EXHIBIT 10.40
[CONFORMED AS EXECUTED]
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CREDIT AGREEMENT,
DATED AS OF JULY 29, 2002,
AMONG
DOMINO'S, INC.
AND
DOMINO'S FRANCHISE HOLDING CO.
(f/k/a Bluefence, Inc.)
AS BORROWERS,
TISM, INC., AS GUARANTOR,
THE LENDERS LISTED HEREIN,
AS LENDERS,
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
AS ARRANGER,
JPMORGAN CHASE BANK,
AS ADMINISTRATIVE AGENT,
BANK ONE, NA,
AS SYNDICATION AGENT,
AND
COMERICA BANK,
AS DOCUMENTATION AGENT
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CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of July 29, 2002 and entered into by
and among Domino's, Inc., a Delaware corporation ("Company"), Domino's Franchise
Holding Co. (f/k/a Bluefence, Inc.), a Michigan corporation ("Subsidiary
Borrower" and, together with Company, each, a "Borrower" and, collectively,
"Borrowers"), TISM, INC., a Michigan corporation ("Holdings"), ▇.▇. ▇▇▇▇▇▇
SECURITIES INC., as arranger (in such capacity, "Arranger"), THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to
herein as a "Lender" and collectively as "Lenders"), JPMORGAN CHASE BANK
("JPMorgan Chase Bank"), as administrative agent for Lenders (in such capacity,
"Administrative Agent"), BANK ONE, NA ("Bank One"), as syndication agent (in
such capacity, "Syndication Agent"), and COMERICA BANK ("Comerica"), as
documentation agent (in such capacity, "Documentation Agent").
R E C I T A L S
WHEREAS, Borrowers, wholly owned subsidiaries of Holdings, have
requested Lenders to extend, and Lenders have agreed to extend, certain credit
facilities in an aggregate principal amount of $465,000,000 to Borrowers on a
joint and several basis, the proceeds of which will be used to refinance certain
existing indebtedness of Holdings and its Subsidiaries (including the Existing
Credit Facility), to pay related transaction fees and expenses, and to provide
financing for working capital and other general corporate purposes of Borrowers
and their respective Subsidiaries;
WHEREAS, Holdings is the direct owner of 100% of the outstanding
common stock of Company and the indirect owner of 100% of the outstanding
capital stock of Subsidiary Borrower;
WHEREAS, each Borrower desires to secure all of the Obligations
hereunder and under the other Loan Documents by granting to Collateral Agent, on
behalf of Secured Creditors, a First Priority Lien on certain of its real and
mixed property and on substantially all of its personal property, including a
pledge of all of the capital stock and other equity Securities of each of its
Domestic Subsidiaries (other than the Excluded Non-Profit Subsidiary) and 65% of
the capital stock of each of its Foreign Subsidiaries which is directly owned by
such Borrower; and
WHEREAS, Holdings and all Subsidiaries of Company (other than
Subsidiary Borrower and the Excluded Subsidiaries) desire to guarantee the
Obligations hereunder and under the other Loan Documents and to secure their
guaranties by granting to Collateral Agent, on behalf of Secured Creditors, a
First Priority Lien on certain of their respective real and mixed property and
on substantially all of their respective personal property, including (i) in the
case of Holdings, a pledge of all of the capital stock of Company and (ii) in
the case of a Subsidiary Guarantor, a pledge of all of the capital stock and
other equity Securities of each Domestic Subsidiary of such Subsidiary Guarantor
(other than the Excluded Non-Profit Subsidiary) and 65% of the capital stock of
each Foreign Subsidiary which is directly owned by such Subsidiary Guarantor;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Credit Agreement Parties, Lenders and
Agents agree as follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"Accounting Period" means each of the thirteen four-week periods or
one five-week period and twelve four-week periods, as the case may be,
comprising a Fiscal Year.
"Accounting Quarter" means, for any Fiscal Year, each of (i) the first
three Accounting Periods of such Fiscal Year, (ii) the fourth through the sixth
Accounting Periods of such Fiscal Year, (iii) the seventh through the ninth
Accounting Periods of such Fiscal Year and (iv) the tenth through the thirteenth
Accounting Periods of such Fiscal Year, as the case may be.
"Additional Mortgage" has the meaning assigned to that term in
subsection 6.9B.
"Additional Mortgage Policy" has the meaning assigned to that term in
subsection 6.9B.
"Additional Mortgaged Property" has the meaning assigned to that term
in subsection 6.9B.
"Adjusted Consolidated Excess Cash Flow" means, for any period, the
remainder of (i) Consolidated Excess Cash Flow for such period minus (ii) the
product of (I) the aggregate amount of principal repayments of Loans to the
extent (and only to the extent) that such repayments were made as voluntary
prepayments with internally generated funds (but in a case of a voluntary
prepayment of Revolving Loans or Swing Line Loans, only to the extent
accompanied by a permanent reduction to the Revolving Loan Commitments) during
such period multiplied by (II) the quotient of (x) 100% divided by (y) the
applicable "sweep percentage" in effect for such period (as determined pursuant
to subsection 2.4B(iii)(d)).
"Adjusted Eurodollar Rate" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum obtained by dividing (i) the arithmetic average (rounded upward to the
nearest 1/100 of one percent) of the offered quotations, if any, to first class
banks in the interbank Eurodollar market by Reference Lenders for U.S. dollar
deposits of amounts in same day funds comparable to the respective principal
amounts of the Eurodollar Rate Loans of Reference Lenders for which the Adjusted
Eurodollar Rate is then being determined (which principal amount shall be deemed
to be $1,000,000 in the case of any Reference Lender not making, converting to
or continuing such a Eurodollar Rate Loan) with maturities comparable to such
Interest Period as of approximately 10:00 A.M. (New York time) on such Interest
Rate Determination Date by (ii) a percentage equal to 100% minus the stated
maximum rate of all reserve requirements (including any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
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Determination Date to any member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D); provided that if any Reference
Lender fails to provide Administrative Agent with its aforementioned quotation
then the Adjusted Eurodollar Rate shall be determined based on the quotation(s)
provided to Administrative Agent by the other Reference Lender(s).
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by Administrative Agent.
"Affected Lender" has the meaning assigned to that term in subsection
2.6C.
