thereon have been paid, together with a certified copy of each Loan Party's
casualty insurance policy or policies evidencing coverage satisfactory to the
Administrative Agent, with additional insured, mortgagee and lender loss payable
special endorsements attached thereto in form and substance satisfactory to the
Administrative Agent and its counsel naming the Administrative Agent as
additional insured, mortgagee and lender loss payee.
7.1.12 Title Insurance.
---------------
The Loan Parties shall have delivered a title insurance
policy or an endorsement or binder in favor of the Administrative Agent for the
benefit of the Lenders, in customary ALTA current mortgagee's form, and in
amounts not less than $3,500,000, with premiums paid thereon, issued by a title
insurance company acceptable to the Administrative Agent and insuring the
Mortgage on the Real Property as a valid first priority Lien upon the applicable
Loan Parties' fee simple title to such Real Property Collateral and all
improvements and all appurtenances thereto (including such easements and
appurtenances as may be required by the Administrative Agent), free and clear of
any and all defects and encumbrances whatsoever, subject only to such exceptions
as may be approved in writing by the Administrative Agent, with endorsements
thereto as to such matters as the Administrative Agent may designate.
7.1.13 Filing Receipts.
---------------
The Administrative Agent shall have received (1) copies
of all filing receipts and acknowledgments issued by any governmental authority
to evidence any recordation or filing necessary to perfect the Lien of the
Lenders on the Collateral or other satisfactory evidence of such recordation and
filing and (2) evidence in a form acceptable to the Administrative Agent that
such Lien constitutes a Prior Security Interest in favor of the Lenders and, in
the case of the Mortgage, a valid and perfected first priority Lien.
7.1.14 Amendment of Existing Credit Agreement.
--------------------------------------
The revolving credit loans, term loans and other
obligations of certain of the Loan Parties under the Agreement shall have been
amended under and pursuant to this Amendment No. 6 to the Agreement, without any
novation having occurred as a result thereof.
7.1.15 Blocked Account.
---------------
The Administrative Agent shall have and continue to
maintain dominion over the cash collateral of the Loan Parties to the extent
required by the Administrative Agent. The dominion to be maintained shall
include, without limitation, the deposit of cash and cash equivalents in a
deposit account or deposit accounts under the sole control of the Administrative
Agent and the application of such funds each Business Day to the outstanding
balance of the Revolving Credit Loans. The Borrower, the Co-Borrower and the
Guarantors shall fully cooperate with the Administrative Agent in connection
with the continued establishment and maintenance of dominion over cash
collateral by the Administrative Agent for the benefit of the Lenders. The
implementation of such dominion over cash collateral by the Administrative Agent
shall be in addition to and not in lieu of any other rights and remedies
provided to the Administrative Agent and the Lenders with respect to the
Collateral under the Loan Documents.
7.1.16 Waiver of Events of Default.
---------------------------
The Loan Parties hereby represent and warrant that all
Events of Default which have occurred under this Agreement are set forth on
Schedule 7.1.16. The execution and delivery of Amendment No. 6 to this Agreement
by the Required Lenders shall be deemed to constitute a waiver of all Events of
Default which have occurred prior to the Closing Date.
7.2 Each Additional Loan.
--------------------
At the time of making any Loans or issuing any Letters of
Credit other than Loans made or Letters of Credit issued on the Closing Date and
after giving effect to the proposed extensions of credit: the representations
and warranties of the Loan Parties contained in Section 6 and in the other Loan
Documents shall be true on and as of the date of such additional Loan or Letter
of Credit with the same effect as though such representations and warranties had
been made on and as of such date (except representations and warranties which
expressly relate solely to an earlier date or time, which representations and
warranties shall be true and correct on and as of the specific dates or times
referred to therein) and the Loan Parties shall have performed and complied with
all covenants and conditions hereof; no Event of Default or Potential Default
shall have occurred and be continuing or shall exist; the making of the Loans or
issuance of such Letter of Credit shall not contravene any Law applicable to any
Loan Party or Subsidiary of any Loan Party or any of the Lenders; and the
Borrower and the Co-Borrower shall have delivered to the Administrative Agent a
duly executed and completed Loan Request or application for a Letter of Credit
as the case may be.
8. COVENANTS
------------
8.1 Affirmative Covenants.
---------------------
The Loan Parties, jointly and severally, covenant and
agree that until payment in full of the Loans, Reimbursement Obligations and
Letter of Credit Borrowings, and interest thereon, expiration or termination of
all Letters of Credit, satisfaction of all of the Loan Parties'other Obligations
under the Loan Documents and termination of the Commitments, the Loan Parties
shall comply at all times with the following affirmative covenants:
8.1.1 Preservation of Existence, Etc.
------------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain its legal existence as a corporation, limited
partnership or limited liability company and its license or qualification and
good standing in each jurisdiction in which its ownership or lease of property
or the nature of its business makes such license or qualification necessary,
except as otherwise expressly permitted in Section 8.2.6.
8.1.2 Payment of Liabilities, Including Taxes, Etc.
--------------------------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, duly pay and discharge all liabilities to which it is subject
or which are asserted against it, promptly as and when the same shall become due
and payable, including all taxes, assessments and governmental charges upon it
or any of its properties, assets, income or profits, prior to the date on which
penalties attach thereto, except to the extent that such liabilities, including
taxes, assessments or charges, are being contested in good faith and by
appropriate and lawful proceedings diligently conducted and for which such
reserve or other appropriate provisions, if any, as shall be required by GAAP
shall have been made, but only to the extent that failure to discharge any such
liabilities would not result in any additional liability which would adversely
affect to a material extent the financial condition of any Loan Party or
Subsidiary of any Loan Party or which would affect the Collateral, provided that
the Loan Parties and their Subsidiaries will pay all such liabilities forthwith
upon the commencement of proceedings to foreclose any Lien which may have
attached as security therefor.
8.1.3 Maintenance of Insurance.
------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, insure its properties and assets against loss or damage by fire
and such other insurable hazards as such assets are commonly insured (including
fire, extended coverage, property damage, workers' compensation, public
liability and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties and
assets are insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound insurers, including
self-insurance to the extent customary, all as reasonably determined by the
Administrative Agent. At the request of the Administrative Agent, the Loan
Parties shall deliver to the Administrative Agent and each of the Lenders (x) on
the Closing Date and annually thereafter an original certificate of insurance
signed by the Loan Parties' independent insurance broker describing and
certifying as to the existence of the insurance on the Collateral required to be
maintained by this Agreement and the other Loan Documents, together with a copy
of the endorsement described in the next sentence attached to such certificate
and (y) from time to time a summary schedule indicating all insurance then in
force with respect to each of the Loan Parties. Such policies of insurance shall
contain special endorsements, in form and substance acceptable to the
Administrative Agent in its reasonable judgment, which shall (i) specify the
Administrative Agent as an additional insured, mortgagee and lender loss payee
as its interests may appear, with the understanding that any obligation imposed
upon the insured (including the liability to pay premiums) shall be the sole
obligation of the applicable Loan Parties and not that of the insured, (ii)
provide that the interest of the Lenders shall be insured regardless of any
breach or violation by the applicable Loan Parties of any warranties,
declarations or conditions contained in such policies or any action or inaction
of the applicable Loan Parties or others insured under such policies, (iii)
provide a waiver of any right of the insurers to set off or counterclaim or any
other deduction, whether by attachment or otherwise, (iv) provide that any and
all rights of subrogation which the insurers may have or acquire shall be, at
all times and in all respects, junior and subordinate to the prior payment in
full of the Indebtedness hereunder and that no insurer shall exercise or assert
any right of subrogation until such time as the Indebtedness hereunder has been
paid in full and the Commitments have terminated, (v) provide, except in the
case of public liability insurance and workmen's compensation insurance, that
all insurance proceeds for losses of less than $250,000 shall be adjusted with
and payable to the applicable Loan Parties and that all insurance proceeds for
losses of $250,000 or more shall be adjusted with and payable to the
Administrative Agent, (vi) include effective waivers by the insurer of all
claims for insurance premiums against the Administrative Agent, (vii) provide
that no cancellation of such policies for any reason (including non-payment of
premium) nor any change therein shall be effective until at least thirty (30)
days after receipt by the Administrative Agent of written notice of such
cancellation or change, (viii) be primary without right of contribution of any
other insurance carried by or on behalf of any additional insureds with respect
to their respective interests in the Collateral, and (ix) provide that inasmuch
as the policy covers more than one insured, all terms, conditions, insuring
agreements and endorsements (except limits of liability) shall operate as if
there were a separate policy covering each insured. The applicable Loan Parties
shall notify the Administrative Agent promptly of any occurrence causing a
material loss or decline in value of the Collateral and the estimated (or
actual, if available) amount of such loss or decline. Any monies received by the
Administrative Agent constituting insurance proceeds or condemnation proceeds
(pursuant to the Mortgage) may, at the option of the Administrative Agent, (i)
be applied by the Administrative Agent to the payment of the Loans in such
manner as the Administrative Agent may reasonably determine, or (ii) be
disbursed to the applicable Loan Parties on such terms as are deemed appropriate
by the Administrative Agent for the repair, restoration and/or replacement of
property in respect of which such proceeds were received.
8.1.4 Maintenance of Properties and Leases.
------------------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in good repair, working order and condition (ordinary
wear and tear excepted) in accordance with the general practice of other
businesses of similar character and size, all of those properties useful or
necessary to its business, and from time to time, such Loan Party will make or
cause to be made all appropriate repairs, renewals or replacements thereof.
8.1.5 Maintenance of Patents, Trademarks, Etc.
---------------------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in full force and effect all patents, trademarks,
service marks, trade names, copyrights, licenses, franchises, permits and other
authorizations necessary for the ownership and operation of its properties and
business if the failure so to maintain the same would constitute a Material
Adverse Change.
8.1.6 Visitation Rights.
-----------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Administrative Agent or any of the Lenders to visit and
inspect any of its properties and to examine and make excerpts from its books
and records and discuss its business affairs, finances and accounts with its
officers, all in such detail and at such times and as often as any of the
Lenders may reasonably request, provided that each Lender shall provide the
Borrower, the Co-Borrower and the Administrative Agent with reasonable notice
prior to any visit or inspection. In the event any Lender desires to conduct an
audit of any Loan Party, such Lender shall conduct such audit contemporaneously
with any audit to be performed by the Administrative Agent.
8.1.7 Keeping of Records and Books of Account.
---------------------------------------
The Borrower shall, and shall cause each Subsidiary of
the Borrower to, maintain and keep proper books of record and account which
enable the Borrower and its Subsidiaries to issue financial statements in
accordance with GAAP and as otherwise required by applicable Laws of any
Official Body having jurisdiction over the Borrower or any Subsidiary of the
Borrower, and in which full, true and correct entries shall be made in all
material respects of all its dealings and business and financial affairs.
8.1.8 Plans and Benefit Arrangements.
------------------------------
The Borrower shall, and shall cause each other member
of the ERISA Group to, comply with ERISA, the Internal Revenue Code and other
applicable Laws applicable to Plans and Benefit Arrangements except where such
failure, alone or in conjunction with any other failure, would not result in a
Material Adverse Change. Without limiting the generality of the foregoing, the
Borrower shall cause all of its Plans and all Plans maintained by any member of
the ERISA Group to be funded in accordance with the minimum funding requirements
of ERISA and shall make, and cause each member of the ERISA Group to make, in a
timely manner, all contributions due to Plans, Benefit Arrangements and
Multiemployer Plans.
8.1.9 Compliance with Laws.
--------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, comply with all applicable Laws, including all Environmental
Laws, in all respects, provided that it shall not be deemed to be a violation of
this Section 8.1.9 if any failure to comply with any Law would not result in
fines, penalties, remediation costs, other similar liabilities or injunctive
relief which in the aggregate would constitute a Material Adverse Change.
8.1.10 Use of Proceeds.
---------------
8.1.10.1 General.
-------
The Loan Parties will use the Letters of Credit and the
proceeds of the Loans only for general and administrative expense purposes, for
working capital, and for payments not in excess of $1,000,000 individually or in
the aggregate for settlement of claims and lawsuits. The Loan Parties shall not
use the Letters of Credit and the proceeds of the Loans for any purposes which
contravenes any applicable Law or any provision hereof.
8.1.10.2 Margin Stock.
------------
The Loan Parties shall not use the proceeds of the
Loans to purchase margin stock as more fully provided in Section 6.1.10.
8.1.10.3 Section 20 Subsidiaries.
-----------------------
The Loan Parties will not, directly or indirectly, use
any portion of the proceeds of the Loans (i) knowingly to purchase any
Ineligible Securities from a Section 20 Subsidiary during any period in which
such Section 20 Subsidiary makes a market in such Ineligible Securities, (ii)
knowingly to purchase during the underwriting or placement period Ineligible
Securities being underwritten or privately placed by a Section 20 Subsidiary, or
(iii) to make payments of principal or interest on Ineligible Securities
underwritten or privately placed by as Section 20 Subsidiary and issued by or
for the benefit of any Loan Party or any Affiliate of any Loan Party.
8.1.11 Further Assurances.
------------------
Each Loan Party shall, from time to time, at its
expense, faithfully preserve and protect the Administrative Agent's Lien on and
Prior Security Interest in the Collateral as a continuing first priority
perfected Lien, subject only to Permitted Liens, and shall do such other acts
and things as the Administrative Agent in its sole discretion may deem necessary
or advisable from time to time in order to preserve, perfect and protect the
Liens granted under the Loan Documents and to exercise and enforce its rights
and remedies thereunder with respect to the Collateral.
