Exhibit 10.2
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CREDIT AGREEMENT
DATED AS OF JUNE 2, 2003
AMONG
RENT-WAY, INC.,
THE GUARANTORS FROM TIME TO TIME PARTIES HERETO,
THE LENDERS FROM TIME TO TIME PARTIES HERETO,
AND
XXXXXX TRUST AND SAVINGS BANK,
as Administrative Agent,
AND
NATIONAL CITY BANK OF PENNSYLVANIA,
as Syndication Agent,
AND
BMO XXXXXXX XXXXX,
as Lead Arranger
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. THE CREDIT FACILITIES................................................................. 1
Section 1.1. Revolving Credit Commitments.......................................................... 1
Section 1.2. Letters of Credit..................................................................... 1
Section 1.3. Applicable Interest Rates............................................................. 4
Section 1.4. Minimum Borrowing Amounts; Maximum Eurodollar Loans................................... 6
Section 1.5. Manner of Borrowing Loans and Designating Applicable Interest Rates................... 6
Section 1.6. Interest Periods...................................................................... 8
Section 1.7. Maturity of Loans..................................................................... 9
Section 1.8. Prepayments........................................................................... 9
Section 1.9. Default Rate.......................................................................... 11
Section 1.10. The Notes............................................................................. 11
Section 1.11. Funding Indemnity..................................................................... 11
Section 1.12. Commitment Terminations............................................................... 12
Section 1.13. Substitution of Lenders............................................................... 12
Section 1.14. Swing Loans........................................................................... 13
SECTION 2. FEES.................................................................................. 14
Section 2.1. Fees................ ................................................................. 14
SECTION 3. PLACE AND APPLICATION OF PAYMENTS..................................................... 15
Section 3.1. Place and Application of Payments..................................................... 15
SECTION 4. THE COLLATERAL AND GUARANTIES......................................................... 17
Section 4.1. Collateral............................................................................ 17
Section 4.2. Liens on Real Property................................................................ 18
Section 4.3. Guaranties............................................................................ 18
Section 4.4. Further Assurances.................................................................... 18
Section 4.5. Excess Cash Flow Escrow Account....................................................... 18
SECTION 5. DEFINITIONS; INTERPRETATION........................................................... 19
Section 5.1. Definitions........................................................................... 19
Section 5.2. Interpretation........................................................................ 34
Section 5.3. Change in Accounting Principles....................................................... 34
SECTION 6. REPRESENTATIONS AND WARRANTIES........................................................ 35
Section 6.1. Organization and Qualification........................................................ 35
Section 6.2. Subsidiaries.......................................................................... 35
Section 6.3. Authority and Validity of Obligations................................................. 35
Section 6.4. Use of Proceeds; Margin Stock......................................................... 36
Section 6.5. Financial Reports..................................................................... 36
Section 6.6. No Material Adverse Change............................................................ 37
Section 6.7. Full Disclosure....................................................................... 37
Section 6.8. Trademarks, Franchises, and Licenses.................................................. 37
Section 6.9. Governmental Authority and Licensing.................................................. 37
Section 6.10. Good Title............................................................................ 37
Section 6.11. Litigation and Other Controversies.................................................... 37
Section 6.12. Taxes................................................................................. 37
Section 6.13. Approvals............................................................................. 38
Section 6.14. Affiliate Transactions................................................................ 38
Section 6.15. Investment Company; Public Utility Holding Company.................................... 38
Section 6.16. ERISA................................................................................. 38
Section 6.17. Compliance with Laws.................................................................. 38
Section 6.18. Other Agreements...................................................................... 39
Section 6.19. Solvency.............................................................................. 39
Section 6.20. No Default............................................................................ 39
Section 6.21. Credit Agreement Obligations.......................................................... 39
SECTION 7. CONDITIONS PRECEDENT.................................................................. 40
Section 7.1. All Credit Events..................................................................... 40
Section 7.2. Initial Credit Event.................................................................. 40
SECTION 8. COVENANTS............................................................................. 43
Section 8.1. Maintenance of Business............................................................... 43
Section 8.2. Maintenance of Properties............................................................. 43
Section 8.3. Taxes and Assessments................................................................. 43
Section 8.4. Insurance............................................................................. 43
Section 8.5. Financial Reports..................................................................... 44
Section 8.6. Inspection............................................................................ 46
Section 8.7. Borrowings and Guaranties............................................................. 46
Section 8.8. Liens................................................................................. 47
Section 8.9. Investments, Acquisitions, Loans and Advances......................................... 48
Section 8.10. Mergers, Consolidations and Sales..................................................... 50
Section 8.11. Maintenance of Subsidiaries........................................................... 50
Section 8.12. Dividends and Certain Other Restricted Payments....................................... 51
Section 8.13. ERISA................................................................................. 51
Section 8.14. Compliance with Laws.................................................................. 51
Section 8.15. Burdensome Contracts With Affiliates.................................................. 52
Section 8.16. No Changes in Fiscal Year............................................................. 52
Section 8.17. Formation of Subsidiaries............................................................. 52
Section 8.18. Change in the Nature of Business...................................................... 52
Section 8.19. Use of Loan Proceeds.................................................................. 52
Section 8.20. No Restrictions....................................................................... 53
Section 8.21. Senior Notes.......................................................................... 53
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Section 8.22 Capital Expenditures.................................................................. 53
Section 8.23. Fixed Charge Coverage Ratio........................................................... 54
Section 8.24. Leverage Ratio........................................................................ 54
Section 8.25. Net Worth............................................................................. 54
Section 8.26. Minimum Rental Merchandise Usage...................................................... 55
Section 8.27. Monthly Minimum EBITDA................................................................ 55
Section 8.28. Preferred Stock....................................................................... 57
SECTION 9. EVENTS OF DEFAULT AND REMEDIES........................................................ 57
Section 9.1. Events of Default..................................................................... 57
Section 9.2. Non-Bankruptcy Defaults............................................................... 59
Section 9.3. Bankruptcy Defaults................................................................... 59
Section 9.4. Collateral for Undrawn Letters of Credit.............................................. 60
Section 9.5. Notice of Default..................................................................... 60
Section 9.6. Expenses.............................................................................. 60
SECTION 10. CHANGE IN CIRCUMSTANCES............................................................... 61
Section 10.1. Change of Law......................................................................... 61
Section 10.2. Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR......... 61
Section 10.3. Increased Cost and Reduced Return..................................................... 61
Section 10.4. Lending Offices....................................................................... 63
Section 10.5. Discretion of Lender as to Manner of Funding.......................................... 63
SECTION 11. THE ADMINISTRATIVE AGENT.............................................................. 63
Section 11.1. Appointment and Authorization of Administrative Agent................................. 63
Section 11.2. Administrative Agent and its Affiliates............................................... 64
Section 11.3. Action by Administrative Agent........................................................ 64
Section 11.4. Consultation with Experts............................................................. 64
Section 11.5. Liability of Administrative Agent; Credit Decision.................................... 64
Section 11.6. Indemnity............................................................................. 65
Section 11.7. Resignation of Administrative Agent and Successor Administrative Agent................ 65
Section 11.8. L/C Issuer............................................................................ 66
Section 11.9. Hedging Liability and Funds Transfer and Deposit Account Liability Arrangements....... 66
Section 11.10. Authorization to Release or Subordinate or Limit Liens................................ 67
Section 11.11. Syndication Agent and Lead Arranger................................................... 67
Section 11.12. Designation of Additional Agents...................................................... 67
Section 11.13. Authorization to Enter into Intercreditor Agreements.................................. 67
SECTION 12. THE GUARANTEES........................................................................ 68
Section 12.1. The Guarantees........................................................................ 68
Section 12.2. Guarantee Unconditional............................................................... 68
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Section 12.3. Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances........... 69
Section 12.4. Subrogation........................................................................... 69
Section 12.5. Waivers............................................................................... 69
Section 12.6. Limit on Recovery..................................................................... 70
Section 12.7. Stay of Acceleration.................................................................. 70
Section 12.8. Benefit to Guarantors................................................................. 70
Section 12.9. Guarantor Covenants................................................................... 70
SECTION 13. MISCELLANEOUS......................................................................... 70
Section 13.1. Withholding Taxes..................................................................... 70
Section 13.2. No Waiver, Cumulative Remedies........................................................ 71
Section 13.3. Non-Business Days..................................................................... 72
Section 13.4. Documentary Taxes..................................................................... 72
Section 13.5. Survival of Representations........................................................... 72
Section 13.6. Survival of Indemnities............................................................... 72
Section 13.7. Sharing of Set-Off.................................................................... 72
Section 13.8. Notices............................................................................... 72
Section 13.9. Counterparts.......................................................................... 73
Section 13.10. Successors and Assigns................................................................ 73
Section 13.11. Participants.......................................................................... 73
Section 13.12. Assignments........................................................................... 74
Section 13.13. Amendments............................................................................ 75
Section 13.14. Headings.............................................................................. 75
Section 13.15. Costs and Expenses; Indemnification................................................... 76
Section 13.16. Set-off............................................................................... 77
Section 13.17. Entire Agreement...................................................................... 77
Section 13.18. Governing Law......................................................................... 77
Section 13.19. Severability of Provisions............................................................ 77
Section 13.20. Excess Interest....................................................................... 77
Section 13.21. Construction.......................................................................... 78
Section 13.22. Lender's Obligations Several.......................................................... 78
Section 13.23. Submission to Jurisdiction; Waiver of Jury Trial...................................... 78
Signature Page................................................................................................... S-1
EXHIBIT A -- Notice of Payment Request
EXHIBIT B -- Notice of Borrowing
EXHIBIT C -- Notice of Continuation/Conversion
EXHIBIT D-1 -- Revolving Note
EXHIBIT D-2 -- Swing Note
EXHIBIT E -- Compliance Certificate
EXHIBIT F -- Additional Guarantor Supplement
EXHIBIT G -- Assignment and Acceptance
EXHIBIT H -- Existing Swaps
SCHEDULE 1 -- Commitments
SCHEDULE 1.2 -- Existing Letters of Credit
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SCHEDULE 6.2 -- Subsidiaries
SCHEDULE 8.8 -- Existing Liens
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CREDIT AGREEMENT
This Credit Agreement is entered into as of June 2, 2003, by and among
RENT-WAY, INC., a Pennsylvania corporation (the "Borrower"), the direct and
indirect Subsidiaries of the Borrower from time to time party to this Agreement,
as Guarantors, the several financial institutions from time to time party to
this Agreement, as Lenders, National City Bank of Pennsylvania, as syndication
agent (the "Syndication Agent"), and Xxxxxx Trust and Savings Bank, as
Administrative Agent as provided herein and BMO Xxxxxxx Xxxxx as Lead Arranger
as provided herein (the "Lead Arranger"). All capitalized terms used herein
without definition shall have the same meanings herein as such terms are defined
in Section 5.1 hereof.
PRELIMINARY STATEMENT
The Borrower has requested, and the Lenders have agreed to extend,
certain credit facilities on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. THE CREDIT FACILITIES.
Section 1.1. Revolving Credit Commitments. Subject to the terms and
conditions hereof, each Lender, by its acceptance hereof, severally agrees to
make a loan or loans (individually a "Revolving Loan" and collectively the
"Revolving Loans") in U.S. Dollars to the Borrower from time to time on a
revolving basis up to the amount of such Lender's Revolving Credit Commitment,
subject to any reductions thereof pursuant to the terms hereof, before the
Revolving Credit Termination Date. The sum of the aggregate principal amount of
Revolving Loans, Swing Loans, and L/C Obligations at any time outstanding shall
not exceed the Revolving Credit Commitments in effect at such time. Each
Borrowing of Revolving Loans shall be made ratably by the Lenders in proportion
to their respective Revolver Percentages. As provided in Section 1.4(a) hereof,
the Borrower may elect that each Borrowing of Revolving Loans be either Base
Rate Loans or Eurodollar Loans. Revolving Loans may be repaid and the principal
amount thereof reborrowed before the Revolving Credit Termination Date, subject
to the terms and conditions hereof.
Section 1.2. Letters of Credit. (a) General Terms. Subject to the terms
and conditions hereof, as part of the Revolving Credit, the L/C Issuer shall
issue standby and commercial letters of credit (each a "Letter of Credit") for
the Borrower's account or for the account of the Borrower and one or more of its
Subsidiaries in an aggregate undrawn face amount up to the L/C Sublimit. Each
Letter of Credit shall be issued by the L/C Issuer, but each Lender shall be
obligated to reimburse the L/C Issuer for such Lender's Revolver Percentage of
the amount of each drawing thereunder and, accordingly, each Letter of Credit
shall constitute usage of the Revolving Credit Commitment of each Lender pro
rata in an amount equal to its Revolver Percentage of the L/C Obligations then
outstanding.
(b) Applications. At any time before the Revolving Credit
Termination Date, the L/C Issuer shall, at the request of the Borrower, issue
one or more Letters of Credit in U.S. Dollars, in a form satisfactory to the L/C
Issuer, with expiration dates no later than the earlier of 12 months from the
date of issuance (or which are cancelable not later than 12 months from the date
of issuance and each renewal) or 30 days prior to the Revolving Credit
Termination Date, in an aggregate face amount as set forth above, upon the
receipt of an application duly executed by the Borrower and, if such Letter of
Credit is for the account of one of its Subsidiaries, such Subsidiary for the
relevant Letter of Credit in the form then customarily prescribed by the L/C
Issuer for the Letter of Credit requested (each an "Application").
Notwithstanding anything contained in any Application to the contrary: (i) the
Borrower shall pay fees in connection with each Letter of Credit as set forth in
Section 2.1 hereof, (ii) except as otherwise provided in Section 1.8 hereof,
before the occurrence of a Default or an Event of Default, the L/C Issuer will
not call for the funding by the Borrower of any amount under a Letter of Credit
before being presented with a drawing thereunder, and (iii) if the L/C Issuer is
not timely reimbursed for the amount of any drawing under a Letter of Credit on
the date such drawing is paid, the Borrower's obligation to reimburse the L/C
Issuer for the amount of such drawing shall bear interest (which the Borrower
hereby promises to pay) from and after the date such drawing is paid at a rate
per annum equal to the sum of 2.0% plus the Applicable Margin plus the Base Rate
from time to time in effect (computed on the basis of a year of 365 or 366 days,
as the case may be, and the actual number of days elapsed). If the L/C Issuer
issues any Letter of Credit with an expiration date that is automatically
extended unless the L/C Issuer gives notice that the expiration date will not so
extend beyond its then scheduled expiration date, unless the Required Lenders
instruct the L/C Issuer otherwise, the L/C Issuer will give such notice of
non-renewal before the time necessary to prevent such automatic extension if
before such required notice date: (i) the expiration date of such Letter of
Credit if so extended would be after the Revolving Credit Termination Date, (ii)
the Revolving Credit Commitments have been terminated, or (iii) a Default or an
Event of Default exists and the Administrative Agent, at the request or with the
consent of the Required Lenders, has given the L/C Issuer instructions not to so
permit the extension of the expiration date of such Letter of Credit. The L/C
Issuer agrees to issue amendments to the Letter(s) of Credit increasing the
amount, or extending the expiration date, thereof at the request of the Borrower
subject to the conditions of Section 7 hereof and the other terms of this
Section 1.2.
(c) The Reimbursement Obligations. Subject to Section 1.2(b) hereof,
the obligation of the Borrower to reimburse the L/C Issuer for all drawings
under a Letter of Credit (a "Reimbursement Obligation") shall be governed by the
Application related to such Letter of Credit, except that reimbursement shall be
made by no later than 12:00 Noon (Chicago time) on the date when each drawing is
to be paid if the Borrower has been informed of such drawing by the L/C Issuer
on or before 11:30 a.m. (Chicago time) on the date when such drawing is to be
paid or, if notice of such drawing is given to the Borrower after 11:30 a.m.
(Chicago time) on the date when such drawing is to be paid, by the end of such
day, in immediately available funds at the Administrative Agent's principal
office in Chicago, Illinois or such other office as the Administrative Agent may
designate in writing to the Borrower (who shall thereafter cause to be
distributed to the L/C Issuer such amount(s) in like funds). If the Borrower
does not make any such reimbursement payment on the date due and the
Participating Lenders fund their participations therein in the manner set forth
in Section 1.2(d) below, then all payments thereafter
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received by the Administrative Agent in discharge of any of the relevant
Reimbursement Obligations shall be distributed in accordance with Section 1.2(d)
below.
(d) The Participating Interests. Each Lender (other than the Lender
acting as L/C Issuer in issuing the relevant Letter of Credit), by its
acceptance hereof, severally agrees to purchase from the L/C Issuer, and the L/C
Issuer hereby agrees to sell to each such Lender (a "Participating Lender"), an
undivided percentage participating interest (a "Participating Interest"), to the
extent of its Revolver Percentage, in each Letter of Credit issued by, and each
Reimbursement Obligation owed to, the L/C Issuer. Upon any failure by the
Borrower to pay any Reimbursement Obligation at the time required on the date
the related drawing is to be paid, as set forth in Section 1.2(c) above, or if
the L/C Issuer is required at any time to return to the Borrower or to a
trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Participating Lender shall, not
later than the Business Day it receives a certificate in the form of Exhibit A
hereto from the L/C Issuer (with a copy to the Administrative Agent) to such
effect, if such certificate is received before 1:00 p.m. (Chicago time), or not
later than 1:00 p.m. (Chicago time) the following Business Day, if such
certificate is received after such time, pay to the Administrative Agent for the
account of the L/C Issuer an amount equal to such Participating Lender's
Revolver Percentage of such unpaid or recaptured Reimbursement Obligation
together with interest on such amount accrued from the date the related payment
was made by the L/C Issuer to the date of such payment by such Participating
Lender at a rate per annum equal to: (i) from the date the related payment was
made by the L/C Issuer to the date 2 Business Days after payment by such
Participating Lender is due hereunder, the Federal Funds Rate for each such day
and (ii) from the date 2 Business Days after the date such payment is due from
such Participating Lender to the date such payment is made by such Participating
Lender, the Base Rate in effect for each such day. Each such Participating
Lender shall thereafter be entitled to receive its Revolver Percentage of each
payment received in respect of the relevant Reimbursement Obligation and of
interest paid thereon, with the L/C Issuer retaining its Revolver Percentage
thereof as a Lender hereunder.
The several obligations of the Participating Lenders to the L/C
Issuer under this Section 1.2 shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and shall not be subject to any
set-off, counterclaim or defense to payment which any Participating Lender may
have or have had against the Borrower, the L/C Issuer, the Administrative
Agent, any Lender or any other Person whatsoever. Without limiting the
generality of the foregoing, such obligations shall not be affected by any
Default or Event of Default or by any reduction or termination of any
Commitment of any Lender, and each payment by a Participating Lender under this
Section 1.2 shall be made without any offset, abatement, withholding or
reduction whatsoever.
(e) Indemnification. The Participating Lenders shall, to the extent
of their respective Revolver Percentages, indemnify the L/C Issuer (to the
extent not reimbursed by the Borrower) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from the L/C Issuer's gross negligence or
willful misconduct) that the L/C Issuer may suffer or incur in connection with
any Letter of Credit issued by it. The obligations of the Participating Lenders
under this Section 1.2(e) and all other parts of
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this Section 1.2 shall survive termination of this Agreement and of all
Applications, Letters of Credit, and all drafts and other documents presented in
connection with drawings thereunder.
(f) Manner of Requesting a Letter of Credit. The Borrower shall
provide at least five (5) Business Days' advance written notice to the
Administrative Agent of each request for the issuance of a Letter of Credit,
such notice in each case to be accompanied by an Application for such Letter of
Credit properly completed and executed by the Borrower and, in the case of an
extension or an increase in the amount of a Letter of Credit, a written request
therefor, in a form acceptable to the Administrative Agent and the L/C Issuer,
in each case, together with the fees called for by this Agreement. The
Administrative Agent shall promptly notify the L/C Issuer of the Administrative
Agent's receipt of each such notice and the L/C Issuer shall promptly notify the
Administrative Agent and the Lenders of the issuance of the Letter of Credit so
requested.
(g) Existing letters of credit. Notwithstanding anything herein to
the contrary, the letters of credit described on Schedule 1.2 hereof issued by
National City Bank of Pennsylvania prior to the date hereof for the account of
the Borrower shall be deemed to be a "Letter of Credit" for all purposes of this
Agreement to the same extent and with the same force and effect as if such
letters of credit had been issued at the request of the Borrower pursuant to
this Agreement.
Section 1.3. Applicable Interest Rates. (a) Base Rate Loans. Each Base
Rate Loan made or maintained by a Lender shall bear interest during each
Interest Period it is outstanding (computed on the basis of a year of 365 or 366
days, as the case may be, and the actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is advanced, continued or created by
conversion from a Eurodollar Loan until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin plus
the Base Rate from time to time in effect, payable on the last day of its
Interest Period and at maturity (whether by acceleration or otherwise).
"Base Rate" means for any day the greater of: (i) the rate of interest
announced or otherwise established by the Administrative Agent from time to time
as its prime commercial rate as in effect on such day, with any change in the
Base Rate resulting from a change in said prime commercial rate to be effective
as of the date of the relevant change in said prime commercial rate (it being
acknowledged and agreed that such rate may not be the Administrative Agent's
best or lowest rate) and (ii) the sum of (x) the rate determined by the
Administrative Agent to be the average (rounded upward, if necessary, to the
next higher 1/100 of 1%) of the rates per annum quoted to the Administrative
Agent at approximately 10:00 a.m. (Chicago time) (or as soon thereafter as is
practicable) on such day (or, if such day is not a Business Day, on the
immediately preceding Business Day) by two or more Federal funds brokers
selected by the Administrative Agent for sale to the Administrative Agent at
face value of Federal funds in the secondary market in an amount equal or
comparable to the principal amount owed to the Administrative Agent for which
such rate is being determined, plus (y) 1/2 of 1%.
(b) Eurodollar Loans. Each Eurodollar Loan made or maintained by a
Lender shall bear interest during each Interest Period it is outstanding
(computed on the basis of a year of 360 days and actual days elapsed) on the
unpaid principal amount thereof from the date such Loan is
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advanced, continued or created by conversion from a Base Rate Loan until
maturity (whether by acceleration or otherwise) at a rate per annum equal to the
sum of the Applicable Margin plus the Adjusted LIBOR applicable for such
Interest Period, payable on the last day of the Interest Period and at maturity
(whether by acceleration or otherwise), and, if the applicable Interest Period
is longer than three months, on each day occurring every three months after the
commencement of such Interest Period.
"Adjusted LIBOR" means, for any Borrowing of Eurodollar Loans, a rate
per annum determined in accordance with the following formula:
Adjusted LIBOR = LIBOR
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1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means, for any Borrowing of Eurodollar
Loans, the daily average for the applicable Interest Period of the maximum rate,
expressed as a decimal, at which reserves (including, without limitation, any
supplemental, marginal, and emergency reserves) are imposed during such Interest
Period by the Board of Governors of the Federal Reserve System (or any
successor) on "eurocurrency liabilities", as defined in such Board's Regulation
D (or in respect of any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Loans is determined or any
category of extensions of credit or other assets that include loans by
non-United States offices of any Lender to United States residents), subject to
any amendments of such reserve requirement by such Board or its successor,
taking into account any transitional adjustments thereto. For purposes of this
definition, the Eurodollar Loans shall be deemed to be "eurocurrency
liabilities" as defined in Regulation D without benefit or credit for any
prorations, exemptions or offsets under Regulation D.
"LIBOR" means, for an Interest Period for a Borrowing of Eurodollar
Loans, (a) the LIBOR Index Rate for such Interest Period, if such rate is
available, and (b) if the LIBOR Index Rate cannot be determined, the arithmetic
average of the rates of interest per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) at which deposits in U.S. Dollars in immediately
available funds are offered to the Administrative Agent at 11:00 a.m. (London,
England time) 2 Business Days before the beginning of such Interest Period by 3
or more major banks in the interbank eurodollar market selected by the
Administrative Agent for delivery on the first day of and for a period equal to
such Interest Period and in an amount equal or comparable to the principal
amount of the Eurodollar Loan scheduled to be made by the Administrative Agent
as part of such Borrowing.
"LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in U.S. Dollars for a period equal to such
Interest Period, which appears on the Telerate Page 3750 as of 11:00 a.m.
(London, England time) on the day 2 Business Days before the commencement of
such Interest Period.
"Telerate Page 3750" means the display designated as "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that service or
such other service as
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may be nominated by the British Bankers' Association as the information vendor
for the purpose of displaying British Bankers' Association Interest Settlement
Rates for U.S. Dollar deposits).
(c) Rate Determinations. The Administrative Agent shall determine
each interest rate applicable to the Loans and the Reimbursement Obligations
hereunder, and its determination thereof shall be conclusive and binding except
in the case of manifest error.
Section 1.4. Minimum Borrowing Amounts; Maximum Eurodollar Loans. Each
Borrowing of Base Rate Loans advanced under a Credit shall be in an amount not
less than $1,000,000. Each Borrowing of Eurodollar Loans advanced, continued or
converted under a Credit shall be in an amount equal to $1,000,000 or such
greater amount which is an integral multiple of $1,000,000. Without the
Administrative Agent's consent, there shall not be more than seven (7)
Borrowings of Eurodollar Loans outstanding under a Credit at any one time.
Section 1.5. Manner of Borrowing Loans and Designating Applicable
Interest Rates. (a) Notice to the Administrative Agent. The Borrower shall give
notice to the Administrative Agent by no later than 10:00 a.m. (Chicago time):
(i) at least 3 Business Days before the date on which the Borrower requests the
Lenders to advance a Borrowing of Eurodollar Loans and (ii) on the date the
Borrower requests the Lenders to advance a Borrowing of Base Rate Loans. The
Loans included in each Borrowing shall bear interest initially at the type of
rate specified in such notice of a new Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne by
each Borrowing or, subject to Section 1.4's minimum amount requirement for each
outstanding Borrowing, a portion thereof, as follows: (i) if such Borrowing is
of Eurodollar Loans, on the last day of the Interest Period applicable thereto,
the Borrower may continue part or all of such Borrowing as Eurodollar Loans or
convert part or all of such Borrowing into Base Rate Loans or (ii) if such
Borrowing is of Base Rate Loans, on any Business Day, the Borrower may convert
all or part of such Borrowing into Eurodollar Loans for an Interest Period or
Interest Periods specified by the Borrower. The Borrower shall give all such
notices requesting the advance, continuation or conversion of a Borrowing to the
Administrative Agent by telephone or telecopy (which notice shall be irrevocable
once given and, if by telephone, shall be promptly confirmed in writing),
substantially in the form attached hereto as Exhibit B (Notice of Borrowing) or
Exhibit C (Notice of Continuation/Conversion), as applicable, or in such other
form acceptable to the Administrative Agent. Notice of the continuation of a
Borrowing of Eurodollar Loans for an additional Interest Period or of the
conversion of part or all of a Borrowing of Base Rate Loans into Eurodollar
Loans must be given by no later than 10:00 a.m. (Chicago time) at least 3
Business Days before the date of the requested continuation or conversion. All
such notices concerning the advance, continuation or conversion of a Borrowing
shall specify the date of the requested advance, continuation or conversion of a
Borrowing (which shall be a Business Day), the amount of the requested Borrowing
to be advanced, continued or converted, the type of Loans to comprise such new,
continued or converted Borrowing and, if such Borrowing is to be comprised of
Eurodollar Loans, the Interest Period applicable thereto. The Borrower agrees
that the Administrative Agent may rely on any such telephonic or telecopy notice
given by any person the Administrative Agent in good faith believes is an
Authorized Representative without the necessity of independent investigation
and, in the event any such notice by telephone conflicts with any written
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confirmation, such telephonic notice shall govern if the Administrative Agent
has acted in reliance thereon.
(b) Notice to the Lenders. The Administrative Agent shall give
prompt telephonic or telecopy notice to each Lender of any notice from the
Borrower received pursuant to Section 1.5(a) above and, if such notice requests
the Lenders to make Eurodollar Loans, the Administrative Agent shall give notice
to the Borrower and each Lender by like means of the interest rate applicable
thereto promptly after the Administrative Agent has made such determination.