"Affected Loans" has the meaning assigned to that term in subsection
2.6C.
"Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agent" means, individually, each of Arranger, Administrative Agent,
Syndication Agent and Documentation Agent, and for the purposes of Section 9
only (except as expressly noted), Collateral Agent, and "Agents" means Arranger,
Administrative Agent, Syndication Agent, and Documentation Agent, and for the
purposes of Section 9 only (except as expressly noted), Collateral Agent,
collectively.
"Agreement" means this Credit Agreement, dated as of July 29, 2002, as
it may be amended, supplemented or otherwise modified from time to time.
"Applicable Base Rate Margin" means in the case of Tranche B Term
Loans and Revolving Loans, (a) for the period from the Closing Date up to (but
excluding) the date of commencement of the first Pricing Period, the applicable
Level IV percentage set forth below and (b) for any date thereafter, a rate per
annum equal to the percentage set forth below opposite the Applicable Leverage
Ratio in effect as of such date of determination, any change in any such
Applicable Base Rate Margin to be effective on the date of any corresponding
change in the Applicable Leverage Ratio:
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Applicable Applicable
---------- ----------
Level Applicable Revolving Loans Tranche B Term Loans
----- ---------- --------------- --------------------
Leverage Ratio Base Rate Margin Base Rate Margin
-------------- ---------------- ----------------
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V Greater than or equal to 3.75x 1.50% 1.50%
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IV less than 3.75x and greater than or equal 1.25% 1.50%
to 3.25x
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III less than 3.25x and greater than or equal 1.00% 1.25%
to 2.75x
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Applicable Applicable
---------- ----------
Level Applicable Revolving Loans Tranche B Term Loans
----- ---------- --------------- --------------------
Leverage Ratio Base Rate Margin Base Rate Margin
-------------- ---------------- ----------------
-------------------------------------------------------------------------------------------------
2.75x
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II less than 2.75x and greater than or equal 0.75% 1.25%
to 2.00x
-------------------------------------------------------------------------------------------------
I less than 2.00x 0.50% 1.25%
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; provided that notwithstanding anything to the contrary contained in this
definition, at any time an Event of Default is then in existence, the Applicable
Base Rate Margin for Loans shall be the applicable Level V percentage set forth
above.
"Applicable Commitment Fee Percentage" means (a) for the period from
the Closing Date up to (but excluding) the date of commencement of the first
Pricing Period, the applicable Level IV percentage set forth below and (b) at
any date of determination thereafter, a rate per annum equal to the percentage
set forth below opposite the Applicable Leverage Ratio in effect as of such date
of determination, any change in the Applicable Commitment Fee Percentage to be
effective on the date of any corresponding change in the Applicable Leverage
Ratio:
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Applicable Applicable Revolver
---------- -------------------
Level Leverage Ratio Commitment Fee
----- -------------- --------------
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V Greater than or equal to 3.75x 0.50%
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IV less than 3.75x and greater than or equal 0.50%
to 3.25x
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III less than 3.25x and greater than or equal 0.50%
to 2.75x
--------------------------------------------------------------------------------
II less than 2.75x and greater than or equal 0.375%
to 2.00x
--------------------------------------------------------------------------------
I less than 2.00x 0.375%
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; provided that notwithstanding anything to the contrary contained in this
definition, at any time an Event of Default is then in existence, the Applicable
Commitment Fee Percentage shall be the applicable Level V percentage set forth
above.
"Applicable Eurodollar Rate Margin" means in the case of Tranche B
Term Loans and Revolving Loans, (a) for the period from the Closing Date up to
(but excluding) the date of commencement of the first Pricing Period, the
applicable Level IV percentage set forth below and (b) for any date thereafter,
a rate per annum equal to the percentage set forth below opposite the Applicable
Leverage Ratio in effect as of such date of determination, any change in any
such Applicable Eurodollar Rate Margin to be effective on the date of any
corresponding change in the Applicable Leverage Ratio:
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Applicable Applicable
---------- ----------
Level Applicable Revolving Loans Tranche B Term Loans
----- ---------- --------------- --------------------
Leverage Ratio Eurodollar Rate Margin Eurodollar Rate Margin
-------------- ---------------------- ----------------------
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V Greater than or equal to 3.75x 2.50% 2.50%
-------------------------------------------------------------------------------------------------------
IV less than 3.75x and greater than or equal 2.25% 2.50%
to 3.25x
-------------------------------------------------------------------------------------------------------
III less than 3.25x and greater than or equal 2.00% 2.25%
to 2.75x
-------------------------------------------------------------------------------------------------------
II less than 2.75x and greater than or equal 1.75% 2.25%
to 2.00x
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I less than 2.00x 1.50% 2.25%
=======================================================================================================
; provided that notwithstanding anything to the contrary contained in this
definition, at any time an Event of Default is then in existence, the Applicable
Eurodollar Rate Margin for Tranche B Term Loans and Revolving Loans shall be the
applicable Level V percentage set forth above.
"Applicable Leverage Ratio" means, with respect to any date of
determination, the Leverage Ratio set forth in the Pricing Certificate (as
defined below) in effect for the Pricing Period (as defined below) in which such
date of determination occurs. For purposes of this definition, (i) "Pricing
Certificate" means an Officer's Certificate of Holdings certifying as to the
Leverage Ratio as of the last day of any Accounting Quarter and setting forth
the calculation of such Leverage Ratio in reasonable detail, which Officer's
Certificate may be delivered to Administrative Agent at any time on or after the
date of delivery by Holdings of the Compliance Certificate (the "Related
Compliance Certificate") with respect to the period ending on the last day of
such Accounting Quarter pursuant to subsection 6.1(iii), and (ii) "Pricing
Period" means each period commencing on the first Business Day after the
delivery to Administrative Agent of a Pricing Certificate and ending on the
first Business Day after the next Pricing Certificate is delivered to
Administrative Agent; provided that, anything contained in this definition to
the contrary notwithstanding, (a) the first Pricing Period for purposes of
calculating the Applicable Leverage Ratio shall commence no earlier than the
date on which Holdings shall have delivered to Administrative Agent the
financial statements and Related Compliance Certificate for the Accounting
Quarter ended September 8, 2002, (b) subject to the provisos at the end of the
definitions of Applicable Base Rate Margin, Applicable Commitment Fee Percentage
and Applicable Eurodollar Margin, the Applicable Leverage Ratio for the period
from the Closing Date to but excluding the date of commencement of such first
Pricing Period shall be deemed to be Level IV for purposes of making the
relevant calculation referred to above, and (c) in the event that, after the
commencement of such first Pricing Period, Holdings fails to deliver a Pricing
Certificate to Administrative Agent setting forth the Leverage Ratio as of the
last day of any Accounting Quarter on or before the last day on which Holdings
is required to deliver the Related Compliance Certificate (such last day being
the "Cutoff Date"), then the Applicable Leverage Ratio in effect for purposes of
making the relevant calculation referred to above for the period from the Cutoff
Date to the date of delivery by Holdings of the next Pricing Certificate shall
be deemed to be Level V.