8.1.12 Subordination of Intercompany Loans.
-----------------------------------
Each Loan Party shall cause any intercompany
Indebtedness, loans or advances owed by any Loan Party to any other Loan Party
to be subordinated pursuant to the terms of the Intercompany Subordination
Agreement.
8.1.13 Interest Rate Protection.
------------------------
The Loan Parties shall enter into or maintain one or
more interest rate protection agreements with one or more of the Lenders and
with the prior consent of the Administrative Agent, which consent shall not be
unreasonably withheld. Such interest rate protection agreements shall be in an
amount of at least (i) during the period from the Closing Date through December
30, 2002, $180,000,000, (ii) during the period from December 31, 2002, through
May 30, 2003, $160,000,000, and (iii) during the period from and after May 31,
2003, $100,000,000 (the interest rate protection agreements entered into
pursuant to this Section 8.1.13 are collectively referred to as the "Interest
Rate Protection Agreements"). Such Interest Rate Protection Agreements shall
contain such terms and conditions as shall be acceptable to the Administrative
Agent. Documentation for the Interest Rate Protection Agreement shall be in a
standard International Swap Dealer Association Agreement and shall provide for
the method of calculating the reimbursable amount of the provider's credit
exposure in a reasonable and customary manner. Such financial institution (if
other than a Lender) may be granted a security interest in the Collateral
pursuant to the Loan Documents and receive a Lien pari passu with the Lien of
the Administrative Agent upon terms acceptable to the Administrative Agent.
8.1.14 Rights of Lenders to Issuance of Warrants.
-----------------------------------------
In the event that the Leverage Ratio of the Borrower
and its Subsidiaries, as measured at June 30, 2003, for the four fiscal quarters
of the Borrower then ended, is equal to or greater than 2.25 to 1.00, the
Borrower shall issue to the Lenders warrants (the "Lender Warrants") in the form
of Exhibit 8.1.14 for the purchase of Common Stock of the Borrower and shall
execute and deliver the Registration Rights Agreement in the form provided for
in the Lender Warrants. The shares of Common Stock which will be obtained by the
Lenders upon the exercise of the Lender Warrants shall equal fifteen percent
(15%) of the total outstanding voting power of all the outstanding Shares of the
Borrower immediately prior to the exercise of the Lender Warrants. The Lender
Warrants shall be allocated to the Lenders based upon each Lender's Ratable
Share. The Borrower shall at all times maintain sufficient number of authorized
Shares of its Common Stock to permit the exercise by the Lenders of the
conversion of the Lender Warrants into Shares of the Common Stock of the
Borrower.
8.2 Negative Covenants.
------------------
The Loan Parties, jointly and severally, covenant and agree
that until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings and interest thereon, expiration or termination of all Letters
of Credit, satisfaction of all of the Loan Parties' other Obligations hereunder
and termination of the Commitments, the Loan Parties shall comply with the
following negative covenants:
8.2.1 Indebtedness.
------------
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time create, incur, assume or suffer
to exist any Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as set forth on
Schedule 8.2.1(including any extensions or renewals thereof, provided there is
no increase in the amount thereof or other significant change in the terms
thereof unless otherwise specified on Schedule 8.2.1;
(iii) Capitalized and operating leases as and to
the extent permitted under Section 8.2.15;
(iv) Indebtedness secured by Purchase Money
Security Interests not exceeding $100,000;
(v) Indebtedness of a Loan Party to another Loan
Party which is subordinated in accordance with the provisions of Section 8.1.12;
(vi) Indebtedness incurred in connection with
Permitted Acquisitions provided that after giving effect thereto, no Potential
Default or Event of Default exists; and
(vii) other unsecured Indebtedness not exceeding
$15,000,000 at any one time outstanding.
8.2.2 Liens.
-----
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time create, incur, assume or suffer
to exist any Lien on any of its property or assets, tangible or intangible, now
owned or hereafter acquired, or agree or become liable to do so, except
Permitted Liens.
8.2.3 Guaranties.
----------
Except as described on Schedule 7.1.16, each of the
Loan Parties shall not, and shall not permit any of its Subsidiaries to, at any
time, directly or indirectly, become or be liable in respect of any Guaranty, or
assume, guarantee, become surety for, endorse or otherwise agree, become or
remain directly or contingently liable upon or with respect to any obligation or
liability of any other Person, except for (i) Guaranties of Indebtedness of the
Loan Parties permitted hereunder, and (ii) Guaranties of Indebtedness permitted
under Section 8.2.1(vi).
8.2.4 Loans and Investments.
---------------------
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time make or suffer to remain
outstanding any loan or advance to, or purchase, acquire or own any stock,
bonds, notes or securities of, or any partnership interest (whether general or
limited) or limited liability company interest in, or any other investment or
interest in, or make any capital contribution to, any other Person, or agree,
become or remain liable to do any of the foregoing, except:
(i) trade credit extended on usual and customary terms
in the ordinary course of business;
(ii) advances to employees to meet expenses incurred by
such employees in the ordinary course of business;
(iii) Permitted Acquisitions;
(iv) Permitted Investments;
(v) loans, advances and investments in other Loan
Parties, provided however, that additional loans, advances and investments in
Action Rent-to-Own Holdings of South Carolina, Inc., a South Carolina
corporation, shall be limited to $500,000 in the aggregate; and .........(vi)
the existing investment of $7,500,000 for the seventy percent (70%) ownership
interest of the Borrower in dPi Teleconnect, L.L.C., a Delaware limited
liability company ("dPi"), and loans and advances not in excess of $4,350,000 to
dPi, provided however, that the Loan Parties' ownership interests in dPi and the
note obligations of dPi to the Loan Parties shall continue to be pledged to the
Administrative Agent for the benefit of the Lenders. For purposes of this Credit
Agreement, the financial results of dPi shall be included in the consolidated
financial statements of the Borrower, as determined and consolidated in
accordance with GAAP, but dPi shall not otherwise constitute a Subsidiary
subject to the terms and conditions of this Credit Agreement and the Loan
Documents which relate to the Subsidiaries of the Loan Parties.
8.2.5 Dividends and Related Distributions.
-----------------------------------
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, make or pay, or agree to become or remain
liable to make or pay, any dividend or other distribution of any nature (whether
in cash, property, securities or otherwise) on account of or in respect of its
shares of capital stock, partnership interests or limited liability company
interests on account of the purchase, redemption, retirement or acquisition of
its shares of capital stock (or warrants, options or rights therefor),
partnership interests or limited liability company interests, except that the
Loan Parties may make dividends or other distributions payable to another Loan
Party.
8.2.6 Liquidations, Mergers, Consolidations,
Acquisitions.
--------------------------------------
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, dissolve, liquidate or wind-up its affairs,
or become a party to any merger or consolidation, or acquire by purchase, lease
or otherwise all or substantially all of the assets or capital stock of any
other Person, provided that
(1) any Loan Party other than the Borrower and
the Co-Borrower may consolidate or merge into another Loan Party which is
wholly-owned by one or more of the other Loan Parties, provided, that Borrower
and the Co-Borrower shall deliver to the Administrative Agent copies of the
applicable merger or consolidation documentation within five (5) Business Days
after the effective date of such merger or consolidation and the appropriate
Loan Parties shall promptly thereafter (but in no event in less than five (5)
Business Days after the Administrative Agent's request therefore) execute and
deliver to the Administrative Agent new UCC-1 financing statements or amendments
to filed UCC-1 financing statements, as appropriate in the discretion of the
Administrative Agent, and take such other action as is necessary to maintain
first priority Liens in the assets of the parties to such merger or
consolidation;
(2) with the prior written consent of all the
Lenders, any Loan Party may acquire, whether by purchase or by merger, (A) all
of the ownership interests of another Person or (B) substantially all of assets
of another Person or of a business or division of another Person (each an
"Permitted Acquisition"), provided that each of the following requirements is
met:
(i) such Person shall be a corporation,
limited liability company or other entity with respect to applicable state law
providing that the owners of all stock or other ownership interests in such
entity shall not be liable for any obligations of such entity or for the claims
of any creditors thereof,
(ii) if the Loan Parties are acquiring the
ownership interests in such Person, such Person shall execute a Guarantor
Joinder and join this Agreement as a Guarantor pursuant to Section 11.18 and
such Person and its owners shall grant Liens in the assets and stock or other
ownership interests in such Person and otherwise comply with Section 11.18 on or
before the date of such Permitted Acquisition,
(iii) the board of directors or other
equivalent governing body of such Person shall have approved such Permitted
Acquisition and the Loan Parties shall have delivered to the Lenders written
evidence of such approval prior to such Permitted Acquisition,
(iv) the business acquired, or the business
conducted by the Person whose ownership interests are being acquired, as
applicable, (x) shall be substantially the same as the Line of Business (y)
shall have Consolidated Cash Flow from Operations, as measured for the four
fiscal quarters of such business preceding the date of the acquisition, of at
least $1.00, and (z) shall comply with Section 8.2.10,
(v) no Potential Default or Event of Default
shall exist immediately prior to and after giving effect to such Permitted
Acquisition,
(vi) the Borrower and the Co-Borrower shall
have given the Administrative Agent quarterly compliance certificate of the
Borrower in the form of Exhibit 8.3.4 which evidences that after giving effect
to the Permitted Acquisition and any Loans to be made in connection therewith,
the Borrower is not in default with respect the covenants set forth in Section
8.2.16,
(vii) any Consideration given by the Loan
Parties in the form of Indebtedness to be paid at a date after the closing date
of the Permitted Acquisition shall be subordinated to the Loans and other
Obligations on terms and conditions satisfactory to the Administrative Agent,
and
(viii) the Loan Parties shall have delivered
to the Lenders such opinions of counsel in form and substance satisfactory to
the Administrative Agent or such other evidence as shall be satisfactory to the
Administrative Agent in its sole discretion that the Loan Parties are in
compliance with all applicable Law in any additional states in which the Loan
Parties do business after the consummation of the Permitted Acquisition; and
(3) the Borrower or the Co-Borrower may acquire
assets of retail store sites from Persons in the same Line of Business as the
Loan Parties in the ordinary course of business as permitted under Section
8.2.7(iv).
8.2.7 Dispositions of Assets or Subsidiaries.
--------------------------------------
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, sell, convey, assign, lease, abandon or
otherwise transfer or dispose of, voluntarily or involuntarily, any of its
properties or assets, tangible or intangible (including sale, assignment,
discount or other disposition of accounts, contract rights, chattel paper,
equipment or general intangibles with or without recourse or of capital stock,
shares of beneficial interest, partnership interests or limited liability
company interests of a Subsidiary of such Loan Party), except:
(i) transactions involving the sale of inventory
in the ordinary course of business;
(ii) any sale, transfer, rental or lease of
assets in the ordinary course of business which are no longer necessary or
required in the conduct of such Loan Party's or such Subsidiary's business,
including, without limitation, assets relating to closings of retail store sites
of the Loan Parties, so long as the net after-tax cash proceeds (as reasonably
estimated by the Borrower and the Co-Borrower) are applied as a mandatory
prepayment of the Term Loans in accordance with the provisions of Section 5.5.2;
(iii) any sale, transfer or lease of assets by
any wholly owned Subsidiary of such Loan Party to another Loan Party;
(iv) any sale, transfer or lease of assets in
the ordinary course of business which are replaced by substitute assets acquired
or leased within the parameters of Section 8.2.15, including, without
limitation, the exchange of assets of retail store sites of the Loan Parties for
assets of retail store sites of Persons in the same Line of Business as the Loan
Parties, provided (x) such substitute assets are subject to the Lenders' Prior
Security Interest and (y) the net after-tax cash proceeds, if any (as reasonably
estimated by the Borrower and the Co-Borrower) are applied as a mandatory
prepayment of the Term Loans in accordance with the provisions of Section 5.5.2
above; or
(v) any sale, transfer or lease of assets, other
than those specifically excepted pursuant to clauses (i) through (iv) above,
which is approved by the Required Lenders so long as the after-tax proceeds (as
reasonably estimated by the Borrower and the Co-Borrower) are applied as a
mandatory prepayment of the Term Loans in accordance with the provisions of
Section 5.5.2 above.
8.2.8 Affiliate Transactions.
----------------------
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, enter into or carry out any transaction
(including purchasing property or services from or selling property or services
to any Affiliate of any Loan Party or other Person) unless such transaction is
not otherwise prohibited by this Agreement, is entered into in the ordinary
course of business upon fair and reasonable arm's-length terms and conditions
which are fully disclosed to the Administrative Agent and is in accordance with
all applicable Law.
8.2.9 Subsidiaries, Partnerships and Joint Ventures.
---------------------------------------------
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, own or create directly or indirectly any
Subsidiaries other than (i) any Subsidiary which has joined this Agreement as
Guarantor on the Closing Date; (ii) any Subsidiary formed after the Closing Date
which joins this Agreement as a Guarantor pursuant to Section 11.18, provided
that the Required Lenders shall have consented to such formation and joinder and
that such Subsidiary and the Loan Parties, as applicable, shall grant and cause
to be perfected first priority Liens to the Administrative Agent for the benefit
of the Lenders in the assets held by, and stock of or other ownership interests
in, such Subsidiary; and (iii) the investment in dPi permitted in accordance
with Section 8.2.4(vi). Each of the Loan Parties shall not become or agree to
(1) become a general or limited partner in any general or limited partnership,
except that the Loan Parties may be general or limited partners in other Loan
Parties, (2) become a member or manager of, or hold a limited liability company
interest in, a limited liability company (other than the investment in dPi
permitted in accordance with Section 8.2.4(vi)), except that the Loan Parties
may be members or managers of, or hold limited liability company interests in,
other Loan Parties, or (3) become a joint venturer or hold a joint venture
interest in any joint venture.