(c) Borrower's Failure to Notify; Automatic Continuations and
Conversions. Any outstanding Borrowing of Base Rate Loans shall automatically be
continued for an additional Interest Period on the last day of its then current
Interest Period unless the Borrower has notified the Administrative Agent within
the period required by Section 1.5(a) that the Borrower intends to convert such
Borrowing, subject to Section 7.1 hereof, into a Borrowing of Eurodollar Loans
or such Borrowing is prepaid in accordance with Section 1.8(a). If the Borrower
fails to give notice pursuant to Section 1.5(a) above of the continuation or
conversion of any outstanding principal amount of a Borrowing of Eurodollar
Loans before the last day of its then current Interest Period within the period
required by Section 1.5(a) or, whether or not such notice has been given, one or
more of the conditions set forth in Section 7.1 for the continuation or
conversion of a Borrowing of Eurodollar Loans would not be satisfied, and such
Borrowing is not prepaid in accordance with Section 1.8(a), such Borrowing shall
automatically be converted into a Borrowing of Base Rate Loans. In the event the
Borrower fails to give notice pursuant to Section 1.5(a) above of a Borrowing
equal to the amount of a Reimbursement Obligation and has not notified the
Administrative Agent by 1:00 p.m. (Chicago time) on the day such Reimbursement
Obligation becomes due that it intends to repay such Reimbursement Obligation
through funds not borrowed under this Agreement, the Borrower shall be deemed to
have requested a Borrowing of Base Rate Loans under the Revolving Credit (or, at
the option of the Administrative Agent, under the Swing Line) on such day in the
amount of the Reimbursement Obligation then due, which Borrowing shall be
applied to pay the Reimbursement Obligation then due.
(d) Disbursement of Loans. Not later than 1:00 p.m. (Chicago time)
on the date of any requested advance of a new Borrowing, subject to Section 7
hereof, each Lender shall make available its Loan comprising part of such
Borrowing in funds immediately available at the principal office of the
Administrative Agent in Chicago, Illinois. The Administrative Agent shall make
the proceeds of each new Borrowing available to the Borrower at the
Administrative Agent's principal office in Chicago, Illinois.
(e) Administrative Agent Reliance on Lender Funding. Unless the
Administrative Agent shall have been notified by a Lender prior to (or, in the
case of a Borrowing of Base Rate Loans, by 1:00 p.m. (Chicago time) on) the date
on which such Lender is scheduled to make payment to the Administrative Agent of
the proceeds of a Loan (which notice shall be effective upon receipt) that such
Lender does not intend to make such payment, the Administrative Agent may assume
that such Lender has made such payment when due and the Administrative Agent may
in reliance upon such assumption (but shall not be required to) make available
to the
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Borrower the proceeds of the Loan to be made by such Lender and, if any Lender
has not in fact made such payment to the Administrative Agent, such Lender
shall, on demand, pay to the Administrative Agent the amount made available to
the Borrower attributable to such Lender 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 ending on (but excluding) the date such
Lender pays such amount to the Administrative Agent at a rate per annum equal
to: (i) from the date the related advance was made by the Administrative Agent
to the date 2 Business Days after payment by such Lender is due hereunder, the
Federal Funds Rate for each such day and (ii) from the date 2 Business Days
after the date such payment is due from such Lender to the date such payment is
made by such Lender, the Base Rate in effect for each such day. If such amount
is not received from such Lender by the Administrative Agent immediately upon
demand, the Borrower will, on demand, repay to the Administrative Agent the
proceeds of the Loan attributable to such Lender with interest thereon at a rate
per annum equal to the interest rate applicable to the relevant Loan, but
without such payment being considered a payment or prepayment of a Loan under
Section 1.11 hereof so that the Borrower will have no liability under such
Section with respect to such payment.
Section 1.6. Interest Periods. As provided in Section 1.5(a) and 1.14
hereof, at the time of each request to advance, continue or create by conversion
a Borrowing of Eurodollar Loans or Swing Loans, the Borrower shall select an
Interest Period applicable to such Loans from among the available options. The
term "Interest Period" means the period commencing on the date a Borrowing of
Loans is advanced, continued or created by conversion and ending: (a) in the
case of Base Rate Loans, on the last day of the calendar month in which such
Borrowing is advanced, continued or created by conversion (or on the last day of
the following calendar month if such Loan is advanced, continued or created by
conversion on the last day of a calendar month), (b) in the case of a Eurodollar
Loan, 1, 2, 3 or 6 months thereafter, and (c) in the case of a Swing Loan, on
the date 1 to 7 days thereafter as mutually agreed to by the Borrower and the
Administrative Agent; provided, however, that:
(a) any Interest Period for a Borrowing of Revolving Loans or
Swing Loans consisting of Base Rate Loans that otherwise would end
after the Revolving Credit Termination Date shall end on the Revolving
Credit Termination Date;
(b) no Interest Period with respect to any portion of the
Revolving Loans or Swing Loans shall extend beyond the Revolving Credit
Termination Date;
(c) whenever the last day of any Interest Period would
otherwise be a day that is not a Business Day, the last day of such
Interest Period shall be extended to the next succeeding Business Day,
provided that, if such extension would cause the last day of an
Interest Period for a Borrowing of Eurodollar Loans to occur in the
following calendar month, the last day of such Interest Period shall be
the immediately preceding Business Day; and
(d) for purposes of determining an Interest Period for a
Borrowing of Eurodollar Loans, a month means a period starting on one
day in a calendar month and ending on the numerically corresponding day
in the next calendar month; provided,
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however, that if there is no numerically corresponding day in the month
in which such an Interest Period is to end or if such an Interest
Period begins on the last Business Day of a calendar month, then such
Interest Period shall end on the last Business Day of the calendar
month in which such Interest Period is to end.
Section 1.7. Maturity of Loans. Each Revolving Loan and Swing Loan,
both for principal and interest not sooner paid, shall mature and become due and
payable by the Borrower on the Revolving Credit Termination Date.
Section 1.8. Prepayments. (a) Optional. The Borrower shall have the
privilege of prepaying without premium or penalty (except as set forth in
Section 1.11 below) and in whole or in part (but, if in part, then: (i) if such
Borrowing is of Base Rate Loans, in an amount not less than $1,000,000, (ii) if
such Borrowing is of Eurodollar Loans, in an amount not less than $1,000,000,
and (iii) in each case, in an amount such that the minimum amount required for a
Borrowing pursuant to Section 1.4 and 1.14 hereof remains outstanding) any
Borrowing of Eurodollar Loans at any time upon 3 Business Days prior notice by
the Borrower to the Administrative Agent or, in the case of a Borrowing of Base
Rate Loans, notice delivered by the Borrower to the Administrative Agent no
later than 10:00 a.m. (Chicago time) on the date of prepayment, such prepayment
to be made by the payment of the principal amount to be prepaid and, in the case
of any Eurodollar Loans or Swing Loans, accrued interest thereon to the date
fixed for prepayment plus any amounts due the Lenders under Section 1.11 hereof.
(b) Mandatory. (i) If the Borrower or any Subsidiary shall at any
time or from time to time make or agree to make a Disposition or shall suffer an
Event of Loss resulting in Net Cash Proceeds in excess of $1,000,000
individually or on a cumulative basis in any fiscal year of the Borrower, then
(x) the Borrower shall promptly notify the Administrative Agent of such proposed
Disposition or Event of Loss (including the amount of the estimated Net Cash
Proceeds to be received by the Borrower or such Subsidiary in respect thereof)
and (y) promptly upon receipt by the Borrower or the Subsidiary of the Net Cash
Proceeds of such Disposition or Event of Loss, the Borrower shall prepay the
outstanding Loans and L/C Obligations in an aggregate amount equal to 100% of
the amount of all such Net Cash Proceeds; provided that in the case of each
Disposition and Event of Loss, if the Borrower states in its notice of such
event that the Borrower or the applicable Subsidiary intends to reinvest, within
180 days of the applicable Disposition or receipt of Net Cash Proceeds from an
Event of Loss, the Net Cash Proceeds thereof in assets similar to the assets
which were subject to such Disposition or Event of Loss, then so long as no
Default or Event of Default then exists, the Borrower shall not be required to
make a mandatory prepayment under this Section in respect of such Net Cash
Proceeds to the extent such Net Cash Proceeds are actually reinvested in such
similar assets with such 180-day period. Promptly after the end of such 180-day
period, the Borrower shall notify the Administrative Agent whether the Borrower
or such Subsidiary has reinvested such Net Cash Proceeds in such similar assets,
and to the extent such Net Cash Proceeds have not been so reinvested, the
Borrower shall promptly prepay the outstanding Loans and L/C Obligations in the
amount of such Net Cash Proceeds not so reinvested. The amount of each such
prepayment shall be applied on a ratable basis among the relevant outstanding
Obligations based on the principal amounts thereof.
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(ii) If after the Closing Date the Borrower or any Subsidiary
shall issue new equity securities (whether common or preferred stock or
otherwise), other than equity securities issued in connection with the exercise
of employee stock options, common stock issued to fund the prepayment,
redemption or purchase of Senior Notes, and capital stock issued to the seller
of an Acquired Business in connection with an Acquisition permitted hereby, the
Borrower shall promptly notify the Administrative Agent of the estimated Net
Cash Proceeds of such issuance to be received by or for the account of the
Borrower or such Subsidiary in respect thereof. Promptly upon receipt by the
Borrower or such Subsidiary of Net Cash Proceeds of such issuance, the Borrower
shall prepay the outstanding Loans and L/C Obligations in an aggregate amount
equal to 100% of the amount of such Net Cash Proceeds. The amount of each such
prepayment shall be applied on a ratable basis among the relevant outstanding
Obligations based on the principal amounts thereof. The Borrower acknowledges
that its performance hereunder shall not limit the rights and remedies of the
Lenders for any breach of Section 8.11 (Maintenance of Subsidiaries) or Section
9.1(i) (Change of Control) hereof or any other terms of the Loan Documents.
(iii) If after the Closing Date the Borrower or any Subsidiary
shall issue any Indebtedness for Borrowed Money, other than Indebtedness for
Borrowed Money permitted by Section 8.7(a)-(e) hereof, the Borrower shall
promptly notify the Administrative Agent of the estimated Net Cash Proceeds of
such issuance to be received by or for the account of the Borrower or such
Subsidiary in respect thereof. Promptly upon receipt by the Borrower or such
Subsidiary of Net Cash Proceeds of such issuance, the Borrower shall prepay the
outstanding Loans and L/C Obligations in an aggregate amount equal to 100% of
the amount of such Net Cash Proceeds. The amount of each such prepayment shall
be applied on a ratable basis among the relevant outstanding Obligations based
on the principal amounts thereof. The Borrower acknowledges that its performance
hereunder shall not limit the rights and remedies of the Lenders for any breach
of Section 8.7 hereof or any other terms of the Loan Documents.
(iv) The Borrower shall, on each date the Revolving Credit
Commitments are reduced pursuant to Section 1.12 hereof, prepay the Revolving
Loans, Swing Loans, and, if necessary, prefund the L/C Obligations by the
amount, if any, necessary to reduce the sum of the aggregate principal amount of
Revolving Loans, Swing Loans, and L/C Obligations then outstanding to the amount
to which the Revolving Credit Commitments have been so reduced.
(v) Unless the Borrower otherwise directs, prepayments of Loans
under this Section 1.8(b) shall be applied first to Borrowings of Base Rate
Loans until payment in full thereof with any balance applied to Borrowings of
Eurodollar Loans in the order in which their Interest Periods expire. Each
prepayment of Loans under this Section 1.8(b) shall be made by the payment of
the principal amount to be prepaid and, in the case of any Eurodollar Loans or
Swing Loans, accrued interest thereon to the date of prepayment together with
any amounts due the Lenders under Section 1.11 hereof. Each prefunding of L/C
Obligations shall be made in accordance with Section 9.4 hereof.
(c) The Administrative Agent will promptly advise each Lender
of any notice of prepayment it receives from the Borrower. Any amount of
Revolving Loans and Swing Loans paid or prepaid before the Revolving Credit
Termination Date may, subject to the terms and conditions of this Agreement, be
borrowed, repaid and borrowed again.
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Section 1.9. Default Rate. Notwithstanding anything to the contrary
contained in Section 1.3 hereof, while any Event of Default exists or after
acceleration, the Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal amount of all
Loans owing by it at a rate per annum equal to:
(a) for any Base Rate Loan or any Swing Loan bearing interest
based on the Base Rate, the sum of 2.0% plus the Applicable Margin plus
the Base Rate from time to time in effect; and
(b) for any Eurodollar Loan or any Swing Loan bearing interest
at the Administrative Agent's Quoted Rate, the sum of 2.0% plus the
rate of interest in effect thereon at the time of such default until
the end of the Interest Period applicable thereto and, thereafter, at a
rate per annum equal to the sum of 2.0% plus the Applicable Margin for
Base Rate Loans plus the Base Rate from time to time in effect;
provided, however, that in the absence of acceleration, any adjustments pursuant
to this Section shall be made at the election of the Administrative Agent,
acting at the request or with the consent of the Required Lenders, with written
notice to the Borrower. While any Event of Default exists or after acceleration,
interest shall be paid on demand of the Administrative Agent at the request or
with the consent of the Required Lenders.
Section 1.10. The Notes. (a) The Revolving Loans made to the Borrower
by a Lender shall be evidenced by a single promissory note of the Borrower
issued to such Lender in the form of Exhibit D-1 hereto. Each such promissory
note is hereinafter referred to as a "Revolving Note" and collectively such
promissory notes are referred to as the "Revolving Notes."
(b) The Swing Loans made to the Borrower by the Administrative Agent
shall be evidenced by a single promissory note of the Borrower issued to the
Administrative Agent in the form of Exhibit D-2 hereto. Such promissory note is
hereinafter referred to as the "Swing Note."
(c) Each Lender shall record on its books and records or on a
schedule to its appropriate Note the amount of each Loan advanced, continued or
converted by it, all payments of principal and interest and the principal
balance from time to time outstanding thereon, the type of such Loan, and, for
any Eurodollar Loan or Swing Loan, the Interest Period and the interest rate
applicable thereto. The record thereof, whether shown on such books and records
of a Lender or on a schedule to the relevant Note, shall be prima facie evidence
as to all such matters; provided, however, that the failure of any Lender to
record any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the Borrower to repay all Loans made to it
hereunder together with accrued interest thereon. At the request of any Lender
and upon such Lender tendering to the Borrower the appropriate Note to be
replaced, the Borrower shall furnish a new Note to such Lender to replace any
outstanding Note, and at such time the first notation appearing on a schedule on
the reverse side of, or attached to, such Note shall set forth the aggregate
unpaid principal amount of all Loans, if any, then outstanding thereon.
Section 1.11. Funding Indemnity. If any Lender shall incur any loss,
cost or expense (including, without limitation, any loss of profit, and any
loss, cost or expense incurred by reason
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of the liquidation or re-employment of deposits or other funds acquired by such
Lender to fund or maintain any Eurodollar Loan or Swing Loan or the relending or
reinvesting of such deposits or amounts paid or prepaid to such Lender) as a
result of:
(a) any payment, prepayment or conversion of a Eurodollar Loan
or Swing Loan on a date other than the last day of its Interest Period,
(b) any failure (because of a failure to meet the conditions
of Section 7 or otherwise) by the Borrower to borrow or continue a
Eurodollar Loan or Swing Loan, or to convert a Base Rate Loan into a
Eurodollar Loan or Swing Loan, on the date specified in a notice given
pursuant to Section 1.5(a) or 1.14 hereof,
(c) any failure by the Borrower to make any payment of
principal on any Eurodollar Loan or Swing Loan when due (whether by
acceleration or otherwise), or
(d) any acceleration of the maturity of a Eurodollar Loan or
Swing Loan as a result of the occurrence of any Event of Default
hereunder,
then, upon the demand of such Lender, the Borrower shall pay to such Lender such
amount as will reimburse such Lender for such loss, cost or expense. If any
Lender makes such a claim for compensation, it shall provide to the Borrower,
with a copy to the Administrative Agent, a certificate setting forth the amount
of such loss, cost or expense in reasonable detail and the amounts shown on such
certificate shall be conclusive if reasonably determined.
Section 1.12. Commitment Terminations. (a) Optional Revolving Credit
Terminations. The Borrower shall have the right at any time and from time to
time, upon 5 Business Days prior written notice to the Administrative Agent (or
such shorter time period agreed to by the Administrative Agent), to terminate
the Revolving Credit Commitments without premium or penalty and in whole or in
part, any partial termination to be (i) in an amount not less than $5,000,000
and (ii) allocated ratably among the Lenders in proportion to their respective
Revolver Percentages, provided that the Revolving Credit Commitments may not be
reduced to an amount less than the sum of the aggregate principal amount of
Revolving Loans, Swing Loans, and L/C Obligations then outstanding. Any
termination of the Revolving Credit Commitments below the L/C Sublimit or Swing
Line Sublimit then in effect shall reduce the L/C Sublimit and Swing Line
Sublimit, as applicable, by a like amount. The Administrative Agent shall give
prompt notice to each Lender of any such termination of the Revolving Credit
Commitments.
(b) Any termination of the Commitments pursuant to this Section 1.12
may not be reinstated.
Section 1.13. Substitution of Lenders. Upon the receipt by the Borrower
of (a) a claim from any Lender for compensation under Section 10.3 or 13.1
hereof, (b) notice by any Lender to the Borrower of any illegality pursuant to
Section 10.1 hereof, (c) in the event any Lender is in default in any material
respect with respect to its obligations under the Loan Documents or (d) as and
to the extent provided in Section 13.13(b) (any such Lender referred to in
clause (a), (b), (c)
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or (d) above being hereinafter referred to as an "Affected Lender"), the
Borrower may, in addition to any other rights the Borrower may have hereunder or
under applicable law, require, at its expense, any such Affected Lender to
assign, at par plus accrued interest and fees, without recourse, all of its
interest, rights, and obligations hereunder (including all of its Commitments
and the Loans and participation interests in Letters of Credit and other amounts
at any time owing to it hereunder and the other Loan Documents) to a bank or
other institutional lender specified by the Borrower (collectively, the
"Replacement Lenders"), provided that (i) such assignment shall not conflict
with or violate any law, rule or regulation or order of any court or other
governmental authority, (ii) the Borrower shall have received the written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld, to such assignment, (iii) the Borrower shall have paid to the Affected
Lender all monies (together with amounts due such Affected Lender under Section
1.11 hereof as if the Loans owing to it were prepaid rather than assigned) other
than such principal, interest, and fees accrued and owing to it hereunder, and
(iv) the assignment is entered into in accordance with the other requirements of
Section 13.12 hereof.
Section 1.14. Swing Loans. (a) Generally. Subject to the terms and
conditions hereof, as part of the Revolving Credit, the Administrative Agent
agrees to make loans to the Borrower under the Swing Line (individually a "Swing
Loan" and collectively the "Swing Loans") which shall not in the aggregate at
any time outstanding exceed the Swing Line Sublimit. The Swing Loans may be
availed of the Borrower from time to time and borrowings thereunder may be
repaid and used again during the period ending on the Revolving Credit
Termination Date; provided that each Swing Loan must be repaid on the last day
of the Interest Period applicable thereto. Each Swing Loan shall be in a minimum
amount of $250,000 or such greater amount which is an integral multiple of
$100,000.
(b) Interest on Swing Loans. Each Swing Loan shall bear interest
until maturity (whether by acceleration or otherwise) at a rate per annum equal
to (i) the sum of the Base Rate plus the Applicable Margin for Base Rate Loans
under the Revolving Credit as from time to time in effect (computed on the basis
of a year of 365 or 366 days, as the case may be, for the actual number of days
elapsed) or (ii) the Administrative Agent's Quoted Rate (computed on the basis
of a year of 360 days for the actual number of days elapsed). Interest on each
Swing Loan shall be due and payable prior to such maturity on the last day of
each Interest Period applicable thereto.
(c) Requests for Swing Loans. The Borrower shall give the
Administrative Agent prior notice (which may be written or oral) no later than
12:00 Noon (Chicago time) on the date upon which a Borrower requests that any
Swing Loan be made, of the amount and date of such Swing Loan, and the Interest
Period requested therefor. Within 30 minutes after receiving such notice, the
Administrative Agent shall in its discretion quote an interest rate to the
Borrower at which the Administrative Agent would be willing to make such Swing
Loan available to the Borrower for the Interest Period so requested (the rate so
quoted for a given Interest Period being herein referred to as "Administrative
Agent's Quoted Rate"). The Borrower acknowledges and agrees that the interest
rate quote is given for immediate and irrevocable acceptance. If the Borrower
does not so immediately accept the Administrative Agent's Quoted Rate for the
full amount requested by the Borrower for such Swing Loan, the Administrative
Agent's Quoted Rate shall
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be deemed immediately withdrawn and such Swing Loan shall bear interest at the
rate per annum determined by adding the Applicable Margin for Base Rate Loans
under the Revolving Credit to the Base Rate as from time to time in effect.
Subject to the terms and conditions hereof, the proceeds of such Swing Loan
shall be made available to the Borrower on the date so requested at the offices
of the Administrative Agent in Chicago, Illinois. Anything contained in the
foregoing to the contrary notwithstanding (i) the obligation of the
Administrative Agent to make Swing Loans shall be subject to all of the terms
and conditions of this Agreement and (ii) the Administrative Agent shall not be
obligated to make more than one Swing Loan during any one day.
(d) Refunding Loans. In its sole and absolute discretion, the
Administrative Agent may at any time, on behalf of the Borrower (which hereby
irrevocably authorizes the Administrative Agent to act on its behalf for such
purpose) and with notice to the Borrower, request each Lender to make a
Revolving Loan in the form of a Base Rate Loan in an amount equal to such
Lender's Revolver Percentage of the amount of the Swing Loans outstanding on the
date such notice is given. Unless an Event of Default described in Section
9.1(j) or 9.1(k) exists with respect to the Borrower, regardless of the
existence of any other Event of Default, each Lender shall make the proceeds of
its requested Revolving Loan available to the Administrative Agent, in
immediately available funds, at the Administrative Agent's principal office in
Chicago, Illinois, before 12:00 Noon (Chicago time) on the Business Day
following the day such notice is given. The proceeds of such Borrowing of
Revolving Loans shall be immediately applied to repay the outstanding Swing
Loans.
(e) Participations. If any Lender refuses or otherwise fails to make
a Revolving Loan when requested by the Administrative Agent pursuant to Section
1.14(d) above (because an Event of Default described in Section 9.1(j) or 9.1(k)
exists with respect to the Borrower or otherwise), such Lender will, by the time
and in the manner such Revolving Loan was to have been funded to the
Administrative Agent, purchase from the Administrative Agent an undivided
participating interest in the outstanding Swing Loans in an amount equal to its
Revolver Percentage of the aggregate principal amount of Swing Loans that were
to have been repaid with such Revolving Loans. Each Lender that so purchases a
participation in a Swing Loan shall thereafter be entitled to receive its
Revolver Percentage of each payment of principal received on the Swing Loan and
of interest received thereon accruing from the date such Lender funded to the
Administrative Agent its participation in such Loan. The several obligations of
the Lenders under this Section shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and shall not be subject to any
set-off, counterclaim or defense to payment which any Lender may have or have
had against the Borrower, any other Lender or any other Person whatever. Without
limiting the generality of the foregoing, such obligations shall not be affected
by any Default or Event of Default or by any reduction or termination of the
Commitments of any Lender, and each payment made by a Lender under this Section
shall be made without any offset, abatement, withholding or reduction
whatsoever.
SECTION 2. FEES.
Section 2.1. Fees. (a) Revolving Credit Commitment Fee. The Borrower
shall pay to the Administrative Agent for the ratable account of the Lenders in
accordance with their Revolver
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Percentages a commitment fee at the rate per annum equal to the Applicable
Margin (computed on the basis of a year of 365/366 days, as the case may be, and
the actual number of days elapsed) on the average daily Unused Revolving Credit
Commitments. Such commitment fee shall be payable quarter-annually in arrears on
the last day of each fiscal quarter in each year (commencing on the first such
date occurring after the date hereof) and on the Revolving Credit Termination
Date, unless the Revolving Credit Commitments are terminated in whole on an
earlier date, in which event the commitment fee for the period to the date of
such termination in whole shall be paid on the date of such termination.
(b) Letter of Credit Fees. On the date of issuance or extension, or
increase in the amount, of any Letter of Credit pursuant to Section 1.2 hereof,
the Borrower shall pay to the L/C Issuer for its own account a fronting fee
equal to 0.125% of the face amount of (or of the increase in the face amount of)
such Letter of Credit. Quarterly in arrears, on the last day of each fiscal
quarter, commencing on the first such date occurring after the date hereof, the
Borrower shall pay to the Administrative Agent, for the ratable benefit of the
Lenders in accordance with their Revolver Percentages, a letter of credit fee at
a rate per annum equal to the Applicable Margin (computed on the basis of a year
of 360 days and the actual number of days elapsed) in effect during each day of
such quarter applied to the daily average face amount of Letters of Credit
outstanding during such quarter. In addition, the Borrower shall pay to the L/C
Issuer for its own account the L/C Issuer's standard issuance, drawing,
negotiation, amendment, and other administrative fees for each Letter of Credit.
Such standard fees referred to in the preceding sentence may be established by
the L/C Issuer from time to time.
(c) Administrative Agent Fees. The Borrower shall pay to the
Administrative Agent, for its own use and benefit, the fees agreed to between
the Administrative Agent and the Borrower in a fee letter dated May 6, 2003 or
as otherwise agreed to in writing between them.
(d) Audit Fees. The Borrower shall pay to the Administrative Agent
for its own use and benefit charges for audits of the Collateral performed by
the Administrative Agent or its agents or representatives (which may include any
of the Lenders) in such amounts as the Administrative Agent may from time to
time request (the Administrative Agent acknowledging and agreeing that such
charges shall be computed in the same manner as it at the time customarily uses
for the assessment of charges for similar collateral audits); provided, however,
that in the absence of any Default and Event of Default, the Borrower shall not
be required to pay the Administrative Agent for more than two (2) such audits
per calendar year.
SECTION 3. PLACE AND APPLICATION OF PAYMENTS.
Section 3.1. Place and Application of Payments. All payments of
principal of and interest on the Loans and the Reimbursement Obligations, and of
all other Obligations payable by the Borrower under this Agreement and the other
Loan Documents, shall be made by the Borrower to the Administrative Agent by no
later than 12:00 Noon (Chicago time) on the due date thereof at the office of
the Administrative Agent in Chicago, Illinois (or such other location as the
Administrative Agent may designate to the Borrower) for the benefit of the
Lender or Lenders entitled thereto. Any payments received after such time shall
be deemed to have been received by the Administrative Agent on the next Business
Day. All such payments shall be
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made in U.S. Dollars, in immediately available funds at the place of payment, in
each case without set-off or counterclaim. The Administrative Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal or interest on Loans and on Reimbursement Obligations in which the
Lenders have purchased Participating Interests ratably to the Lenders and like
funds relating to the payment of any other amount payable to any Lender to such
Lender, in each case to be applied in accordance with the terms of this
Agreement.
Anything contained herein to the contrary notwithstanding, all payments
and collections received in respect of the Obligations and all proceeds of the
Collateral received, in each instance, by the Administrative Agent or any of the
Lenders after the occurrence and during the continuation of an Event of Default
shall be remitted to the Administrative Agent and distributed as follows:
(a) first, to the payment of any outstanding costs and
expenses incurred by the Administrative Agent, and any security trustee
therefor, in monitoring, verifying, protecting, preserving or enforcing
the Liens on the Collateral, in protecting, preserving or enforcing
rights under the Loan Documents, and in any event all costs and
expenses of a character which the Borrower has agreed to pay the
Administrative Agent under Section 13.15 hereof (such funds to be
retained by the Administrative Agent for its own account unless it has
previously been reimbursed for such costs and expenses by the Lenders,
in which event such amounts shall be remitted to the Lenders to
reimburse them for payments theretofore made to the Administrative
Agent);
(b) second, to the payment of principal and interest on the
Swing Note until paid in full;
(c) third, to the payment of any outstanding interest and fees
due under the Loan Documents to be allocated pro rata in accordance
with the aggregate unpaid amounts owing to each holder thereof;
(d) fourth, to the payment of principal on the Notes, unpaid
Reimbursement Obligations, together with amounts to be held by the
Administrative Agent as collateral security for any outstanding L/C
Obligations pursuant to Section 9.4 hereof (until the Administrative
Agent is holding an amount of cash equal to the then outstanding amount
of all such L/C Obligations), Hedging Liability owed to the Existing
Swap Providers with regard to the Existing Swaps and Hedging Liability
owed to any Lender under any interest rate protection arrangement
entered into after the Closing Date if the Required Lenders have agreed
that such Hedging Liability shall be entitled to distributions pursuant
to this subsection (d), the aggregate amount paid to, or held as
collateral security for, the Lenders and, in the case of such Hedging
Liability, their Affiliates and the Existing Swaps Providers with
respect only to the Existing Swaps to be allocated pro rata in
accordance with the aggregate unpaid amounts owing to each holder
thereof;
(e) fifth, to the payment of all other unpaid Obligations and
all other indebtedness, obligations, and liabilities of the Borrower
and its Subsidiaries secured by the Collateral Documents (including,
without limitation, Funds Transfer and Deposit
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Account Liability and Hedging Liability owed to the Lenders under
interest rate protection arrangements entered into after the Closing
Date which are not entitled to distributions pursuant to subsection (d)
above and any Hedging Liability owed to the Existing Swap Providers
with respect only to the Existing Swaps) to be allocated pro rata in
accordance with the aggregate unpaid amounts owing to each holder
thereof;
(f) sixth, to the Trustee under the Intercreditor Agreement;
and
(g) seventh, to the Borrower or whoever else may be lawfully
entitled thereto.