"Applied Amount" has the meaning assigned to that term in subsection
2.4B(iv)(b).
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"Approved Fund" has the meaning assigned to that term in Section
10.1B.
"Arranger" has the meaning assigned to that term in the introduction
to this Agreement.
"Asset Sale" means the sale by Holdings or any of its Subsidiaries to
any Person other than Holdings or any of its wholly owned Subsidiaries of (i)
any of the stock of any of Holdings' Subsidiaries, (ii) substantially all of the
assets of any division or line of business of Holdings or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Holdings or any of its Subsidiaries (excluding (a) assets acquired for resale to
Franchisees and inventory sold in the ordinary course of business and (b) any
such other assets to the extent that the aggregate fair market value of such
assets (at the time of sale thereof) sold in any single transaction or related
series of transactions is equal to $1,000,000 or less); provided, however, that
Asset Sales shall not include (1) any sale or discount, in each case without
recourse, of accounts receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof, (2) any sale or
exchange of specific items of equipment, so long as the purpose of each such
sale or exchange is to acquire (and results within 90 days of such sale or
exchange in the acquisition of) replacement items of equipment which are the
functional equivalent of the item of equipment so sold or exchanged, (3) the
leasing (pursuant to leases in the ordinary course of business) or licensing of
real or personal property, including intellectual property and the licensing to
Franchisees in the ordinary course of business of rights to the Domino's PULSE
System but excluding (for avoidance of doubt) any sale of the property
constructed or developed pursuant to the WRC Project, or (4) disposals of
obsolete, uneconomical, negligible, worn out or surplus property in the ordinary
course of business.
"Assignment Agreement" means an Assignment Agreement in substantially
the form of Exhibit VII annexed hereto.
"▇▇▇▇" means ▇▇▇▇ Capital, LLC and/or one or more of its Affiliates.
"▇▇▇▇ Advisory Services Agreement" means that certain Advisory
Services Agreement by and among Holdings, certain Subsidiaries of Holdings and
▇▇▇▇, in the form delivered to Arranger and Administrative Agent prior to the
Closing Date and as such agreement may thereafter be amended, supplemented or
otherwise modified from time to time to the extent permitted under Subsection
7.14A.
"▇▇▇▇ Management Fees" means the fees (including one-time fees payable
in connection with acquisitions, divestitures, recapitalizations, financings and
refinancings) payable by Holdings and its Subsidiaries to ▇▇▇▇ pursuant to the
▇▇▇▇ Advisory Services Agreement.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher of:
(i) the rate of interest announced publicly by JPMorgan Chase Bank in
New York, New York, from time to time, as JPMorgan Chase Bank's base rate;
and
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(ii) 1/2 of 1% per annum above the Federal Funds Effective Rate.
"Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular Person, such Person shall be deemed to have
beneficial ownership of all securities that such Person has the right to
acquire, whether such right is currently exercisable or is exercisable only upon
the occurrence of subsequent condition.
"Borrower" and "Borrowers" has the meaning assigned to that term in
the introduction to this Agreement.
"Business Day" means (i) any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is a day
on which banking institutions located in such state are authorized or required
by law or other governmental action to close, and (ii) with respect to all
notices, determinations, fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, any day that is a Business Day
described in clause (i) above and that is also a day for trading by and between
banks in Dollar deposits in the London interbank market.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, would be required to be accounted for as a capital lease
on the balance sheet of that Person.
"Cash" means money, currency or a credit balance in a Deposit Account.
"Cash Equivalents" means: (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct 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 and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Ratings Group ("S&P") or ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and at the time of acquisition,
having a rating of at least "A-1" from S&P or at least "P-1" from Moody's; (iv)
certificates of deposit or bankers' acceptances (or, with respect to foreign
banks, similar instruments) maturing within one year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States of America or any state thereof or the District of Columbia, Japan or any
member of the European Economic Community or any U.S. branch of a foreign bank
having at the date of acquisition thereof combined capital and surplus of not
less than $200,000,000; (v) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (iv)
above; and (vi) investments in money market
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funds which invest substantially all of their assets in securities of the types
described in clauses (i) through (v) above.
"Certificate re Non-Bank Status" means a certificate substantially in
the form of Exhibit VIII annexed hereto delivered by a Lender to Administrative
Agent pursuant to subsection 2.7B(iii).
"Class" means, as applied to Lenders, each of the following classes of
Lenders: (i) Lenders having Tranche B Term Loan Exposure and (ii) Lenders having
Revolving Loan Exposure.
"CLO" has the meaning assigned to that term in Section 10.1B.
"Closing Date" means the date on or before August 31, 2002, on which
the initial Loans are made.
"Closing Date Mortgage" has the meaning assigned to that term in
subsection 4.1I.
"Closing Date Mortgage Policies" has the meaning assigned to that term
in subsection 4.1I.
"Closing Date Mortgaged Property" has the meaning assigned to that
term in subsection 4.1I.
"Collateral" means, collectively, all of the real, personal and mixed
property (including capital stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"Collateral Agent" means JPMorgan Chase Bank acting in its capacity as
collateral agent under the applicable Collateral Documents on behalf of the
Lenders.
"Collateral Documents" means the Security Agreement, the Pledge
Agreement, the Mortgages and all other instruments or documents delivered by any
Loan Party pursuant to this Agreement or any of the other Loan Documents in
order to grant to Collateral Agent, on behalf of Secured Creditors, a Lien on
any real, personal or mixed property of that Loan Party as security for the
Obligations.