8.2.10 Continuation of or Change in Business.
-------------------------------------
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than the Line of
Business substantially as conducted and operated by such Loan Party or
Subsidiary during the present fiscal year, and such Loan Party or Subsidiary
shall not permit any material change in such business.
8.2.11 Plans and Benefit Arrangements.
------------------------------
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to:
(i) fail to satisfy the minimum funding
requirements of ERISA and the Internal Revenue Code with respect to any Plan;
(ii) request a minimum funding waiver from the
Internal Revenue Service with respect to any Plan;
(iii) engage in a Prohibited Transaction with
any Plan, Benefit Arrangement or Multiemployer Plan which, alone or in
conjunction with any other circumstances or set of circumstances resulting in
liability under ERISA, would constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present
value of all benefit liabilities (whether or not vested) under each Plan,
determined on a plan termination basis, as disclosed in the most recent
actuarial report completed with respect to such Plan, to exceed, as of any
actuarial valuation date, the fair market value of the assets of such Plan;
(v) fail to make when due any contribution to
any Multiemployer Plan that the Borrower or any member of the ERISA Group may be
required to make under any agreement relating to such Multiemployer Plan, or any
Law pertaining thereto;
(vi) withdraw (completely or partially) from any
Multiemployer Plan or withdraw (or be deemed under Section 4062(e) of ERISA to
withdraw) from any Multiple Employer Plan, where any such withdrawal is likely
to result in a material liability of the Borrower or any member of the ERISA
Group;
(vii) terminate, or institute proceedings to
terminate, any Plan, where such termination is likely to result in a material
liability to the Borrower or any member of the ERISA Group;
(viii) make any amendment to any Plan with
respect to which security is required under Section 307 of ERISA; or
(ix) fail to give any and all notices and make
all disclosures and governmental filings required under ERISA or the Internal
Revenue Code, where such failure is likely to result in a Material Adverse
Change.
8.2.12 Fiscal Year.
-----------
The Borrower and the Co-Borrower shall not, and shall
not permit any Subsidiary of the Borrower to, change its fiscal year from the
twelve-month period beginning October 1 and ending September 30.
8.2.13 Issuance of Stock.
-----------------
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, issue any additional shares of its capital
stock or any options, warrants or other rights in respect thereof, except that
the Borrower may issue additional Shares of capital stock and warrants (i) for
Permitted Acquisitions in accordance with the provisions of Section 8.2.6(2),
(ii) for distribution to employees as provided for under the stock option plans
and 401(k) plans set forth on Schedule 6.1.21 as in effect on the Closing Date,
(iii) in connection with the Mass Mutual Warrants, (iv) pursuant to the
requirements of Section 8.1.14, and (v) if the net cash proceeds of the issuance
are used by the Borrower to reduce (a) the Loans outstanding under this
Agreement, and (b) the Commitments of the Lenders.
8.2.14 Changes in Organizational Documents.
-----------------------------------
Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, amend in any respect its certificate or
articles of incorporation (including any provisions or resolutions relating to
capital stock), by-laws, certificate of limited partnership, partnership
agreement, certificate of formation, articles of organization, operating
agreement, regulations or other organizational documents without providing at
least thirty (30) calendar days' prior written notice to the Administrative
Agent and the Lenders and, in the event such change would be adverse to the
Lenders as determined by the Administrative Agent in its sole discretion,
obtaining the prior written consent of the Required Lenders.
8.2.15 Capital Expenditures and Leases.
-------------------------------
Excluding the purchase of Rental Merchandise, each of
the Loan Parties shall not, and shall not permit any of its Subsidiaries to,
make any payments exceeding $20,000,000 in the aggregate in any fiscal year on
account of the purchase or lease of any assets which if purchased would
constitute fixed assets or which if leased would constitute a capitalized lease,
or any payments exceeding $1,000,000 in the aggregate in any fiscal year on
account of the rental or lease of real or personal property of any other Person
which does not constitute a capitalized lease (other than leases of retail store
sites and motor vehicles), and all such capital expenditures and leases shall be
made under usual and customary terms and in the ordinary course of business.
8.2.16 Maximum Leverage Ratio (Total Funded Debt).
------------------------------------------
The Loan Parties shall not permit the Leverage Ratio of
the Borrower and its Subsidiaries, as calculated at the end of each fiscal
quarter of the Borrower, to exceed the ratios set forth below for the applicable
periods set forth below.
Period Ratio
12/31/01 5.75 to 1.00
3/31/02 4.50 to 1.00
6/30/02 4.00 to 1.00
9/30/02 through 3/31/03 3.50 to 1.00
6/30/03 3.25 to 1.00
9/30/03 and thereafter 3.00 to 1.00
In calculating the Leverage Ratio, (x) the Consolidated
Cash Flow from Operations included in such calculation shall be determined as
follows: (i) at December 31, 2001, for the fiscal quarter then ended, multiplied
by four, (ii) at March 31, 2002, for the two fiscal quarters then ended
multiplied by two, (iii) at June 30, 2002, for the three fiscal quarters then
ended, multiplied by 1.33, and (iv) at September 30, 2002, and at the end of
each fiscal quarter thereafter, for the four fiscal quarters then ended, and (y)
Occupancy Expense included in such shall calculation shall be determined as
follows: (i) at December 31, 2001, for the fiscal quarter then ended, multiplied
by four, which product is then multiplied by three, (ii) at March 31, 2002, for
the two fiscal quarters then ended multiplied by two, which product is then
multiplied by three (iii) at June 30, 2002, for the three fiscal quarters then
ended, multiplied by 1.33, which product is then multiplied by three, and (iv)
at September 30, 2002, and at the end of each fiscal quarter thereafter, for the
four fiscal quarters then ended, multiplied by three.
8.2.17 [Intentionally Omitted].
-----------------------
8.2.18 Minimum Interest Coverage Ratio.
-------------------------------
The Loan Parties shall not permit the Interest Coverage
Ratio of the Borrower and its Subsidiaries, as calculated at the end of each
fiscal quarter of the Borrower, to be less than the ratios set forth below for
the applicable periods set forth below.
Period Ratio
Closing Date through 12/31/01 Not applicable
3/31/02 through 6/30/02 1.00 to 1.00
9/30/02 through 12/31/02 1.25 to 1.00
3/31/03 and thereafter 1.50 to 1.00
In calculating the Interest Coverage Ratio, the
Consolidated Adjusted Cash Flow from Operations and interest expense included in
such calculation shall be measured as follows: (i) at March 31, 2002, for the
two fiscal quarters then ended, (ii) at June 30, 2002, for the three fiscal
quarters then ended, and (iii) at September 30, 2002, and at the end of each
fiscal quarter thereafter, for the four fiscal quarters then ended.
8.2.19 Minimum Net Worth.
-----------------
The Borrower shall not at any time permit Consolidated
Net Worth to be less than the Base Net Worth.
8.2.20 Fixed Charge Coverage Ratio.
---------------------------
The Loan Parties shall not permit the Fixed Charge
Coverage Ratio of the Borrower and its Subsidiaries, as calculated at the end of
each fiscal quarter of the Borrower, to be less than the ratios set forth below
for the applicable periods set forth below.
Period Ratio
Closing Date through 12/31/01 Not applicable
3/31/02 through 6/30/02 0.75 to 1.00
9/30/02 and thereafter 1.00 to 1.00
In calculating the Fixed Charge Coverage Ratio, the
Consolidated Cash Flow from Operations and the Fixed Charges expense included in
such calculation shall be measured as follows: (i) at March 31, 2002, for the
two fiscal quarters then ended, (ii) at June 30, 2002, for the three fiscal
quarters then ended, and (iii) at September 30, 2002, and at the end of each
fiscal quarter thereafter, for the four fiscal quarters then ended.
8.2.21 Rental Merchandise Usage.
------------------------
The Loan Parties shall not permit the value of the
Rental Merchandise under lease pursuant to Rental Contracts to be less than 77%
of the total value of Rental Merchandise held for rental under rental contracts,
as measured at the end of each fiscal quarter of the Borrower commencing
September 30, 2001 and thereafter. For purposes of this Section 8.2.21, the
value of the Rental Merchandise shall be as it is recorded on the books and
records of the Loan Parties, determined in accordance with GAAP and the value of
any jewelry shall be excluded from all calculations made. The Loan Parties shall
not permit the value of idle jewelry to exceed 7.5% of the total value of Rental
Merchandise, as measured at the end of each fiscal quarter of the Borrower
commencing September 30, 2001.
8.3 Reporting Requirements.
----------------------
The Loan Parties, jointly and severally, covenant and agree
that until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings and interest thereon, expiration or termination of all Letters
of Credit, satisfaction of all of the Loan Parties' other Obligations hereunder
and under the other Loan Documents and termination of the Commitments, the Loan
Parties will furnish or cause to be furnished to the Administrative Agent and
each of the Lenders:
8.3.1 Monthly Financial Statements.
----------------------------
As soon as available and in any event within thirty
(30) calendar days after the end of each calendar month, the Borrower's
financial statements, consisting of a consolidated and consolidating balance
sheet as of the end of such month and related consolidated and consolidating
statements of income, stockholders' equity and cash flows for the month then
ended and the fiscal year through that date, all in reasonable detail and
certified (subject to normal year-end adjustments) by the Chief Executive
Officer, President or Chief Financial Officer of the Borrower as having been
prepared in accordance with GAAP, consistently applied, and setting forth in
comparative form the respective financial statements for the corresponding date
and period in the previous fiscal year.
8.3.2 Quarterly Financial Statements.
------------------------------
As soon as available and in any event within forty-five
(45) calendar days after the end of each of the first three fiscal quarters in
each fiscal year, the quarterly report of Form 10-Q for the Borrower and its
consolidated financial statements, consisting of a consolidated and
consolidating balance sheet as of the end of such fiscal quarter and related
consolidated and consolidating statements of income, stockholders' equity and
cash flows for the fiscal quarter then ended and the fiscal year through that
date, all in reasonable detail and certified (subject to normal year-end audit
adjustments) by the Chief Executive Officer, President or Chief Financial
Officer of the Borrower as having been prepared in accordance with GAAP,
consistently applied, and setting forth in comparative form the respective
financial statements for the corresponding date and period in the previous
fiscal year.
8.3.3 Annual Financial Statements.
---------------------------
As soon as available and in any event within ninety
(90) days after the end of each fiscal year of the Borrower, the annual report
on Form 10-K for the Borrower and its consolidated financial statements,
consisting of a consolidated and consolidating balance sheet as of the end of
such fiscal year, and related consolidated and consolidating statements of
income, stockholders' equity and cash flows for the fiscal year then ended, all
in reasonable detail and setting forth in comparative form the financial
statements as of the end of and for the preceding fiscal year, and certified by
PriceWaterhouseCoopers L.L.P. or such other independent certified public
accountants of comparable nationally recognized standing satisfactory to the
Administrative Agent in its reasonable judgment. The consolidating statement of
income shall include a schedule detailing the income by each retail location of
the Loan Parties. The certificate or report of accountants shall be free of
qualifications (other than any consistency qualification that may result from a
change in the method used to prepare the financial statements as to which such
accountants concur) and shall not indicate the occurrence or existence of any
event, condition or contingency which would materially impair the prospect of
payment or performance of any covenant, agreement or duty of any Loan Party
under any of the Loan Documents. The Loan Parties shall deliver with such
financial statements and certification by their accountants a letter of such
accountants to the Administrative Agent and the Lenders substantially (i) to the
effect that, based upon their ordinary and customary examination of the affairs
of the Borrower, performed in connection with the preparation of such
consolidated financial statements, and in accordance with generally accepted
auditing standards, they are not aware of the existence of any condition or
event which constitutes an Event of Default or Potential Default or, if they are
aware of such condition or event, stating the nature thereof and confirming the
Borrower's calculations with respect to the certificate to be delivered pursuant
to Section 8.3.4 with respect to such financial statements and (ii) to the
effect that the Lenders are intended to rely upon such accountant's
certification of the annual financial statements and that such accountants
authorize the Loan Parties to deliver such reports and certificate to the
Lenders on such accountants' behalf.
8.3.4 Certificate of the Borrower.
---------------------------
Concurrently with the financial statements of the
Borrower furnished to the Administrative Agent and to the Lenders pursuant to
Sections 8.3.2 and 8.3.3, a certificate of the Borrower signed by the Chief
Executive Officer, President or Chief Financial Officer of the Borrower, in the
form of Exhibit 8.3.4, to the effect that, except as described pursuant to
Section 8.3.6, (i) the representations and warranties of the Borrower contained
in Section 6 and in the other Loan Documents are true on and as of the date of
such certificate with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which expressly relate solely to an earlier date or time) and the
Loan Parties have performed and complied with all covenants and conditions
hereof, (ii) no Event of Default or Potential Default exists and is continuing
on the date of such certificate and (iii) containing calculations in sufficient
detail to demonstrate compliance as of the date of such financial statements
with all financial covenants contained in Section 8.2.