SECTION 4. THE COLLATERAL AND GUARANTIES.
Section 4.1. Collateral. The Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability shall be secured by (a) valid, perfected
and enforceable Liens on all right, title, and interest of the Borrower and each
Subsidiary in all capital stock and other equity interests held by such Person
in each of its Subsidiaries, whether now owned or hereafter formed or acquired,
and all proceeds thereof, and (b) valid, perfected, and enforceable Liens on all
right, title, and interest of the Borrower and each Subsidiary in all personal
property, fixtures, and real estate (other than leases of retail stores),
whether now owned or hereafter acquired or arising, and all proceeds thereof;
provided, however, that: (i) until a Default or Event of Default has occurred
and is continuing and thereafter until otherwise required by the Administrative
Agent or the Required Lenders, (x) Liens on local deposit accounts maintained by
the Borrower and its Subsidiaries in proximity to their operations need not be
perfected provided that any funds held in such deposit accounts are transferred
to an account maintained by the Borrower with the Administrative Agent by the
close of each Business Day and (y) Liens on payroll accounts maintained by the
Borrower and its Subsidiaries need not be perfected provided the total amount on
deposit at any time does not exceed the current amount of their payroll
obligations, (ii) until a Default or Event of Default has occurred and is
continuing and thereafter until otherwise required by the Administrative Agent
or the Required Lenders, Liens on vehicles which are subject to a certificate of
title law need not be perfected provided that the total value of such property
at any one time not so perfected shall not exceed $500,000 in the aggregate,
(iii) unless otherwise required by the Administrative Agent or the Required
Lenders during the existence of any Event of Default, Liens on the capital stock
or other equity interests of a Foreign Subsidiary which, if granted, would cause
a material adverse effect on the Borrower's federal income tax liability shall
be limited to 66% of the total outstanding Voting Stock of such Foreign
Subsidiary, and (iv) unless otherwise required by the Administrative Agent or
the Required Lenders during the existence of any Event of Default, Liens need
not be granted on the assets of a Foreign Subsidiary which, if granted, would
cause a material adverse effect on the Borrower's federal income tax liability.
The Borrower acknowledges and agrees that the Liens on the Collateral shall be
granted to the Administrative Agent for the benefit of the holder of the
Obligations, the Hedging Liability, and the Funds Transfer and Deposit Account
Liability and shall be valid and perfected first priority Liens subject only to
Liens permitted by Section 8.8 hereof, in each case pursuant to one or more
Collateral Documents from such Persons, each in form and substance satisfactory
to the Administrative Agent.
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Section 4.2. Liens on Real Property. In the event that the Borrower or
any Subsidiary owns or hereafter acquires a fee ownership interest in any real
property, the Borrower shall, or shall cause such Subsidiary to, execute and
deliver to the Administrative Agent (or a security trustee therefor) a mortgage
or deed of trust acceptable in form and substance to the Administrative Agent
for the purpose of granting to the Administrative Agent a Lien on such fee
ownership interest in real property to secure the Obligations, Hedging
Liability, and Funds Transfer and Deposit Account Liability, shall pay all
taxes, costs, and expenses incurred by the Administrative Agent in recording
such mortgage or deed of trust, and shall supply to the Administrative Agent at
the Borrower's cost and expense a survey, environmental report, hazard insurance
policy, appraisal report, and a mortgagee's policy of title insurance from a
title insurer acceptable to the Administrative Agent insuring the validity of
such mortgage or deed of trust and its status as a first Lien (subject to Liens
permitted by this Agreement) on the real property encumbered thereby and such
other instrument, documents, certificates, and opinions reasonably required by
the Administrative Agent in connection therewith.
Section 4.3. Guaranties. The payment and performance of the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability
shall at all times be guaranteed by each direct and indirect Subsidiary of the
Borrower pursuant to Section 12 hereof or pursuant to one or more guaranty
agreements in form and substance acceptable to the Administrative Agent, as the
same may be amended, modified or supplemented from time to time; provided,
however, that (a) unless otherwise required by the Administrative Agent or the
Required Lenders during the existence of any Event of Default, a Foreign
Subsidiary shall not be required to be a guarantor hereunder if providing such
Guaranty would cause a material adverse effect on the Borrower's federal income
tax liability and (b) dPi Teleconnect, L.L.C. shall not be required to comply
with this Section 4.3 until it has delivered audited financial statements
acceptable to the Administrative Agent. The guarantees to be provided pursuant
to this Section 4.3 shall be hereinafter referred to individually as a
"Guaranty" and collectively as the "Guaranties".
Section 4.4. Further Assurances. The Borrower agrees that it shall, and
shall cause each Subsidiary to, from time to time at the request of the
Administrative Agent or the Required Lenders, execute and deliver such documents
and do such acts and things as the Administrative Agent or the Required Lenders
may reasonably request in order to provide for or perfect or protect such Liens
on the Collateral. In the event the Borrower or any Subsidiary forms or acquires
any other Subsidiary after the date hereof, the Borrower shall promptly upon
such formation or acquisition cause such newly formed or acquired Subsidiary to
execute a Guaranty and such Collateral Documents as the Administrative Agent may
then require, and the Borrower shall also deliver to the Administrative Agent,
or cause such Subsidiary to deliver to the Administrative Agent, at the
Borrower's cost and expense, such other instruments, documents, certificates,
and opinions reasonably required by the Administrative Agent in connection
therewith.
Section 4.5. Excess Cash Flow Escrow Account. The Borrower shall
establish with an Acceptable Intermediary a separate securities account (such
account, and the credit balances, properties (including all investment property
and securities entitlements), and any other investments from time to time held
therein, and any substitutions for such account, any certificate of deposit or
other instrument evidencing any of the foregoing and all proceeds of and
earnings
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on any of the foregoing being collectively called the "Excess Cash Flow Escrow
Account"), which shall be held in the name of the Borrower (or in the
Administrative Agent's name if the Administrative Agent so elects) subject to
the exclusive dominion and control of the Administrative Agent for the benefit
of the Administrative Agent, the Lenders and the L/C Issuer and, on a
subordinate basis, the Trustee for the benefit of the holders of the Senior
Notes. The Borrower shall deposit into the Excess Cash Flow Escrow Account the
portion of Excess Cash Flow as required under Section 4.19 of the Senior Note
Indenture. At the written request of the Borrower, the Acceptable Intermediary
shall remit to the Borrower any funds held in the Excess Cash Flow Escrow
Account for the sole purpose of enabling the Borrower to comply with Section
4.19 of the Senior Note Indenture, but the Borrower shall not make such a
request unless the conditions specified in Section 8.21(b) of this Agreement are
then satisfied unless such funds are used to repay Obligations outstanding under
this Agreement. The Borrower shall invest all funds in the Excess Cash Flow
Escrow Account in Cash Equivalents. Notwithstanding anything to the contrary
contained in this section upon the occurrence of an Event of Default, all
amounts held in the Excess Cash Flow Escrow Account shall be applied in
accordance with the Intercreditor Agreement.
SECTION 5. DEFINITIONS; INTERPRETATION.
Section 5.1. Definitions. The following terms when used herein shall
have the following meanings:
"Acceptable Intermediary" means any securities intermediary selected
by the Administrative Agent having a combined capital and surplus of at least
$250.0 million and having a long-term debt rating of at least "A" by Xxxxx'x and
at least "A" by S&P.
"Acquired Business" means the entity or assets acquired by the
Borrower or a Subsidiary in an Acquisition, whether before or after the date
hereof.
"Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person
(other than a Person that is a Subsidiary), or otherwise causing any Person to
become a Subsidiary, or (c) a merger or consolidation or any other combination
with another Person (other than a Person that is a Subsidiary) provided that the
Borrower or the Subsidiary is the surviving entity.
"Adjusted LIBOR" is defined in Section 1.3(b) hereof.
"Administrative Agent" means Xxxxxx Trust and Savings Bank and any
successor pursuant to Section 11.7 hereof.
"Administrative Agent's Quoted Rate" is defined in Section 1.14(c)
hereof.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control
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another Person for the purposes of this definition if such Person possesses,
directly or indirectly, the power to direct, or cause the direction of, the
management and policies of the other Person, whether through the ownership of
voting securities, common directors, trustees or officers, by contract or
otherwise; provided that, in any event for purposes of this definition, any
Person that owns, directly or indirectly, 5% or more of the securities having
the ordinary voting power for the election of directors or governing body of a
corporation or 5% or more of the partnership or other ownership interest of any
other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person.
"Agreement" means this Credit Agreement, as the same may be amended,
modified, restated or supplemented from time to time pursuant to the terms
hereof.
"Applicable Margin" means, with respect to Loans, Reimbursement
Obligations, and the commitment fees and letter of credit fees payable under
Section 2.1 hereof until the first Pricing Date, the rates per annum shown
opposite Level IV below, and thereafter from one Pricing Date to the next the
Applicable Margin means the rates per annum determined in accordance with the
following schedule:
APPLICABLE MARGIN APPLICABLE MARGIN
FOR BASE RATE LOANS FOR EURODOLLAR
UNDER REVOLVING LOANS UNDER APPLICABLE
LEVERAGE RATIO CREDIT AND REVOLVING CREDIT MARGIN FOR
FOR SUCH PRICING REIMBURSEMENT AND LETTER OF CREDIT COMMITMENT
LEVEL DATE OBLIGATIONS SHALL BE: FEE SHALL BE: FEE SHALL BE:
IV Greater than 4.0 to 1.0 1.75% 3.50% 0.50%
III Less than or equal to 1.50% 3.25% 0.50%
4.0 to 1.0, but greater
than 3.5 to 1.0
II Less than or equal to 1.0% 2.75% 0.50%
3.5 to 1.0, but greater
than 3.0 to 1.0
I Less than or equal to 0.50% 2.25% 0.50%
3.0 to 1.0
For purposes hereof, the term "Pricing Date" means, for any fiscal quarter of
the Borrower ending on or after September 30, 2003, the date on which the
Administrative Agent is in receipt of the Borrower's most recent financial
statements (and, in the case of the year-end financial statements, audit report)
for the fiscal quarter then ended, pursuant to Section 8.5 hereof. The
Applicable Margin shall be established based on the Leverage Ratio for the most
recently completed fiscal quarter and the Applicable Margin established on a
Pricing Date shall remain in effect until the next Pricing Date. If the Borrower
has not delivered its financial statements by the date such financial statements
(and, in the case of the year-end financial statements, audit report) are
required to be delivered under Section 8.5 hereof, from such date until such
financial statements and audit report are delivered, the Applicable Margin shall
be the highest Applicable Margin (i.e., the Leverage Ratio shall be deemed to be
greater than 4.0 to 1.0). If the Borrower
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subsequently delivers such financial statements before the next Pricing Date,
the Applicable Margin established by such late delivered financial statements
shall take effect from the date of delivery until the next Pricing Date. In all
other circumstances, the Applicable Margin established by such financial
statements shall be in effect from the Pricing Date that occurs immediately
after the end of the fiscal quarter covered by such financial statements until
the next Pricing Date. Each determination of the Applicable Margin made by the
Administrative Agent in accordance with the foregoing shall be conclusive and
binding on the Borrower and the Lenders if reasonably determined.
"Application" is defined in Section 1.2(b) hereof.
"Authorized Representative" means those persons shown on the list of
officers provided by the Borrower pursuant to Section 7.2 hereof or on any
update of any such list provided by the Borrower to the Administrative Agent, or
any further or different officers of the Borrower so named by any Authorized
Representative of the Borrower in a written notice to the Administrative Agent.
"Base Rate" is defined in Section 1.3(a) hereof.
"Base Rate Loan" means a Loan bearing interest at a rate specified in
Section 1.3(a) hereof.
"BMO Xxxxxxx Xxxxx" means Bank of Montreal, Chicago Branch.
"Borrower" is defined in the introductory paragraph of this Agreement.
"Borrowing" means the total of Loans of a single type advanced,
continued for an additional Interest Period, or converted from a different type
into such type by the Lenders under a Credit on a single date and, in the case
of Eurodollar Loans, for a single Interest Period. Borrowings of Loans are made
and maintained ratably from each of the Lenders under a Credit according to
their Percentages of such Credit. A Borrowing is "advanced" on the day Lenders
advance funds comprising such Borrowing to the Borrower, is "continued" on the
date a new Interest Period for the same type of Loans commences for such
Borrowing, and is "converted" when such Borrowing is changed from one type of
Loans to the other, all as requested by the Borrower pursuant to Section 1.5(a)
hereof. Borrowings of Swing Loans are made by the Administrative Agent in
accordance with the procedures set forth in Section 1.14 hereof.
"Business Day" means any day (other than a Saturday or Sunday) on which
banks are not authorized or required to close in Chicago, Illinois and, if the
applicable Business Day relates to the advance or continuation of, or conversion
into, or payment of a Eurodollar Loan, on which banks are dealing in U.S. Dollar
deposits in the interbank eurodollar market in London, England and Nassau,
Bahamas.
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate amount of all expenditures (whether paid in cash or
accrued as a liability) by such Person during that period for the acquisition or
leasing (pursuant to a Capital Lease) of fixed or capital assets or
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additions to property, plant, or equipment (including replacements, capitalized
repairs, and improvements) which should be capitalized on the balance sheet of
such Person in accordance with GAAP.
"Capital Lease" means any lease of Property which in accordance with
GAAP is required to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligation" means, for any Person, the amount of the
liability shown on the balance sheet of such Person in respect of a Capital
Lease determined in accordance with GAAP.
"Cash Equivalents" means:
(a) securities issued or directly and fully guaranteed or
insured by the United States Government or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof), having maturities of not
more than one year from the date of acquisition;
(b) marketable general obligations issued by any state of the
United States of America or any political subdivision of any such state
or any public instrumentality thereof maturing within one year from the
date of acquisition thereof (provided that the full faith and credit of
such state is pledged in support thereof) and, at the time of
acquisition thereof, having one of the two highest credit ratings
obtainable from both S&P's and Moody's;
(c) certificates of deposit, time deposits, eurodollar time
deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition
thereof issued by any commercial bank organized in the United States of
America, the long-term debt of which is rated at the time of
acquisition thereof in one of the two highest categories obtainable
from both S&P's and Moody's, and having combined capital and surplus in
excess of $500.0 million;
(d) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (a),
(b) and (c) entered into with any bank meeting the qualifications
specified in clause (c) above;
(e) commercial paper rated at the time of acquisition thereof
in one of the two highest categories obtainable from both S&P's and
Moody's or carrying an equivalent rating by a nationally recognized
rating agency, if both of the two named rating agencies cease
publishing ratings of investments, and in any case maturing within one
year after the date of acquisition thereof; and
(f) interests in any investment company or money market fund
which invests at least 95% of its assets in instruments of the type
specified in clauses (a) through (e) above.
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"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C.Sections 9601 et seq., and any future
amendments.
"Change of Control" means any of (a) the acquisition by any "person" or
"group" (as such terms are used in sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) at any time of beneficial ownership of 50% or
more of the outstanding capital stock or other equity interest of the Borrower
on a fully-diluted basis, (b) the failure of individuals who are members of the
board of directors (or similar governing body) of the Borrower on the Closing
Date (together with any new or replacement directors whose initial nomination
for election was approved by a majority of the directors who were either
directors on the Closing Date or previously so approved) to constitute a
majority of the board of directors (or similar governing body) of the Borrower,
or (c) any "Change of Control" (or words of like import), as defined in any
agreement or indenture relating to any issue of Indebtedness for Borrowed Money
or any equity securities of the Borrower shall occur.
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Section 7.2 shall be satisfied or
waived in a manner acceptable to the Administrative Agent in its discretion.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"Collateral" means all properties, rights, interests, and privileges
from time to time subject to the Liens granted to the Administrative Agent, or
any security trustee therefor, by the Collateral Documents.
"Collateral Account" is defined in Section 9.4 hereof.
"Collateral Documents" means the Mortgages, the Security Agreement, and
all other mortgages, deeds of trust, security agreements, pledge agreements,
assignments, financing statements and other documents as shall from time to time
secure or relate to the Obligations, the Hedging Liability, and the Funds
Transfer and Deposit Account Liability or any part thereof.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Credit" means any of the Revolving Credit or the Swing Line.
"Credit Event" means the advancing of any Loan, the continuation of or
conversion into a Eurodollar Loan, or the issuance of, or extension of the
expiration date or increase in the amount of, any Letter of Credit.
"Damages" means all damages including, without limitation, punitive
damages, liabilities, costs, expenses, losses, diminutions in value, fines,
penalties, demands, claims, cost
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recovery actions, lawsuits, administrative proceedings, orders, response action,
removal and remedial costs, compliance costs, investigation expenses, consultant
fees, attorneys' and paralegals' fees and litigation expenses.
"Default" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an Event
of Default.
"Disposition" means the sale, lease, conveyance or other disposition of
Property, other than sales or other dispositions expressly permitted under
Sections 8.10(a)-(d) hereof.
"EBITDA" means, with reference to any period, Net Income of the
Borrower and the Guarantors for such period plus the sum of all amounts deducted
in arriving at such Net Income amount in respect of (a) Interest Expense for
such period, (b) federal, state, and local income taxes for such period, (c)
depreciation of fixed assets and amortization of intangible assets for such
period (other than depreciation of Rental Merchandise) and (d) any fees, costs
and expenses paid in connection with the execution and delivery of this
Agreement and the other Loan Documents and the issuance and sale of the Senior
Notes and Preferred Shares to the extent such fees, costs and expenses are not
capitalized; provided, however, EBITDA shall be: (i) for the fiscal quarter
ending June 30, 2002, $14,194,000, (ii) for the fiscal quarter ending September
30, 2002, $14,393,000, (iii) for the fiscal quarter ending December 31, 2002,
$13,605,000, and (iv) for the fiscal quarter ending March 31, 2003, $18,342,000;
provided, further, however, for any four fiscal quarter rolling period ending on
or after June 30, 2003, adjustments shall be made to (x) EBITDA with respect to
one-time non-cash charges not related to store closures in amounts which are
reasonable and acceptable to (A) the Required Lenders if such non-cash charges
might become cash charges in any subsequent accounting period, or (B) the
Administrative Agent in all other cases, (y) EBITDA with respect to non-cash
restructuring charges resulting from store closures occurring on or before
September 30, 2004 in an aggregate amount not to exceed $2,500,000 which are
reasonable and acceptable to the Administrative Agent and (z) EBITDA with
respect to cash or non-cash charges resulting from discontinued operations
associated with store closures occurring on or before September 30, 2004 in an
aggregate amount not to exceed $3,000,000 which are reasonable and acceptable to
the Administrative Agent.
"Eligible Line of Business" means any business engaged in as of the
date of this Agreement by the Borrower or any of its Subsidiaries, and any
related or complementary line of business with respect thereto which is
consistent with such Person's market demographic acceptable to the
Administrative Agent.
"Environmental Claim" means any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding or claim (whether administrative, judicial or
private in nature) arising (a) pursuant to, or in connection with an actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Material, (c) from any abatement, removal, remedial, corrective or
response action in connection with a Hazardous Material, Environmental Law or
order of a governmental authority or (d) from any actual or alleged damage,
injury, threat or harm to health, safety, natural resources or the environment.
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"Environmental Law" means any current or future Legal Requirement
pertaining to (a) the protection of health, safety and the indoor or outdoor
environment, (b) the conservation, management or use of natural resources and
wildlife, (c) the protection or use of surface water or groundwater, (d) the
management, manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, Release, threatened Release, abatement, removal,
remediation or handling of, or exposure to, any Hazardous Material or (e)
pollution (including any Release to air, land, surface water or groundwater),
and any amendment, rule, regulation, order or directive issued thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"Eurodollar Loan" means a Loan bearing interest at the rate specified
in Section 1.3(b) hereof.
"Eurodollar Reserve Percentage" is defined in Section 1.3(b) hereof.
"Event of Default" means any event or condition identified as such in
Section 9.1 hereof.
"Event of Loss" means, with respect to any Property, any of the
following: (a) any loss, destruction or damage of such Property or (b) any
condemnation, seizure, or taking, by exercise of the power of eminent domain or
otherwise, of such Property, or confiscation of such Property or the requisition
of the use of such Property.
"Excess Cash Flow Escrow Account" is defined in Section 4.5 hereof.
"Existing Letters of Credit" mean those letters of credit identified
and described on Schedule 1.2 hereof.
"Existing Swap Providers" shall mean the financial institutions listed
on Exhibit H.
"Existing Swaps" mean the interest rate hedging agreements described on
Exhibit H.
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of Base Rate appearing in
Section 1.3(a) hereof.
"Fixed Charges" means, with reference to any period, the sum of (a) all
payments of principal made or to be made during such period with respect to
Indebtedness for Borrowed Money of the Borrower and each Guarantor, but
excluding payments of Obligations owed under the Revolving Credit and the
repayment of the Borrower's Indebtedness for Borrowed Money under the Prior
Credit Agreement, plus (b) Interest Expense for such period paid in cash, plus
(c) all Restricted Payments made during such period, plus (d) all prepayments
(whether voluntary or mandatory) on the Senior Notes made during such period,
plus (e) federal, state, and local income taxes paid in cash or payable by the
Borrower and each Guarantor during such period.
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"Foreign Subsidiary" means each Subsidiary which (a) is organized under
the laws of a jurisdiction other than the United States of America or any state
thereof, (b) conducts substantially all of its business outside of the United
States of America, and (c) has substantially all of its assets outside of the
United States of America.
"Funds Transfer and Deposit Account Liability" means the liability of
the Borrower or any of its Subsidiaries owing to any of the Lenders, or any
Affiliates of such Lenders, arising out of (a) the execution or processing of
electronic transfers of funds by automatic clearing house transfer, wire
transfer or otherwise to or from the deposit accounts of the Borrower and/or any
Subsidiary now or hereafter maintained with any of the Lenders or their
Affiliates, (b) the acceptance for deposit or the honoring for payment of any
check, draft or other item with respect to any such deposit accounts, and (c)
any other deposit, disbursement, and cash management services afforded to the
Borrower or any such Subsidiary by any of such Lenders or their Affiliates.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Guarantor" and "Guarantors" each is defined in Section 12.1 hereof.
"Guaranty" and "Guaranties" each is defined in Section 4.3 hereof.
"Hazardous Material" means any substance, chemical, compound, product,
solid, gas, liquid, waste, byproduct, pollutant, contaminant or material which
is hazardous or toxic, and includes, without limitation, (a) asbestos,
polychlorinated biphenyls and petroleum (including crude oil or any fraction
thereof) and (b) any material classified or regulated as "hazardous" or "toxic"
or words of like import pursuant to an Environmental Law.
"Hazardous Material Activity" means any activity, event or occurrence
involving a Hazardous Material, including, without limitation, the manufacture,
possession, presence, use, generation, transportation, treatment, storage,
disposal, Release, threatened Release, abatement, removal, remediation, handling
of or corrective or response action to any Hazardous Material.
"Hedging Liability" means the liability of the Borrower or any
Subsidiary to any of the Lenders, any Affiliates of such Lenders, or any
Existing Swap Provider in respect of any interest rate swap, exchange, cap,
collar, floor, forward, future or option agreement, or any other similar
interest rate hedging arrangement, as the Borrower or such Subsidiary, as the
case may be, may from time to time enter into with any one or more of the
Lenders party to this Agreement, their Affiliates or the Existing Swap
Providers.
"Hostile Acquisition" means the acquisition of the capital stock or
other equity interests of a Person through a tender offer or similar
solicitation of the owners of such capital stock or
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other equity interests which has not been approved (prior to such acquisition)
by resolutions of the Board of Directors of such Person or by similar action if
such Person is not a corporation, and as to which such approval has not been
withdrawn.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) (a) all indebtedness of such Person for borrowed money, whether
current or funded, or secured or unsecured, (b) all indebtedness for the
deferred purchase price of Property or services, (c) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of a default are
limited to repossession or sale of such Property), (d) all indebtedness secured
by a purchase money mortgage or other Lien to secure all or part of the purchase
price of Property subject to such mortgage or Lien, (e) all obligations under
leases which shall have been or must be, in accordance with GAAP, recorded as
Capital Leases in respect of which such Person is liable as lessee, (f) any
liability in respect of banker's acceptances or letters of credit, (g) any
indebtedness, whether or not assumed, secured by Liens on Property acquired by
such Person at the time of acquisition thereof, it being understood that the
term "Indebtedness for Borrowed Money" shall not include trade payables arising
in the ordinary course of business and (h) the Preferred Shares.
"Intercreditor Agreement" means the Intercreditor Agreement dated as of
June 2, 2003, among the Borrower, the Administrative Agent and Manufacturers and
Traders Trust Company, as Trustee for the Senior Notes.
"Interest Expense" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense) of the
Borrower and the Guarantors minus the sum of all interest income of the Borrower
and the Guarantors, in each case for such period determined on a consolidated
basis in accordance with GAAP.
"Interest Period" is defined in Section 1.6 hereof.
"L/C Issuer" means (i) with respect to each Letter of Credit other the
Letters of Credit identified on Schedule 1.2 hereto, Xxxxxx Trust and Savings
Bank and (ii) with respect to each Letter of Credit identified on Schedule 1.2
hereto, National City Bank of Pennsylvania.
"L/C Obligations" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"L/C Sublimit" means $15,000,000, as reduced pursuant to the terms
hereof.
"Lead Arranger" shall have the meaning set forth in the introductory
paragraph hereto.
"Legal Requirement" means any treaty, convention, statute, law,
regulation, ordinance, license, permit, governmental approval, injunction,
judgment, order, consent decree or other requirement of any governmental
authority, whether federal, state, or local.
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"Lenders" means and includes Xxxxxx Trust and Savings Bank and the
other financial institutions from time to time party to this Agreement,
including each assignee Lender pursuant to Section 13.12 hereof.
"Lending Office" is defined in Section 10.4 hereof.
"Letter of Credit" is defined in Section 1.2(a) hereof.
"Leverage Ratio" means, as of the last day of any fiscal quarter of the
Borrower, the ratio of (x) Total Funded Debt of the Borrower and each Guarantor
as of the last day of such fiscal quarter minus the amount on deposit in the
Excess Cash Flow Escrow Account as of such date to (y) EBITDA of the Borrower
and each Guarantor for the period of four fiscal quarters then ended.
"LIBOR" is defined in Section 1.3(b) hereof.
"Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"Loan" means any Revolving Loan or Swing Loan, whether outstanding as a
Base Rate Loan or Eurodollar Loan or otherwise, each of which is a "type" of
Loan hereunder.
"Loan Documents" means this Agreement, the Notes, the Applications, the
Collateral Documents, the Guaranties, and each other instrument or document to
be delivered hereunder or thereunder or otherwise in connection therewith.