"Commercial Letter of Credit" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment mechanism in
connection with the purchase of any materials, goods or services by either
Borrower or any of its Subsidiaries in the ordinary course of business of such
Borrower or such Subsidiary.
"Commitments" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"Company" has the meaning assigned to that term in the introduction to
this Agreement.
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"Compliance Certificate" means a certificate substantially in the form
of Exhibit IX annexed hereto delivered to Administrative Agent by Holdings
pursuant to subsection 6.1(iii).
"Conforming Leasehold Interest" means any Recorded Leasehold Interest
as to which the lessor has substantially agreed in writing for the benefit of
Administrative Agent (which writing has been delivered to Administrative Agent),
whether under the terms of the applicable lease, under the terms of a Landlord
Consent and Estoppel, or otherwise, to the matters described in the definition
of "Landlord Consent and Estoppel," which interest, if a subleasehold or
sub-subleasehold interest, is not subject to any contrary restrictions contained
in a superior lease or sublease.
"Consolidated Adjusted EBITDA" means, for any period, (x) the sum of
the amounts for such period, without duplication, of (i) Consolidated Net
Income, (ii) Consolidated Interest Expense, (iii) provisions for taxes based on
income (including, without duplication, foreign withholding taxes, the Michigan
Single Business Tax and other similar state taxes), (iv) total depreciation
expense, (v) total amortization expense, (vi) other non-cash items reducing
Consolidated Net Income (including, without limitation, (x) non-cash write-offs
of goodwill and long-lived assets in accordance with FAS 142 and FAS 144, as
applicable, (y) non-cash purchase accounting adjustments in accordance with FAS
141 and debt extinguishment costs and (z) non-cash expenses incurred in
connection with stock options, stock appreciation rights or similar equity
rights but excluding accruals of expenses and the establishment of reserves in
the ordinary course of business) less other non-cash items increasing
Consolidated Net Income (other than accruals of revenue or reversals of reserves
in the ordinary course of business), (vii) to the extent deducted in determining
Consolidated Net Income, those items described on Schedule 1.1(i) annexed
hereto, (viii) non-cash income subtracted in calculating Consolidated Adjusted
EBITDA in a prior period to the extent such non-cash income is paid in cash in
the current period and (ix) the cumulative effect of accounting changes to the
extent such changes result in a reduction of Consolidated Net Income less (y)
the sum of (i) non-cash charges added in calculating Consolidated Adjusted
EBITDA in a prior period to the extent such non-cash charges are paid in cash in
the current period and (ii) the cumulative effect of accounting changes to the
extent such changes result in an increase in Consolidated Net Income, all of the
foregoing as determined on a consolidated basis for Holdings and its
Subsidiaries in conformity with GAAP.
"Consolidated Capital Expenditures" means, for any period, the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability and including that portion of Capital Leases which is
capitalized during such period on the consolidated balance sheet of Holdings and
its Subsidiaries) by Holdings and its Subsidiaries during that period that, in
conformity with GAAP, are included in "purchases of property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Holdings and its Subsidiaries; provided, however, that the following
shall in any event be excluded from the definition of Consolidated Capital
Expenditures: (a) any such expenditures made with, or subsequently reimbursed
out of, the proceeds of insurance, condemnation awards (or payments in lieu
thereof), indemnity payments or payments in respect of judgments or settlements
received from third parties for purposes of replacing or repairing the assets in
respect of which such proceeds, awards or payments were received, so long as
such expenditures are commenced within 270 days, and completed within 360 days,
of the later of the occurrence of the damage to or loss of the assets being
replaced or repaired and the receipt of such proceeds,
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awards or payments in respect thereof and (b) any such expenditures constituting
the reinvestment of proceeds from the sales of assets in equipment or other
productive assets of Borrowers and their respective Subsidiaries, so long as
such expenditures are commenced within 270 days and completed within 360 days of
the receipt of such proceeds; and provided, further, however, that Consolidated
Capital Expenditures shall not include any expenditures made by Company or any
of its Subsidiaries (x) to acquire in a Permitted Acquisition the business,
property or fixed assets of any Person, or the stock or other evidence of
beneficial ownership of any Person that, as a result of such acquisition,
becomes a Subsidiary of Company or a Joint Venture to which Company or any of
its Subsidiaries is a party or (y) to acquire the business, property and/or
related assets of any Person which collectively represent an ongoing business
concern (it being understood that the acquisition of an individual asset (e.g.,
an empty store site) that is not acquired as part of an ongoing business concern
shall not be excluded from Consolidated Capital Expenditures pursuant to this
clause (y)).
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period excluding, however, (i) any
interest expense not payable in Cash (including interest expense paid in kind
and amortization of discount, of deferred financing fees, of premiums paid on
Hedge Agreements and of debt issuance costs) and (ii) any interest expense
attributable to deferred payments under the Consulting Agreement.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the amount for such period of Consolidated Adjusted
EBITDA minus (ii) the sum, without duplication, of the amounts for such period
(to the extent not financed with the proceeds of related financings) of (a)
scheduled repayments of Consolidated Total Debt, (b) Consolidated Capital
Expenditures, other than those made in reliance on subsection 7.8B (net of any
proceeds of any related financings with respect to such expenditures), (c)
Consolidated Cash Interest Expense, (d) any add-backs to Consolidated Adjusted
EBITDA made during such period with respect to items set forth on Schedule
1.1(i) annexed hereto, (e) the provision for current taxes based on income
(including, without duplication, foreign withholding taxes, the Michigan Single
Business Tax and other similar state taxes) of Holdings and its Subsidiaries and
payable in cash with respect to such period, including taxes payable in cash
within 90 days following the end of such period, (f) to the extent not otherwise
deducted in determining Consolidated Excess Cash Flow, fees and expenses paid
during such period in connection with the issuance of Permitted Additional
Subordinated Indebtedness and cash payments made during such period with respect
to non-current liabilities, (g) distributions by Holdings made pursuant to
Section 7.5(ix) during such period, to the extent such distributions are not
deducted in calculating Consolidated Adjusted EBITDA during such period, (h) the
amount of cash expended in respect of Permitted Acquisitions during such period
and (i) the amount of cash expended in respect of repurchases of Senior
Subordinated Notes permitted in accordance with subsection 7.5(iii) which was
not funded with Net Equity Proceeds or the proceeds of Permitted Additional
Subordinated Indebtedness or financed in reliance on clause (w) of the proviso
to said subsection (i.e., with the Excess Proceeds Amount).