8.3.5 Weekly Cash Flow Forecast.
-------------------------
At least once each week and as otherwise requested by
the Administrative Agent, provide to the Lenders a forecast which details the
Loan Parties' anticipated cash flows, including without limitation, anticipated
receipts, expenditures and borrowings of Revolving Credit Loans. Each such
forecast shall be accompanied by a summary report of the Loan Parties of the
actual receipts, expenditures and borrowings of Revolving Credit Loans for the
previous week and a comparison of such results to the forecast previously
delivered for such week. Each cash flow forecast shall provide a forecast for
the next succeeding four weeks.
8.3.6 Notice of Default.
-----------------
Promptly after any officer of any Loan Party has
learned of the occurrence of an Event of Default or Potential Default, a
certificate signed by the Chief Executive Officer, President or Chief Financial
Officer of such Loan Party setting forth the details of such Event of Default or
Potential Default and the action which the such Loan Party proposes to take with
respect thereto.
8.3.7 Notice of Litigation.
--------------------
Promptly after any Loan Party receives notice of the
commencement thereof, notice of all actions, suits, proceedings or
investigations before or by any Official Body or any other Person against any
Loan Party or Subsidiary of any Loan Party which relate to the Collateral,
involve a claim or series of claims in excess of $100,000 or which if adversely
determined would constitute a Material Adverse Change; within forty-five (45)
calendar days after the end of each fiscal quarter in each fiscal year, a
litigation report in form satisfactory to the Agent which provides the status of
all litigation in which any Loan Party is a defendant for which the amount at
issue, individually or in the aggregate, is in excess of $1,000,000.
8.3.8 Certain Events.
--------------
Written notice to the Administrative Agent:
(i) at least fourteen (14) calendar days prior
thereto, with respect to any proposed sale or transfer of assets pursuant to
Section 8.2.7(ii),(iv) or (v);
(ii) within the time limits set forth in Section
8.2.14, any amendment to the organizational documents of any Loan Party;
(iii) at least fourteen (14) calendar days prior
thereto, with respect to any change in any Loan Party's locations from the
locations set forth in Schedule A to the Security Agreement, other than changes
resulting from the consummation of a Permitted Acquisition; and
(iv) at least five (5) calendar days prior
thereto, with respect to any change in any Loan Party's locations from the
locations set forth in Schedule A to the Security Agreement resulting from the
consummation of a Permitted Acquisition.
8.3.9 Budgets, Forecasts, Other Reports and Information
-------------------------------------------------
Promptly upon becoming available to the Borrower:
(i) the annual budget and any forecasts or
projections of the Borrower, to be supplied not later than sixty (60) days prior
to commencement of the fiscal year to which any of the foregoing may be
applicable,
(ii) any reports including management letters
submitted to the Borrower by independent accountants in connection with any
annual, interim or special audit,
(iii) any reports, notices or proxy statements
generally distributed by the Borrower to its stockholders on a date no later
than the date supplied to such stockholders,
(iv) regular or periodic reports, including
Forms 10-K, 10-Q and 8-K, registration statements and prospectuses, filed by the
Borrower with the Securities and Exchange Commission,
(v) a copy of any order in any proceeding to
which the Borrower or any of its Subsidiaries is a party issued by any Official
Body, and
(vi) such other reports and information as any
of the Lenders may from time to time reasonably request. The Borrower shall also
notify the Lenders promptly of the enactment or adoption of any Law which may
result in a Material Adverse Change.
8.3.10 Notices Regarding Plans and Benefit Arrangements
------------------------------------------------
8.3.10.1 Certain Events.
--------------
Promptly upon becoming aware of the occurrence
thereof, notice (including the nature of the event and, when known, any action
taken or threatened by the Internal Revenue Service or the PBGC with respect
thereto) of:
(i) any Reportable Event with respect to the
Borrower or any other member of the ERISA Group (regardless of whether the
obligation to report said Reportable Event to the PBGC has been waived),
(ii) any Prohibited Transaction which could
subject the Borrower or any other member of the ERISA Group to a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Internal Revenue Code in connection with any Plan, any Benefit Arrangement
or any trust created thereunder,
(iii) any assertion of material withdrawal
liability with respect to any Multiemployer Plan,
(iv) any partial or complete withdrawal from a
Multiemployer Plan by the Borrower or any other member of the ERISA Group under
Title IV of ERISA (or assertion thereof), where such withdrawal is likely to
result in material withdrawal liability,
(v) any cessation of operations (by the Borrower
or any other member of the ERISA Group) at a facility in the circumstances
described in Section 4062(e) of ERISA,
(vi) withdrawal by the Borrower or any other
member of the ERISA Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or any other
member of the ERISA Group to make a payment to a Plan required to avoid
imposition of a Lien under Section 302(f) of ERISA,
(viii) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA, or
(ix) any change in the actuarial assumptions or
funding methods used for any Plan, where the effect of such change is to
materially increase or materially reduce the unfunded benefit liability or
obligation to make periodic contributions.
8.3.10.2 Notices of Involuntary Termination and
Annual Reports.
--------------------------------------
Promptly after receipt thereof, copies of (a)
all notices received by the Borrower or any other member of the ERISA Group of
the PBGC's intent to terminate any Plan administered or maintained by the
Borrower or any member of the ERISA Group, or to have a trustee appointed to
administer any such Plan; and (b) at the request of the Administrative Agent or
any Lender each annual report (IRS Form 5500 series) and all accompanying
schedules, the most recent actuarial reports, the most recent financial
information concerning the financial status of each Plan administered or
maintained by the Borrower or any other member of the ERISA Group, and schedules
showing the amounts contributed to each such Plan by or on behalf of the
Borrower or any other member of the ERISA Group in which any of their personnel
participate or from which such personnel may derive a benefit, and each Schedule
B (Actuarial Information) to the annual report filed by the Borrower or any
other member of the ERISA Group with the Internal Revenue Service with respect
to each such Plan.
8.3.10.3 Notice of Voluntary Termination.
-------------------------------
Promptly upon the filing thereof, copies of any
Form 5310, or any successor or equivalent form to Form 5310, filed with the PBGC
in connection with the termination of any Plan.
9. DEFAULT
-------
9.1 Events of Default.
-----------------
An Event of Default shall mean the occurrence or existence
of any one or more of the following events or conditions (whatever the reason
therefor and whether voluntary, involuntary or effected by operation of Law):
9.1.1 Payments Under Loan Documents.
-----------------------------
The Borrower or either Co-Borrower shall fail to pay
any principal of any Loan (including mandatory prepayments or the payment due at
maturity), Reimbursement Obligation or Letter of Credit Borrowing or any other
amount owing hereunder or under the other Loan Documents after such principal or
other amount becomes due in accordance with the terms hereof or thereof, or the
Borrower or either Co-Borrower shall fail to pay any interest on any Loan,
Reimbursement Obligation or Letter of Credit Borrowing within five calendar days
after such interest becomes due in accordance with the terms hereof;
9.1.2 Breach of Warranty.
------------------
Any representation or warranty made at any time by any
of the Loan Parties herein or by any of the Loan Parties in any other Loan
Document, or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time it was made or furnished;
9.1.3 Breach of Negative Covenants or Visitation Rights
-------------------------------------------------
Any of the Loan Parties shall default in the observance
or performance of any covenant contained in Section 8.1.6, 8.1.14 or Section
8.2;
9.1.4 Breach of Other Covenants.
-------------------------
Any of the Loan Parties shall default in the observance
or performance of any other covenant, condition or provision hereof or of any
other Loan Document and such default shall continue unremedied for a period of
ten (10) Business Days after any officer of any Loan Party becomes aware of the
occurrence thereof (such grace period to be applicable only in the event such
default can be remedied by corrective action of the Loan Parties as determined
by the Administrative Agent in its sole discretion);
9.1.5 Defaults in Other Agreements or Indebtedness.
--------------------------------------------
A default or event of default shall occur at any time
under the terms of any other agreement involving borrowed money or the extension
of credit or any other Indebtedness under which any Loan Party or Subsidiary of
any Loan Party may be obligated as a borrower or guarantor in excess of $300,000
in the aggregate, and such breach, default or event of default consists of the
failure to pay (beyond any period of grace permitted with respect thereto,
whether waived or not) any indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or if such breach or default permits or causes the
acceleration of any indebtedness (whether or not such right shall have been
waived) or the termination of any commitment to lend;
9.1.6 Final Judgments or Orders.
-------------------------
Any final judgments or orders for the payment of money
in excess of $100,000 in the aggregate shall be entered against any Loan Party
by a court having jurisdiction in the premises, which judgment is not
discharged, vacated, bonded or stayed pending appeal within a period of thirty
(30) days from the date of entry, or any one or more of the Loan Parties shall
be liable and obligated to pay cash on account of any judgments or settlements
of claims and lawsuits which individually or in the aggregate exceed the
insurance coverage available for such judgments or settlements by an amount in
excess of $1,000,000;
9.1.7 Loan Document Unenforceable.
---------------------------
Any of the Loan Documents shall cease to be legal,
valid and binding agreements enforceable against the party executing the same or
such party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof or shall in any way be terminated
(except in accordance with its terms) or become or be declared ineffective or
inoperative or shall in any way be challenged or contested or cease to give or
provide the respective Liens, security interests, rights, titles, interests,
remedies, powers or privileges intended to be created thereby;
9.1.8 Uninsured Losses; Proceedings Against Assets.
--------------------------------------------
There shall occur any material uninsured damage to or
loss, theft or destruction of any of the Collateral in excess of $250,000 or the
Collateral or any other of the Loan Parties' or any of their Subsidiaries'
assets are attached, seized, levied upon or subjected to a writ or distress
warrant; or such come within the possession of any receiver, trustee, custodian
or assignee for the benefit of creditors and the same is not cured within thirty
(30) days thereafter;
9.1.9 Notice of Lien or Assessment.
----------------------------
A notice of Lien or assessment in excess of $100,000
which is not a Permitted Lien is filed of record with respect to all or any part
of any of the Loan Parties' or any of their Subsidiaries' assets by the United
States, or any department, agency or instrumentality thereof, or by any state,
county, municipal or other governmental agency, including the PBGC, or any taxes
or debts owing at any time or times hereafter to any one of these becomes
payable and the same is not paid within thirty (30) days after the same becomes
payable;
9.1.10 Insolvency.
----------
Any Loan Party or any Subsidiary of a Loan Party ceases
to be solvent or admits in writing its inability to pay its debts as they
mature;
9.1.11 Events Relating to Plans and Benefit Arrangements
-------------------------------------------------
Any of the following occurs: (i) any Reportable Event,
which the Administrative Agent determines in good faith constitutes grounds for
the termination of any Plan by the PBGC or the appointment of a trustee to
administer or liquidate any Plan, shall have occurred and be continuing; (ii)
proceedings shall have been instituted or other action taken to terminate any
Plan, or a termination notice shall have been filed with respect to any Plan;
(iii) a trustee shall be appointed to administer or liquidate any Plan; (iv) the
PBGC shall give notice of its intent to institute proceedings to terminate any
Plan or Plans or to appoint a trustee to administer or liquidate any Plan; and,
in the case of the occurrence of (i), (ii), (iii) or (iv) above, the
Administrative Agent determines in good faith that the amount of the Borrower's
or either Co-Borrower's liability is likely to exceed 10% of Consolidated Net
Worth less intangibles; (v) the Borrower or any member of the ERISA Group shall
fail to make any contributions when due to a Plan or a Multiemployer Plan; (vi)
the Borrower or any other member of the ERISA Group shall make any amendment to
a Plan with respect to which security is required under Section 307 of ERISA;
(vii) the Borrower or any other member of the ERISA Group shall withdraw
completely or partially from a Multiemployer Plan; (viii) the Borrower or any
other member of the ERISA Group shall withdraw (or shall be deemed under Section
4062(e) of ERISA to withdraw) from a Multiple Employer Plan; or (ix) any
applicable Law is adopted, changed or interpreted by any Official Body with
respect to or otherwise affecting one or more Plans, Multiemployer Plans or
Benefit Arrangements and, with respect to any of the events specified in (v),
(vi), (vii), (viii) or (ix), the Administrative Agent determines in good faith
that any such occurrence would be reasonably likely to materially and adversely
affect the total enterprise represented by the Borrower and the other members of
the ERISA Group;
9.1.12 Cessation of Business.
---------------------
Any Loan Party or Subsidiary of a Loan Party ceases to
conduct its business as contemplated, except as expressly permitted under
Section 8.2.6 or 8.2.7, or any Loan Party or Subsidiary of a Loan Party is
enjoined, restrained or in any way prevented by court order from conducting all
or any material part of its business and such injunction, restraint or other
preventive order is not dismissed within thirty (30) days after the entry
thereof;
9.1.13 Change of Control.
-----------------
(i) An Acquiring Person shall have acquired, or
obtained the right to acquire, legal or beneficial ownership of 50% or more of
the outstanding shares of the Voting Stock of the Borrower; (ii) all the
outstanding partnership interests and capital stock, as the case may be, of
either Co-Borrower shall cease to be owned beneficially and of record by the
Borrower, the Borrower's direct and indirect wholly-owned Subsidiaries or some
combination of the foregoing, or (iii) within a period of twelve (12)
consecutive calendar months, individuals who were directors of the Borrower on
the first day of such period shall cease to constitute a majority of the board
of directors of the Borrower;
9.1.14 Involuntary Proceedings.
-----------------------
A proceeding shall have been instituted in a court
having jurisdiction in the premises seeking a decree or order for relief in
respect of any Loan Party or Subsidiary of a Loan Party in an involuntary case
under any applicable bankruptcy, insolvency, reorganization or other similar law
now or hereafter in effect, or for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator, conservator (or similar official) of
any Loan Party or Subsidiary of a Loan Party for any substantial part of its
property, or for the winding-up or liquidation of its affairs, and such
proceeding shall remain undismissed or unstayed and in effect for a period of
thirty (30) consecutive days or such court shall enter a decree or order
granting any of the relief sought in such proceeding; or
9.1.15 Voluntary Proceedings.
---------------------
Any Loan Party or Subsidiary of a Loan Party shall
commence a voluntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect, shall consent to
the entry of an order for relief in an involuntary case under any such law, or
shall consent to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator, conservator (or other similar
official) of itself or for any substantial part of its property or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any action in furtherance of any of
the foregoing.