"Material Adverse Effect" means (a) a material adverse change in, or
material adverse effect upon, the operations, business, Property, condition
(financial or otherwise) or prospects of the Borrower or of the Borrower and its
Subsidiaries taken as a whole, (b) a material impairment of the ability of the
Borrower or any Subsidiary to perform its material obligations under any Loan
Document or (c) a material adverse effect upon (i) the legality, validity,
binding effect or enforceability against the Borrower or any Subsidiary of any
Loan Document or the rights and remedies of the Administrative Agent and the
Lenders thereunder or (ii) the perfection or priority of any Lien granted under
any Collateral Document.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgages" means, collectively, the Mortgage and Security Agreement
with Assignment of Rents between the Borrower or the relevant Subsidiary and the
Administrative Agent relating to such Person's real property owned as of the
Closing Date and located in the state of Pennsylvania and any other mortgages or
deeds of trust delivered to the Administrative Agent pursuant to Section 4.2
hereof, as the same may be amended, modified, supplemented or restated from time
to time.
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"Net Cash Proceeds" means, as applicable, (a) with respect to any
Disposition by a Person, cash and cash equivalent proceeds received by or for
such Person's account, net of (i) reasonable direct costs relating to such
Disposition and (ii) sale, use or other transactional taxes paid or payable by
such Person as a direct result of such Disposition, (b) with respect to any
Event of Loss of a Person, cash and cash equivalent proceeds received by or for
such Person's account (whether as a result of payments made under any applicable
insurance policy therefor or in connection with condemnation proceedings or
otherwise), net of reasonable direct costs incurred in connection with the
collection of such proceeds, awards or other payments, and (c) with respect to
any offering of equity securities of a Person or the issuance of any
Indebtedness for Borrowed Money by a Person, cash and cash equivalent proceeds
received by or for such Person's account, net of reasonable legal, underwriting,
and other fees and expenses incurred as a direct result thereof.
"Net Income" means, with reference to any period, the net income (or
net loss) of the Borrower and each Guarantor for such period computed on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded from Net Income (a) the net income (or net loss) of any Person accrued
prior to the date it becomes a Guarantor, or has merged into or consolidated
with the Borrower or another Guarantor, and (b) the net income (or net loss) of
any Person (other than a Guarantor) in which the Borrower or any of the
Guarantors has a equity interest in, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of the
Guarantors during such period.
"Net Worth" means, for any Person and at any time the same is to be
determined, total shareholder's equity (including capital stock, additional
paid-in capital, and retained earnings after deducting treasury stock) which
would appear on the balance sheet of such Person in accordance with GAAP.
"Notes" means and includes the Revolving Notes and the Swing Note.
"Obligations" means all obligations of the Borrower to pay principal
and interest on the Loans, all Reimbursement Obligations owing under the
Applications, all fees and charges payable hereunder, and all other payment
obligations of the Borrower or any of its Subsidiaries arising under or in
relation to any Loan Document, in each case whether now existing or hereafter
arising, due or to become due, direct or indirect, absolute or contingent, and
howsoever evidenced, held or acquired.
"Participating Interest" is defined in Section 1.2(d) hereof.
"Participating Lender" is defined in Section 1.2(d) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Percentage" means for any Lender its Revolver Percentage.
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"Permitted Acquisition" means any Acquisition with respect to which all
of the following conditions shall have been satisfied:
(a) the Acquired Business is in an Eligible Line of Business
and has its primary operations within the United States of America;
(b) the Acquisition shall not be a Hostile Acquisition;
(c) promptly upon the request of the Administrative Agent, the
financial statements of the Acquired Business shall have been audited
by one of the "Big Four" accounting firms or by another independent
accounting firm of national or regional repute or otherwise reasonably
satisfactory to the Administrative Agent, or if such financial
statements have not been audited by such an accounting firm, (i) such
financial statements shall have been approved by the Administrative
Agent and (ii) the Acquired Business has undergone a successful
so-called businessman's review by one of the "Big Four" accounting
firms as part of the Borrowers' due diligence on the Acquisition;
(d) the Total Consideration for the Acquired Business, when
taken together with the Total Consideration for all Acquired Businesses
acquired during the immediately preceding 12-month period, does not
exceed $3,000,000 in the aggregate;
(e) the Borrowers shall have notified the Administrative Agent
and Lenders not less than 30 days prior to any such Acquisition and,
promptly upon the request of the Administrative Agent, furnished to the
Administrative Agent and Lenders at such time reasonable details as to
such Acquisition (including sources and uses of funds therefor), and
3-year historical financial information and 3-year pro forma financial
forecasts of the Acquired Business on a stand alone basis as well as of
the Borrower on a consolidated basis after giving effect to the
Acquisition and covenant compliance calculations reasonably
satisfactory to the Administrative Agent;
(f) if a new Subsidiary is formed or acquired as a result of
or in connection with the Acquisition, the Borrower shall have complied
with the requirements of Section 4 hereof in connection therewith; and
(g) after giving effect to the Acquisition, no Default or
Event of Default shall exist, including with respect to the covenants
contained in Sections 8.22, 8.23, 8.24, 8.25 and 8.26 on a pro forma
basis.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization or any other
entity or organization, including a government or agency or political
subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
that either (a) is maintained by a member of the Controlled Group for employees
of a member of the Controlled Group or (b) is maintained pursuant to a
collective bargaining agreement or any other
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arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.
"Preferred Stock" means the Series A Convertible Preferred Stock of the
Borrower issued pursuant to that certain Securities Purchase Agreement, dated as
of June 2, 2003, between the Borrower and the buyers party thereto in the
aggregate amount of $15,000,000 in form and substance acceptable to the
Administrative Agent.
"Premises" means the real property owned or leased by the Borrower or
any Subsidiary, including without limitation the real property and improvements
thereon owned by the Borrower or any Subsidiary subject to the Lien of the
Mortgages or any other Collateral Documents.
"Prior Credit Agreement" means that certain Credit Agreement, dated as
of September 23, 1999, as amended, by and among the Borrower, Rent-Way of TTIG,
L.P., the guarantors party thereto, the banks and other financial services
companies party thereto, Bank of America, as documentation agent for the lenders
party thereto, Xxxxxx Trust and Savings Bank, as syndication agent for the
lenders party thereto, and National City Bank of Pennsylvania, as administrative
agent and collateral agent for the lenders party thereto.
"Property" means, as to any Person, all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent balance sheet of such Person and its subsidiaries
under GAAP.
"RCRA" means the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments
of 1984, 42 U.S.C. Sections 6901 et seq., and any future amendments.
"Reimbursement Obligation" is defined in Section 1.2(c) hereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migration, dumping, or
disposing into the indoor or outdoor environment, including, without limitation,
the abandonment or discarding of barrels, drums, containers, tanks or other
receptacles containing or previously containing any Hazardous Material.
"Rental Contracts" shall mean all rental and rental-purchase contracts
of the Borrower and the Guarantors 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 Borrower and the Guarantors
acquired for the purpose of lease or sale under the Rental Contracts.
"Replacement Lenders" is defined in Section 1.13.
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"Required Lenders" means, as of the date of determination thereof,
Lenders whose outstanding Loans and interests in Letters of Credit and Unused
Revolving Credit Commitments constitute more than 66 2/3% of the sum of the
total outstanding Loans, interests in Letters of Credit, and Unused Revolving
Credit Commitments of the Lenders.
"Restricted Payments" is defined in Section 8.12.
"Revolver Percentage" means, for each Lender, the percentage of the
Revolving Credit Commitments represented by such Lender's Revolving Credit
Commitment or, if the Revolving Credit Commitments have been terminated, the
percentage held by such Lender (including through participation interests in
Reimbursement Obligations) of the aggregate principal amount of all Revolving
Loans and L/C Obligations then outstanding.
"Revolving Credit" means the credit facility for making Revolving Loans
and issuing Letters of Credit described in Sections 1.1 and 1.2 hereof.
"Revolving Credit Commitment" means, as to any Lender, the obligation
of such Lender to make Revolving Loans and to participate in Letters of Credit
issued for the account of the Borrower hereunder in an aggregate principal or
face amount at any one time outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule 1 attached hereto and made a part
hereof, as the same may be reduced or modified at any time or from time to time
pursuant to the terms hereof. The Borrower and the Lenders acknowledge and agree
that the Revolving Credit Commitments of the Lenders aggregate $60,000,000 on
the date hereof.
"Revolving Credit Termination Date" means June 2, 2008, or such earlier
date on which the Revolving Credit Commitments are terminated in whole pursuant
to Section 1.12, 9.2 or 9.3 hereof.
"Revolving Loan" is defined in Section 1.1 hereof and, as so defined,
includes a Base Rate Loan or a Eurodollar Loan, each of which is a "type" of
Revolving Loan hereunder.
"Revolving Note" is defined in Section 1.10 hereof.
"S&P" means Standard & Poor's Ratings Services Group, a division of The
XxXxxx-Xxxx Companies, Inc.
"Security Agreement" means that certain Security Agreement dated the
date of this Agreement among the Borrower and its Subsidiaries and the
Administrative Agent, as the same may be amended, modified, supplemented or
restated from time to time.
"Senior Note Indentures" means the Indenture dated as of June 2, 2003,
between the Borrower and Manufacturers and Traders Trust Company, as trustee for
the Senior Notes.
"Senior Notes" means the Borrower's 11 7/8% Senior Secured Notes due
June 15, 2010 in the aggregate principal amount of $205,000,000, in form and
substance satisfactory to the Administrative Agent.
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"Subsidiary" means, as to any particular parent corporation or
organization, any other corporation or organization more than 50% of the
outstanding Voting Stock of which is at the time directly or indirectly owned by
such parent corporation or organization or by any one or more other entities
which are themselves subsidiaries of such parent corporation or organization.
Unless otherwise expressly noted herein, the term "Subsidiary" means a
Subsidiary of the Borrower or of any of its direct or indirect Subsidiaries.
"Swing Line" means the credit facility for making one or more Swing
Loans described in Section 1.14 hereof.
"Swing Line Sublimit" means $5,000,000, as reduced pursuant to the
terms hereof.
"Swing Loan" and "Swing Loans" each is defined in Section 1.14 hereof.
"Swing Note" is defined in Section 1.10 hereof.
"Syndication Agent" shall have the meaning set forth in the
introductory paragraph hereto.
"Total Consideration" means the total amount (but without duplication)
of (a) cash paid in connection with any Acquisition, plus (b) indebtedness
payable to the seller in connection with such Acquisition, plus (c) the fair
market value of any equity securities, including any warrants or options
therefor, delivered in connection with any Acquisition, plus (d) the present
value of covenants not to compete entered into in connection with such
Acquisition or other future payments which are required to be made over a period
of time and are not contingent upon the Borrower or its Subsidiary meeting
financial performance objectives (exclusive of salaries paid in the ordinary
course of business) (discounted at the Base Rate), but only to the extent not
included in clause (a), (b) or (c) above, plus (e) the amount of indebtedness
assumed in connection with such Acquisition.
"Total Funded Debt" means, at any time the same is to be determined,
the sum (but without duplication) of (a) all Indebtedness for Borrowed Money of
the Borrower and each Guarantor at such time, plus (b) all Indebtedness for
Borrowed Money of any other Person which is directly or indirectly guaranteed by
the Borrower or any of the Guarantors or which the Borrower or any of the
Guarantors has agreed (contingently or otherwise) to purchase or otherwise
acquire or in respect of which the Borrower or any of the Guarantors has
otherwise assured a creditor against loss.
"Trustee" shall have the meaning set forth in the Intercreditor
Agreement.
"Unfunded Vested Liabilities" means, for any Plan at any time, the
amount (if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
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"Unused Revolving Credit Commitments" means, at any time, the
difference between the Revolving Credit Commitments then in effect and the
aggregate outstanding principal amount of Revolving Loans and L/C Obligations,
provided that Swing Loans outstanding from time to time shall be deemed to
reduce the Unused Revolving Credit Commitment of the Administrative Agent for
purposes of computing the commitment fee under Section 2.1(a) hereof.
"U.S. Dollars" and "$" each means the lawful currency of the United
States of America.
"Voting Stock" of any Person means capital stock or other equity
interests of any class or classes (however designated) having ordinary power for
the election of directors or other similar governing body of such Person, other
than stock or other equity interests having such power only by reason of the
happening of a contingency.
"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of
ERISA.
"Wholly-owned Subsidiary" means a Subsidiary of which all of the issued
and outstanding shares of capital stock (other than directors' qualifying shares
as required by law) or other equity interests are owned by the Borrower and/or
one or more Wholly-owned Subsidiaries within the meaning of this definition.
Section 5.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"hereof", "herein", and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois, time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement.
Section 5.3. Change in Accounting Principles. If, after the date of
this Agreement, there shall occur any change in GAAP from those used in the
preparation of the financial statements referred to in Section 6.5 hereof and
such change shall result in a change in the method of calculation of any
financial covenant, standard or term found in this Agreement, either the
Borrower or the Required Lenders may by notice to the Lenders and the Borrower,
respectively, require that the Lenders and the Borrower negotiate in good faith
to amend such covenants, standards, and term so as equitably to reflect such
change in accounting principles, with the desired result being that the criteria
for evaluating the financial condition of the Borrower and its Subsidiaries
shall be the same as if such change had not been made. No delay by the Borrower
or the Required Lenders in requiring such negotiation shall limit their right to
so require such a negotiation at any time after such a change in accounting
principles. Until any such covenant, standard, or term is amended in accordance
with this Section 5.3, financial covenants shall be computed and determined in
accordance with GAAP in effect prior to such change in accounting principles.
Without limiting the generality of the foregoing, the Borrower shall neither be
deemed to be in compliance with any financial covenant hereunder nor out of
compliance with any financial covenant hereunder if such state of compliance or
noncompliance, as the case may
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be, would not exist but for the occurrence of a change in accounting principles
after the date hereof.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Administrative Agent and
the Lenders as follows:
Section 6.1. Organization and Qualification. The Borrower is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of Pennsylvania, has full and adequate power to own its Property
and conduct its business as now conducted, and is duly licensed or qualified and
in good standing in each jurisdiction in which the nature of the business
conducted by it or the nature of the Property owned or leased by it requires
such licensing or qualifying, except where the failure to do so would not have a
Material Adverse Effect.
Section 6.2. Subsidiaries. Each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, as the case may be, has full and adequate power to
own its Property and conduct its business as now conducted, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to do so would
not have a Material Adverse Effect. Schedule 6.2 hereto identifies each
Subsidiary, the jurisdiction of its incorporation or organization, as the case
may be, the percentage of issued and outstanding shares of each class of its
capital stock or other equity interests owned by the Borrower and the other
Subsidiaries and, if such percentage is not 100% (excluding directors'
qualifying shares as required by law), a description of each class of its
authorized capital stock and other equity interests and the number of shares of
each class issued and outstanding. All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable and all such shares and other
equity interests indicated on Schedule 6.2 as owned by the Borrower or another
Subsidiary are owned, beneficially and of record, by the Borrower or such
Subsidiary free and clear of all Liens other than the Liens granted in favor of
the Administrative Agent pursuant to the Collateral Documents. There are no
outstanding commitments or other obligations of any Subsidiary to issue, and no
options, warrants or other rights of any Person to acquire, any shares of any
class of capital stock or other equity interests of any Subsidiary.
Section 6.3. Authority and Validity of Obligations. The Borrower has
full right and authority to enter into this Agreement and the other Loan
Documents executed by it, to make the borrowings herein provided for, to issue
its Notes in evidence thereof, to grant to the Administrative Agent the Liens
described in the Collateral Documents executed by the Borrower, and to perform
all of its obligations hereunder and under the other Loan Documents executed by
it. Each Subsidiary has full right and authority to enter into the Loan
Documents executed by it, to guarantee the Obligations, Hedging Liability, and
Funds Transfer and Deposit Account Liability, to grant to the Administrative
Agent the Liens described in the Collateral Documents executed by such Person,
and to perform all of its obligations under the Loan Documents
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executed by it. The Loan Documents delivered by the Borrower and by each
Subsidiary have been duly authorized, executed, and delivered by such Person and
constitute valid and binding obligations of such Person enforceable against it
in accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law); and this Agreement and the other Loan Documents do not, nor
does the performance or observance by the Borrower or any Subsidiary of any of
the matters and things herein or therein provided for, (a) contravene or
constitute a default under any provision of law or any judgment, injunction,
order or decree binding upon the Borrower or any Subsidiary or any provision of
the organizational documents (e.g., charter, articles of incorporation or
by-laws, articles of association or operating agreement, partnership agreement
or other similar document) of the Borrower or any Subsidiary, (b) contravene or
constitute a default under any covenant, indenture or agreement of or affecting
the Borrower or any Subsidiary or any of its Property, in each case where such
contravention or default, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or (c) result in the creation or
imposition of any Lien on any Property of the Borrower or any Subsidiary other
than the Liens granted in favor of the Administrative Agent pursuant to the
Collateral Documents.
Section 6.4. Use of Proceeds; Margin Stock. The Borrower shall use the
proceeds of the Revolving Credit to refinance existing indebtedness, for its
general working capital purposes and for such other legal and proper purposes as
are consistent with all applicable laws. Neither the Borrower nor any Subsidiary
is engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Loan or any other extension of credit made hereunder will be used to purchase or
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock. Margin stock (as hereinabove
defined) constitutes less than 25% of the assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge or other
restriction hereunder.
Section 6.5. Financial Reports. The consolidated balance sheet of the
Borrower and its Subsidiaries as at September 30, 2002, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, and accompanying
notes thereto, which financial statements are accompanied by the audit report of
PricewaterhouseCoopers LLP, independent public accountants, and the unaudited
interim consolidated balance sheet of the Borrower and its Subsidiaries as at
March 31, 2003, and the related consolidated statements of income, retained
earnings and cash flows of the Borrower and its Subsidiaries for the six (6)
months then ended, heretofore furnished to the Administrative Agent and the
Lenders, fairly present the consolidated financial condition of the Borrower and
its Subsidiaries as at said dates and the consolidated results of their
operations and cash flows for the periods then ended in conformity with GAAP
applied on a consistent basis. Neither the Borrower nor any Subsidiary has
contingent liabilities which are material to it other than as indicated on such
financial statements or, with respect to future periods, on the financial
statements furnished pursuant to Section 8.5 hereof.
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Section 6.6. No Material Adverse Change. Since September 30, 2002,
there has been no change in the condition (financial or otherwise) or business
prospects of the Borrower or any Subsidiary except those occurring in the
ordinary course of business, none of which individually or in the aggregate have
been materially adverse.
Section 6.7. Full Disclosure. The statements and information furnished
to the Administrative Agent and the Lenders in connection with the negotiation
of this Agreement and the other Loan Documents and the commitments by the
Lenders to provide all or part of the financing contemplated hereby do not
contain any untrue statements of a material fact or omit a material fact
necessary to make the material statements contained herein or therein not
misleading, the Administrative Agent and the Lenders acknowledging that as to
any projections furnished to the Administrative Agent and the Lenders, the
Borrower only represents that the same were prepared on the basis of information
and estimates the Borrower believed to be reasonable.
Section 6.8. Trademarks, Franchises, and Licenses. The Borrower and its
Subsidiaries own, possess, or have the right to use all necessary patents,
licenses, franchises, trademarks, trade names, trade styles, copyrights, trade
secrets, know how, and confidential commercial and proprietary information to
conduct their businesses as now conducted, without known conflict with any
patent, license, franchise, trademark, trade name, trade style, copyright or
other proprietary right of any other Person.
Section 6.9. Governmental Authority and Licensing. The Borrower and its
Subsidiaries have received all licenses, permits, and approvals of all federal,
state, and local governmental authorities, if any, necessary to conduct their
businesses, in each case where the failure to obtain or maintain the same could
reasonably be expected to have a Material Adverse Effect. No investigation or
proceeding which, if adversely determined, could reasonably be expected to
result in revocation or denial of any material license, permit or approval is
pending or, to the knowledge of the Borrower, threatened.
Section 6.10. Good Title. The Borrower and its Subsidiaries have good
and defensible title (or valid leasehold interests) to their assets as reflected
on the most recent consolidated balance sheet of the Borrower and its
Subsidiaries furnished to the Administrative Agent and the Lenders (except for
sales of assets in the ordinary course of business), subject to no Liens other
than such thereof as are permitted by Section 8.8 hereof.
Section 6.11. Litigation and Other Controversies. There is no
litigation or governmental or arbitration proceeding or labor controversy
pending, nor to the knowledge of the Borrower threatened, against the Borrower
or any Subsidiary, except as disclosed in the Borrower's public filings with the
SEC.
Section 6.12. Taxes. All tax returns required to be filed by the
Borrower or any Subsidiary in any jurisdiction have, in fact, been filed, and
all taxes, assessments, fees, and other governmental charges upon the Borrower
or any Subsidiary or upon any of its Property, income or franchises, which are
shown to be due and payable in such returns, have been paid, except such taxes,
assessments, fees and governmental charges, if any, as are being contested in
good
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faith and by appropriate proceedings which prevent enforcement of the matter
under contest and as to which adequate reserves established in accordance with
GAAP have been provided. The Borrower does not know of any proposed additional
tax assessment against it or its Subsidiaries for which adequate provisions in
accordance with GAAP have not been made on their accounts. Adequate provisions
in accordance with GAAP for taxes on the books of the Borrower and each
Subsidiary have been made for all open years, and for its current fiscal period.
Section 6.13. Approvals. No authorization, consent, license or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any approval or consent of any other
Person, is or will be necessary to the valid execution, delivery or performance
by the Borrower or any Subsidiary of any Loan Document, except for such
approvals which have been obtained prior to the date of this Agreement and
remain in full force and effect.
Section 6.14. Affiliate Transactions. Neither the Borrower nor any
Subsidiary is a party to any contracts or agreements with any of its Affiliates
(other than with Wholly-owned Subsidiaries) on terms and conditions which are
less favorable to the Borrower or such Subsidiary than would be usual and
customary in similar contracts or agreements between Persons not affiliated with
each other.
Section 6.15. Investment Company; Public Utility Holding Company.
Neither the Borrower nor any Subsidiary is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "public utility holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 6.16. ERISA. The Borrower and each other member of its
Controlled Group has fulfilled its obligations under the minimum funding
standards of and is in compliance in all material respects with ERISA and the
Code to the extent applicable to it and has not incurred any liability to the
PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA. Neither the Borrower nor any Subsidiary
has any contingent liabilities with respect to any post-retirement benefits
under a Welfare Plan, other than liability for continuation coverage described
in article 6 of Title I of ERISA.
Section 6.17. Compliance with Laws. (a) The Borrower and its
Subsidiaries are in compliance with the requirements of all federal, state and
local laws, rules and regulations applicable to or pertaining to their Property
or business operations (including, without limitation, the Occupational Safety
and Health Act of 1970, the Americans with Disabilities Act of 1990, and laws
and regulations establishing quality criteria and standards for air, water, land
and toxic or hazardous wastes and substances), where any such non-compliance,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Without limiting the representations and warranties set forth in
Section 6.17(a) above, except for such matters, individually or in the
aggregate, which could not reasonably be expected to result in a Material
Adverse Effect, the Borrower represents and warrants that: (i) the Borrower and
its Subsidiaries, and each of the Premises, comply in all material respects
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with all applicable Environmental Laws; (ii) the Borrower and its Subsidiaries
have obtained all governmental approvals required for their operations and each
of the Premises by any applicable Environmental Law; (iii) the Borrower and its
Subsidiaries have not, and the Borrower has no knowledge of any other Person who
has, caused any Release, threatened Release or disposal of any Hazardous
Material at, on, about, or off any of the Premises in any material quantity and,
to the knowledge of the Borrower, none of the Premises are adversely affected by
any Release, threatened Release or disposal of a Hazardous Material originating
or emanating from any other property; (iv) none of the Premises contain and have
contained any: (1) underground storage tank, (2) material amounts of asbestos
containing building material, (3) landfills or dumps, (4) hazardous waste
management facility as defined pursuant to RCRA or any comparable state law, or
(5) site on or nominated for the National Priority List promulgated pursuant to
CERCLA or any state remedial priority list promulgated or published pursuant to
any comparable state law; (v) the Borrower and its Subsidiaries have not used a
material quantity of any Hazardous Material and have conducted no Hazardous
Material Activity at any of the Premises; (vi) the Borrower and its Subsidiaries
have no material liability for response or corrective action, natural resource
damage or other harm pursuant to CERCLA, RCRA or any comparable state law; (vii)
the Borrower and its Subsidiaries are not subject to, have no notice or
knowledge of and are not required to give any notice of any Environmental Claim
involving the Borrower or any Subsidiary or any of the Premises, and there are
no conditions or occurrences at any of the Premises which could reasonably be
anticipated to form the basis for an Environmental Claim against the Borrower or
any Subsidiary or such Premises; (viii) none of the Premises are subject to any,
and the Borrower has no knowledge of any imminent, restriction on the ownership,
occupancy, use or transferability of the Premises in connection with any (1)
Environmental Law or (2) Release, threatened Release or disposal of a Hazardous
Material; and (ix) there are no conditions or circumstances at any of the
Premises which pose an unreasonable risk to the environment or the health or
safety of Persons.
Section 6.18. Other Agreements. Neither the Borrower nor any Subsidiary
is in default under the terms of any covenant, indenture or agreement of or
affecting such Person or any of its Property, which default if uncured could
reasonably be expected to have a Material Adverse Effect.
Section 6.19. Solvency. The Borrower and its Subsidiaries are solvent,
able to pay their debts as they become due, and have sufficient capital to carry
on their business and all businesses in which they are about to engage.
Section 6.20. No Default. No Default or Event of Default has occurred
and is continuing.
Section 6.21. Credit Agreement Obligations. The Obligations, Hedging
Liabilities owed to the Lenders, their Affiliates and the Existing Swap
Providers, and the Funds Transfer and Deposit Account Liabilities owed to the
Lenders and their Affiliates constitute "Senior Debt" (as defined in the Senior
Note Indenture) and as "Permitted Debt" (as defined in the Senior Note
Indenture), and the Borrower hereby designates them as such.
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SECTION 7. CONDITIONS PRECEDENT.
The obligation of each Lender to advance, continue or convert any Loan
(other than the continuation of, or conversion into, a Base Rate Loan) or of the
L/C Issuer to issue, extend the expiration date (including by not giving notice
of non-renewal) of or increase the amount of any Letter of Credit under this
Agreement, shall be subject to the following conditions precedent:
Section 7.1. All Credit Events. At the time of each Credit Event
hereunder:
(a) each of the representations and warranties set forth
herein and in the other Loan Documents shall be and remain true and
correct as of said time, except to the extent the same expressly relate
to an earlier date;
(b) the Borrower and each Subsidiary shall be in compliance
with all of the terms and conditions hereof and of the other Loan
Documents, and no Default or Event of Default shall have occurred and
be continuing or would occur as a result of such Credit Event;
(c) in the case of a Borrowing the Administrative Agent shall
have received the notice required by Section 1.5 hereof, in the case of
the issuance of any Letter of Credit the L/C Issuer shall have received
a duly completed Application for such Letter of Credit together with
any fees called for by Section 2.1 hereof, and, in the case of an
extension or increase in the amount of a Letter of Credit, a written
request therefor in a form acceptable to the L/C Issuer together with
fees called for by Section 2.1 hereof; and
(d) such Credit Event shall not violate any order, judgment or
decree of any court or other authority or any provision of law or
regulation applicable to the Administrative Agent or any Lender
(including, without limitation, Regulation U of the Board of Governors
of the Federal Reserve System) as then in effect.
Each request for a Borrowing hereunder and each request for the
issuance of, increase in the amount of, or extension of the expiration date of,
a Letter of Credit shall be deemed to be a representation and warranty by the
Borrower on the date on such Credit Event as to the facts specified in
subsections (a) through (c), both inclusive, of this Section.