"Consolidated Interest Expense" means, for any period, total cash and
non-cash interest expense (including that portion attributable to Capital Leases
in accordance with GAAP and capitalized interest) of Holdings and its
Subsidiaries on a consolidated basis in accordance with GAAP with respect to all
outstanding Indebtedness of Holdings and its Subsidiaries, includ-
-10-
ing all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, net costs under Interest
Rate Agreements, commitment fees accrued under subsection 2.3A and any
administrative agent's fees payable to Administrative Agent.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Holdings and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP; provided
that there shall be excluded (i) the income (or loss) of any Person (other than
a Subsidiary of Holdings) in which any other Person (other than Holdings or any
of its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Holdings or any of its
Subsidiaries by such Person during such period, (ii) except as expressly
required by the pro forma adjustment provisions set forth in subsection 7.6D,
the income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of Holdings or is merged into or consolidated with Holdings or any of
its Subsidiaries or that Person's assets are acquired by Holdings or any of its
Subsidiaries, (iii) the income of any Subsidiary of Holdings to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary, (iv) any
after-tax gains or losses attributable to sales of assets or returned surplus
assets of any Pension Plan, and (v) (to the extent not included in clauses (i)
through (iv) above) any net extraordinary, unusual or non-recurring gains or net
extraordinary, unusual or non-recurring losses.
"Consolidated Senior Debt" means at any time (x) Consolidated Total
Debt at such time less (y) the aggregate outstanding principal amount of all
Subordinated Indebtedness at such time.
"Consolidated Total Debt" means, as at any date of determination, (x)
the aggregate stated balance sheet amount of all Indebtedness of Holdings and
its Subsidiaries, determined on a consolidated basis in accordance with GAAP
less (y) the aggregate amount of the Seller Contingent Note, to the extent
included as balance sheet Indebtedness pursuant to clause (x).
"Consulting Agreement" means the Consulting Agreement, dated as of
December 21, 1998, between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Holdings and certain Subsidiaries
of Holdings, as such agreement may be amended from time to time thereafter to
the extent permitted by subsection 7.14A.
"Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Hedge Agreements. Contingent Obligations shall include (a) the direct
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or indirect guaranty, endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or sale
with recourse by such Person of the obligation of another, (b) the obligation to
make take-or-pay or similar payments if required regardless of non-performance
by any other party or parties to an agreement, and (c) any liability of such
Person for the obligation of another through any agreement (contingent or
otherwise) (X) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (Y) to maintain the solvency or any balance sheet
item, level of income or financial condition of another if, in the case of any
agreement described under subclauses (X) or (Y) of this sentence, the primary
purpose or intent thereof is as described in the preceding sentence. The amount
of any Contingent Obligation shall be equal to (A) the amount of the obligation
so guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited (including netting of obligations
under Hedge Agreements), or (B) if neither amount in clause (A) is stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform) as determined by such Person in
good faith. Notwithstanding the foregoing, (i) Contingent Obligations shall not
include standard contractual indemnities entered into in the ordinary course of
business and (ii) the Capital Lease entered into by Company and/or a Subsidiary
Guarantor with WRC JV shall be deemed not to be a Contingent Obligation of
Company or such Subsidiary Guarantor in respect of any Indebtedness of the WRC
JV incurred to finance the WRC Project.
"Continuing Director" means, as of any date of determination, any
member of the Board of Directors of any Person who (i) was a member of the Board
of Directors of such Person on the Closing Date or (ii) was nominated for
election or elected to such Board of Directors with the affirmative vote of ▇▇▇▇
and the Other Investors or (iii) on and after the consummation of a Qualified
IPO, was nominated for election or elected to the Board of Directors by a
majority vote of the then Continuing Directors.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"Credit Agreement Party" means and includes Holdings and each
Borrower.
"Cumulative Preferred Stock" means the 11.5% cumulative preferred
stock of Holdings, $.001 par value per share, issued pursuant to the Cumulative
Preferred Stock Certificate of Designation.
"Cumulative Preferred Stock Certificate of Designation" means the
Restated Articles of Incorporation of Holdings, as the same may be amended,
modified or supplemented from time to time to the extent permitted by subsection
7.14B.
"Cumulative Preferred Stock Documents" means, collectively, the
Cumulative Preferred Stock Certificate of Designation and the exhibits thereto,
the Cumulative Preferred
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Stock, the Cumulative Preferred Stock Purchase Agreement and all other documents
and instruments entered into in connection with the issuance of the Cumulative
Preferred Stock.
"Cumulative Preferred Stock Purchase Agreement" means the 11.5%
Cumulative Preferred Stock Purchase Agreement, dated as of December 21, 1998, as
the same may be amended, modified or supplemented from time to time to the
extent permitted by subsection 7.14B.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Holdings or any of its Subsidiaries is
a party.
"Default Excess" has the meaning assigned to that term in subsection
2.9.
"Default Period" has the meaning assigned to that term in subsection
2.9.
"Defaulted Revolving Loan" has the meaning assigned to that term in
subsection 2.9.
"Defaulting Lender" has the meaning assigned to that term in
subsection 2.9.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"Documentation Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Dollars" and the sign "$" mean the lawful money of the United States
of America.
"Domestic Subsidiary" means any Subsidiary of Holdings which is
organized under the laws of the United States or any state thereof.
"Domino's PULSE System" means the point of sale system developed by
Company and called "Domino's Pulse".
"Eligible Assets" has the meaning assigned to that term in subsection
2.4B(iii)(a).