9.2 Consequences of Event of Default.
--------------------------------
9.2.1 Events of Default Other Than Bankruptcy,
Insolvency or Reorganization Proceedings.
-----------------------------------------
If an Event of Default specified under Sections 9.1.1
through 9.1.13 shall occur and be continuing, the Lenders and the Administrative
Agent shall be under no further obligation to make Loans or issue Letters of
Credit, as the case may be, and the Administrative Agent may, and upon the
request of the Required Lenders, shall (i) by written notice to the Borrower and
the Co-Borrower, declare the unpaid principal amount of the Notes then
outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower and the Co-Borrower to the Lenders hereunder and
thereunder to be forthwith due and payable, and the same shall thereupon become
and be immediately due and payable to the Administrative Agent for the benefit
of each Lender without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived, and (ii) require the Borrower
and the Co-Borrower to, and the Borrower and the Co-Borrower shall thereupon,
deposit in a non-interest bearing account with the Administrative Agent, as cash
collateral for its Obligations under the Loan Documents, an amount equal to the
maximum amount currently or at any time thereafter available to be drawn on all
outstanding Letters of Credit, and the Borrower and the Co-Borrower hereby
pledge to the Administrative Agent and the Lenders, and grants to the
Administrative Agent and the Lenders a security interest in, all such cash as
security for such Obligations. Upon the curing of all existing Events of Default
to the satisfaction of the Required Lenders, the Administrative Agent shall
return such cash collateral to the Borrower and the Co-Borrower; and
9.2.2 Bankruptcy, Insolvency or Reorganization
Proceedings.
----------------------------------------
If an Event of Default specified under Section 9.1.14
or 9.1.15 shall occur, the Lenders shall be under no further obligations to make
Loans hereunder and the unpaid principal amount of the Notes then outstanding
and all interest accrued thereon, any unpaid fees and all other Indebtedness of
the Borrower and the Co-Borrower to the Lenders hereunder and thereunder shall
be immediately due and payable, without presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived; and
9.2.3 Set-off.
-------
If an Event of Default shall occur and be continuing,
any Lender to whom any Obligation is owed by any Loan Party hereunder or under
any other Loan Document or any participant of such Lender which has agreed in
writing to be bound by the provisions of Section 10.13 and any branch,
Subsidiary or Affiliate of such Lender or participant anywhere in the world
shall have the right, in addition to all other rights and remedies available to
it, without notice to such Loan Party, to set-off against and apply to the then
unpaid balance of all the Loans and all other Obligations of the Borrower and
the Co-Borrower and the other Loan Parties hereunder or under any other Loan
Document any debt owing to, and any other funds held in any manner for the
account of, the Borrower, the Co-Borrower or such other Loan Party by such
Lender or participant or by such branch, Subsidiary or Affiliate, including all
funds in all deposit accounts (whether time or demand, general or special,
provisionally credited or finally credited, or otherwise) now or hereafter
maintained by the Borrower, the Co-Borrower or such other Loan Party for its own
account (but not including funds held in custodian or trust accounts) with such
Lender or participant or such branch, Subsidiary or Affiliate. Such right shall
exist whether or not any Lender or the Administrative Agent shall have made any
demand under this Agreement or any other Loan Document, whether or not such debt
owing to or funds held for the account of the Borrower, the Co-Borrower or such
other Loan Party is or are matured or unmatured and regardless of the existence
or adequacy of any Collateral, Guaranty or any other security, right or remedy
available to any Lender or the Administrative Agent; and
9.2.4 Suits, Actions, Proceedings.
---------------------------
If an Event of Default shall occur and be continuing,
and whether or not the Administrative Agent shall have accelerated the maturity
of Loans pursuant to any of the foregoing provisions of this Section 9.2, the
Administrative Agent or any Lender, if owed any amount with respect to the
Notes, may proceed to protect and enforce its rights by suit in equity, action
at law and/or other appropriate proceeding, whether for the specific performance
of any covenant or agreement contained in this Agreement or the Notes, including
as permitted by applicable Law the obtaining of the ex parte appointment of a
receiver, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of the Administrative Agent or such Lender; and
9.2.5 Application of Proceeds.
-----------------------
From and after the date on which the Administrative
Agent has taken any action pursuant to this Section 9.2 and until all
Obligations of the Loan Parties have been paid in full, any and all proceeds
received by the Administrative Agent from any sale or other disposition of the
Collateral, or any part thereof, or the exercise of any other remedy by the
Administrative Agent, shall be applied as follows:
(i) first, to reimburse the Administrative Agent
and the Lenders for out-of-pocket costs, expenses and disbursements, including
reasonable attorneys' and paralegals' fees and legal expenses, incurred by the
Administrative Agent or the Lenders in connection with realizing on the
Collateral or collection of any Obligations of any of the Loan Parties under any
of the Loan Documents, including advances made by the Lenders or any one of them
or the Administrative Agent for the reasonable maintenance, preservation,
protection or enforcement of, or realization upon, the Collateral, including
advances for taxes, insurance, repairs and the like and reasonable expenses
incurred to sell or otherwise realize on, or prepare for sale or other
realization on, any of the Collateral;
(ii) second, to the repayment of all
Indebtedness then due and unpaid of the Loan Parties to the Lenders incurred
under this Agreement or any of the other Loan Documents, whether of principal,
interest, fees, expenses or otherwise, in such manner as the Administrative
Agent may determine in its discretion; and
(iii) the balance, if any, as required by Law.
9.2.6 Other Rights and Remedies.
-------------------------
In addition to all of the rights and remedies contained
in this Agreement or in any of the other Loan Documents (including the
Mortgage), the Administrative Agent shall have all of the rights and remedies of
a secured party under the Uniform Commercial Code or other applicable Law, all
of which rights and remedies shall be cumulative and non-exclusive, to the
extent permitted by Law. The Administrative Agent may, and upon the request of
the Required Lenders shall, exercise all post-default rights granted to the
Administrative Agent and the Lenders under the Loan Documents or applicable Law.
9.3 Notice of Sale.
--------------
Any notice required to be given by the Administrative Agent
of a sale, lease, or other disposition of the Collateral or any other intended
action by the Administrative Agent, if given ten (10) days prior to such
proposed action, shall constitute commercially reasonable and fair notice
thereof to the Borrower and the Co-Borrower.
10.THE AGENT
---------
10.1 Appointment.
-----------
Each Lender hereby irrevocably designates, appoints and
authorizes National City to act as Administrative Agent for such Lender under
this Agreement and to execute and deliver or accept on behalf of each of the
Lenders the other Loan Documents. Each Lender hereby irrevocably authorizes, and
each holder of any Note by the acceptance of a Note shall be deemed irrevocably
to authorize, the Administrative Agent to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and any other
instruments and agreements referred to herein, and to exercise such powers and
to perform such duties hereunder as are specifically delegated to or required of
the Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. National City agrees to act as the Administrative
Agent on behalf of the Lenders to the extent provided in this Agreement.
None of the Lenders identified on the facing page or
signature pages of this Agreement as "Documentation Agent" or "Syndication
Agent" shall have any right, power, obligation, liability, responsibility, or
duty under this Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, none of the Lenders so identified as
"Documentation Agent" or "Syndication Agent' shall have or be deemed to have any
fiduciary relationship with any Lender. Each Lender acknowledges that it has not
relied and will not rely on any of the Lenders so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.
10.2 Delegation of Duties.
--------------------
The Administrative Agent may perform any of its duties
hereunder by or through agents or employees (provided such delegation does not
constitute a relinquishment of its duties as Administrative Agent) and, subject
to Sections 10.5 and 10.6, shall be entitled to engage and pay for the advice or
services of any attorneys, accountants or other experts concerning all matters
pertaining to its duties hereunder and to rely upon any advice so obtained.
10.3 Nature of Duties; Independent Credit Investigation.
--------------------------------------------------
The Administrative Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and no
implied covenants, functions, responsibilities, duties, obligations, or
liabilities shall be read into this Agreement or otherwise exist. The duties of
the Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement a fiduciary or
trust relationship in respect of any Lender; and nothing in this Agreement,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement except as
expressly set forth herein. Without limiting the generality of the foregoing,
the use of the term "agent" in this Agreement with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable Law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Each Lender expressly acknowledges (i) that the
Administrative Agent has not made any representations or warranties to it and
that no act by the Administrative Agent hereafter taken, including any review of
the affairs of any of the Loan Parties, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender; (ii) that
it has made and will continue to make, without reliance upon the Administrative
Agent, its own independent investigation of the financial condition and affairs
and its own appraisal of the creditworthiness of each of the Loan Parties in
connection with this Agreement and the making and continuance of the Loans
hereunder; and (iii) except as expressly provided herein, that the
Administrative Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of any Loan or at any time or times thereafter.
10.4 Actions in Discretion of Administrative Agent;
Instructions from the Lenders.
----------------------------------------------
The Administrative Agent agrees, upon the written request of
the Required Lenders, to take or refrain from taking any action of the type
specified as being within the Administrative Agent's rights, powers or
discretion herein, provided that the Administrative Agent shall not be required
to take any action which exposes the Administrative Agent to personal liability
or which is contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Lenders, the Administrative
Agent shall have authority, in its sole discretion, to take or not to take any
such action, unless this Agreement specifically requires the consent of the
Required Lenders or all of the Lenders. Any action taken or failure to act
pursuant to such instructions or discretion shall be binding on the Lenders,
subject to Section 10.6. Subject to the provisions of Section 10.6, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders, or in the absence of
such instructions, in the absolute discretion of the Administrative Agent.
10.5 Reimbursement and Indemnification of
Administrative Agent.
------------------------------------
The Borrower and the Co-Borrower unconditionally agree to
pay or reimburse the Administrative Agent and hold the Administrative Agent
harmless against (a) liability for the payment of all reasonable out-of-pocket
costs, expenses and disbursements, including fees and expenses of counsel
(including the allocated costs of staff counsel), appraisers and environmental
consultants, incurred by the Administrative Agent (i) in connection with the
development, negotiation, preparation, printing, execution, administration,
syndication, interpretation and performance of this Agreement and the other Loan
Documents, (ii) relating to any requested amendments, waivers or consents
pursuant to the provisions hereof, (iii) in connection with the enforcement of
this Agreement or any other Loan Document or collection of amounts due hereunder
or thereunder or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (iv) in any workout or restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or under any other Loan Document or
in connection with any foreclosure, collection or bankruptcy proceedings, and
(b) 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 the
Administrative Agent, in its capacity as such, in any way relating to or arising
out of this Agreement or any other Loan Documents or any action taken or omitted
by the Administrative Agent hereunder or thereunder, provided that the Borrower
and the Co-Borrower shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements if the same results from the Administrative Agent's
gross negligence or willful misconduct, or if the Borrower and the Co-Borrower
were not given notice of the subject claim and the opportunity to participate in
the defense thereof, at their expense (except that the Borrower and the
Co-Borrower shall remain liable to the extent such failure to give notice does
not result in a loss to the Borrower and the Co-Borrower), or if the same
results from a compromise or settlement agreement entered into without the
consent of the Borrower and the Co-Borrower, which shall not be unreasonably
withheld. In addition, the Borrower and the Co-Borrower agree to reimburse and
pay all reasonable out-of-pocket expenses of the Administrative Agent's regular
employees and agents engaged periodically to perform audits of the Loan Parties'
books, records and business properties.
10.6 Exculpatory Provisions; Limitation of Liability.
-----------------------------------------------
Neither the Administrative Agent nor any of its directors,
officers, employees, agents, attorneys or Affiliates shall (a) be liable to any
Lender for any action taken or omitted to be taken by it or them hereunder, or
in connection herewith including pursuant to any Loan Document, unless caused by
its or their own gross negligence or willful misconduct, (b) be responsible in
any manner to any of the Lenders for the effectiveness, enforceability,
genuineness, validity or the due execution of this Agreement or any other Loan
Documents or for any recital, representation, warranty, document, certificate,
report or statement herein or made or furnished under or in connection with this
Agreement or any other Loan Documents, or (c) be under any obligation to any of
the Lenders to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions hereof or thereof on the part of the
Loan Parties, or the financial condition of the Loan Parties, or the existence
or possible existence of any Event of Default or Potential Default. No claim may
be made by any of the Loan Parties, any Lender, the Administrative Agent or any
of their respective Subsidiaries against the Administrative Agent, any Lender or
any of their respective directors, officers, employees, agents, attorneys or
Affiliates, or any of them, for any special, indirect or consequential damages
or, to the fullest extent permitted by Law, for any punitive damages in respect
of any claim or cause of action (whether based on contract, tort, statutory
liability, or any other ground) based on, arising out of or related to any Loan
Document or the transactions contemplated hereby or any act, omission or event
occurring in connection therewith, including the negotiation, documentation,
administration or collection of the Loans, and each of the Loan Parties, (for
itself and on behalf of each of its Subsidiaries), the Administrative Agent and
each Lender hereby waive, releases and agree never to xxx upon any claim for any
such damages, whether such claim now exists or hereafter arises and whether or
not it is now known or suspected to exist in its favor. Each Lender agrees that,
except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder or given to the
Administrative Agent for the account of or with copies for the Lenders, the
Administrative Agent and each of its directors, officers, employees, agents,
attorneys or Affiliates shall not have any duty or responsibility to provide any
Lender with an credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Loan Parties which may come into the possession of the Administrative Agent
or any of its directors, officers, employees, agents, attorneys or Affiliates.