Section 7.2. Initial Credit Event. Before or concurrently with the
initial Credit Event:
(a) the Administrative Agent shall have received for each
Lender this Agreement duly executed by the Borrower and the Lenders;
(b) the Administrative Agent shall have received for each
Lender such Lender's duly executed Notes of the Borrower dated the date
hereof and otherwise in compliance with the provisions of Section 1.10
hereof;
(c) the Administrative Agent shall have received the Mortgages
and Security Agreement duly executed by the Borrower and its
Subsidiaries, together with (i) original
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stock certificates or other similar instruments or securities
representing all of the issued and outstanding shares of capital stock
or other equity interests in each Subsidiary (66% of such capital stock
in the case of any Foreign Subsidiary as provided in Section 4.1
hereof) as of the Closing Date, (ii) stock powers for the Collateral
consisting of the stock or other equity interest in each Subsidiary
executed in blank and undated, (iii) patent, trademark, and copyright
collateral assignments to the extent requested by the Administrative
Agent and (iv) deposit account, securities account, and commodity
account control agreements to the extent requested by the
Administrative Agent
(d) the Administrative Agent shall have received evidence of
insurance required to be maintained under the Loan Documents, naming
the Administrative Agent as mortgagee and loss payee;
(e) the Administrative Agent shall have received for each
Lender copies of the Borrower's and each Subsidiary's articles of
incorporation and bylaws (or comparable organizational documents) and
any amendments thereto, certified in each instance by its Secretary or
Assistant Secretary;
(f) the Administrative Agent shall have received for each
Lender copies of resolutions of the Borrower's and each Subsidiary's
Board of Directors (or similar governing body) authorizing the
execution, delivery and performance of this Agreement and the other
Loan Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby, together with specimen
signatures of the persons authorized to execute such documents on the
Borrower's and each Subsidiary's behalf, all certified in each instance
by its Secretary or Assistant Secretary;
(g) the Administrative Agent shall have received for each
Lender copies of the certificates of good standing for the Borrower and
each Subsidiary (dated no earlier than 30 days prior to the date
hereof) from the office of the secretary of the state of its
incorporation or organization and of each state in which it is
qualified to do business as a foreign corporation or organization;
(h) the Administrative Agent shall have received for each
Lender a list of the Borrower's Authorized Representatives;
(i) the Administrative Agent shall have received for itself
and for the Lenders the initial fees called for by Section 2.1 hereof;
(j) the Administrative Agent shall have received a mortgagee's
title insurance policy (or a prepaid binding commitment therefor) in
form and substance acceptable to the Administrative Agent from a title
insurance company acceptable to the Administrative Agent in the
aggregate amount equal to 105% of the fair-market value of the
Collateral subject thereto insuring the Lien of the Mortgages to be
valid first priority Liens subject to no defects or objections which
are unacceptable to the Administrative Agent, together with such
endorsements as the Administrative Agent may require;
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(k) each Lender shall have received such evaluations,
certifications and financial information as it may reasonably require
(including a compliance certificate in the form attached hereto as
Exhibit E containing compliance calculations of the financial covenants
as of the date of this Agreement) in order to satisfy itself as to (i)
the value of the Collateral, (ii) the financial condition of the
Borrower and its Subsidiaries (including, without limitation, (1) five
years of audited consolidated financial information with respect to the
Borrower and its Subsidiaries, (2) interim consolidated statements with
respect to the Borrower and its Subsidiaries as of March 31, 2003, (3)
five years of projected consolidated financial statements of the
Borrower and its Subsidiaries and (4) quarterly consolidating financial
projections for the four quarterly periods ending September 30, 2004),
and (iii) the lack of material contingent liabilities of the Borrower
and its Subsidiaries;
(l) the Administrative Agent shall have received financing
statement, tax, and judgment lien search results against the Property
of the Borrower and each Subsidiary evidencing the absence of Liens on
its Property except as permitted by Section 8.8 hereof;
(m) the Administrative Agent shall have received pay-off and
lien release letters from secured creditors of the Borrower and each
Subsidiary setting forth, among other things, the total amount of
indebtedness outstanding and owing to them (or outstanding letters of
credit issued for the account of the Borrower or any Subsidiary) and
containing an undertaking to cause to be delivered to the
Administrative Agent UCC termination statements and any other lien
release instruments necessary to release their Liens on the assets of
the Borrower and each Subsidiary, which pay-off and lien release
letters shall be in form and substance acceptable to the Administrative
Agent;
(n) the Administrative Agent shall have received for each
Lender the favorable written opinion of counsel to the Borrower and
each Subsidiary, in form and substance satisfactory to the
Administrative Agent;
(o) the Administrative Agent shall have received evidence
satisfactory to the Administrative Agent that the EBITDA of the
Borrower and its Subsidiaries for the twelve calendar months ending
March 31, 2003 is not less than $58,000,000;
(p) the Administrative Agent shall have received evidence of
the Borrower's receipt of (i) not less than $201,000,000 in gross
proceeds from the Senior Notes and (ii) not less than $15,000,000 in
gross proceeds of the Preferred Stock;
(q) the Administrative Agent shall be in receipt of a fully
executed Intercreditor Agreement in a form acceptable thereto;
(r) the shareholder lawsuits pertaining to the Borrower shall
have been reasonably resolved in a manner acceptable to the
Administrative Agent; and
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(s) the Administrative Agent shall have received for the
account of the Lenders such other agreements, material contracts,
instruments, documents, certificates, and opinions as the
Administrative Agent may reasonably request.
SECTION 8. COVENANTS.
The Borrower agrees that, so long as any credit is available to or in
use by the Borrower hereunder, except to the extent compliance in any case or
cases is waived in writing pursuant to the terms of Section 13.13 hereof:
Section 8.1. Maintenance of Business. The Borrower shall, and shall
cause each Subsidiary to, preserve and maintain its existence, except as
otherwise provided in Section 8.10(c) hereof. The Borrower shall, and shall
cause each Subsidiary to, preserve and keep in force and effect all licenses,
permits, franchises, approvals, patents, trademarks, trade names, trade styles,
copyrights, and other proprietary rights necessary to the proper conduct of its
business where the failure to do so could reasonably be expected to have a
Material Adverse Effect.
Section 8.2. Maintenance of Properties. The Borrower shall, and shall
cause each Subsidiary to, maintain, preserve, and keep its property, plant, and
equipment in good repair, working order and condition (ordinary wear and tear
excepted), and shall from time to time make all needful and proper repairs,
renewals, replacements, additions, and betterments thereto so that at all times
the efficiency thereof shall be fully preserved and maintained, except to the
extent that, in the reasonable business judgment of such Person, any such
Property is no longer necessary for the proper conduct of the business of such
Person.
Section 8.3. Taxes and Assessments. The Borrower shall duly pay and
discharge, and shall cause each Subsidiary to duly pay and discharge, all taxes,
rates, assessments, fees, and governmental charges upon or against it or its
Property, in each case before the same become delinquent and before penalties
accrue thereon, unless and to the extent that the same are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and adequate reserves are provided therefor.
Section 8.4. Insurance. The Borrower shall insure and keep insured, and
shall cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Borrower shall insure, and shall cause each Subsidiary to
insure, such other hazards and risks (including, without limitation, employers'
and public liability risks) with good and responsible insurance companies as and
to the extent usually insured by Persons similarly situated and conducting
similar businesses. The Borrower shall in any event maintain, and cause each
Subsidiary to maintain, insurance on the Collateral to the extent required by
the Collateral Documents. The Borrower shall, upon the request of the
Administrative Agent, furnish to the Administrative Agent and the Lenders a
certificate setting forth in summary form the nature and extent of the insurance
maintained pursuant to this Section.
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Section 8.5. Financial Reports. The Borrower shall, and shall cause
each Subsidiary to, maintain a standard system of accounting in accordance with
GAAP and shall furnish to the Administrative Agent, each Lender and each of
their duly authorized representatives such information respecting the business
and financial condition of the Borrower and each Subsidiary as the
Administrative Agent or such Lender may reasonably request; and without any
request, shall furnish to the Administrative Agent and the Lenders:
(a) as soon as available, and in any event within 30 days
after the last day of each calendar month, a copy of the consolidated
balance sheet of the Borrower and its Subsidiaries (other than dPi
Teleconnect, L.L.C.) as of the last day of such month and the
consolidated statements of income, retained earnings, and cash flows of
the Borrower and its Subsidiaries (other than dPi Teleconnect, L.L.C.)
for the month and for the fiscal year-to-date period then ended, each
in reasonable detail showing in comparative form the figures for the
corresponding date and period in the previous fiscal year, prepared by
the Borrower in accordance with GAAP (subject to the absence of
footnote disclosures and year-end audit adjustments) and certified to
by its chief financial officer or another officer of the Borrower
acceptable to the Administrative Agent;
(b) as soon as available, and in any event within 45 days
after the close of each fiscal quarter of each fiscal year of the
Borrower, a copy of the consolidated and consolidating balance sheet of
the Borrower and its Subsidiaries as of the last day of such fiscal
quarter and the consolidated and consolidating statements of income,
retained earnings, and cash flows of the Borrower and its Subsidiaries
for the fiscal quarter and for the fiscal year-to-date period then
ended, each in reasonable detail showing in comparative form the
figures for the corresponding date and period in the previous fiscal
year, prepared by the Borrower in accordance with GAAP (subject to the
absence of footnote disclosures and year-end audit adjustments) and
certified to by its chief financial officer or another officer of the
Borrower acceptable to the Administrative Agent;
(c) as soon as available, and in any event within 90 days
after the close of each fiscal year of the Borrower, a copy of the
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the last day of the fiscal year then ended and the
consolidated and consolidating statements of income, retained earnings,
and cash flows of the Borrower and its Subsidiaries for the fiscal year
then ended, and accompanying notes thereto, each in reasonable detail
showing in comparative form the figures for the previous fiscal year,
accompanied in the case of the consolidated financial statements by an
unqualified opinion of PricewaterhouseCoopers LLP or another firm of
independent public accountants of recognized national standing,
selected by the Borrower and reasonably satisfactory to the
Administrative Agent and the Required Lenders, to the effect that the
consolidated financial statements have been prepared in accordance with
GAAP and present fairly in accordance with GAAP the consolidated
financial condition of the Borrower and its Subsidiaries as of the
close of such fiscal year and the results of their operations and cash
flows for the fiscal year then ended and that an examination of such
accounts in connection with such financial statements has been made in
accordance with generally accepted auditing standards and, accordingly,
such examination included
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such tests of the accounting records and such other auditing procedures
as were considered necessary in the circumstances;
(d) within the period provided in subsection (c) above, the
written statement of the accountants who certified the audit report
thereby required that in the course of their audit they have obtained
no knowledge of any Default or Event of Default, or, if such
accountants have obtained knowledge of any such Default or Event of
Default, they shall disclose in such statement the nature and period of
the existence thereof;
(e) promptly after receipt thereof, any additional written
reports, management letters or other detailed information contained in
writing concerning significant aspects of the Borrower's or any
Subsidiary's operations and financial affairs given to it by its
independent public accountants;
(f) promptly after the sending or filing thereof, copies of
each financial statement, report, notice or proxy statement sent by the
Borrower or any Subsidiary to its stockholders or other equity holders,
and copies of each regular, periodic or special report, registration
statement or prospectus (including all Form 10-K, Form 10-Q and Form
8-K reports) filed by the Borrower or any Subsidiary with any
securities exchange or the Securities and Exchange Commission or any
successor agency;
(g) as soon as available, and in any event within 15 days
prior to the end of each fiscal year of the Borrower, a copy of the
Borrower's consolidated and consolidating business plan for the
following fiscal year, such business plan to show the Borrower's
projected consolidated and consolidating revenues, expenses and balance
sheet on a quarter-by-quarter basis, such business plan to be in
reasonable detail prepared by the Borrower and in form satisfactory to
the Administrative Agent and the Required Lenders (which shall include
a summary of all assumptions made in preparing such business plan);
(h) notice of any Change in Control;
(i) promptly after knowledge thereof shall have come to the
attention of any responsible officer of the Borrower, written notice of
any threatened or pending litigation or governmental or arbitration
proceeding or labor controversy against the Borrower or any Subsidiary
which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect or of the occurrence of any Default or Event of
Default hereunder;
(j) with each of the financial statements furnished to the
Lenders pursuant to subsections (a) and (b) above, a written
certificate in the form attached hereto as Exhibit E signed by the
chief financial officer of the Borrower or another officer of the
Borrower acceptable to the Administrative Agent to the effect that to
the best of such officer's knowledge and belief no Default or Event of
Default has occurred during the period covered by such statements or,
if any such Default or Event of Default has occurred during such
period, setting forth a description of such Default or Event of
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Default and specifying the action, if any, taken by the Borrower or any
Subsidiary to remedy the same. Such certificate shall also set forth
the calculations supporting such statements in respect of Sections
8.22, 8.23, 8.24, 8.25, 8.26 and 8.27 hereof; provided, however, with
respect to the calculations supporting Section 8.27 hereof for any
month ending March 31, June 30, September 30 or December 31, the
calculations supporting Section 8.27 for such month end shall be
furnished to the Lenders along with the financial statements delivered
pursuant to subsection (b) above; and
(k) notwithstanding anything herein to the contrary, each
report and financial statement furnished to the Lenders pursuant to
this Section 8.5 shall be in a form and scope reasonably acceptable to
the Administrative Agent and the Required Lenders.
Section 8.6. Inspection. The Borrower shall, and shall cause each
Subsidiary to, permit the Administrative Agent, each Lender, and each of their
duly authorized representatives and agents to visit and inspect any of its
Property, corporate books, and financial records, to examine and make copies of
its books of accounts and other financial records, and to discuss its affairs,
finances, and accounts with, and to be advised as to the same by, its officers,
employees and independent public accountants (and by this provision the Borrower
hereby authorizes such accountants to discuss with the Administrative Agent and
such Lenders the finances and affairs of the Borrower and its Subsidiaries) at
such reasonable times and intervals as the Administrative Agent or any such
Lender may designate and, so long as no Default or Event of Default exists, with
reasonable prior notice to the Borrower.
Section 8.7. Borrowings and Guaranties. The Borrower shall not, nor
shall it permit any Subsidiary to, issue, incur, assume, create or have
outstanding any Indebtedness for Borrowed Money, or be or become liable as
endorser, guarantor, surety or otherwise for any debt, obligation or undertaking
of any other Person, or otherwise agree to provide funds for payment of the
obligations of another, or supply funds thereto or invest therein or otherwise
assure a creditor of another against loss, or apply for or become liable to the
issuer of a letter of credit which supports an obligation of another, or
subordinate any claim or demand it may have to the claim or demand of any other
Person; provided, however, that the foregoing shall not restrict nor operate to
prevent:
(a) the Obligations, Hedging Liability, and Funds Transfer and
Deposit Account Liability of the Borrower and its Subsidiaries owing to
the Administrative Agent and the Lenders (and their Affiliates);
(b) purchase money indebtedness and Capitalized Lease
Obligations of the Borrower and its Subsidiaries in an amount not to
exceed $20,000,000 in the aggregate at any one time outstanding;
(c) obligations of the Borrower arising out of interest rate
and foreign currency hedging agreements entered into with financial
institutions in the ordinary course of business;
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(d) endorsement of items for deposit or collection of
commercial paper received in the ordinary course of business;
(e) indebtedness from time to time owing by any Subsidiary to
the Borrower;
(f) indebtedness and guaranties with respect to the Senior
Notes;
(g) indebtedness of the Borrower and its Subsidiaries not
otherwise permitted by this Section in an amount not to exceed
$10,000,000 in the aggregate at any one time outstanding; and
(h) the Preferred Shares.
Section 8.8. Liens. The Borrower shall not, nor shall it permit any
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by any such Person; provided, however, that the foregoing shall
not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar
charges (other than Liens arising under ERISA), good faith cash
deposits in connection with tenders, contracts or leases to which the
Borrower or any Subsidiary is a party or other cash deposits required
to be made in the ordinary course of business, provided in each case
that the obligation is not for borrowed money and that the obligation
secured is not overdue or, if overdue, is being contested in good faith
by appropriate proceedings which prevent enforcement of the matter
under contest and adequate reserves have been established therefor;
(b) mechanics', workmen's, materialmen's, landlords',
carriers' or other similar Liens arising in the ordinary course of
business with respect to obligations which are not due or which are
being contested in good faith by appropriate proceedings which prevent
enforcement of the matter under contest;
(c) judgment liens and judicial attachment liens not
constituting an Event of Default under Section 9.1(g) hereof and the
pledge of assets for the purpose of securing an appeal, stay or
discharge in the course of any legal proceeding, provided that the
aggregate amount of such judgment liens and attachments and liabilities
of the Borrower and its Subsidiaries secured by a pledge of assets
permitted under this subsection, including interest and penalties
thereon, if any, shall not be in excess of $500,000 at any one time
outstanding;
(d) Liens on property of the Borrower or any Subsidiary
created solely for the purpose of securing indebtedness permitted by
Section 8.7(b) hereof, representing or incurred to finance the purchase
price of Property, provided that no such Lien shall extend to or cover
other Property of the Borrower or such Subsidiary other than the
respective Property so acquired, and the principal amount of
indebtedness secured by any
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such Lien shall at no time exceed the purchase price of such Property,
as reduced by repayments of principal thereon;
(e) any interest or title of a lessor under any operating
lease;
(f) easements, rights-of-way, restrictions, and other similar
encumbrances against real property incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and
which do not materially detract from the value of the Property subject
thereto or materially interfere with the ordinary conduct of the
business of the Borrower or any Subsidiary; and
(g) the Liens evidenced by the financing statements and other
items identified on Schedule 8.8 hereto;
(h) the Liens granted in favor of the Administrative Agent
pursuant to the Collateral Documents;
(i) Liens securing the indebtedness and guaranties with
respect to the Senior Notes; and
(j) other Liens not otherwise permitted pursuant to this
Section 8.8 in an aggregate amount not to exceed $5,000,000 at any
point in time.
Section 8.9. Investments, Acquisitions, Loans and Advances. The
Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances to, any
other Person, or acquire all or any substantial part of the assets or business
of any other Person or division thereof; provided, however, that the foregoing
shall not apply to nor operate to prevent:
(a) investments in direct obligations of the United States of
America or of any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States of
America, provided that any such obligations shall mature within one
year of the date of issuance thereof;
(b) investments in commercial paper rated at least P-1 by
Xxxxx'x and at least A-1 by S&P maturing within one year of the date of
issuance thereof;
(c) investments in certificates of deposit issued by any
Lender or by any United States commercial bank having capital and
surplus of not less than $100,000,000 which have a maturity of one year
or less;
(d) investments in repurchase obligations with a term of not
more than 7 days for underlying securities of the types described in
subsection (a) above entered into with any bank meeting the
qualifications specified in subsection (c) above, provided all such
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agreements require physical delivery of the securities securing such
repurchase agreement, except those delivered through the Federal
Reserve Book Entry System;
(e) investments in money market funds that invest solely, and
which are restricted by their respective charters to invest solely, in
investments of the type described in the immediately preceding
subsections (a), (b), (c), and (d) above;
(f) the Borrower's investments from time to time in its
Subsidiaries, and investments made from time to time by a Subsidiary in
or more of its Subsidiaries;
(g) intercompany advances made from time to time from the
Borrower to any one or more Guarantors in the ordinary course of
business to finance working capital needs;
(h) Permitted Acquisitions;
(i) 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 the existing
loans and advances not in excess of $4,500,000 to dPi, provided,
however, that the Borrower and the Guarantors ownership interests in
dPi and the note obligations of dPi to the Borrower and the Guarantors
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 Borrower
and the Guarantors until such time as it becomes a Guarantor);
(j) the acquisition of Property in exchange for Property sold,
transferred, leased or otherwise disposed of pursuant to Section
8.10(g) hereof; provided that such acquired assets are subject to a
valid and perfected first priority Lien in favor of the Administrative
Agent pursuant to one or more of the Collateral Documents;
(k) investments in Cash Equivalents of amounts on deposit in
the Excess Cash Flow Escrow Account; and
(l) other investments, loans, and advances in addition to
those otherwise permitted by this Section in an amount not to exceed
$500,000 in the aggregate at any one time outstanding.
In determining the amount of investments, acquisitions, loans, and advances
permitted under this Section, investments and acquisitions shall always be taken
at the original cost thereof (regardless of any subsequent appreciation or
depreciation therein), and loans and advances shall be taken at the principal
amount thereof then remaining unpaid.
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Section 8.10. Mergers, Consolidations and Sales. The Borrower shall
not, nor shall it permit any Subsidiary to, be a party to any merger or
consolidation, or sell, transfer, lease or otherwise dispose of all or any part
of its Property, including any disposition of Property as part of a sale and
leaseback transaction, or in any event sell or discount (with or without
recourse) any of its notes or accounts receivable; provided, however, that so
long as no Default or Event of Default exists this Section shall not apply to
nor operate to prevent:
(a) the sale or lease of inventory in the ordinary course of
business;
(b) the sale, transfer, lease or other disposition of Property
of the Borrower and its Subsidiaries to one another in the ordinary
course of its business;
(c) the merger of any Subsidiary with and into the Borrower or
any other Subsidiary, provided that, in the case of any merger
involving the Borrower, the Borrower is the corporation surviving the
merger;
(d) the sale of delinquent notes or accounts receivable in the
ordinary course of business for purposes of collection only (and not
for the purpose of any bulk sale or securitization transaction);
(e) the sale, transfer or other disposition of any tangible
personal property that, in the reasonable business judgment of the
Borrower or its Subsidiary, has become obsolete or worn out, and which
is disposed of in the ordinary course of business;
(f) the sale, transfer, lease or other disposition of Property
of the Borrower or any Subsidiary (including any disposition of
Property as part of a sale and leaseback transaction) aggregating for
the Borrower and its Subsidiaries not more than $2,500,000 during any
fiscal year of the Borrower; and
(g) the sale, transfer, lease or other disposition of Property
of the Borrower or any Subsidiary with respect to an exchange of assets
or retail store sites of the Borrower and its Subsidiaries for assets
of retail store sites of Persons in the same Eligible Line of Business
as the Borrower and its Subsidiaries, provided that such substitute
assets are subject to a valid and perfected first priority Lien
pursuant to one or more of the Collateral Documents.
Section 8.11. Maintenance of Subsidiaries. The Borrower shall not
assign, sell or transfer, nor shall it permit any Subsidiary to issue, assign,
sell or transfer, any shares of capital stock or other equity interests of a
Subsidiary; provided, however, that the foregoing shall not operate to prevent
(a) Liens on the capital stock or other equity interests of Subsidiaries granted
to the Administrative Agent pursuant to the Collateral Documents and the
documents securing the Senior Notes, (b) the issuance, sale, and transfer to any
person of any shares of capital stock of a Subsidiary solely for the purpose of
qualifying, and to the extent legally necessary to qualify, such person as a
director of such Subsidiary, and (c) any transaction permitted by Section
8.10(c) above.
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Section 8.12. Dividends and Certain Other Restricted Payments. The
Borrower shall not, nor shall it permit any Subsidiary to, (a) declare or pay
any dividends on or make any other distributions in respect of any class or
series of its capital stock or other equity interests or (b) directly or
indirectly purchase, redeem, or otherwise acquire or retire any of its capital
stock or other equity interests or any warrants, options, or similar instruments
to acquire the same (collectively, "Restricted Payments"); provided, however,
that the foregoing shall not operate to prevent the making of dividends or
distributions by any Wholly-owned Subsidiary of the Borrower to its parent
corporation; provided, further, however, that the foregoing shall not operate to
prevent (i) the redemption by the Borrower of any of its capital stock or other
equity interest so long as (x) no Revolving Loans are outstanding immediately
prior to and for ten consecutive days immediately after such redemption, (y) the
Borrower's Leverage Ratio after giving effect to such redemption shall be less
than 2.5 to 1.0 and (z) no Default or Event of Default shall exist before and
after giving effect thereto or (ii) the declaration or payment of dividends with
respect to the Preferred Stock so long as no Default or Event of Default shall
exist before and after giving effect thereto.
Section 8.13. ERISA. The Borrower shall, and shall cause each
Subsidiary to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed could
reasonably be expected to result in the imposition of a Lien against any of its
Property. The Borrower shall, and shall cause each Subsidiary to, promptly
notify the Administrative Agent and each Lender of: (a) the occurrence of any
reportable event (as defined in ERISA) with respect to a Plan, (b) receipt of
any notice from the PBGC of its intention to seek termination of any Plan or
appointment of a trustee therefor, (c) its intention to terminate or withdraw
from any Plan, and (d) the occurrence of any event with respect to any Plan
which would result in the incurrence by the Borrower or any Subsidiary of any
material liability, fine or penalty, or any material increase in the contingent
liability of the Borrower or any Subsidiary with respect to any post-retirement
Welfare Plan benefit.
Section 8.14. Compliance with Laws. (a) The Borrower shall, and shall
cause each Subsidiary to, comply in all respects with the requirements of all
federal, state, and local laws, rules, regulations, ordinances and orders
applicable to or pertaining to its Property or business operations, where any
such non-compliance, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or result in a Lien upon any of its
Property.
(b) Without limiting the agreements set forth in Section 8.14(a)
above, the Borrower shall, and shall cause each Subsidiary to, at all times, do
the following to the extent the failure to do so, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect: (i)
comply in all material respects with, and maintain each of the Premises in
compliance in all material respects with, all applicable Environmental Laws;
(ii) require that each tenant and subtenant, if any, of any of the Premises or
any part thereof comply in all material respects with all applicable
Environmental Laws; (iii) obtain and maintain in full force and effect all
material governmental approvals required by any applicable Environmental Law for
operations at each of the Premises; (iv) cure any material violation by it or at
any of the Premises of applicable Environmental Laws; (v) not allow the presence
or operation at any of the Premises of any (1) landfill or dump or (2) hazardous
waste management facility or solid waste disposal facility as defined pursuant
to RCRA or any comparable state law; (vi) not manufacture, use, generate,
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transport, treat, store, release, dispose or handle any Hazardous Material at
any of the Premises except in the ordinary course of its business and in de
minimis amounts; (vii) within 10 Business Days notify the Administrative Agent
in writing of and provide any reasonably requested documents upon learning of
any of the following in connection with the Borrower or any Subsidiary or any of
the Premises: (1) any material liability for response or corrective action,
natural resource damage or other harm pursuant to CERCLA, RCRA or any comparable
state law; (2) any material Environmental Claim; (3) any material violation of
an Environmental Law or material Release, threatened Release or disposal of a
Hazardous Material; (4) any restriction on the ownership, occupancy, use or
transferability arising pursuant to any (x) Release, threatened Release or
disposal of a Hazardous Substance or (y) Environmental Law; or (5) any
environmental, natural resource, health or safety condition, which could
reasonably be expected to have a Material Adverse Effect; (viii) conduct at its
expense any investigation, study, sampling, testing, abatement, cleanup,
removal, remediation or other response action necessary to remove, remediate,
clean up or xxxxx any material Release, threatened Release or disposal of a
Hazardous Material as required by any applicable Environmental Law, (ix) abide
by and observe any restrictions on the use of the Premises imposed by any
governmental authority as set forth in a deed or other instrument affecting the
Borrower's or any Subsidiary's interest therein; (x) promptly provide or
otherwise make available to the Administrative Agent any reasonably requested
environmental record concerning the Premises which the Borrower or any
Subsidiary possesses or can reasonably obtain; and (xi) perform, satisfy, and
implement any operation or maintenance actions required by any governmental
authority or Environmental Law, or included in any no further action letter or
covenant not to xxx issued by any governmental authority under any Environmental
Law.
Section 8.15. Burdensome Contracts With Affiliates. The Borrower shall
not, nor shall it permit any Subsidiary to, enter into any contract, agreement
or business arrangement with any of its Affiliates (other than with Wholly-owned
Subsidiaries) on terms and conditions which are less favorable to the Borrower
or such Subsidiary than would be usual and customary in similar contracts,
agreements or business arrangements between Persons not affiliated with each
other.
Section 8.16. No Changes in Fiscal Year. The fiscal year of the
Borrower and its Subsidiaries ends on September 30 of each year; and the
Borrower shall not, nor shall it permit any Subsidiary to, change its fiscal
year from its present basis.
Section 8.17. Formation of Subsidiaries. Promptly upon the formation or
acquisition of any Subsidiary, the Borrower shall provide the Administrative
Agent and the Lenders notice thereof and timely comply with the requirements of
Section 4 hereof (at which time Schedule 6.2 shall be deemed amended to include
reference to such Subsidiary).
Section 8.18. Change in the Nature of Business. The Borrower shall not,
nor shall it permit any Subsidiary to, engage in any business or activity if as
a result the general nature of the business of the Borrower or any Subsidiary
would be changed in any material respect from the general nature of the business
engaged in by it as of the Closing Date.
Section 8.19. Use of Loan Proceeds. The Borrower shall use the credit
extended under this Agreement solely for the purposes set forth in, or otherwise
permitted by, Section 6.4 hereof.