"Eligible Assignee" means (A) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (iii) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys loans as
one of its businesses including insurance companies, funds,
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investment companies and lease financing companies; and (B) any Lender, any
Affiliate of any Lender and, with respect to any Lender that is an investment
fund that invests in commercial loans, any other investment fund that invests in
commercial loans and that is managed or advised by the same investment advisor
as such Lender or by an Affiliate of such investment advisor; provided that no
Affiliate of Holdings shall be an Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is maintained or contributed to by (or to which
there is an obligation to contribute of) Holdings, any of its Subsidiaries or
any of their respective ERISA Affiliates and, with respect to each such employee
benefit plan which is a "pension plan" (as defined in Section 3(2) of ERISA)
which is subject to Title IV of ERISA, each such pension plan for the five-year
period immediately following the latest date on which Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates maintained, contributed
to or had an obligation to contribute to such pension plan.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, judgments, Governmental Authorizations,
or any other requirements of governmental authorities relating to (i)
environmental matters, including those relating to any Hazardous Materials
Activity, (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health or welfare
from environmental hazards (including Hazardous Materials), in any manner
applicable to Holdings or any of its Subsidiaries or any Facility, including the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
(S) 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. (S)
1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. (S) 1251 et seq.), the
Clean Air Act (42 U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. (S) 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act
(7 U.S.C. (S) 136 et seq.), the Occupational Safety and Health Act (29 U.S.C.
(S) 651 et seq.), the Oil Pollution Act (33 U.S.C. (S) 2701 et seq.) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. (S) 11001 et
seq.), each as amended or supplemented, any analogous present or future state or
local statutes or laws, and any regulations promulgated pursuant to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto, and the regulations
promulgated and rulings issued thereunder.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Code of which that Person is a member; (ii) any trade or
business (whether or not incorporated) which is a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is a member; and (iii) any member of
an affiliated service group within the meaning of Section 414(m) or (o) of the
Internal Revenue Code of which that Person, any corporation described in clause
(i) above or any trade or business described in clause (ii) above is a member.
Any former ERISA Affiliate of Holdings or any of its Subsidiaries shall continue
to be considered an ERISA Affiliate of Holdings or such Subsidiary within the
meaning of this definition with respect to the period such entity was an ERISA
Affiliate of Holdings or such Subsidiary and with respect to liabilities arising
after such period for which Holdings or such Subsidiary could be liable under
the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043(c) of ERISA with respect to a Pension Plan that is subject to Title
IV of ERISA other than those events as to which the 30-day notice period is
waived under subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section
4043; (ii) the failure to meet the minimum funding standard of Section 412 of
the Internal Revenue Code with respect to any Pension Plan (whether or not
waived in accordance with Section 412(d) of the Internal Revenue Code) or the
failure to make by its due date a required installment under Section 412(m) of
the Internal Revenue Code with respect to any Pension Plan or the failure to
make any required contribution to a Multiemployer Plan; (iii) the provision by
the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of
a notice of intent to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan
with two or more contributing sponsors or the termination of any such Pension
Plan resulting in liability pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which might constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates pursuant to Section
4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of
ERISA; (vii) the withdrawal of Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates in a complete or partial withdrawal (within the
meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there
is any potential liability therefor, or the receipt by Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates of material fines,
material penalties, material taxes or material related charges under Chapter 43
of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (1),
or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan; (x) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan (or any
other Employee Benefit Plan intended to be qualified under Section 401 (a) of
the Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or
-15-
the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code if
such trust was intended to so qualify; or (xi) the imposition of a Lien pursuant
to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to
ERISA with respect to any Pension Plan.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"Event of Default" means each of the events set forth in Section 8.
"Excess Proceeds Amount" means $0 as of the Closing Date, which amount
shall be (i) increased on the date of delivery in any Fiscal Year of an
Officer's Certificate setting forth the calculation of the Adjusted Consolidated
Excess Cash Flow for the preceding Fiscal Year pursuant to subsection
2.4B(iii)(e) (each such date being an "Excess Cash Payment Date"), so long as
any prepayment required pursuant to subsection 2.4B(iii)(d) has been made, by an
amount equal to the remainder of (x) Consolidated Excess Cash Flow for such
Fiscal Year less (y) the sum of (I) the aggregate principal amount of
prepayments of Loans during such period, to the extent (and only to the extent)
that such prepayments were made as voluntary prepayments with internally
generated funds (but in the case of a voluntary prepayment of Revolving Loans or
Swing Line Loans, only to the extent accompanied by a permanent reduction to the
Revolving Loan Commitments) plus (II) the aggregate principal amount of Loans
repaid pursuant to subsection 2.4B(iii)(d) on the respective Excess Cash Payment
Date and (ii) reduced (a) to $0 on the close of business on the Business Day
immediately preceding each succeeding Excess Cash Payment Date, (b) at the time
any Consolidated Capital Expenditure is made pursuant to subsection 7.8B, by the
amount of such expenditure and (c) at any time that any repurchase of Senior
Subordinated Notes is made pursuant to subsection 7.5(iii) (to the extent
repurchased in reliance on sub-clause (w) thereof), by the amount of cash
proceeds expended in connection with such repurchase.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Excluded Non-Profit Subsidiary" means Domino's National Advertising
Fund Inc., a Michigan not-for-profit corporation.
"Excluded Subsidiaries" means, collectively, (i) all Foreign
Subsidiaries which are not Subsidiary Guarantors and (ii) the Excluded
Non-Profit Subsidiary.
"Existing Credit Agreement" means that certain Credit Agreement, dated
as of December 21, 1998, by and among the Borrowers, Holdings, the financial
institutions listed on the signature pages thereto, JPMorgan Chase Bank
(formerly known as ▇▇▇▇▇▇ Guaranty Trust Company of New York), as administrative
agent, Bank One, NA (successor in interest to NBD Bank), as syndication agent,
and Comerica Bank, as documentation agent, as in effect on the Closing Date
(immediately prior to giving effect to the consummation of the Refinancing).
"Existing Letter of Credit" shall have the meaning provided in
subsection 3.1D.
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"Existing Shareholders" means certain existing shareholders of
Holdings disclosed to Arranger and Administrative Agent.
"Existing Swap Agreement" shall mean that certain Swap Agreement, Ref.
# S28817RM, by and between Company and The Bank of Nova Scotia, as in effect on
the Closing Date.
"Facilities" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or (for purposes
of subsection 5.13 only) heretofore owned, leased, operated or used by Holdings
or any of its Subsidiaries or any of their respective predecessors or
Affiliates.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"Financial Plan" has the meaning assigned to that term in subsection
6.1(xii).