10.7 Reimbursement and Indemnification of Administrative
Agent by Lenders.
---------------------------------------------------
Each Lender agrees to reimburse and indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower and the
Co-Borrower and without limiting the Obligation of the Borrower and the
Co-Borrower to do so) in proportion to its Ratable Share from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
and reasonable costs, expenses or disbursements, including reasonable attorneys'
fees and disbursements (including the allocated costs of staff counsel), and
costs of appraisers and environmental consultants, of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent, in its capacity as such, in any way relating to or arising
out of this Agreement or any other Loan Documents or any action taken or omitted
by the Administrative Agent hereunder or thereunder, provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
(a) if the same results from the Administrative Agent's gross negligence or
willful misconduct, or (b) if such Lender was not given notice of the subject
claim and the opportunity to participate in the defense thereof, at its expense
(except that such Lender shall remain liable to the extent such failure to give
notice does not result in a loss to the Lender), or (c) if the same results from
a compromise and settlement agreement entered into without the consent of such
Lender, which shall not be unreasonably withheld. In addition, each Lender
agrees promptly upon demand to reimburse the Administrative Agent (to the extent
not reimbursed by the Borrower and the Co-Borrower and without limiting the
Obligation of the Borrower and the Co-Borrower to do so) in proportion to its
Ratable Share for all amounts due and payable by the Borrower and the
Co-Borrower to the Administrative Agent in connection with the Administrative
Agent's periodic audit of the Loan Parties' books, records and business
properties.
10.8 Reliance by Administrative Agent.
--------------------------------
The Administrative Agent shall be entitled to rely upon any
writing, telegram, telex or teletype message, resolution, notice, consent,
certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons, and upon
the advice and opinions of counsel and other professional advisers selected by
the Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action hereunder unless it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.
10.9 Notice of Default.
-----------------
The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Potential Default or Event of
Default unless the Administrative Agent has received written notice from a
Lender, the Borrower or the Co-Borrower referring to this Agreement, describing
such Potential Default or Event of Default and stating that such notice is a
"notice of default."
10.10 Notices.
-------
The Administrative Agent shall promptly send to each Lender
a copy of all notices received from the Borrower and the Co-Borrower pursuant to
the provisions of this Agreement or the other Loan Documents promptly upon
receipt thereof. The Administrative Agent shall promptly notify the Borrower,
the Co-Borrower and the other Lenders of each change in the Base Rate and the
effective date thereof. Upon the request of any Lender, the Administrative Agent
shall provide such Lender with any report provided by the Borrower and the
Co-Borrower to the Administrative Agent pursuant to the provisions of this
Agreement or the Loan Documents which are not required to be provided to all the
Lenders.
10.11 Lenders in Their Individual Capacities.
--------------------------------------
With respect to its Revolving Credit Commitment, the
Revolving Credit Loans, the Term Loan A Commitment, the Term Loan A, the Term
Loan B Commitment and the Term Loan B made by it and any other rights and powers
given to it as a Lender hereunder or under any of the other Loan Documents, the
Administrative Agent shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not the Administrative
Agent, and the term "Lenders" shall, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. National City and
its Affiliates and each of the Lenders and their respective Affiliates may,
without liability to account, except as prohibited herein, make loans to, accept
deposits from, discount drafts for, act as trustee under indentures of, and
generally engage in any kind of banking or trust business with, the Loan Parties
and their Affiliates, in the case of the Administrative Agent, as though it were
not acting as Administrative Agent hereunder and in the case of each Lender, as
though such Lender were not a Lender hereunder. The Lenders acknowledge that,
pursuant to such activities, the Administrative Agent or its Affiliates may (i)
receive information regarding the Loan Parties (including information that may
be subject to confidentiality obligations in favor of the Loan Parties) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them, and (ii) accept fees and other consideration
from the Loan Parties for services in connection with this Agreement and
otherwise without having to account for the same to the Lenders.
10.12 Holders of Notes.
----------------
The Administrative Agent may deem and treat any payee of any
Note as the owner thereof for all purposes hereof unless and until written
notice of the assignment or transfer thereof shall have been filed with the
Administrative Agent. Any request, authority or consent of any Person who at the
time of making such request or giving such authority or consent is the holder of
any Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
10.13 Equalization of Lenders.
-----------------------
The Lenders and the holders of any participations in any
Notes agree among themselves that, with respect to all amounts received by any
Lender or any such holder for application on any Obligation hereunder or under
any Note or under any such participation, whether received by voluntary payment,
by realization upon security, by the exercise of the right of set-off or
banker's lien, by counterclaim or by any other non-pro rata source, equitable
adjustment will be made in the manner stated in the following sentence so that,
in effect, all such excess amounts will be shared ratably among the Lenders and
such holders in proportion to their interests in payments under the Notes,
except as otherwise provided in Section 4.4.3, 5.4.3 or 5.6. The Lenders or any
such holder receiving any such amount shall purchase for cash from each of the
other Lenders an interest in such Lender's Loans in such amount as shall result
in a ratable participation by the Lenders and each such holder in the aggregate
unpaid amount under the Notes, provided that if all or any portion of such
excess amount is thereafter recovered from the Lender or the holder making such
purchase, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, together with interest or other amounts, if any,
required by law (including court order) to be paid by the Lender or the holder
making such purchase.
10.14 Successor Administrative Agent.
------------------------------
The Administrative Agent (i) may resign as Administrative
Agent or (ii) shall resign if such resignation is requested by the Required
Lenders (if the Administrative Agent is a Lender, the Administrative Agent's
Loans and its Commitment shall be considered in determining whether the Required
Lenders have requested such resignation) or required by Section 5.4.3, in either
case of (i) or (ii) by giving not less than thirty (30) days' prior written
notice to the Borrower and the Co-Borrower. If the Administrative Agent shall
resign under this Agreement, then either (a) the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, subject to the consent
of the Borrower and the Co-Borrower, such consent not to be unreasonably
withheld, or (b) if a successor agent shall not be so appointed and approved
within the thirty (30) day period following the Administrative Agent's notice to
the Lenders of its resignation, then the Administrative Agent shall appoint,
with the consent of the Borrower and the Co-Borrower, such consent not to be
unreasonably withheld, a successor agent who shall serve as Administrative Agent
until such time as the Required Lenders appoint and the Borrower and the
Co-Borrower consent to the appointment of a successor agent. Upon its
appointment pursuant to either clause (a) or (b) above, such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent, and
the term "Administrative Agent" shall mean such successor agent, 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 10 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.
10.15 Availability of Funds.
---------------------
The Administrative Agent may assume that each Lender has
made or will make the proceeds of a Loan available to the Administrative Agent
unless the Administrative Agent shall have been notified by such Lender on or
before the later of (1) the close of Business on the Business Day preceding the
Borrowing Date with respect to such Loan or (2) 24 hours before the time on
which the Administrative Agent actually funds the proceeds of such Loan to the
Borrower and the Co-Borrower (whether using its own funds pursuant to this
Section 10.15 or using proceeds deposited with the Administrative Agent by the
Lenders and whether such funding occurs before or after the time on which
Lenders are required to deposit the proceeds of such Loan with the
Administrative Agent). The Administrative Agent may, in reliance upon such
assumption (but shall not be required to), make available to the Borrower and
the Co-Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by such Lender, the
Administrative Agent shall be entitled to recover such amount on demand from
such Lender (or, if such Lender fails to pay such amount forthwith upon such
demand from the Borrower and the Co-Borrower) together with interest thereon, in
respect of each day during the period commencing on the date such amount was
made available to the Borrower and the Co-Borrower and ending on the date the
Administrative Agent recovers such amount, at a rate per annum equal to the
applicable interest rate in respect of the Loan.
10.16 Calculations.
------------
In the absence of gross negligence or willful misconduct,
the Administrative Agent shall not be liable for any error in computing the
amount payable to any Lender whether in respect of the Loans, fees or any other
amounts due to the Lenders under this Agreement. In the event an error in
computing any amount payable to any Lender is made, the Administrative Agent,
the Borrower, the Co-Borrower and each affected Lender shall, forthwith upon
discovery of such error, make such adjustments as shall be required to correct
such error, and any compensation therefor will be calculated at the Federal
Funds Effective Rate.
10.17 Beneficiaries.
-------------
Except as expressly provided herein, the provisions of this
Section 10 are solely for the benefit of the Administrative Agent, the other
Managing Agents and the Lenders, and the Loan Parties shall not have any rights
to rely on or enforce any of the provisions hereof. In performing its functions
and duties under this Agreement, the Administrative Agent shall act solely as
agent of the Lenders and does not assume and shall not be deemed to have assumed
any obligation toward or relationship of agency or trust with or for any of the
Loan Parties.
11. MISCELLANEOUS
-------------
11.1 Modifications, Amendments or Waivers.
------------------------------------
With the written consent of the Required Lenders, the
Administrative Agent, acting on behalf of all the Lenders, and the Borrower and
the Co-Borrower, on behalf of the Loan Parties, may from time to time enter into
written agreements amending or changing any provision of this Agreement or any
other Loan Document or the rights of the Lenders or the Loan Parties hereunder
or thereunder, or may grant written waivers or consents to a departure from the
due performance of the Obligations of the Loan Parties hereunder or thereunder.
Any such agreement, waiver or consent made with such written consent shall be
effective to bind all the Lenders and the Loan Parties; provided, that, without
the written consent of all the Lenders, no such agreement, waiver or consent may
be made which will:
11.1.1 Increase of Commitment; Extension or
Expiration Date.
-----------------------------------------------
Increase the amount of the Revolving Credit Commitment,
the Term Loan A Commitment or the Term Loan B Commitment of any Lender hereunder
without such Lender's written consent, or extend the Expiration Date, the Term
Loan A Maturity Date or the Term Loan B Maturity Date.;
11.1.2 Extension of Payment; Reduction of Principal
Interest or Fees; Modification of Terms
of Payment.
-----------------------------------------------
Whether or not any Loans are outstanding, extend the
time for any regularly scheduled payment (it is acknowledged that a mandatory
prepayment of a Loan, and any Commitment reduction in connection with such
mandatory prepayment, is not a "regularly scheduled payment" of such Loan) of
principal or interest of any Loan, the Commitment Fee or any other fee payable
to any Lender, or reduce the principal amount of or the rate of interest borne
by any Loan or reduce the Commitment Fee or any other fee payable to any Lender,
or otherwise affect the terms of any regularly scheduled payment of the
principal of or interest of any Loan, the Commitment Fee or any other fee
payable to any Lender;
11.1.3 Release of Collateral or Guarantor.
----------------------------------
Except for sales of assets permitted by Section 8.2.7,
release any Collateral, any Guarantor from its Obligations under the Guaranty
Agreement or any other security for any of the Loan Parties' Obligations; or
11.1.4 Miscellaneous
-------------
Amend Section 5.2 [Pro Rata Treatment of Lenders], 10.6
[Exculpatory Provisions, etc.] or 10.13 [Equalization of Lenders] or this
Section 11.1, alter any provision regarding the pro rata treatment of the
Lenders, change the definition of Required Lenders, or change any requirement
providing for the Lenders or the Required Lenders to authorize the taking of any
action hereunder;
provided, further, that no agreement, waiver or consent
which would modify the interests, rights or obligations of the Administrative
Agent in its capacity as Administrative Agent or as the issuer of Letters of
Credit shall be effective without the written consent of the Administrative
Agent; provided further, that notwithstanding any provision of this Section 11.1
to the contrary, during the Syndications Period any provision of this Agreement
that affects the structure, terms or pricing of the Term Loans B or the Term
Loan B Commitments (including, without limitation, the interest rates or
interest rate margins applicable thereto and the amortization of the Term Loans
B subsequent to the occurrence of the Expiration Date and the Term Loan A
Maturity Date) may be amended, modified or waived with the written consent of
(i) the holders of one hundred percent (100%) of the Term Loans B outstanding
(or, if no Term Loans B are outstanding, one hundred percent (100%) of the Term
Loan B Commitments), (ii) the Administrative Agent, and (iii) the Borrower and
the Co-Borrower, for themselves and on behalf of the Loan Parties, except that
in no event may the amount of the Term Loan B Commitments or the Term Loans B be
reduced pursuant to any such amendment, modification or waiver.
11.2 No Implied Waivers; Cumulative Remedies;
Writing Required.
-----------------------------------------
No course of dealing and no delay or failure of the
Administrative Agent or any Lender in exercising any right, power, remedy or
privilege under this Agreement or any other Loan Document shall affect any other
or future exercise thereof or operate as a waiver thereof, nor shall any single
or partial exercise thereof or any abandonment or discontinuance of steps to
enforce such a right, power, remedy or privilege preclude any further exercise
thereof or of any other right, power, remedy or privilege. The rights and
remedies of the Administrative Agent and the Lenders under this Agreement and
any other Loan Documents are cumulative and not exclusive of any rights or
remedies which they would otherwise have. Any waiver, permit, consent or
approval of any kind or character on the part of any Lender of any breach or
default under this Agreement or any such waiver of any provision or condition of
this Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing.