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Section 8.20. No Restrictions. Except as provided herein, the Borrower
shall not, nor shall it permit any Subsidiary to, directly or indirectly create
or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of the Borrower or any
Subsidiary to: (a) pay dividends or make any other distribution on any
Subsidiary's capital stock or other equity interests owned by the Borrower or
any other Subsidiary, (b) pay any indebtedness owed to the Borrower or any other
Subsidiary, (c) make loans or advances to the Borrower or any other Subsidiary,
(d) transfer any of its Property to the Borrower or any other Subsidiary or (e)
guarantee the Obligations and/or grant Liens on its assets to the Administrative
Agent as required by the Loan Documents.
Section 8.21. Senior Notes. (a) The Borrower shall not, nor shall it
permit any Subsidiary to, (i) amend or modify any of the terms or conditions
relating to Senior Notes (other than amendments and modifications that (A) would
extend the maturity or reduce the amount of any payment of principal or reduce
the rate or extend any date for payment of interest, (B) adds collateral that
conforms to collateral covered by the Collateral Documents, or (C) releases
collateral) or (ii) directly or indirectly make any voluntary prepayment of any
Senior Notes, purchase any Senior Notes, or effect any voluntary redemption of
any Senior Notes; provided, however, the foregoing shall not prohibit the
Borrower from prepaying, purchasing and redeeming Senior Notes (x) with the
proceeds of the issuance and sale of common stock of the Borrower so long as no
Default or Event of Default shall exist before or after giving effect thereto
and (y) after the Borrower's obligations under Section 4.19 of the Senior Note
Indenture have terminated pursuant to Section 4.19(d) of the Senior Note
Indenture so long as (I) no Revolving Loans are outstanding immediately prior to
and for 10 consecutive days immediately after such prepayment, purchase or
redemption, and (II) no Default or Event of Default shall exist before and after
giving effect thereto
(b) The Borrower shall not, nor shall it permit any Subsidiary to,
prepay, purchase or redeem any Senior Notes with any Excess Cash Flow or any
amounts held in the Excess Cash Flow Escrow Account, pursuant to Section 4.19 of
the Senior Note Indenture unless (i) no Revolving Loans are outstanding
immediately prior to and for 10 consecutive days immediately after such
prepayment, purchase or redemption, and (ii) no Default or Event of Default
shall exist before and after giving effect thereto.
(c) Any Senior Notes repurchased by the Borrower as permitted hereby
and not cancelled may not be resold by the Borrower.
Section 8.22. Capital Expenditures. The Borrower shall not, nor shall
it permit any of the Guarantors to, incur Capital Expenditures in an amount in
excess of $20,000,000 in the aggregate during any fiscal year (the "Annual CapEx
Permitted Amount"); provided, however, that the Annual CapEx Permitted Amount
shall be increased by the amount, if any, by which the Annual CapEx Permitted
Amount for the immediately preceding fiscal year, computed without giving effect
to this proviso, exceeds the actual Capital Expenditures extended by the
Borrower and the Guarantors for such preceding fiscal year (the "CapEx
Adjustment"); provided, further, however, that the CapEx Adjustment shall in no
event exceed $2,500,000 for any fiscal year period.
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Section 8.23. Fixed Charge Coverage Ratio. As of the last day of each
fiscal quarter of the Borrower ending during each of the periods specified
below, the Borrower shall maintain a ratio of (a) EBITDA for the four fiscal
quarters of the Borrower then ENDED less Capital Expenditures not financed by
Capitalized Leases to (b) Fixed Charges for the same four fiscal quarters then
ended of not less:
FIXED CHARGE COVERAGE
RATIO SHALL NOT BE LESS
FROM AND INCLUDING TO AND INCLUDING THAN:
The date hereof June 30, 2003 1.05 to 1.0
July 1, 2003 September 30, 2003 1.15 to 1.0
October 1, 2003 March 31, 2004 1.20 to 1.0
April 1, 2004 Revolving Credit Termination 1.25 to 1.0
Date
Section 8.24. Leverage Ratio. As of the last day of each fiscal quarter
of the Borrower ending during each of the periods specified below, the Borrower
shall not permit the Leverage Ratio at such time to be greater than:
LEVERAGE RATIO SHALL NOT BE
FROM AND INCLUDING TO AND INCLUDING MORE THAN:
The date hereof March 31, 2004 5.0 to 1.0
April 1, 2004 June 30, 2004 4.75 to 1.0
July 1, 2004 September 30, 2004 4.5 to 1.0
October 1, 2004 September 30, 2005 4.0 to 1.0
October 1, 2005 September 30, 2006 3.75 to 1.0
October 1, 2006 September 30, 2007 3.25 to 1.0
October 1, 2007 Revolving Credit Termination 2.75 to 1.0
Date
Section 8.25. Net Worth. The Borrower shall, at all times during the
periods set forth below, maintain Net Worth of the Borrower and each Guarantor
determined on a consolidated basis in an amount not less than the sum of (a)
$85,000,000, (b) 75% of positive Net Income for each quarter of each fiscal year
of the Borrower ending on or after September 30, 2003 (without deduction for
losses) and (c) 90% of any subsequent incremental issuance of new equity
securities (whether common or preferred stock or otherwise), other than equities
issues in connection with the exercise of employee stock options and capital
stock issued to the seller of an acquired business in connection with an
acquisition permitted hereby.
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Section 8.26. Minimum Rental Merchandise Usage. The Borrower and the
Guarantors shall not permit the value of the Rental Merchandise under lease
pursuant to Rental Contracts as of the date of determination to be less than (i)
74% for each calendar month ending September 30, October 31 and November 30 in
each fiscal year and (ii) 77% as of the last day of all other calendar month in
each fiscal year, of the total value of Rental Merchandise held for rental under
rental contracts, as measured at the end of each calendar month of the Borrower
commencing June 30, 2003. For purposes of this Section 8.26, the value of the
Rental Merchandise shall be as it is recorded on the books and records of the
Borrower and the Guarantors, determined in accordance with GAAP and the value of
any jewelry shall be excluded from all calculations made. The Borrower and the
Guarantors 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 calendar month
of the Borrower commencing June 30, 2003.
Section 8.27. Monthly Minimum EBITDA. As of the last day of each
calendar month specified below, the Borrower shall not permit EBITDA for the
twelve (12) consecutive calendar months then ended to be less than:
FOR THE MONTH ENDING MINIMUM EBITDA
June 2003 $57,500,000
July 2003 $56,000,000
August 2003 $55,000,000
September 2003 $53,000,000
October 2003 $51,000,000
November 2003 $51,000,000
December 2003 $51,000,000
January 2004 $50,000,000
February 2004 $48,000,000
March 2004 $48,000,000
April 2004 $49,000,000
May 2004 $50,000,000
June 2004 $52,000,000
July 2004 $53,000,000
August 2004 $54,000,000
September 2004 $55,500,000
October 2004 $56,500,000
November 2004 $57,000,000
December 2004 $58,000,000
January 2005 $58,000,000
February 2005 $59,000,000
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FOR THE MONTH ENDING MINIMUM EBITDA
March 2005 $59,000,000
April 2005 $60,000,000
May 2005 $60,000,000
June 2005 $60,000,000
July 2005 $60,000,000
August 2005 $60,000,000
September 2005 $60,000,000
October 2005 $60,000,000
November 2005 $60,000,000
December 2005 $60,000,000
January 2006 $60,000,000
February 2006 $60,000,000
March 2006 $62,500,000
April 2006 $62,500,000
May 2006 $62,500,000
June 2006 $62,500,000
July 2006 $62,500,000
August 2006 $62,500,000
September 2006 $62,500,000
October 2006 $62,500,000
November 2006 $62,500,000
December 2006 $62,500,000
January 2007 $65,000,000
February 2007 $65,000,000
March 2007 $65,000,000
April 2007 $65,000,000
May 2007 $65,000,000
June 2007 $65,000,000
July 2007 $65,000,000
August 2007 $65,000,000
September 2007 and thereafter $65,000,000
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Section 8.28. Preferred Stock. The Borrower shall not, nor shall it
permit any Subsidiary to, amend or modify its articles of incorporation,
charter, by-laws, certificate of limited partnership, limited partnership
agreement, certificate of organization, organizational agreement or any other
agreement under which such Person is organized with respect to any terms or
conditions relating to the Preferred Stock.
SECTION 9. EVENTS OF DEFAULT AND REMEDIES.
Section 9.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" hereunder:
(a) (i) default in the payment when due of all or any part of
the principal of any Note (whether at the stated maturity thereof or at
any other time provided for in this Agreement) or of any Reimbursement
Obligation or (ii) default for a period of 5 Business Days in the
payment of any interest or any fee or other Obligation payable
hereunder or under any other Loan Document;
(b) default in the observance or performance of any covenant
set forth in Sections 8.1, 8.5, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.17,
8.18, 8.21, 8.22, 8.23, 8.24, 8.25, 8.26, 8.27, or 8.28 hereof or of
any provision in any Loan Document dealing with the use, disposition or
remittance of the proceeds of Collateral or requiring the maintenance
of insurance thereon;
(c) default in the observance or performance of any other
provision hereof or of any other Loan Document which is not remedied
within 30 days after the earlier of (i) the date on which such failure
shall first become known to any officer of the Borrower or (ii) written
notice thereof is given to the Borrower by the Administrative Agent;
(d) any representation or warranty made herein or in any other
Loan Document or in any certificate furnished to the Administrative
Agent or the Lenders pursuant hereto or thereto or in connection with
any transaction contemplated hereby or thereby proves untrue in any
material respect as of the date of the issuance or making or deemed
making thereof;
(e) any event occurs or condition exists (other than those
described in subsections (a) through (d) above) which is specified as
an event of default under any of the other Loan Documents, or any of
the Loan Documents shall for any reason not be or shall cease to be in
full force and effect or is declared to be null and void, or any of the
Collateral Documents shall for any reason fail to create a valid and
perfected first priority Lien in favor of the Administrative Agent in
any Collateral purported to be covered thereby except as expressly
permitted by the terms thereof, or any Subsidiary takes any action for
the purpose of terminating, repudiating or rescinding any Loan Document
executed by it or any of its obligations thereunder;
(f) default shall occur under any Indebtedness for Borrowed
Money issued, assumed or guaranteed by the Borrower or any Subsidiary
aggregating in excess of
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$1,000,000, or under any indenture, agreement or other instrument under which
the same may be issued, and such default shall continue for a period of time
sufficient to permit the acceleration of the maturity of any such Indebtedness
for Borrowed Money (whether or not such maturity is in fact accelerated), or any
such Indebtedness for Borrowed Money shall not be paid when due (whether by
demand, lapse of time, acceleration or otherwise);
(g) any judgment or judgments, writ or writs or warrant or
warrants of attachment, or any similar process or processes, shall be
entered or filed against the Borrower or any Subsidiary, or against any
of its Property, in an aggregate amount in excess of $1,000,000 (except
to the extent fully covered by insurance pursuant to which the insurer
has accepted liability therefor in writing), and which remains
undischarged, unvacated, unbonded or unstayed for a period of 30 days;
(h) the Borrower or any Subsidiary, or any member of its
Controlled Group, shall fail to pay when due an amount or amounts
aggregating in excess of $1,000,000 which it shall have become liable
to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans having aggregate Unfunded Vested
Liabilities in excess of $1,000,000 (collectively, a "Material Plan")
shall be filed under Title IV of ERISA by the Borrower or any
Subsidiary, or any other member of its Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause
a trustee to be appointed to administer any Material Plan or a
proceeding shall be instituted by a fiduciary of any Material Plan
against the Borrower or any Subsidiary, or any member of its Controlled
Group, to enforce Section 515 or 4219(c)(5) of ERISA and such
proceeding shall not have been dismissed within 30 days thereafter; or
a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be
terminated;
(i) any Change of Control shall occur;
(j) the Borrower or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) apply for, seek, consent
to or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part
of its Property, (v) institute any proceeding seeking to have entered
against it an order for relief under the United States Bankruptcy Code,
as amended, to adjudicate it insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed
against it, (vi) take any action in furtherance of any matter described
in parts (i) through (v) above, or (vii) fail to contest in good faith
any appointment or proceeding described in Section 9.1(k) hereof;
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(k) a custodian, receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower or any Subsidiary,
or any substantial part of any of its Property, or a proceeding
described in Section 9.1(j)(v) shall be instituted against the Borrower
or any Subsidiary, and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 60 days;
or
(l) the Intercreditor Agreement shall for any reason not be or
shall cease to be in full force and effect or is declared to be null
and void, or any holder of any Senior Note (or security agent or
trustee therefor) takes any action for the purpose of terminating,
repudiating or rescinding the Intercreditor Agreement executed by it or
any of its obligations thereunder; or
(m) any event occurs or condition exists which would require,
or create an obligation of, the Borrower to redeem, prepay, purchase or
otherwise retire any portion of the Preferred Stock; or
(n) any termination event, default or event of default shall
occur under any agreement entered into with respect to any Hedging
Liability in excess of $1,000,000, and such termination event, default
or event of default shall continue for a period of time sufficient to
permit the acceleration of the maturity of any such Hedging Liability
(whether or not such maturity is in fact accelerated), or any such
Hedging Liability shall not be paid when due (whether by demand, lapse
of time, acceleration or otherwise).
Section 9.2. Non-Bankruptcy Defaults. When any Event of Default other
than those described in subsection (j) or (k) of Section 9.1 hereof has occurred
and is continuing, the Administrative Agent shall, by written notice to the
Borrower: (a) if so directed by the Required Lenders, terminate the remaining
Commitments and all other obligations of the Lenders hereunder on the date
stated in such notice (which may be the date thereof); (b) if so directed by the
Required Lenders, declare the principal of and the accrued interest on all
outstanding Notes to be forthwith due and payable and thereupon all outstanding
Notes, including both principal and interest thereon, shall be and become
immediately due and payable together with all other amounts payable under the
Loan Documents without further demand, presentment, protest or notice of any
kind; and (c) if so directed by the Required Lenders, demand that the Borrower
immediately pay to the Administrative Agent the full amount then available for
drawing under each or any Letter of Credit, and the Borrower agrees to
immediately make such payment and acknowledges and agrees that the Lenders would
not have an adequate remedy at law for failure by the Borrower to honor any such
demand and that the Administrative Agent, for the benefit of the Lenders, shall
have the right to require the Borrower to specifically perform such undertaking
whether or not any drawings or other demands for payment have been made under
any Letter of Credit. The Administrative Agent, after giving notice to the
Borrower pursuant to Section 9.1(c) or this Section 9.2, shall also promptly
send a copy of such notice to the other Lenders, but the failure to do so shall
not impair or annul the effect of such notice.
Section 9.3. Bankruptcy Defaults. When any Event of Default described
in subsections (j) or (k) of Section 9.1 hereof has occurred and is continuing,
then all outstanding Notes shall immediately become due and payable together
with all other amounts payable under
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the Loan Documents without presentment, demand, protest or notice of any kind,
the obligation of the Lenders to extend further credit pursuant to any of the
terms hereof shall immediately terminate and the Borrower shall immediately pay
to the Administrative Agent the full amount then available for drawing under all
outstanding Letters of Credit, the Borrower acknowledging and agreeing that the
Lenders would not have an adequate remedy at law for failure by the Borrower to
honor any such demand and that the Lenders, and the Administrative Agent on
their behalf, shall have the right to require the Borrower to specifically
perform such undertaking whether or not any draws or other demands for payment
have been made under any of the Letters of Credit.
Section 9.4. Collateral for Undrawn Letters of Credit. (a) If the
prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 1.8(b) or under Section 9.2 or 9.3
above, the Borrower shall forthwith pay the amount required to be so prepaid, to
be held by the Administrative Agent as provided in subsection (b) below.
(b) All amounts prepaid pursuant to subsection (a) above shall be
held by the Administrative Agent in one or more separate collateral accounts
(each such account, and the credit balances, properties, and any investments
from time to time held therein, and any substitutions for such account, any
certificate of deposit or other instrument evidencing any of the foregoing and
all proceeds of and earnings on any of the foregoing being collectively called
the "Collateral Account") as security for, and for application by the
Administrative Agent (to the extent available) to, the reimbursement of any
payment under any Letter of Credit then or thereafter made by the Administrative
Agent, and to the payment of the unpaid balance of any other Obligations. The
Collateral Account shall be held in the name of and subject to the exclusive
dominion and control of the Administrative Agent for the benefit of the
Administrative Agent, the Lenders, and the L/C Issuer. If and when requested by
the Borrower, the Administrative Agent shall invest funds held in the Collateral
Account from time to time in direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United States of
America with a remaining maturity of one year or less, provided that the
Administrative Agent is irrevocably authorized to sell investments held in the
Collateral Account when and as required to make payments out of the Collateral
Account for application to amounts due and owing from the Borrower to the L/C
Issuer, the Administrative Agent or the Lenders; provided, however, that if (i)
the Borrower shall have made payment of all such obligations referred to in
subsection (a) above, (ii) all relevant preference or other disgorgement periods
relating to the receipt of such payments have passed, and (iii) no Letters of
Credit, Commitments, Loans or other Obligations remain outstanding hereunder,
then the Administrative Agent shall release to the Borrower any remaining
amounts held in the Collateral Account.
Section 9.5. Notice of Default. The Administrative Agent shall give
notice to the Borrower under Section 9.1(c) hereof promptly upon being requested
to do so by any Lender and shall thereupon notify all the Lenders thereof.
Section 9.6. Expenses. The Borrower agrees to pay to the Administrative
Agent and each Lender, and any other holder of any Note outstanding hereunder,
all costs and expenses
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reasonably incurred or paid by the Administrative Agent and such Lender or any
such holder, including reasonable attorneys' fees and court costs, in connection
with any Default or Event of Default by the Borrower hereunder or in connection
with the enforcement of any of the Loan Documents (including all such costs and
expenses incurred in connection with any proceeding under the United States
Bankruptcy Code involving the Borrower or any Subsidiary as a debtor
thereunder).
SECTION 10. CHANGE IN CIRCUMSTANCES.
Section 10.1. Change of Law. Notwithstanding any other provisions of
this Agreement or any Note, if at any time any change in applicable law or
regulation or in the interpretation thereof makes it unlawful for any Lender to
make or continue to maintain any Eurodollar Loans or to perform its obligations
as contemplated hereby, such Lender shall promptly give notice thereof to the
Borrower and such Lender's obligations to make or maintain Eurodollar Loans
under this Agreement shall be suspended until it is no longer unlawful for such
Lender to make or maintain Eurodollar Loans. The Borrower shall prepay on demand
the outstanding principal amount of any such affected Eurodollar Loans, together
with all interest accrued thereon and all other amounts then due and payable to
such Lender under this Agreement; provided, however, subject to all of the terms
and conditions of this Agreement, the Borrower may then elect to borrow the
principal amount of the affected Eurodollar Loans from such Lender by means of
Base Rate Loans from such Lender, which Base Rate Loans shall not be made
ratably by the Lenders but only from such affected Lender.
Section 10.2. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR. If on or prior to the first day of any Interest Period for
any Borrowing of Eurodollar Loans:
(a) the Administrative Agent determines that deposits in U.S.
Dollars (in the applicable amounts) are not being offered to it in the
interbank eurodollar market for such Interest Period, or that by reason
of circumstances affecting the interbank eurodollar market adequate and
reasonable means do not exist for ascertaining the applicable LIBOR, or
(b) the Required Lenders advise the Administrative Agent that
(i) LIBOR as determined by the Administrative Agent will not adequately
and fairly reflect the cost to such Lenders of funding their Eurodollar
Loans for such Interest Period or (ii) that the making or funding of
Eurodollar Loans become impracticable,
then the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Lenders, whereupon until the Administrative Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer exist,
the obligations of the Lenders to make Eurodollar Loans shall be suspended.
Section 10.3. Increased Cost and Reduced Return. (a) If, on or after
the date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or
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comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) shall subject any Lender (or its Lending Office) to
any tax, duty or other charge with respect to its Eurodollar Loans, its
Notes, its Letter(s) of Credit, or its participation in any thereof,
any Reimbursement Obligations owed to it or its obligation to make
Eurodollar Loans, issue a Letter of Credit, or to participate therein,
or shall change the basis of taxation of payments to any Lender (or its
Lending Office) of the principal of or interest on its Eurodollar
Loans, Letter(s) of Credit, or participations therein or any other
amounts due under this Agreement or any other Loan Document in respect
of its Eurodollar Loans, Letter(s) of Credit, any participation
therein, any Reimbursement Obligations owed to it, or its obligation to
make Eurodollar Loans, or issue a Letter of Credit, or acquire
participations therein (except for changes in the rate of tax on the
overall net income of such Lender or its Lending Office imposed by the
jurisdiction in which such Lender's principal executive office or
Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System, but excluding with respect to any Eurodollar Loans any
such requirement included in an applicable Eurodollar Reserve
Percentage) against assets of, deposits with or for the account of, or
credit extended by, any Lender (or its Lending Office) or shall impose
on any Lender (or its Lending Office) or on the interbank market any
other condition affecting its Eurodollar Loans, its Notes, its
Letter(s) of Credit, or its participation in any thereof, any
Reimbursement Obligation owed to it, or its obligation to make
Eurodollar Loans, or to issue a Letter of Credit, or to participate
therein;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) of making or maintaining any Eurodollar Loan, issuing or
maintaining a Letter of Credit, or participating therein, or to reduce the
amount of any sum received or receivable by such Lender (or its Lending Office)
under this Agreement or under any other Loan Document with respect thereto, by
an amount deemed by such Lender to be material, then, within 15 days after
demand by such Lender (with a copy to the Administrative Agent), the Borrower
shall be obligated to pay to such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduction.
(b) If, after the date hereof, any Lender or the Administrative
Agent shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Lending Office) or
any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has had the effect of reducing the rate of
return on such Lender's or such corporation's capital as a
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consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, within 15 days after demand by such Lender
(with a copy to the Administrative Agent), the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
(c) A certificate of a Lender claiming compensation under this
Section 10.3 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive if reasonably determined. In determining such
amount, such Lender may use any reasonable averaging and attribution methods.
Section 10.4. Lending Offices. Each Lender may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "Lending Office") for each type of
Loan available hereunder or at such other of its branches, offices or affiliates
as it may from time to time elect and designate in a written notice to the
Borrower and the Administrative Agent. To the extent reasonably possible, a
Lender shall designate an alternative branch or funding office with respect to
its Eurodollar Loans to reduce any liability of the Borrower to such Lender
under Section 10.3 hereof or to avoid the unavailability of Eurodollar Loans
under Section 10.2 hereof, so long as such designation is not otherwise
disadvantageous to the Lender.
Section 10.5. Discretion of Lender as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Lender shall be
entitled to fund and maintain its funding of all or any part of its Loans in any
manner it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder with respect to Eurodollar Loans shall be
made as if each Lender had actually funded and maintained each Eurodollar Loan
through the purchase of deposits in the interbank eurodollar market having a
maturity corresponding to such Loan's Interest Period, and bearing an interest
rate equal to LIBOR for such Interest Period.
SECTION 11. THE ADMINISTRATIVE AGENT.
Section 11.1. Appointment and Authorization of Administrative Agent.
Each Lender hereby appoints Xxxxxx Trust and Savings Bank as the Administrative
Agent under the Loan Documents and hereby authorizes the Administrative Agent to
take such action as Administrative Agent on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto. Without limiting the foregoing, the Administrative Agent is hereby
authorized to execute and deliver on behalf of the Lenders the Collateral
Documents. The Lenders expressly agree that the Administrative Agent is not
acting as a fiduciary of the Lenders in respect of the Loan Documents, the
Borrower or otherwise, and nothing herein or in any of the other Loan Documents
shall result in any duties or obligations on the Administrative Agent or any of
the Lenders except as expressly set forth herein.
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Section 11.2. Administrative Agent and its Affiliates. The
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise or refrain
from exercising such rights and power as though it were not the Administrative
Agent, and the Administrative Agent and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower or
any Affiliate of the Borrower as if it were not the Administrative Agent under
the Loan Documents. The term "Lender" as used herein and in all other Loan
Documents, unless the context otherwise clearly requires, includes the
Administrative Agent in its individual capacity as a Lender. References in
Section 1 hereof to the Administrative Agent's Loans, or to the amount owing to
the Administrative Agent for which an interest rate is being determined, refer
to the Administrative Agent in its individual capacity as a Lender.
Section 11.3. Action by Administrative Agent. If the Administrative
Agent receives from the Borrower a written notice of an Event of Default
pursuant to Section 8.5 hereof, the Administrative Agent shall promptly give
each of the Lenders written notice thereof. The obligations of the
Administrative Agent under the Loan Documents are only those expressly set forth
therein. Without limiting the generality of the foregoing, the Administrative
Agent shall not be required to take any action hereunder with respect to any
Default or Event of Default, except as expressly provided in Sections 9.2 and
9.5. Upon the occurrence of an Event of Default, the Administrative Agent shall
take such action to enforce its Lien on the Collateral and to preserve and
protect the Collateral as may be directed by the Required Lenders. Unless and
until the Required Lenders give such direction, the Administrative Agent may
(but shall not be obligated to) take or refrain from taking such actions as it
deems appropriate and in the best interest of all the Lenders. In no event,
however, shall the Administrative Agent be required to take any action in
violation of applicable law or of any provision of any Loan Document, and the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder or under any other Loan Document unless it first
receives any further assurances of its indemnification from the Lenders that it
may require, including prepayment of any related expenses and any other
protection it requires against any and all costs, expense, and liability which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall be entitled to assume that no Default or Event of
Default exists unless notified in writing to the contrary by a Lender or the
Borrower. In all cases in which the Loan Documents do not require the
Administrative Agent to take specific action, the Administrative Agent shall be
fully justified in using its discretion in failing to take or in taking any
action thereunder. Any instructions of the Required Lenders, or of any other
group of Lenders called for under the specific provisions of the Loan Documents,
shall be binding upon all the Lenders and the holders of the Obligations.
Section 11.4. Consultation with Experts. The Administrative Agent may
consult with legal counsel, independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
Section 11.5. Liability of Administrative Agent; Credit Decision.
Neither the Administrative Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
with the Loan Documents: (i) with the consent or at
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the request of the Required Lenders or (ii) in the absence of its own gross
negligence or willful misconduct. Neither the Administrative Agent nor any of
its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify: (i) any statement, warranty or
representation made in connection with this Agreement, any other Loan Document
or any Credit Event; (ii) the performance or observance of any of the covenants
or agreements of the Borrower or any Subsidiary contained herein or in any other
Loan Document; (iii) the satisfaction of any condition specified in Section 7
hereof, except receipt of items required to be delivered to the Administrative
Agent; or (iv) the validity, effectiveness, genuineness, enforceability,
perfection, value, worth or collectibility hereof or of any other Loan Document
or of any other documents or writing furnished in connection with any Loan
Document or of any Collateral; and the Administrative Agent makes no
representation of any kind or character with respect to any such matter
mentioned in this sentence. The Administrative Agent may execute any of its
duties under any of the Loan Documents by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders, the Borrower, or
any other Person for the default or misconduct of any such agents or
attorneys-in-fact selected with reasonable care. The Administrative Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, other document or statement (whether written or oral) believed by
it to be genuine or to be sent by the proper party or parties. In particular and
without limiting any of the foregoing, the Administrative Agent shall have no
responsibility for confirming the accuracy of any compliance certificate or
other document or instrument received by it under the Loan Documents. The
Administrative Agent may treat the payee of any Note as the holder thereof until
written notice of transfer shall have been filed with the Administrative Agent
signed by such payee in form satisfactory to the Administrative Agent. Each
Lender acknowledges that it has independently and without reliance on the
Administrative Agent or any other Lender, and based upon such information,
investigations and inquiries as it deems appropriate, made its own credit
analysis and decision to extend credit to the Borrower in the manner set forth
in the Loan Documents. It shall be the responsibility of each Lender to keep
itself informed as to the creditworthiness of the Borrower and its Subsidiaries,
and the Administrative Agent shall have no liability to any Lender with respect
thereto.