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (other than Permitted
Encumbrances of the type referred to in clauses (v), (vi), (vii), (xiii), (xiv)
and (xv) of the definition thereof, Permitted Encumbrances of the type that are,
under applicable law and notwithstanding their subsequent creation, accorded
priority over Liens on the Collateral created pursuant to the Collateral
Documents and Liens permitted pursuant to subsection 7.2A(iii), 7.2A(iv) or
7.2A(v) (subject to the proviso therein)) and (ii) such Lien is the only Lien
(other than Permitted Encumbrances and Liens permitted pursuant to subsection
7.2) to which such Collateral is subject.
"Fiscal Year" means the fiscal year of Holdings and its Subsidiaries
ending on the Sunday nearest to December 31 of each calendar year. For purposes
of this Agreement, any particular Fiscal Year shall be designated by reference
to the calendar year in which the majority of such Fiscal Year falls.
"Flood Hazard Property" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"Foreign Cash Equivalents" means certificates of deposit or bankers
acceptances of any bank organized under the laws of Canada, Japan or any country
that is a member of the European Economic Community whose short-term commercial
paper rating from S&P is at least A-2 or the equivalent thereof or from ▇▇▇▇▇'▇
is at least P-2 or the equivalent thereof, in each case with maturities of not
more than one year from the date of acquisition.
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"Foreign Subsidiary" means a Subsidiary of Holdings other than a
Domestic Subsidiary.
"Foreign Subsidiary Investment Basket Amount" means on any date of
determination, an amount equal to the sum of (i) $25,000,000 plus (ii) on each
January 1 (commencing January 1, 2003), $2,500,000.
"Foreign Subsidiary Working Capital Indebtedness" has the meaning
assigned to that term in subsection 7.1(xi).
"Franchisee" shall mean any Person which owns and operates any pizza
franchise of Holdings and its Subsidiaries, provided, however, that in no event
shall any Subsidiary of Holdings be a Franchisee hereunder.
"Franchisee Investment Basket Amount" means on any date of
determination, an amount equal to the sum of (i) $60,000,000 plus (ii) on each
January 1 (commencing January 1, 2003), $10,000,000.
"Funding and Payment Office" means (i) the office of Administrative
Agent and Swing Line Lender located at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ or (ii) such other office of Administrative Agent and Swing Line Lender as
may from time to time hereafter be designated as such in a written notice
delivered by Administrative Agent and Swing Line Lender to Borrowers and each
Lender.
"Funding Date" means the date of the funding of a Loan.
"Funding Default" has the meaning assigned to that term in subsection
2.9.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsections 1.2 and 1.4, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"Governmental Acts" has the meaning assigned to that term in
subsection 3.5A.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"Guaranteed Creditors" means and include each of each Agent,
Collateral Agent, each Issuing Lender, the Lenders and each party (other than
any Loan Party) party to an Interest Rate Agreement or Currency Agreement to the
extent such party constitutes a Secured Creditor under the Security Documents.
-18-
"Guaranteed Obligations" means (i) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each Note issued by, and all Loans made to, each
Borrower (or either of them) under this Agreement and all reimbursement
obligations and unpaid drawings with respect to Letters of Credit, together with
all the other obligations (including obligations which, but for the automatic
stay under Section 362(a) of the Bankruptcy Code, would become due),
indebtedness and liabilities (including, without limitation, indemnities, fees
and interest (including any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided
for herein, whether or not such interest is an allowed claim in any such
proceeding) thereon) of each Borrower (or either of them) to the Lenders, each
Issuing Lender, Administrative Agent and Collateral Agent now existing or
hereafter incurred under, arising out of or in connection with this Agreement
and each other Credit Document to which such Borrower is party and the due
performance and compliance by each Borrower with all the terms, conditions and
agreements contained in this Agreement and in each such other Loan Document and
(ii) the full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including obligations which, but
for the automatic stay under Section 362(a) of the Bankruptcy Code, would become
due), liabilities and indebtedness (including any interest accruing after the
commencement of any bankruptcy, insolvency, receivership or similar proceeding
at the rate provided for herein, whether or not such interest is an allowed
claim in any such proceeding) of each Borrower (or either of them) owing under
any Interest Rate Agreement or Currency Agreement entered into by such Borrower
with any Lender or any affiliate thereof (even if, in the case of a Lender, such
Lender subsequently ceases to be a Lender under this Agreement for any reason)
and under the Existing Swap Agreement, so long as such Lender or affiliate (or,
in the case of the Existing Swap Agreement, The Bank of Nova Scotia)
participates in such Interest Rate Agreement or Currency Agreement and their
subsequent assigns, if any, whether now in existence or hereafter arising, and
the due performance and compliance with all terms, conditions and agreements
contained therein.
"Guarantor" means, collectively, Holdings and each Subsidiary
Guarantor.
"Guaranty" means the Holdings Guaranty and the Subsidiaries Guaranty.
"Hazardous Materials" means (i) any chemical, material or substance at
any time defined in any statute or regulation as or included in the definition
in any statute or regulation of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous waste", "acutely hazardous waste",
"radioactive waste", "biohazardous waste", "pollutant", "toxic pollutant",
"contaminant", "restricted hazardous waste", "infectious waste", "toxic
substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar meaning and
regulatory effect under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) polychlorinated biphenyls, including any oil or dielectric fluid
containing polychlorinated
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biphenyls; (ix) pesticides; and (x) any other chemical, material or substance
which could pose a hazard to the health and safety of the owners, occupants or
any Persons in the vicinity of any Facility or to the indoor or outdoor
environment.
"Hazardous Materials Activity" means any past, present or future
activity, event or occurrence involving any Hazardous Materials, including the
use, manufacture, possession, storage, holding, migration, Release, threatened
Release, discharge, placement, generation, transportation, processing,
treatment, abatement, removal, remediation, disposal, disposition or handling of
any Hazardous Materials, and any corrective action or response action with
respect to any of the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively.
"Holdings" has the meaning assigned to that term in the first
paragraph of this Agreement.
"Holdings Common Stock" means common stock of Holdings.
"Holdings Guaranty" means the guaranty of Holdings pursuant to Section
11.
"Immaterial Subsidiaries" means, with respect to any Person, any
Subsidiary or Subsidiaries of such Person the assets of which constitute,
individually or in the aggregate, less than 5 % of the total assets of such
Person and its Subsidiaries on a consolidated basis; provided that in no event
shall the term "Immaterial Subsidiary" include either Borrower.