11.3 Reimbursement and Indemnification of Lenders; Taxes.
---------------------------------------------------
The Borrower and the Co-Borrower agree unconditionally upon
demand to pay or reimburse to each Lender (other than the Administrative Agent,
as to which the Borrower's and the Co-Borrower' Obligations are set forth in
Section 10.5) and to save such Lender harmless against (i) liability for the
payment of all reasonable out-of-pocket costs, expenses and disbursements
(including fees and expenses of counsel (including allocated costs of staff
counsel) for each Lender), incurred by such Lender (a) in connection with the
enforcement of this Agreement or any other Loan Document, or collection of
amounts due hereunder or thereunder or the proof and allowability of any claim
arising under this Agreement or any other Loan Document, whether in bankruptcy
or receivership proceedings or otherwise, and (b) in any workout or
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings, or (ii) 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 such Lender, in its capacity as such, in any way relating to or arising
out of this Agreement or any other Loan Documents or any action taken or omitted
by such Lender hereunder or thereunder, provided that the Borrower and the
Co-Borrower shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (A) if the same results from such Lender's gross
negligence or willful misconduct, or (B) if the Borrower and the Co-Borrower
were not given notice of the subject claim and the opportunity to participate in
the defense thereof, at its expense (except that the Borrower and the
Co-Borrower shall remain liable to the extent such failure to give notice does
not result in a loss to the Borrower and the Co-Borrower), or (C) if the same
results from a compromise or settlement agreement entered into without the
consent of the Borrower and the Co-Borrower, which shall not be unreasonably
withheld. The Lenders will attempt to minimize the fees and expenses of legal
counsel for the Lenders which are subject to reimbursement by the Borrower and
the Co-Borrower hereunder by considering the usage of one law firm to represent
the Lenders and the Administrative Agent if appropriate under the circumstances.
The Borrower and the Co-Borrower agree unconditionally to pay all stamp,
document, transfer, recording or filing taxes or fees and similar impositions
now or hereafter determined by the Administrative Agent or any Lender to be
payable in connection with this Agreement or any other Loan Document, and the
Borrower and the Co-Borrower agree unconditionally to save the Administrative
Agent and the Lenders harmless from and against any and all present or future
claims, liabilities or losses with respect to or resulting from any omission to
pay or delay in paying any such taxes, fees or impositions.
11.4 Holidays.
--------
Whenever payment of a Loan to be made or taken hereunder
shall be due on a day which is not a Business Day such payment shall be due on
the next Business Day and such extension of time shall be included in computing
interest and fee, except that the Loans shall be due on the Business Day
preceding the Expiration Date if the Expiration Date is not a Business Day.
Whenever any payment or action to be made or taken hereunder (other than payment
of the Loans) shall be stated to be due on a day which is not a Business Day,
such payment or action shall be made or taken on the next following Business Day
(except as provided in Section 4.2 with respect to Interest Periods under the
Euro-Rate Option), and such extension of time shall not be included in computing
interest or fees, if any, in connection with such payment or action.
11.5 Funding by Branch, Subsidiary or Affiliate.
------------------------------------------
11.5.1 Notional Funding.
----------------
Each Lender shall have the right from time to time,
without notice to the Borrower or the Co-Borrower, to deem any branch,
Subsidiary or Affiliate (which for the purposes of this Section 11.5 shall mean
any corporation or association which is directly or indirectly controlled by or
is under direct or indirect common control with any corporation or association
which directly or indirectly controls such Lender) of such Lender to have made,
maintained or funded any Loan to which the Euro-Rate Option applies at any time,
provided that immediately following (on the assumption that a payment were then
due from the Borrower and the Co-Borrower to such other office), and as a result
of such change, the Borrower and the Co-Borrower would not be under any greater
financial obligation pursuant to Section 5.6 than they would have been in the
absence of such change. Notional funding offices may be selected by each Lender
without regard to such Lender's actual methods of making, maintaining or funding
the Loans or any sources of funding actually used by or available to such
Lender.
11.5.2 Actual Funding.
--------------
Each Lender shall have the right from time to time to
make or maintain any Loan by arranging for a branch, Subsidiary or Affiliate of
such Lender to make or maintain such Loan subject to the last sentence of this
Section 11.5.2. If any Lender causes a branch, Subsidiary or Affiliate to make
or maintain any part of the Loans hereunder, all terms and conditions of this
Agreement shall, except where the context clearly requires otherwise, be
applicable to such part of the Loans to the same extent as if such Loans were
made or maintained by such Lender, but in no event shall any Lender's use of
such a branch, Subsidiary or Affiliate to make or maintain any part of the Loans
hereunder cause such Lender or such branch, Subsidiary or Affiliate to incur any
cost or expenses payable by the Borrower and the Co-Borrower hereunder or
require the Borrower and the Co-Borrower to pay any other compensation to any
Lender (including any expenses incurred or payable pursuant to Section 5.6)
which would otherwise not be incurred.
11.6 Notices.
-------
All notices, requests, demands, directions and other
communications (as used in this Section 11.6, collectively referred to as
"Notices") given to or made upon any party hereto under the provisions of this
Agreement shall be by telephone or in writing (including telex or facsimile
communication) unless otherwise expressly permitted hereunder and shall be
delivered or sent by telex or facsimile to the respective parties at the
addresses and numbers set forth under their respective names on Schedule 1.1(B)
hereof or in accordance with any subsequent unrevoked written direction from any
party to the others. All Notices shall, except as otherwise expressly herein
provided, be effective (a) in the case of telex or facsimile, when received, (b)
in the case of hand-delivered Notice, when hand-delivered, (c) in the case of
telephone, when telephoned, provided, however, that in order to be effective,
telephonic Notices must be confirmed in writing no later than the next day by
letter, facsimile or telex, (d) if given by mail, four (4) days after such
communication is deposited in the mail with first-class postage prepaid, return
receipt requested, and (e) if given by any other means (including by air
courier), when delivered; provided, that Notices to the Administrative Agent
shall not be effective until received. Any Lender giving any Notice to any Loan
Party shall simultaneously send a copy thereof to the Administrative Agent, and
the Administrative Agent shall promptly notify the other Lenders of the receipt
by it of any such Notice.
11.7 Severability.
------------
The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
11.8 Governing Law.
-------------
Each Letter of Credit and Section 2.9 shall be subject to
the Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500, as the same may be
revised or amended from time to time, and to the extent not inconsistent
therewith, the internal laws of the Commonwealth of Pennsylvania without regard
to its conflict of laws principles and the balance of this Agreement shall be
deemed to be a contract under the Laws of the Commonwealth of Pennsylvania and
for all purposes shall be governed by and construed and enforced in accordance
with the internal laws of the Commonwealth of Pennsylvania without regard to its
conflict of laws principles.
11.9 Prior Understanding.
-------------------
This Agreement, the other Loan Documents and the letter
agreement dated October 5, 2001, between the Administrative Agent and the
Borrower supersede all prior understandings and agreements, whether written or
oral, between the parties hereto and thereto relating to the transactions
provided for herein and therein, including any prior confidentiality agreements
and commitments.
11.10 Duration; Survival.
------------------
All representations and warranties of the Loan Parties
contained herein or made in connection herewith shall survive the making of
Loans and issuance of Letters of Credit and shall not be waived by the execution
and delivery of this Agreement, any investigation by the Administrative Agent or
the Lenders, the making of Loans, issuance of Letters of Credit, or payment in
full of the Loans. All covenants and agreements of the Loan Parties contained in
Sections 8.1, 8.2 and 8.3 herein shall continue in full force and effect from
and after the date hereof so long as the Borrower and the Co-Borrower may borrow
or request Letters of Credit hereunder and until termination of the Commitments
and payment in full of the Loans and expiration or termination of all Letters of
Credit. All covenants and agreements of the Borrower and the Co-Borrower
contained herein relating to the payment of principal, interest, premiums,
additional compensation or expenses and indemnification, including those set
forth in the Notes, Section 5 and Sections 10.5, 10.7 and 11.3, shall survive
payment in full of the Loans, expiration or termination of the Letters of Credit
and termination of the Commitments.
11.11 Successors and Assigns.
----------------------
(i) This Agreement shall be binding upon and shall
inure to the benefit of the Lenders, the Administrative Agent, the Loan Parties
and their respective successors and assigns, except that none of the Loan
Parties may assign or transfer any of its rights and Obligations hereunder or
any interest herein. Each Lender may, at its own cost, make assignments of or
sell participations in all or any part of its Commitment and the Loans made by
it to one or more banks or other entities, subject to the consent of the
Borrower, the Co-Borrower and the Administrative Agent with respect to any
assignee, such consent not to be unreasonably withheld, provided that (1) no
consent of the Borrower or the Co-Borrower shall be required in the case of an
assignment by a Lender to an Affiliate of such Lender or to the extent an Event
of Default has occurred and is continuing, and (2) assignments may not be made
in amounts less than $1,000,000. In the case of an assignment, upon receipt by
the Administrative Agent of the Assignment and Assumption Agreement, the
assignee shall have, to the extent of such assignment (unless otherwise provided
therein), the same rights, benefits and obligations as it would have if it had
been a signatory Lender hereunder, the Commitments shall be adjusted
accordingly, and the Assignor shall be relieved from all obligations and
liabilities which accrue after the Assignment and based upon the Commitment and
related rights assigned to the Assignee. Upon surrender of any Note subject to
such assignment, the Borrower and the Co-Borrower shall execute and deliver a
new Note to the assignee in an amount equal to the amount of the Revolving
Credit Commitment, the Term Loan A or the Term Loan B assumed by it and a new
Revolving Credit Note, Term Note A or Term Note B to the assigning Lender in an
amount equal to the Revolving Credit Commitment, Term Loan A or Term Loan B
retained by it hereunder. The assigning Lender shall pay to the Administrative
Agent a service fee in the amount of $3,500 for each assignment. In the case of
a participation, the participant shall only have the rights specified in Section
9.2.3 (the participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such Lender in
favor of the participant relating thereto and not to include any voting rights
except with respect to changes of the type referenced in Sections 11.1.1,
11.1.2, or 11.1.3), all of such Lender's obligations under this Agreement or any
other Loan Document shall remain unchanged, and all amounts payable by any Loan
Party hereunder or thereunder shall be determined as if such Lender had not sold
such participation.
(ii) Any assignee or participant which is not
incorporated under the Laws of the United States of America or a state thereof
shall deliver to the Borrower and the Co-Borrower and the Administrative Agent
the form of certificate described in Section 11.17 relating to federal income
tax withholding. Each Lender may furnish any publicly available information
concerning any Loan Party or its Subsidiaries and any other information
concerning any Loan Party or its Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective assignees
or participants), provided that such assignees and participants agree to be
bound by the provisions of Section 11.12.
(iii) Notwithstanding any other provision in this
Agreement, any Lender may at any time pledge or grant a security interest in all
or any portion of its rights under this Agreement, its Note and the other Loan
Documents to any Federal Reserve Bank in accordance with Regulation A of the FRB
or U.S. Treasury Regulation 31 CFR Section 203.14 without notice to or consent
of the Borrower, the Co-Borrower or the Administrative Agent. No such pledge or
grant of a security interest shall release the transferor Lender of its
obligations hereunder or under any other Loan Document.
11.12 Confidentiality.
---------------
(i) The Administrative Agent and the Lenders each
agree to keep confidential all information obtained from any Loan Party or its
Subsidiaries which is nonpublic and confidential or proprietary in nature
(including any information the Borrower and the Co-Borrower specifically
designates as confidential), except as provided below, and to use such
information only in connection with their respective capacities under this
Agreement and for the purposes contemplated hereby. The Administrative Agent and
the Lenders shall be permitted to disclose such information (i) to outside legal
counsel, Affiliates, accountants and other professional advisors who need to
know such information in connection with the administration and enforcement of
this Agreement, subject to agreement of such Persons to maintain the
confidentiality; (ii) in connection with the exercise, preservation or
protection of any right or remedy under the Credit Agreement, applicable law or
in equity, including without limitation in connection with any litigation or any
proof of claim, adequate protection, relief from stay or other proceeding in any
bankruptcy case; (iii) in connection with the defense of any claim,
counterclaim, crossclaim or cause of action commenced or threatened to be
commenced against the Administrative Agent or any Lender, or its or their
counsel, including without limitation any litigation, arbitration or
administrative proceeding; (iv) to potential assignees and participants as
contemplated by Section 11.11; (v) to the extent requested by any bank
regulatory authority or, with notice to the Borrower and the Co-Borrower (to the
extent permitted by applicable Law), as otherwise required by applicable Law or
by any subpoena or similar legal process, or in connection with any
investigation or proceeding arising out of the transactions contemplated by this
Agreement; (vi) if it becomes publicly available other than as a result of a
breach of this Agreement or becomes available from a source not known to be
subject to confidentiality restrictions; or (vii) if the Borrower or the
Co-Borrower shall have consented to such disclosure.
(ii) Pursuant to Section 11.12 of the Credit
Agreement, the Borrower and the Co-Borrower hereby designate as confidential
information all information pertaining to E&Y Reviews as confidential and to
treat and use all such information as confidential information in accordance
with the provisions of Section 11.12 thereof. Without limiting the generality of
the foregoing, the parties hereto agree that confidential information includes
all oral and written communications concerning the review by Ernst & Young, LLP
("E&Y") of (1) certain financial projections the Borrower and Co-Borrower and
(2) the books and records of the Loan Parties (the "E&Y Reviews") between or
among any of the parties hereto, any member of the Audit Committee of the
Borrower (the "Audit Committee"), any members of the Board of Directors of the
Borrower (the "Board of Directors")who are not employees of the Borrower or
Co-Borrower (the "Outside Directors"), E&Y or any of their respective counsel
(collectively, the "Financial Confidential Information").