Section 11.6. Indemnity. The Lenders shall ratably, in accordance with
their respective Percentages, indemnify and hold the Administrative Agent, and
its directors, officers, employees, agents, and representatives harmless from
and against any liabilities, losses, costs or expenses suffered or incurred by
it under any Loan Document or in connection with the transactions contemplated
thereby, regardless of when asserted or arising, except to the extent they are
promptly reimbursed for the same by the Borrower and except to the extent that
any event giving rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified. The obligations of the
Lenders under this Section shall survive termination of this Agreement. The
Administrative Agent shall be entitled to offset amounts received for the
account of a Lender under this Agreement against unpaid amounts due from such
Lender to the Administrative Agent hereunder (whether as fundings of
participations, indemnities or otherwise), but shall not be entitled to offset
against amounts owed to the Administrative Agent by any Lender arising outside
of this Agreement and the other Loan Documents.
Section 11.7. Resignation of Administrative Agent and Successor
Administrative Agent. The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders
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and the Borrower. Upon any such resignation of the Administrative Agent, the
Required Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent's giving of notice of resignation then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which may be any Lender hereunder or any commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $200,000,000. Upon the
acceptance of its appointment as the Administrative Agent hereunder, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights and duties of the retiring Administrative Agent under the Loan
Documents, and the retiring Administrative Agent shall be discharged from its
duties and obligations thereunder. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Section 11
and all protective provisions of the other Loan Documents shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent, but no successor Administrative Agent shall in any event
be liable or responsible for any actions of its predecessor. If the
Administrative Agent resigns and no successor is appointed, the rights and
obligations of such Administrative Agent shall be automatically assumed by the
Required Lenders and (i) the Borrower shall be directed to make all payments due
each Lender hereunder directly to such Lender and (ii) the Administrative
Agent's rights in the Collateral Documents shall be assigned without
representation, recourse or warranty to the Lenders as their interests may
appear.
Section 11.8. L/C Issuer. The L/C Issuer shall act on behalf of the
Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith. The L/C Issuer shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Section 11 with
respect to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and the
Applications pertaining to such Letters of Credit as fully as if the term
"Administrative Agent", as used in this Section 11, included the L/C Issuer with
respect to such acts or omissions and (ii) as additionally provided in this
Agreement with respect to such L/C Issuer.
Section 11.9. Hedging Liability and Funds Transfer and Deposit Account
Liability Arrangements. By virtue of a Lender's execution of this Agreement or
an assignment agreement pursuant to Section 13.12 hereof, as the case may be,
any Affiliate of such Lender with whom the Borrower or any Subsidiary has
entered into an agreement creating Hedging Liability or Funds Transfer and
Deposit Account Liability shall be deemed a Lender party hereto for purposes of
any reference in a Loan Document to the parties for whom the Administrative
Agent is acting, it being understood and agreed that the rights and benefits of
such Affiliate under the Loan Documents consist exclusively of such Affiliate's
right to share in payments and collections out of the Collateral and the
Guaranties as more fully set forth in Section 3.1 hereof. In connection with any
such distribution of payments and collections, the Administrative Agent shall be
entitled to assume no amounts are due to any Lender or its Affiliate with
respect to Hedging Liability or Funds Transfer and Deposit Account Liability
unless such Lender has notified the Agent in writing of the amount of any such
liability owed to it or its Affiliate prior to such distribution.
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Section 11.10. Authorization to Release or Subordinate or Limit Liens.
The Administrative Agent is hereby irrevocably authorized by each of the Lenders
to (a) release any Lien covering any Collateral that is sold, transferred, or
otherwise disposed of in accordance with the terms and conditions of this
Agreement and the relevant Collateral Documents (including a sale, transfer, or
disposition permitted by the terms of Section 8.10 hereof or which has otherwise
been consented to in accordance with Section 12.13 hereof), (b) release or
subordinate any Lien on Collateral consisting of goods financed with purchase
money indebtedness or under a Capital Lease to the extent such purchase money
indebtedness or Capitalized Lease Obligation, and the Lien securing the same,
are permitted by Sections 8.7(b) and 8.8(d) hereof, and (c) to reduce or limit
the amount of the indebtedness secured by any particular item of Collateral to
an amount not less than the estimated value thereof to the extent necessary to
reduce mortgage registry, filing and similar tax.
Section 11.11. Syndication Agent and Lead Arranger. (a) In acting under
or by virtue of this Agreement, the Syndication Agent shall be entitled to all
the rights, authority, privileges and immunities provided to Administrative
Agent in this Section 11, all of which such provisions are incorporated by
reference herein with the same force and effect as if set forth herein. The
Syndication Agent hereby disclaims any representation or warranty to the Lenders
concerning the perfection of the security interest granted hereunder or the
value of the Collateral.
(b) In acting under or by virtue of this Agreement, the Lead
Arranger shall be entitled to all the rights, authority, privileges and
immunities provided to Administrative Agent in this Section 11, all of which
such provisions are incorporated by reference herein with the same force and
effect as if set forth herein. The Lead Arranger hereby disclaims any
representation or warranty to the Lenders concerning the perfection of the
security interest granted hereunder or the value of the Collateral.
Section 11.12. Designation of Additional Agents. The Administrative
Agent shall have the continuing right, for purposes hereof, at any time and from
time to time to designate one or more of the Lenders (and/or its or their
Affiliates) as "syndication agents," "documentation agents," "arrangers," or
other designations for purposes hereto, but such designation shall have no
substantive effect, and such Lenders and their Affiliates shall have no
additional powers, duties or responsibilities as a result thereof.
Section 11.13. Authorization to Enter into Intercreditor Agreement.
The Administrative Agent is hereby irrevocably authorized by each of the Lenders
to execute and deliver the Intercreditor Agreement on behalf of each of the
Lenders and to take such action and exercise such powers under the Intercreditor
Agreement as the Administrative Agent considers appropriate, provided, that the
Administrative Agent shall not amend the Intercreditor Agreement, or consent to
a waiver of any provision of the Intercreditor Agreement, unless such amendment
or waiver is agreed to in writing by the Required Lenders. Each Lender
acknowledges and agrees that it will be bound by the terms and conditions of the
Intercreditor Agreement upon the execution and delivery thereof by the
Administrative Agent.
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SECTION 12. THE GUARANTEES.
Section 12.1. The Guarantees. To induce the Lenders to provide the
credits described herein and in consideration of benefits expected to accrue to
the Borrower by reason of the Commitments and for other good and valuable
consideration, receipt of which is hereby acknowledged, each Subsidiary
(individually a "Guarantor" and collectively the "Guarantors," including
Subsidiaries formed or acquired after the Closing Date executing an Additional
Guarantor Supplement in the form attached hereto as Exhibit F or such other form
acceptable to the Administrative Agent) hereby unconditionally and irrevocably
guarantee jointly and severally to the Administrative Agent, the Lenders, and
their Affiliates, the due and punctual payment of all present and future
Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability, including, but not limited to, the due and punctual payment of
principal of and interest on the Notes, the Reimbursement Obligations, and the
due and punctual payment of all other Obligations now or hereafter owed by the
Borrower under the Loan Documents as and when the same shall become due and
payable, whether at stated maturity, by acceleration, or otherwise, according to
the terms hereof and thereof. In case of failure by the Borrower punctually to
pay any Obligations, Hedging Liability, or Funds Transfer and Deposit Account
Liability guaranteed hereby, each Guarantor hereby unconditionally agrees to
make such payment or to cause such payment to be made punctually as and when the
same shall become due and payable, whether at stated maturity, by acceleration,
or otherwise, and as if such payment were made by the Borrower.
Section 12.2. Guarantee Unconditional. The obligations of each
Guarantor under this Section 12 shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged, or
otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver,
or release in respect of any obligation of the Borrower or of any other
guarantor under this Agreement or any other Loan Document or by
operation of law or otherwise;
(b) any modification or amendment of or supplement to this
Agreement or any other Loan Document;
(c) any change in the corporate existence, structure, or
ownership of, or any insolvency, bankruptcy, reorganization, or other
similar proceeding affecting, the Borrower, any other guarantor, or any
of their respective assets, or any resulting release or discharge of
any obligation of the Borrower or of any other guarantor contained in
any Loan Document;
(d) the existence of any claim, set-off, or other rights which
the Borrower or any other guarantor may have at any time against the
Administrative Agent, any Lender, or any other Person, whether or not
arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or
demand or any exercise of, or failure to exercise, any rights or
remedies against the Borrower, any other guarantor, or any other Person
or Property;
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(f) any application of any sums by whomsoever paid or
howsoever realized to any obligation of the Borrower, regardless of
what obligations of the Borrower remain unpaid;
(g) any invalidity or unenforceability relating to or against
the Borrower or any other guarantor for any reason of this Agreement or
of any other Loan Document or any provision of applicable law or
regulation purporting to prohibit the payment by the Borrower or any
other guarantor of the principal of or interest on any Note or any
Reimbursement Obligation or any other amount payable under the Loan
Documents; or
(h) any other act or omission to act or delay of any kind by
the Administrative Agent, any Lender, or any other Person or any other
circumstance whatsoever that might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the obligations
of any Guarantor under this Section 12.
Section 12.3. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. Each Guarantor's obligations under this Section 12 shall
remain in full force and effect until the Commitments are terminated, all
Letters of Credit have expired, and the principal of and interest on the Notes
and all other amounts payable by the Borrower and the Guarantors under this
Agreement and all other Loan Documents and, if then outstanding and unpaid, all
Hedging Liability and Funds Transfer and Deposit Account Liability shall have
been paid in full. If at any time any payment of the principal of or interest on
any Note or any Reimbursement Obligation or any other amount payable by the
Borrower or any Guarantor under the Loan Documents is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy, or
reorganization of the Borrower or of any guarantor, or otherwise, each
Guarantor's obligations under this Section 12 with respect to such payment shall
be reinstated at such time as though such payment had become due but had not
been made at such time.
Section 12.4. Subrogation. Each Guarantor agrees it will not exercise
any rights which it may acquire by way of subrogation by any payment made
hereunder, or otherwise, until all the Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability shall have been paid in full subsequent
to the termination of all the Commitments and expiration of all Letters of
Credit. If any amount shall be paid to a Guarantor on account of such
subrogation rights at any time prior to the later of (x) the payment in full of
the Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability and all other amounts payable by the Borrower hereunder and the other
Loan Documents and (y) the termination of the Commitments and expiration of all
Letters of Credit, such amount shall be held in trust for the benefit of the
Administrative Agent and the Lenders and shall forthwith be paid to the
Administrative Agent for the benefit of the Lenders or be credited and applied
upon the Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability, whether matured or unmatured, in accordance with the terms of this
Agreement.
Section 12.5. Waivers. Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest, and any notice not provided for herein, as
well as any requirement that at any time any action be taken by the
Administrative Agent, any Lender, or any other Person against the Borrower,
another guarantor, or any other Person.
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Section 12.6. Limit on Recovery. Notwithstanding any other provision
hereof, the right of recovery against each Guarantor under this Section 12 shall
not exceed $1.00 less than the lowest amount which would render such Guarantor's
obligations under this Section 12 void or voidable under applicable law,
including, without limitation, fraudulent conveyance law.
Section 12.7. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower under this Agreement or any other
Loan Document, or under any agreement establishing Hedging Liability or Funds
Transfer and Deposit Account Liability, is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to acceleration under the terms of this Agreement or the other Loan Documents,
or under any agreement establishing Hedging Liability or Funds Transfer and
Deposit Account Liability, shall nonetheless be payable by the Guarantors
hereunder forthwith on demand by the Administrative Agent made at the request of
the Required Lenders.
Section 12.8. Benefit to Guarantors. All of the Guarantors are engaged
in related businesses and integrated to such an extent that the financial
strength and flexibility of each Guarantor has a direct impact on the success of
each other Guarantor. Each Guarantor will derive substantial direct and indirect
benefit from the extension of credit hereunder.
Section 12.9. Guarantor Covenants. Each Guarantor shall take such
action as the Borrower is required by this Agreement to cause such Guarantor to
take, and shall refrain from taking such action as the Borrower is required by
this Agreement to prohibit such Guarantor from taking.
SECTION 13. MISCELLANEOUS.
Section 13.1. Withholding Taxes. (a) Payments Free of Withholding.
Except as otherwise required by law and subject to Section 13.1(b) hereof, each
payment by the Borrower under this Agreement or the other Loan Documents shall
be made without withholding for or on account of any present or future taxes
(other than overall net income taxes on the recipient) imposed by or within the
jurisdiction in which the Borrower is domiciled, any jurisdiction from which the
Borrower makes any payment, or (in each case) any political subdivision or
taxing authority thereof or therein. If any such withholding is so required, the
Borrower shall make the withholding, pay the amount withheld to the appropriate
governmental authority before penalties attach thereto or interest accrues
thereon and forthwith pay such additional amount as may be necessary to ensure
that the net amount actually received by each Lender and the Administrative
Agent free and clear of such taxes (including such taxes on such additional
amount) is equal to the amount which that Lender or the Administrative Agent (as
the case may be) would have received had such withholding not been made. If the
Administrative Agent or any Lender pays any amount in respect of any such taxes,
penalties or interest, the Borrower shall reimburse the Administrative Agent or
such Lender for that payment on demand in the currency in which such payment was
made. If the Borrower pays any such taxes, penalties or interest, it shall
deliver official tax receipts evidencing that payment or certified copies
thereof to the Lender or Administrative Agent on whose account such withholding
was made (with a copy to the Administrative Agent if not the recipient of the
original) on or before the thirtieth day after payment.
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(b) U.S. Withholding Tax Exemptions. Each Lender that is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Borrower and the Administrative Agent on or before the
date the initial Credit Event is made hereunder or, if later, the date such
financial institution becomes a Lender hereunder, two duly completed and signed
copies of (i) either Form W-8 BEN (relating to such Lender and entitling it to a
complete exemption from withholding under the Code on all amounts to be received
by such Lender, including fees, pursuant to the Loan Documents and the
Obligations) or Form W-8 ECI (relating to all amounts to be received by such
Lender, including fees, pursuant to the Loan Documents and the Obligations) of
the United States Internal Revenue Service or (ii) solely if such Lender is
claiming exemption from United States withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio interest", a Form W-8
BEN, or any successor form prescribed by the Internal Revenue Service, and a
certificate representing that such Lender is not a bank for purposes of Section
881(c) of the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled
foreign corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Code). Thereafter and from time to time, each Lender shall
submit to the Borrower and the Administrative Agent such additional duly
completed and signed copies of one or the other of such Forms (or such successor
forms as shall be adopted from time to time by the relevant United States taxing
authorities) and such other certificates as may be (i) requested by the Borrower
in a written notice, directly or through the Administrative Agent, to such
Lender and (ii) required under then-current United States law or regulations to
avoid or reduce United States withholding taxes on payments in respect of all
amounts to be received by such Lender, including fees, pursuant to the Loan
Documents or the Obligations. Upon the request of the Borrower or the
Administrative Agent, each Lender that is a United States person (as such term
is defined in Section 7701(a)(30) of the Code) shall submit to the Borrower and
the Administrative Agent a certificate to the effect that it is such a United
States person.
(c) Inability of Lender to Submit Forms. If any Lender determines,
as a result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to submit to
the Borrower or the Administrative Agent any form or certificate that such
Lender is obligated to submit pursuant to subsection (b) of this Section 13.1 or
that such Lender is required to withdraw or cancel any such form or certificate
previously submitted or any such form or certificate otherwise becomes
ineffective or inaccurate, such Lender shall promptly notify the Borrower and
Administrative Agent of such fact and the Lender shall to that extent not be
obligated to provide any such form or certificate and will be entitled to
withdraw or cancel any affected form or certificate, as applicable.
Section 13.2. No Waiver, Cumulative Remedies. No delay or failure on
the part of the Administrative Agent or any Lender or on the part of the holder
or holders of any of the Obligations in the exercise of any power or right under
any Loan Document shall operate as a waiver thereof or as an acquiescence in any
default, nor shall any single or partial exercise of any power or right preclude
any other or further exercise thereof or the exercise of any other power or
right. The rights and remedies hereunder of the Administrative Agent, the
Lenders and of the holder or holders of any of the Obligations are cumulative
to, and not exclusive of, any rights or remedies which any of them would
otherwise have.
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Section 13.3. Non-Business Days. If any payment hereunder becomes due
and payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such payment
shall be due and payable. In the case of any payment of principal falling due on
a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect,
which accrued amount shall be due and payable on the next scheduled date for the
payment of interest.
Section 13.4. Documentary Taxes. The Borrower agrees to pay on demand
any documentary, stamp or similar taxes payable in respect of this Agreement or
any other Loan Document, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit is then in use or available hereunder.
Section 13.5. Survival of Representations. All representations and
warranties made herein or in any other Loan Document or in certificates given
pursuant hereto or thereto shall survive the execution and delivery of this
Agreement and the other Loan Documents, and shall continue in full force and
effect with respect to the date as of which they were made as long as any credit
is in use or available hereunder.
Section 13.6. Survival of Indemnities. All indemnities and other
provisions relative to reimbursement to the Lenders of amounts sufficient to
protect the yield of the Lenders with respect to the Loans and Letters of
Credit, including, but not limited to, Sections 1.11, 10.3, and 13.15 hereof,
shall survive the termination of this Agreement and the other Loan Documents and
the payment of the Obligations.
Section 13.7. Sharing of Set-Off. Each Lender agrees with each other
Lender a party hereto that if such Lender shall receive and retain any payment,
whether by set-off or application of deposit balances or otherwise, on any of
the Loans or Reimbursement Obligations in excess of its ratable share of
payments on all such Obligations then outstanding to the Lenders, then such
Lender shall purchase for cash at face value, but without recourse, ratably from
each of the other Lenders such amount of the Loans or Reimbursement Obligations,
or participations therein, held by each such other Lenders (or interest therein)
as shall be necessary to cause such Lender to share such excess payment ratably
with all the other Lenders; provided, however, that if any such purchase is made
by any Lender, and if such excess payment or part thereof is thereafter
recovered from such purchasing Lender, the related purchases from the other
Lenders shall be rescinded ratably and the purchase price restored as to the
portion of such excess payment so recovered, but without interest. For purposes
of this Section, amounts owed to or recovered by the L/C Issuer in connection
with Reimbursement Obligations in which Lenders have been required to fund their
participation shall be treated as amounts owed to or recovered by the L/C Issuer
as a Lender hereunder.
Section 13.8. Notices. Except as otherwise specified herein, all
notices hereunder and under the other Loan Documents shall be in writing
(including, without limitation, notice by telecopy) and shall be given to the
relevant party at its address or telecopier number set forth below, or such
other address or telecopier number as such party may hereafter specify by notice
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to the Administrative Agent and the Borrower given by courier, by United States
certified or registered mail, by telecopy or by other telecommunication device
capable of creating a written record of such notice and its receipt. Notices
under the Loan Documents to the Lenders and the Administrative Agent shall be
addressed to their respective addresses or telecopier numbers set forth on the
signature pages hereof, and to the Borrower to:
Rent-Way, Inc.
Xxx Xxxx-Xxx Xxxxx
Xxxx, Xxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section or on the signature pages hereof and a confirmation of
such telecopy has been received by the sender, (ii) if given by mail, 5 days
after such communication is deposited in the mail, certified or registered with
return receipt requested, addressed as aforesaid or (iii) if given by any other
means, when delivered at the addresses specified in this Section or on the
signature pages hereof; provided that any notice given pursuant to Section 1
hereof shall be effective only upon receipt.
Section 13.9. Counterparts. This Agreement may be executed in any
number of counterparts, and by the different parties hereto on separate
counterpart signature pages, and all such counterparts taken together shall be
deemed to constitute one and the same instrument.
Section 13.10. Successors and Assigns. This Agreement shall be binding
upon the Borrower and the Guarantors and their successors and assigns, and shall
inure to the benefit of the Administrative Agent and each of the Lenders and the
benefit of their respective successors and assigns, including any subsequent
holder of any of the Obligations. The Borrower and the Guarantors may not assign
any of their rights or obligations under any Loan Document without the written
consent of all of the Lenders.
Section 13.11. Participants. Each Lender shall have the right at its
own cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations
and/or Commitments held by such Lender at any time and from time to time to one
or more other Persons; provided that no such participation shall relieve any
Lender of any of its obligations under this Agreement, and, provided, further
that no such participant shall have any rights under this Agreement except as
provided in this Section, and the Administrative Agent shall have no obligation
or responsibility to such participant. Any agreement pursuant to which such
participation is granted shall provide that the granting Lender shall retain the
sole right and responsibility to enforce the obligations of the Borrower under
this Agreement and the other Loan Documents including, without limitation, the
right to approve any amendment, modification or waiver of any provision of the
Loan Documents, except that such agreement may provide that such Lender will not
agree to any modification, amendment or waiver of the Loan Documents that would
reduce the amount of or postpone any fixed date for payment of any Obligation in
which such participant has an interest.
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Any party to which such a participation has been granted shall have the benefits
of Section 1.11 and Section 10.3 hereof. The Borrower authorizes each Lender to
disclose to any participant or prospective participant under this Section any
financial or other information pertaining to the Borrower or any Subsidiary.
Section 13.12. Assignments. (a) Each Lender shall have the right at any
time, with the prior consent of the Administrative Agent and, so long as no
Event of Default then exists, the Borrower (which consent of the Borrower shall
not be unreasonably withheld) to sell, assign, transfer or negotiate all or any
part of its rights and obligations under the Loan Documents (including, without
limitation, the indebtedness evidenced by the Notes then held by such assigning
Lender, together with an equivalent percentage of its obligation to make Loans
and participate in Letters of Credit) to one or more commercial banks or other
financial institutions or investors, provided that, unless otherwise agreed to
by the Administrative Agent, such assignment shall be of a fixed percentage (and
not by its terms of varying percentage) of the assigning Lender's rights and
obligations under the Loan Documents; provided, however, that in order to make
any such assignment (i) unless the assigning Lender is assigning all of its
Commitments, outstanding Loans and interests in Letters of Credit Obligations,
the assigning Lender shall retain at least $5,000,000 in unused Commitments,
outstanding Loans and interests in Letters of Credit, (ii) the assignee Lender
shall have Commitments, outstanding Loans and interests in Letters of Credit of
at least $5,000,000, (iii) each such assignment shall be evidenced by a written
agreement (substantially in the form attached hereto as Exhibit G or in such
other form acceptable to the Administrative Agent) executed by such assigning
Lender, such assignee Lender or Lenders, the Administrative Agent and, if
required as provided above, the Borrower, which agreement shall specify in each
instance the portion of the Obligations which are to be assigned to the assignee
Lender and the portion of the Commitments of the assigning Lender to be assumed
by the assignee Lender, and (iv) the assigning Lender shall pay to the
Administrative Agent a processing fee of $3,500 and any out-of-pocket attorneys'
fees and expenses incurred by the Administrative Agent in connection with any
such assignment agreement. Any such assignee shall become a Lender for all
purposes hereunder to the extent of the rights and obligations under the Loan
Documents it assumes and the assigning Lender shall be released from its
obligations, and will have released its rights, under the Loan Documents to the
extent of such assignment. Each Lender that hereafter becomes a party to this
Agreement acknowledges and agrees that it (x) has received a complete and
accurate copy of the Intercreditor Agreement, (y) will be bound by the terms and
conditions of the Intercreditor Agreement and (z) appoints and authorizes the
Administrative Agent to take such action and exercise such powers under the
Intercreditor Agreement as the Administrative Agent considers appropriate. The
address for notices to such assignee Lender shall be as specified in the
assignment agreement executed by it. Promptly upon the effectiveness of any such
assignment agreement, the Borrower shall execute and deliver replacement Notes
to the assignee Lender and the assigning Lender in the respective amounts of
their Commitments (or assigned principal amounts, as applicable) after giving
effect to the reduction occasioned by such assignment (all such Notes to
constitute "Notes" for all purposes of the Loan Documents), and the assignee
Lender shall thereafter surrender to the Borrower its old Notes. The Borrower
authorizes each Lender to disclose to any purchaser or prospective purchaser of
an interest in the Loans and interest in Letters of Credit owed to it or its
Commitments under this Section any financial or other information pertaining to
the Borrower or any Subsidiary.
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(b) Any Lender may at any time pledge or grant a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any such pledge or grant to a Federal Reserve Bank,
and this Section shall not apply to any such pledge or grant of a security
interest; provided that no such pledge or grant of a security interest shall
release a Lender from any of its obligations hereunder or substitute any such
pledgee or secured party for such Lender as a party hereto; provided further,
however, the right of any such pledgee or grantee (other than any Federal
Reserve Bank) to further transfer all or any portion of the rights pledged or
granted to it, whether by means of foreclosure or otherwise, shall be at all
times subject to the terms of this Agreement.
Section 13.13. Amendments. (a) Any provision of this Agreement or the
other Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by (1) the Borrower, (2) the Required
Lenders, and (3) if the rights or duties of the Administrative Agent are
affected thereby, the Administrative Agent; provided that:
(i) no amendment or waiver pursuant to this Section 13.13
shall (A) increase any Commitment of any Lender without the consent
of such Lender or (B) reduce the amount of or postpone the date for
any scheduled payment of any principal of or interest on any Loan or
of any Reimbursement Obligation (for the sake of clarity, the
reference to "scheduled payment" in this Section 13.13(i)(B) shall
not be deemed to include any mandatory prepayment pursuant to
Section 1.8 hereof) or of any fee payable hereunder without the
consent of the Lender to which such payment is owing or which has
committed to make such Loan or Letter of Credit (or participate
therein) hereunder; and
(ii) no amendment or waiver pursuant to this Section 13.13
shall, unless signed by each Lender, increase the aggregate
Commitments of the Lenders, change the definitions of Revolving
Credit Termination Date or Required Lenders, change the provisions
of this Section 13.13, release any material guarantor or any
substantial part of the Collateral (except as otherwise provided for
in the Loan Documents), or affect the number of Lenders required to
take any action hereunder or under any other Loan Document.
(b) If, in connection with any proposed change, waiver, discharge or
termination with respect to any of the provisions of this Agreement which is
subject to a vote by the Required Lenders pursuant to Section 13.13(a), the
consent of the Required Lenders is obtained but the consent of one or more of
such other Lenders whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Lenders whose individual
consent is required are treated as described below, to replace each such
non-consenting Lender or Lenders with one or more Replacement Lenders pursuant
to Section 1.13 so long as at the time of such replacement, each such
Replacement Lender consents to the proposed change, waiver, discharge or
termination, provided, that in any event, the Borrower shall not have the right
to replace a Lender solely as a result of the exercise of such Lender's rights
(and the withholding of any required consent by such Lender) pursuant to the
proviso to Section 13.12(a).
Section 13.14. Headings. Section headings used in this Agreement are
for reference only and shall not affect the construction of this Agreement.
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Section 13.15. Costs and Expenses; Indemnification. (a) The Borrower
agrees to pay all costs and expenses of the Administrative Agent in connection
with the preparation, negotiation, syndication, and administration of the Loan
Documents, including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent, in connection with the preparation and
execution of the Loan Documents, and any amendment, waiver or consent related
thereto, whether or not the transactions contemplated herein are consummated,
together with any fees and charges suffered or incurred by the Administrative
Agent in connection with periodic environmental audits, fixed asset appraisals,
title insurance policies, collateral filing fees and lien searches. The Borrower
further agrees to indemnify the Administrative Agent, each Lender, and their
respective directors, officers, employees, agents, financial advisors, and
consultants against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all reasonable expenses
of litigation or preparation therefor, whether or not the indemnified Person is
a party thereto, or any settlement arrangement arising from or relating to any
such litigation) which any of them may pay or incur arising out of or relating
to any Loan Document or any of the transactions contemplated thereby or the
direct or indirect application or proposed application of the proceeds of any
Loan or Letter of Credit, other than those which arise from the gross negligence
or willful misconduct of the party claiming indemnification. The Borrower, upon
demand by the Administrative Agent or a Lender at any time, shall reimburse the
Administrative Agent or such Lender for any legal or other expenses incurred in
connection with investigating or defending against any of the foregoing
(including any settlement costs relating to the foregoing) except if the same is
directly due to the gross negligence or willful misconduct of the party to be
indemnified. The obligations of the Borrower under this Section shall survive
the termination of this Agreement.