(iii) Upon receipt by any of the parties hereto, the
Audit Committee, the Outside Directors or any of their respective counsel of any
request by any third party or service of legal process (including subpoena) upon
any such person or entity to divulge any Financial Confidential Information
(collectively, a "Demand"), the person or entity upon whom such Demand is made,
will promptly inform counsel set forth in item (v) below, the Audit Committee
and the Outside Directors, and where applicable provide a copy of any such
Demand to counsel at the addresses listed below and to the Borrower and
Co-Borrower in the manner provided in Section 11.6 of the Credit Agreement, so
that the Audit Committee and the Outside Directors and their counsel, the
Borrower or Co-Borrower may, at no cost to the Administrative Agent or any
Lender, take all steps deemed necessary to prevent the disclosure of the
requested Financial Confidential Information.
(iv) Solely with respect to Financial Confidential
Information, the Audit Committee and the Outside Directors shall be a
beneficiary of the rights and protections of the provisions of this Section
11.12.
(v) Copies of the Demands are to be forwarded to
counsel via facsimile, as follows:
(1) Xxxxxxxx Xxxxxxxxx Professional Corporation
One Oxford Centre, 20th Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
(000) 000-0000
(000) 000-0000 (Fax)
Attention: Xxxxxx X. Xxxxx, Esq.
(2) To:
Counsel to the Audit Committee
and Outside Directors
Xxxx & Xxxxxxx
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000 (Fax)
Attention: Xxxxxxxx Xxxxxxxxx, Esq.
11.13 Counterparts.
------------
This Agreement may be executed by different parties hereto
on any number of separate counterparts, each of which, when so executed and
delivered, shall be an original, and all such counterparts shall together
constitute one and the same instrument.
11.14 Administrative Agent's or Lender's Consent.
------------------------------------------
Whenever the Administrative Agent's or any Lender's consent
is required to be obtained under this Agreement or any of the other Loan
Documents as a condition to any action, inaction, condition or event, the
Administrative Agent and each Lender shall be authorized to give or withhold
such consent in its sole and absolute discretion and to condition its consent
upon the giving of additional collateral, the payment of money or any other
matter.
11.15 Exceptions.
----------
The representations, warranties and covenants contained
herein shall be independent of each other, and no exception to any
representation, warranty or covenant shall be deemed to be an exception to any
other representation, warranty or covenant contained herein unless expressly
provided, nor shall any such exceptions be deemed to permit any action or
omission that would be in contravention of applicable Law.
11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY AND
THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA, AND
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH
LOAN PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION 11.6 AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH LOAN PARTY
WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST
IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE. EACH LOAN PARTY, THE AGENT AND THE LENDERS HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
COLLATERAL TO THE FULL EXTENT PERMITTED BY LAW.
11.17 Tax Withholding Clause.
----------------------
Each Lender or assignee or participant of a Lender that is
not incorporated under the Laws of the United States of America or a state
thereof agrees that it will deliver to each of the Borrower, the Co-Borrower and
the Administrative Agent two (2) duly completed copies of the following: (i)
Internal Revenue Service Form W-9, 4224 or 1001, or other applicable form
prescribed by the Internal Revenue Service, certifying that such Lender,
assignee or participant is entitled to receive payments under this Agreement and
the other Loan Documents without deduction or withholding of any United States
federal income taxes, or is subject to such tax at a reduced rate under an
applicable tax treaty, or (ii) Internal Revenue Service Form W-8 or other
applicable form or a certificate of such Lender, assignee or participant
indicating that no such exemption or reduced rate is allowable with respect to
such payments. Each Lender, assignee or participant required to deliver to the
Borrower, the Co-Borrower and the Administrative Agent a form or certificate
pursuant to the preceding sentence shall deliver such form or certificate as
follows: (A) each Lender which is a party hereto on the Closing Date shall
deliver such form or certificate at least five (5) Business Days prior to the
first date on which any interest or fees are payable by the Borrower and the
Co-Borrower hereunder for the account of such Lender; (B) each assignee or
participant shall deliver such form or certificate at least five (5) Business
Days before the effective date of such assignment or participation (unless the
Administrative Agent in its sole discretion shall permit such assignee or
participant to deliver such form or certificate less than five (5) Business Days
before such date in which case it shall be due on the date specified by the
Administrative Agent). Each Lender, assignee or participant which so delivers a
Form W-8, W-9, 4224 or 1001 further undertakes to deliver to each of the
Borrower, the Co-Borrower and the Administrative Agent two (2) additional copies
of such form (or a successor form) on or before the date that such form expires
or becomes obsolete or after the occurrence of any event requiring a change in
the most recent form so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by the Borrower,
the Co-Borrower or the Administrative Agent, either certifying that such Lender,
assignee or participant is entitled to receive payments under this Agreement and
the other Loan Documents without deduction or withholding of any United States
federal income taxes or is subject to such tax at a reduced rate under an
applicable tax treaty or stating that no such exemption or reduced rate is
allowable. The Administrative Agent shall be entitled to withhold United States
federal income taxes at the full withholding rate unless the Lender, assignee or
participant establishes an exemption or that it is subject to a reduced rate as
established pursuant to the above provisions.
11.18 Joinder of Guarantors.
---------------------
Any Subsidiary of the Borrower which is required to join
this Agreement as a Guarantor pursuant to Section 8.2.6 or Section 8.2.9 shall
execute and deliver to the Administrative Agent (i) a Guarantor Joinder in
substantially the form attached hereto as Exhibit 1.1(G)(1) pursuant to which it
shall join as a Guarantor each of the documents to which the Guarantors are
parties; (ii) documents in the forms described in Section 7.1 [First Loans]
modified as appropriate to relate to such Subsidiary; and (iii) documents
necessary to grant and perfect Prior Security Interests to the Administrative
Agent for the benefit of the Lenders in all assets held by such Subsidiary and
in the stock or other ownership interests of such Subsidiary. The Loan Parties
shall deliver such Guarantor Joinder and related documents to the Administrative
Agent within five (5) Business Days after the date of the acquisition of the
Subsidiary or the date of the filing of such Subsidiary's articles of
incorporation if the Subsidiary is a corporation, the date of the filing of its
certificate of limited partnership if it is a limited partnership or the date of
its organization if it is an entity other than a limited partnership or
corporation.
11.19 Joint and Several Liability of Borrower
and Co-Borrower.
-----------------------------------------------------
The Obligations of the Borrower and the Co-Borrower under
this Agreement, the Notes and the Loan Documents to which the Borrower and the
Co-Borrower are parties shall be joint and several obligations and liabilities
of the Borrower and the Co-Borrower, and such Obligations may be enforced by the
Administrative Agent and the Lenders in their sole discretion against the
Borrower and either Co-Borrower either individually in any action brought
against the Borrower or either Co-Borrower or jointly in any action brought
against both the Borrower and one or more Co-Borrower For purposes of advancing
funds, rendering statements, receiving requests from, or otherwise communicating
with the Borrower and the Co-Borrower or in the Administrative Agent's
administration of this Agreement and the related transactions, the Co-Borrower
hereby authorizes the Administrative Agent to treat the Borrower as the sole
agent for the Co-Borrower under the Loan Documents and to deal with it
exclusively, and any act done or omitted or any document, certificate, or
instrument executed or delivered by the Borrower shall be binding on each of
them. To induce the Lenders to enter into this Agreement and to make advances of
the Loans in the manner set forth in this Agreement, the Borrower and the
Co-Borrower hereby represent, warrant, covenant and state to each of the Lenders
that (i) the Borrower and the Co-Borrower share with the other common management
and ownership, (ii) the Borrower and the Co-Borrower desire to utilize their
borrowing potential on a consolidated basis to the full extent possible, and
consistent with realizing such potential, to make available to the Lenders
security commensurate with the amount and nature of their aggregate borrowings,
(iii) the Borrower and the Co-Borrower have determined that it will benefit
specifically and materially from the advances of credit contemplated by this
Agreement and that under a joint and several loan facility it is able to obtain
financing on terms more favorable than otherwise available to it separately, and
(iv) the Borrower and the Co-Borrower have requested and bargained for the
structure and terms of and security for the advances contemplated by this
Agreement.
Until indefeasible payment in full of the Loans and
termination of all Letters of Credit and Commitments, the Borrower and the
Co-Borrower waive and agrees not to enforce any of the rights it may have
against the Borrower or any Co-Borrower, including, but not limited to: (i) any
right to be subrogated in whole or in part to any right or claim with respect to
any Obligations or any portion thereof owed to the Lenders which might otherwise
arise from payment by the Borrower or the Co-Borrower on the account of the
Obligations or any portion thereof until all the Obligations are indefeasibly
paid in full and the Letters of Credit and Commitments have terminated; and (ii)
any right of the Borrower or the Co-Borrower to require the marshalling of
assets of the Borrower, the Co-Borrower or any Guarantor which might otherwise
arise from payment by the Borrower, the Co-Borrower or any Guarantor to the
Lenders on account of the Obligations or any portion thereof.
The Borrower and the Co-Borrower agree that the
Administrative Agent and the Lenders may from time to time and as many times as
the Administrative Agent and the Lenders, in their absolute discretion, deem
appropriate, do any of the following without notice to the Borrower or the
Co-Borrower and without adversely affecting the validity or enforceability of
the joint and several liability of the Borrower and the Co-Borrower under this
Agreement and the Notes: (i) release, surrender, exchange, compromise, or settle
the Obligations or any portion thereof; (ii) change, renew, or waive the terms
of the Obligations or any portion thereof; (iii) grant any extension or
indulgence with respect to the payment to the Lenders of the Obligations or any
portion thereof; (iv) enter into any agreement of forbearance with respect to
the Obligations or any portion thereof; (v) release, surrender, exchange or
compromise any security held by the Lenders for the Obligations; (vi) release
any Person who is a Guarantor or surety or otherwise liable with respect to the
Obligations or any portion thereof; and (vii) release, surrender, exchange or
compromise any security or Lien held by the Administrative Agent for the benefit
of the Lenders for the liabilities of any Person who is a Guarantor or surety
for the Obligations or any portion thereof. The Borrower and the Co-Borrower
agree that the Administrative Agent and the Lenders may do any of the above as
they deem necessary or advisable, in their sole discretion, without giving any
notice to the Borrower or the Co-Borrower, and that the Borrower and the
Co-Borrower will remain jointly and severally liable for full payment to the
Administrative Agent and the Lenders of the Obligations.
If the joint and several liability of either Co-Borrower
under this Agreement would be held or determined to be void, invalid or
unenforceable on account of the amount of the Co-Borrower's aggregate liability
under this Agreement, then, notwithstanding any other provision of this
Agreement to the contrary, the aggregate amount of such liability shall, without
any further action by the Lenders, the Borrower, the Co-Borrower or any other
Person, be automatically limited and reduced to the highest amount which is
valid and enforceable as determined in such action or proceeding, which may be
an amount which is not greater than the greater of:
(i) the fair consideration actually received by the
Co-Borrower under the terms of and as a result of this Agreement and the related
transactions, including, without limiting the generality of the foregoing,
advances made to the Co-Borrower or the transfer of property to the Co-Borrower,
or
(ii) ninety-five percent (95%) of the excess of (1) the
amount of the fair saleable value of the assets of the Co-Borrower as of the
date of this Agreement as determined in accordance with applicable federal and
state laws governing determinations of the insolvency of debtors as in effect on
the date thereof, over (2) the amount of all liabilities of the Co-Borrower as
of the date of this Agreement, also as determined on the basis of applicable
federal and state laws governing the insolvency of debtors as in effect on the
date thereof.
SCHEDULE 1.1(A)
PRICING GRID
------------------------------------------------------------------------------------------------------------------------------
Revolving Credit and Term
Loan A Revolving Credit and Term
Euro-Rate Spread and Loan A Term Loan B Term Loan B Base
Letter of Credit Fee* Base Rate Spread* Euro-Rate Spread* Rate Spread rate*
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Current Pay 5.5% 4.5% 6.0% 5.0%
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Payment in Kind 4.5%** 4.5%** 5.0%** 5.0%**
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Total Applicable Margin to 10.0% 9.0% 11.0% 10.0%
be added to Euro-Rate or
Base Rate
------------------------------------------------------------------------------------------------------------------------------
* The default rate in Section 4.3 may increase these interest rates.
** If the Leverage Ratio is less than or equal to 2.0 to 1.0, as
calculated in accordance with Section 8.2.16, at the end of any fiscal quarter
of the Borrower beginning with and subsequent to the fiscal quarter ended June
30, 2003, the Payment in Kind margin shall be reduced from 4.5% and 5.0% (as the
case may be) to 2.0%, effective as of the first day of the month following the
due date for the delivery of the Compliance Certificate evidencing such
reduction in the Leverage Ratio on or after such date; provided however, that
such margin shall be restored to 4.5% and 5.0% (as the case may be) if the
Leverage Ratio is greater than 2.0 to 1.0 as calculated at the end of any
subsequent fiscal quarter, such increase to be effective as of the first day of
the month following the due date for the delivery of the Compliance Certificate
evidencing such increase in the Leverage Ratio.