(b) The Borrower unconditionally agrees to forever indemnify, defend
and hold harmless, and covenants not to xxx for any claim for contribution
against, the Administrative Agent and the Lenders for any damages, costs, loss
or expense, including without limitation, response, remedial or removal costs,
arising out of any of the following: (i) any presence, release, threatened
release or disposal of any hazardous or toxic substance or petroleum by the
Borrower or any Subsidiary or otherwise occurring on or with respect to its
Property (whether owned or leased), (ii) the operation or violation of any
environmental law, whether federal, state, or local, and any regulations
promulgated thereunder, by the Borrower or any Subsidiary or otherwise occurring
on or with respect to its Property (whether owned or leased), (iii) any claim
for personal injury or property damage in connection with the Borrower or any
Subsidiary or otherwise occurring on or with respect to its Property (whether
owned or leased), and (iv) the inaccuracy or breach of any environmental
representation, warranty or covenant by the Borrower or any Subsidiary made
herein or in any other Loan Document evidencing or securing any Obligations or
setting forth terms and conditions applicable thereto or otherwise relating
thereto, except for damages arising from the willful misconduct or gross
negligence of the party claiming indemnification. This indemnification shall
survive the payment and satisfaction of all Obligations and the termination of
this Agreement, and shall remain in force beyond the expiration of any
applicable statute of limitations and payment or satisfaction in full of any
single claim under this indemnification. This indemnification shall be binding
upon the successors and assigns of the Borrower and shall inure to the benefit
of Administrative Agent and the Lenders directors, officers, employees, agents,
and collateral trustees, and their successors and assigns.
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Section 13.16. Set-off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default, each Lender and each subsequent
holder of any Obligation is hereby authorized by the Borrower and each Guarantor
at any time or from time to time, without notice to the Borrower or such
Guarantor or to any other Person, any such notice being hereby expressly waived,
to set-off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts, and
in whatever currency denominated) and any other indebtedness at any time held or
owing by that Lender or that subsequent holder to or for the credit or the
account of the Borrower or such Guarantor, whether or not matured, against and
on account of the Obligations of the Borrower or such Guarantor to that Lender
or that subsequent holder under the Loan Documents, including, but not limited
to, all claims of any nature or description arising out of or connected with the
Loan Documents, irrespective of whether or not (a) that Lender or that
subsequent holder shall have made any demand hereunder or (b) the principal of
or the interest on the Loans or Notes and other amounts due hereunder shall have
become due and payable pursuant to Section 9 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
Section 13.17. Entire Agreement. The Loan Documents constitute the
entire understanding of the parties thereto with respect to the subject matter
thereof and any prior agreements, whether written or oral, with respect thereto
are superseded hereby.
Section 13.18. Governing Law. This Agreement and the other Loan
Documents, and the rights and duties of the parties hereto, shall be construed
and determined in accordance with the internal laws of the State of Illinois.
Section 13.19. Severability of Provisions. Any provision of any Loan
Document which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. All rights, remedies
and powers provided in this Agreement and the other Loan Documents may be
exercised only to the extent that the exercise thereof does not violate any
applicable mandatory provisions of law, and all the provisions of this Agreement
and other Loan Documents are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement or the other Loan
Documents invalid or unenforceable.
Section 13.20. Excess Interest. Notwithstanding any provision to the
contrary contained herein or in any other Loan Document, no such provision shall
require the payment or permit the collection of any amount of interest in excess
of the maximum amount of interest permitted by applicable law to be charged for
the use or detention, or the forbearance in the collection, of all or any
portion of the Loans or other obligations outstanding under this Agreement or
any other Loan Document ("Excess Interest"). If any Excess Interest is provided
for, or is adjudicated to be provided for, herein or in any other Loan Document,
then in such event (a) the provisions of this Section shall govern and control,
(b) neither the Borrower nor any guarantor or endorser shall be obligated to pay
any Excess Interest, (c) any Excess Interest that the Administrative Agent or
any
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Lender may have received hereunder shall, at the option of the Administrative
Agent, be (i) applied as a credit against the then outstanding principal amount
of Obligations hereunder and accrued and unpaid interest thereon (not to exceed
the maximum amount permitted by applicable law), (ii) refunded to the Borrower,
or (iii) any combination of the foregoing, (d) the interest rate payable
hereunder or under any other Loan Document shall be automatically subject to
reduction to the maximum lawful contract rate allowed under applicable usury
laws (the "Maximum Rate"), and this Agreement and the other Loan Documents shall
be deemed to have been, and shall be, reformed and modified to reflect such
reduction in the relevant interest rate, and (e) neither the Borrower nor any
guarantor or endorser shall have any action against the Administrative Agent or
any Lender for any damages whatsoever arising out of the payment or collection
of any Excess Interest. Notwithstanding the foregoing, if for any period of time
interest on any of Borrower's Obligations is calculated at the Maximum Rate
rather than the applicable rate under this Agreement, and thereafter such
applicable rate becomes less than the Maximum Rate, the rate of interest payable
on the Borrower's Obligations shall remain at the Maximum Rate until the Lenders
have received the amount of interest which such Lenders would have received
during such period on the Borrower's Obligations had the rate of interest not
been limited to the Maximum Rate during such period.
Section 13.21. Construction. Nothing contained herein shall be deemed
or construed to permit any act or omission which is prohibited by the terms of
any Collateral Document, the covenants and agreements contained herein being in
addition to and not in substitution for the covenants and agreements contained
in the Collateral Documents.
Section 13.22. Lender's Obligations Several. The obligations of the
Lenders hereunder are several and not joint. Nothing contained in this Agreement
and no action taken by the Lenders pursuant hereto shall be deemed to constitute
the Lenders a partnership, association, joint venture or other entity.
Section 13.23. Submission to Jurisdiction; Waiver of Jury Trial. The
Borrower and the Guarantors hereby submit to the nonexclusive jurisdiction of
the United States District Court for the Northern District of Illinois and of
any Illinois State court sitting in the City of Chicago for purposes of all
legal proceedings arising out of or relating to this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby. The Borrower and
the Guarantors irrevocably waive, to the fullest extent permitted by law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. THE BORROWER,
THE GUARANTORS, THE ADMINISTRATIVE AGENT, AND THE LENDERS HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
[SIGNATURE PAGES TO FOLLOW]
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This Agreement is entered into between us for the uses and purposes
hereinabove set forth as of the date first above written.
"BORROWER"
RENT-WAY, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxxx
Name Xxxxxxx X. Xxxxxxxxxxx
_______________________________
Title Chief Executive Officer
_______________________________
"GUARANTORS"
RENT-WAY OF TOMORROW, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxxx
Name Xxxxxxx X. Xxxxxxxxxxx
_______________________________
Title President
_______________________________
RENT-WAY OF MICHIGAN, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxxx
Name Xxxxxxx X. Xxxxxxxxxxx
_______________________________
Title President
_______________________________
ACTION RENT-TO-OWN HOLDINGS OF
SOUTH CAROLINA, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxxx
Name Xxxxxxx X. Xxxxxxxxxxx
_______________________________
Title President
_______________________________
RENT-WAY DEVELOPMENTS, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxxx
Name Xxxxxxx X. Xxxxxxxxxxx
_______________________________
Title President
_______________________________
S-1
RENT-WAY OF TTIG, L.P.
By /s/ Xxxxxxx X. Xxxxxxxxxxx
Name Xxxxxxx X. Xxxxxxxxxxx
______________________________
President
Title ______________________________
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
S-2
"LENDERS"
XXXXXX TRUST AND SAVINGS BANK, in its
individual capacity as a Lender, as
L/C Issuer, and as Administrative
Agent
By /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Name ______________________________
Vice President
Title ______________________________
Address:
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
BANK OF MONTREAL, in its individual
capacity as a Lender and as Lead
Arranger
By /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Name _______________________________
Managing Director
Title ______________________________
Address:
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Syndications
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
S-3
NATIONAL CITY BANK OF PENNSYLVANIA, in
its individual capacity as a Lender
and as Syndication Agent
By /s/ Xxxx X. Xxxx
Xxxx X. Xxxx
Name________________________________
Senior VP
Title_______________________________
Address:
National City Center
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxx, Senior VP
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
S-4
EXHIBIT A
NOTICE OF PAYMENT REQUEST
[Date]
[Name of Lender]
[Address]
Attention:
Reference is made to the Credit Agreement, dated as of June 2, 2003,
among Rent-Way, Inc., the Lenders party thereto, and Xxxxxx Trust and Savings
Bank, as Administrative Agent (the "Credit Agreement"). Capitalized terms used
herein and not defined herein have the meanings assigned to them in the Credit
Agreement. [THE BORROWER HAS FAILED TO PAY ITS REIMBURSEMENT OBLIGATION IN THE
AMOUNT OF $____________. YOUR REVOLVER PERCENTAGE OF THE UNPAID REIMBURSEMENT
OBLIGATION IS $_____________] OR [__________________________ HAS BEEN REQUIRED
TO RETURN A PAYMENT BY THE BORROWER OF A REIMBURSEMENT OBLIGATION IN THE AMOUNT
OF $_______________. YOUR REVOLVER PERCENTAGE OF THE RETURNED REIMBURSEMENT
OBLIGATION IS $_______________.]
Very truly yours,
XXXXXX TRUST AND SAVINGS BANK,
as L/C Issuer
By
Name________________________________
Title_______________________________
EXHIBIT B
NOTICE OF BORROWING
Date:__________________, ____
To: Xxxxxx Trust and Savings Bank, as Administrative Agent for the Lenders
parties to the Credit Agreement dated as of June 2, 2003 (as extended,
renewed, amended or restated from time to time, the "Credit
Agreement"), among Rent-Way, Inc., certain Lenders which are
signatories thereto, and Xxxxxx Trust and Savings Bank, as
Administrative Agent.
Ladies and Gentlemen:
The undersigned, ______________________________ (the "Borrower"),
refers to the Credit Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably, pursuant to Section
1.5 of the Credit Agreement, of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is ___________,
____.
2. The aggregate amount of the proposed Borrowing is
$______________.
3. The Borrowing is being advanced under the Revolving Credit.
4. The Borrowing is to be comprised of $___________ of [BASE
RATE] [EURODOLLAR] Loans.
[5. THE DURATION OF THE INTEREST PERIOD FOR THE EURODOLLAR
LOANS INCLUDED IN THE BORROWING SHALL BE ____________ MONTHS.]
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Borrower
contained in Section 6 of the Credit Agreement are true and correct as
though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in which case
they are true and correct as of such date); and
(b) no Default or Event of Default has occurred and is
continuing or would result from such proposed Borrowing.
RENT-WAY, INC.
By
Name________________________________
Title_______________________________
S-2
EXHIBIT C
NOTICE OF CONTINUATION/CONVERSION
Date: ____________, ____
To: Xxxxxx Trust and Savings Bank, as Administrative Agent for the Lenders
parties to the Credit Agreement dated as of June 2, 2003 (as extended,
renewed, amended or restated from time to time, the "Credit Agreement")
among Rent-Way, Inc., certain Lenders which are signatories thereto, and
Xxxxxx Trust and Savings Bank, as Administrative Agent
Ladies and Gentlemen:
The undersigned, _______________________ (the "Borrower"), refers to
the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 1.5 of the
Credit Agreement, of the [CONVERSION] [CONTINUATION] of the Loans specified
herein, that:
1. The conversion/continuation Date is __________, ____.
2. The aggregate amount of the Revolving Loans to be
[CONVERTED] [CONTINUED] is $______________.
3. The Loans are to be [converted into] [continued as]
[Eurodollar] [Base Rate] Loans.
4. [IF APPLICABLE:] The duration of the Interest Period for
the Revolving Loans included in the [CONVERSION] [CONTINUATION] shall
be _________ months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the proposed conversion/continuation
date, before and after giving effect thereto and to the application of the
proceeds therefrom:
(a) the representations and warranties of the Borrower
contained in Section 6 of the Credit Agreement are true and correct as
though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in which case
they are true and correct as of such date); provided, however, that
this condition shall not apply to the conversion of an outstanding
Eurodollar Loan to a Base Rate Loan; and
(b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed [CONVERSION]
[CONTINUATION].
RENT-WAY, INC.
By
Name________________________________
Title_______________________________
-2-
EXHIBIT D-1
REVOLVING NOTE
U.S. $_______________ ____________, ______
FOR VALUE RECEIVED, the undersigned, RENT-WAY, INC., a Pennsylvania
corporation (the "Borrower"), hereby promises to pay to the order of
____________________ (the "Lender") on the Revolving Credit Termination Date of
the hereinafter defined Credit Agreement, at the principal office Xxxxxx Trust
and Savings Bank, as Administrative Agent, in Chicago, Illinois, in immediately
available funds, the principal sum of ___________________ Dollars ($__________)
or, if less, the aggregate unpaid principal amount of all Revolving Loans made
by the Lender to the Borrower pursuant to the Credit Agreement, together with
interest on the principal amount of each Revolving Loan from time to time
outstanding hereunder at the rates, and payable in the manner and on the dates,
specified in the Credit Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement dated as of June 2, 2003, among the Borrower, Xxxxxx Trust and Savings
Bank, as Administrative Agent and the Lenders party thereto (the "Credit
Agreement"), and this Note and the holder hereof are entitled to all the
benefits and security provided for thereby or referred to therein, to which
Credit Agreement reference is hereby made for a statement thereof. All defined
terms used in this Note, except terms otherwise defined herein, shall have the
same meaning as in the Credit Agreement. This Note shall be governed by and
construed in accordance with the internal laws of the State of Illinois.
Voluntary prepayments may be made hereon, certain prepayments are
required to be made hereon, and this Note may be declared due prior to the
expressed maturity hereof, all in the events, on the terms and in the manner as
provided for in the Credit Agreement.
The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.
RENT-WAY, INC.
By
Name________________________________
Title_______________________________
EXHIBIT D-2
SWING NOTE
U.S. $_____________ ____________, ____
FOR VALUE RECEIVED, the undersigned, RENT-WAY, INC., a Pennsylvania
corporation (the "Borrower"), hereby promises to pay to the order of
___________________ (the "Lender") on the Revolving Credit Termination Date of
the hereinafter defined Credit Agreement, at the principal office of Xxxxxx
Trust and Savings Bank, as Administrative Agent, in Chicago, Illinois, in
immediately available funds, the principal sum of ________________________
Dollars ($___________) or, if less, the aggregate unpaid principal amount of all
Swing Loans made by the Lender to the Borrower pursuant to the Credit Agreement,
together with interest on the principal amount of each Swing Loan from time to
time outstanding hereunder at the rates, and payable in the manner and on the
dates, specified in the Credit Agreement.
This Note is the Swing Note referred to in the Credit Agreement dated
as of June 2, 2003, among the Borrower, the Guarantors party thereto, the
Lenders party thereto, and Xxxxxx Trust and Savings Bank, as Administrative
Agent for the Lenders (the "Credit Agreement"), and this Note and the holder
hereof are entitled to all the benefits and security provided for thereby or
referred to therein, to which Credit Agreement reference is hereby made for a
statement thereof. All defined terms used in this Note, except terms otherwise
defined herein, shall have the same meaning as in the Credit Agreement. This
Note shall be governed by and construed in accordance with the internal laws of
the State of Illinois.
Voluntary prepayments may be made hereon, certain prepayments are
required to be made hereon, and this Note may be declared due prior to the
expressed maturity hereof, all in the events, on the terms and in the manner as
provided for in the Credit Agreement.
The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.
RENT-WAY, INC.
By
Name________________________________
Title_______________________________
EXHIBIT E
RENT-WAY, INC.
COMPLIANCE CERTIFICATE
To: Xxxxxx Trust and Savings Bank, as
Administrative Agent under, and the
Lenders party to, the Credit Agreement
described below
This Compliance Certificate is furnished to the Administrative Agent
and the Lenders pursuant to that certain Credit Agreement dated as of June 2,
2003, among us (the "Credit Agreement"). Unless otherwise defined herein, the
terms used in this Compliance Certificate have the meanings ascribed thereto in
the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ____________ of RENT-WAY, INC.;
2. I have reviewed the terms of the Credit Agreement and I
have made, or have caused to be made under my supervision, a detailed
review of the transactions and conditions of the Borrower and its
Subsidiaries during the accounting period covered by the attached
financial statements;
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or the
occurrence of any event which constitutes a Default or Event of Default
during or at the end of the accounting period covered by the attached
financial statements or as of the date of this Compliance Certificate,
except as set forth below;
4. The financial statements required by Section 8.5 of the
Credit Agreement and being furnished to you concurrently with this
Compliance Certificate are true, correct and complete as of the date
and for the periods covered thereby; and
5. The Schedule I hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain
covenants of the Credit Agreement, all of which data and computations
are, to the best of my knowledge, true, complete and correct and have
been made in accordance with the relevant Sections of the Credit
Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ______ day of
__________________ 20___.
RENT-WAY, INC.
By
Name___________________________________
Title__________________________________
-2-
SCHEDULE I
TO COMPLIANCE CERTIFICATE
RENT-WAY, INC.
COMPLIANCE CALCULATIONS
FOR CREDIT AGREEMENT DATED AS OF JUNE 2, 2003
CALCULATIONS AS OF _____________, _______
A. Leverage Ratio (Section 8.24)
1. Total Funded Debt $___________
2. Amounts on deposit in the Excess Cash Flow Escrow Account $___________
3. Lines A1 minus A2 $___________
4. Net Income for past 4 quarters $___________
5. Interest Expense for past 4 quarters $___________
6. Income taxes for past 4 quarters $___________
7. Depreciation and Amortization Expense for past 4 quarters $___________
8. Any fees, costs and expenses paid in connection with the execution and
delivery of this Agreement and the other Loan Documents and the issuance
and sale of the Senior Notes and Preferred Shares to the extent such
fees, costs and expenses are not capitalized $___________
9. One-time non-cash charges not related to store closures $___________
10. Non-cash restructuring charges related to store closures occurring on or $___________
before September 30 2004
11. Cash or non-cash charges resulting from discontinued operations
associated with store closures occurring on or before September 30, 2004 $___________
12. Sum of Lines A4, A5, A6, A7, A8, A9, A10 and A11 ("EBITDA") $___________
13. Ratio of Line A3 to A12 ____:1.0
14. Line A13 ratio must not exceed ____:1.0
15. The Borrower is in compliance (circle yes or no) yes/no
B. Net Worth (Section 8.25)
1. Net Worth $___________
2. 75% of Net Income for each quarter of each fiscal year of the Borrower
ending on or after September 30, 2003 $___________
3. 90% of any subsequent incremental issuance of new equity securities $___________
4. The sum of Lines B2, B3 and $85,000,000 $___________
5. Lines B1 shall not be less than Line B4
6. The Borrower is in compliance (circle yes or no) yes/no
C. Fixed Charge Coverage Ratio (Section 8.23)
1. Line A12 above $___________
2. Capital Expenditures not financed by Capitalized Leases for the past 4
quarters $___________
3. Line C1 minus Line C2 $___________
4. Principal payments made or to be made during the past 4 quarters with
respect to Indebtedness for Borrowed Money of the Borrower and each
Guarantor, but excluding payments of Obligations owed under the
Revolving Credit and the repayment of the Borrower's Indebtedness for
Borrowed Money under the Prior Credit Agreement $___________
5. Cash Interest Expense for past 4 quarters $___________
6. Restricted Payments for past 4 quarters $___________
7. All prepayments (whether voluntary of mandatory) on the Senior Note for
past 4 quarters $___________
8. Income taxes paid in cash for past 4 quarters $___________
9. Sum of Lines C4, C5, C6, C7 and C8 ("Fixed Charges") $___________
10. Ratio of Line C3 to Line C9 ____:1.0
11. Line C10 ratio must not be less than ____:1.0
12. The Borrower is in compliance (circle yes or no) yes/no
-2-
D. Capital Expenditures (Section 8.22)
1. Year-to-date Capital Expenditures $___________
2. Maximum permitted amount $___________
3. The Borrower is in compliance (circle yes or no) yes/no
E. Minimum Rental Merchandise Usage (Section 8.26)
1. Rental Merchandise under lease pursuant to Rental Contracts $___________
2. Total value of Rental Merchandise held for rental under Rental Contracts $___________
3. Line E1 divided by E2 (then multiplied by 100) ____%
4. Minimum permitted amount ____%
5. The Borrower is in compliance (circle yes or no) yes/no
6. Value of idle jewelry held for rent $___________
7. Line E6 divided by Line E2 (then multiplied by 100) ____%
8. Maximum permitted amount ____%
9. The Borrower is in compliance (circle yes or no) yes/no
F. Minimum Monthly EBITDA (Section 8.27)
1. EBITDA (Line A12 above) $___________
2. Minimum permitted amount $___________
3. The Borrower is in compliance (circle yes or no) yes/no
-3-
EXHIBIT F
ADDITIONAL GUARANTOR SUPPLEMENT
______________, ____
Xxxxxx Trust and Savings Bank, as
Administrative Agent for the Lenders
named in the Credit Agreement dated as
of June 2, 2003, among Rent-Way, Inc.,
as Borrower, the Guarantors referred to
therein, the Lenders from time to time
party thereto, and the Administrative
Agent (the "Credit Agreement")
Ladies and Gentlemen:
Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.
The undersigned, [NAME OF SUBSIDIARY GUARANTOR], a [JURISDICTION OF
INCORPORATION OR ORGANIZATION] hereby elects to be a "Guarantor" for all
purposes of the Credit Agreement, effective from the date hereof. The
undersigned confirms that the representations and warranties set forth in
Section 6 of the Credit Agreement are true and correct as to the undersigned as
of the date hereof and the undersigned shall comply with each of the covenants
set forth in Section 8 of the Credit Agreement applicable to it.
Without limiting the generality of the foregoing, the undersigned
hereby agrees to perform all the obligations of a Guarantor under, and to be
bound in all respects by the terms of, the Credit Agreement, including without
limitation Section 12 thereof, to the same extent and with the same force and
effect as if the undersigned were a signatory party thereto.
The undersigned acknowledges that this Agreement shall be effective
upon its execution and delivery o by the undersigned to the Administrative
Agent, and it shall not be necessary for the Administrative Agent or any Lender,
or any of their Affiliates entitled to the benefits hereof, to execute this
Agreement or any other acceptance hereof. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Illinois.
Very truly yours,
[NAME OF SUBSIDIARY GUARANTOR]
By
Name________________________________
Title_______________________________
-2-
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
Dated _____________, _____
Reference is made to the Credit Agreement dated as of June 2, 2003 (the
"Credit Agreement") among Rent-Way, Inc., the Lenders (as defined in the Credit
Agreement) and Xxxxxx Trust and Savings Bank, as Administrative Agent for the
Lenders (the "Administrative Agent"). Terms defined in the Credit Agreement are
used herein with the same meaning.
______________________________________________________ (the "Assignor")
and _________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, a _______%
interest in and to all of the Assignor's rights and obligations under
the Credit Agreement as of the Effective Date (as defined below),
including, without limitation, such percentage interest in the
Assignor's Commitments as in effect on the Effective Date and the
Loans, if any, owing to the Assignor on the Effective Date and the
Assignor's Percentage of any outstanding L/C Obligations.
2. The Assignor (i) represents and warrants that as of the
date hereof (A) its Revolving Credit Commitment is $_______________,
(B) the aggregate outstanding principal amount of Loans made by it
under the Credit Agreement that have not been repaid is $___________
and a description of the interest rates and interest periods of such
Loans is attached as Annex 1 hereto, and (C) the aggregate principal
amount of Assignor's Percentage of outstanding L/C Obligations is
$___________; (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim, lien, or
encumbrance of any kind; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other instrument or
document furnished pursuant thereto; and (iv) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or any Subsidiary or the performance or
observance by the Borrower or any Subsidiary of any of their respective
obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the most recent financial
statements delivered to the Lenders pursuant to Section 8.5(a) and (b)
thereof and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance;
(ii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iii) appoints and authorizes the
Administrative Agent to take such action as Administrative Agent on its
behalf and to exercise such powers under the Credit Agreement, the
other Loan Documents and the Intercreditor Agreement as are delegated
to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (iv) agrees that it will
perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it as
a Lender; and (v) specifies as its lending office (and address for
notices) the offices set forth beneath its name on the signature pages
hereof.
4. As consideration for the assignment and sale contemplated
in Annex 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in Federal funds an amount equal to $________________*.
It is understood that commitment and/or letter of credit fees accrued
to the Effective Date with respect to the interest assigned hereby are
for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee. Each of
the Assignor and the Assignee hereby agrees that if it receives any
amount under the Credit Agreement which is for the account of the other
party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
5. The effective date for this Assignment and Acceptance shall
be ___________, (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Administrative
Agent for acceptance and recording by the Administrative Agent and, if
required, the relevant Borrower.
6. Upon such acceptance and recording, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to
the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to
the extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Credit Agreement.
7. Upon such acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments under
the Credit Agreement in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and
----------------------
* Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula
rather than as a fixed sum.
-2-
Assignee shall make all appropriate adjustments in payments under the
Credit Agreement for periods prior to the Effective Date directly
between themselves.
8. In accordance with Section 13.12 of the Credit Agreement,
the Assignor and the Assignee request and direct that the
Administrative Agent prepare and cause the relevant Borrower to execute
and deliver to the Assignee the relevant Note payable to the Assignee
in the amount of its Commitment and a new Note to the Assignor in the
amount of its Commitment after giving effect to this assignment.
9. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Illinois.
[Assignor Lender]
By
Name _______________________________
Title ______________________________
[Assignee Lender]
By
Name _______________________________
Title ______________________________
Lending office (and address for notices):
Accepted and consented this
____ day of _____________
RENT-WAY, INC.
By ________________________________
Name ___________________________
Title __________________________
Accepted and consented to by the Administrative Agent this
_______ day of _________________
XXXXXX TRUST AND SAVINGS BANK, as Administrative Agent
By _________________________________
Name ____________________________
Title ___________________________
-3-
ANNEX I
TO ASSIGNMENT AND ACCEPTANCE
PRINCIPAL AMOUNT TYPE OF LOAN INTEREST RATE MATURITY DATE
EXHIBIT H
EXISTING SWAPS
NOTIONAL MATURITY RATE
-------- -------- ----
Xxxxxx Bank 20,000,000 Dec-03 5.090%
SunTrust Bank - Dec-03 5.105%
LaSalle Bank 10,000,000 Dec-03 5.095%
Bank of America 10,000,000 Dec-03 5.120%
Xxxxxx Bank 10,000,000 Dec-03 5.120%
PNC Bank 2,000,000 Sep-04 6.740%
National City 10,000,000 Sep-04 6.730%
Bank
Bank One 10,000,000 Aug-05 6.950%
PNC Bank 10,000,000 Aug-05 6.965%
Xxxxxx Bank 20,000,000 Aug-05 6.880%
102,000,000
SCHEDULE 1
COMMITMENTS
REVOLVING
CREDIT SWING LINE
NAME OF LENDER COMMITMENT COMMITMENT
Xxxxxx Trust and Savings Bank $25,000,000 $5,000,000
National City Bank of
Pennsylvania $22,500,000 $ 0
Bank of Montreal $12,500,000 $ 0
TOTAL $60,000,000 $5,000,000
SCHEDULE 1.2
EXISTING LETTERS OF CREDIT
ISSUER BENEFICIARY AMOUNT
National City Bank of Pennsylvania Travelers $5,000,000
National City Bank of Pennsylvania GE Capital $2,400,000
National City Bank of Pennsylvania Employers Insurance of Wausau $ 650,000
National City Bank of Pennsylvania XX Xxxxxx Chase $ 300,000
National City Bank of Pennsylvania Liberty Mutual Insurance $ 200,000
National City Bank of Pennsylvania Hartford Fire Insurance $ 100,000
National City Bank of Pennsylvania Reliance Insurance $ 50,000
National City Bank of Pennsylvania Tennessee Regulatory Authority $ 20,000
SCHEDULE 6.2
SUBSIDIARIES
JURISDICTION OF PERCENTAGE
NAME ORGANIZATION OWNERSHIP OWNER
Rent-Way of Tomorrow, Inc. Delaware 100% Borrower
("Tomorrow")
Rent-Way of Michigan, Inc. Delaware 100% Borrower
("Michigan")
Action Rent-To-Own
Holdings of South Carolina, South Carolina 100% Borrower
Inc.
Rent-Way Developments, Inc. Delaware 100% Michigan
("Developments")
Rent-Way of TTIG, L.P. Indiana 100% Developments and
Tomorrow
dPi Teleconnect, L.L.C. Delaware 70% Borrower
SCHEDULE 8.8
EXISTING LIENS
-NONE-