"Increased-Cost Lender" has the meaning assigned to that term in
subsection 2.10A(i).
"Indebtedness", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (including any earn-out obligations owed by such Person
which are required by GAAP to be shown as a liability on the balance sheet of
such Person but excluding any such obligations incurred under ERISA, any accrued
expenses or trade payables and any obligations in respect of employment
agreements of Holdings and its Subsidiaries (including under the Consulting
Agreement)), (a) which obligation in accordance with GAAP would be shown as a
liability on the balance sheet of such Person or (b) which purchase price is
evidenced by a note or similar written instrument, and (v) all indebtedness
secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person. The amount of any
Indebtedness which is non-recourse to the obligor thereunder or to any other
obligor and for which recourse is limited to an identified asset or assets shall
be equal to the lesser of (1) the stated amount of such obligation and (2) the
fair market value of such asset or assets. Obligations under Interest Rate
Agreements and Currency Agreements constitute (X) in the case
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of Hedge Agreements, Contingent Obligations, and (Y) in all other cases,
Investments, and in neither case constitute Indebtedness.
"Indemnitee" has the meaning assigned to that term in subsection 10.3.
"Independent Public Accountant" means any of the five largest public
accounting firms in the United States selected by Holdings or Company.
"Initial Period" means the period commencing on and including the
Closing Date and ending on (but excluding) the earlier of (i) the date on which
Arranger notifies Borrowers that it has concluded its primary syndication of the
Loans and Commitments and (ii) the date which is 30 days after the Closing Date.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes which are used in the conduct of
the business of Holdings and its Subsidiaries as currently conducted that are
material to the condition (financial or otherwise), business or operations of
Holdings and its Subsidiaries, taken as a whole.
"Interest Payment Date" means (i) with respect to any Base Rate Loan,
each March 31, June 30, September 30 and December 31 of each year, commencing on
the first such date to occur after the Closing Date, and (ii) with respect to
any Eurodollar Rate Loan, the last day of each Interest Period applicable to
such Loan; provided that in the case of each Interest Period of longer than
three months, "Interest Payment Date" shall also include each date that is three
months, or an integral multiple thereof, after the commencement of such Interest
Period.
"Interest Period" has the meaning assigned to that term in subsection
2.2B.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Holdings or any of its Subsidiaries is a
party.
"Interest Rate Determination Date" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute, and the regulations promulgated by the Internal Revenue Service
thereunder.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Holdings), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Holdings from any Person other than
Holdings or any of its Subsidiaries, of any equity Securities of such
Subsidiary, (iii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business), capital contribution
or other extension of credit by Holdings or any of its Subsidiaries to any other
Person, including any Contingent Obligation in respect of the Indebtedness of
such other Person but excluding accounts receivable from that other Person to
the extent (and only to the
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extent) same are current assets or arise from sales to that other Person in the
ordinary course of business or (iv) Interest Rate Agreements or Currency
Agreements not constituting Hedge Agreements. The amount of any Investment shall
be the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"IP Collateral" means all the trademarks, patents, copyrights and
related intellectual property rights pledged pursuant to the Security Agreement.
"Issuing Lender" means, with respect to any Letter of Credit, the
Lender which issues or is otherwise obligated to issue such Letter of Credit,
determined as provided in subsection 3.1B(ii), provided that with respect to any
Existing Letter of Credit, Bank One, NA (successor in interest to NBD Bank)
shall be deemed to be the "Issuing Lender" for all purposes of this Agreement.
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form, provided
that in no event shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.
"JPMorgan Chase Bank" has the meaning assigned to that term in the
introduction to this Agreement.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, reasonably satisfactory in form and substance to
Administrative Agent, pursuant to which such lessor substantially agrees, for
the benefit of Administrative Agent, (i) that without any further consent of
such lessor or any further action on the part of the Loan Party holding such
Leasehold Property, such Leasehold Property may be encumbered pursuant to a
Mortgage and may be assigned to the purchaser at a foreclosure sale or in a
transfer in lieu of such a sale (and to a subsequent third party assignee if
Administrative Agent, any Lender, or an Affiliate of either so acquires such
Leasehold Property), (ii) that such lessor shall not terminate such lease as a
result of a default by such Loan Party thereunder without first giving
Administrative Agent notice of such default and at least 60 days (or, if such
default cannot reasonably be cured by Administrative Agent within such period,
such longer period as may reasonably be required) to cure such default and (iii)
to such other matters relating to such Leasehold Property as Administrative
Agent may reasonably request; provided, however, that Administrative Agent may
determine in its reasonable discretion that any one or more of the agreements
set forth in clauses (i) through (iii) may be modified or omitted from a
Landlord Consent and Estoppel with respect to a particular Leasehold Property.
"Leasehold Property" means any leasehold interest of any Loan Party as
lessee under any lease of real property, other than any such leasehold interest
designated from time to time by Administrative Agent in its reasonable
discretion as not being required to be included in the Collateral.
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"Lender" and "Lenders" means the Persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 10.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires; provided that
the term "Lenders", when used in the context of a particular Commitment, shall
mean Lenders having that Commitment.
"Letter of Credit" or "Letters of Credit" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing Lenders
for the joint and several account of Borrowers pursuant to subsection 3.1.
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or, at any time thereafter, may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed by Borrowers (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to subsection
3.3B).
"Leverage Ratio" means, at any time of determination, the ratio of (i)
Consolidated Total Debt as of the last day of the Test Period then most recently
ended to (ii) Consolidated Adjusted EBITDA for the Test Period then most
recently ended, in each case as set forth in the most recent Compliance
Certificate delivered by Holdings to Administrative Agent pursuant to clause
(iii) of subsection 6.1 (or, for purposes of the definition of Applicable
Leverage Ratio, in the relevant Pricing Certificate), provided that for purposes
of subsections 7.1(xiv) and 7.7(xvi)(c), Consolidated Total Debt shall be
determined in accordance with the relevant requirements of said subsections and
shall be as set forth in the Officer's Certificate delivered pursuant said
subsections. For purposes of determining the Leverage Ratio in this Agreement,
Consolidated Adjusted EBITDA shall be determined on a pro forma basis in
accordance with the provisions of subsection 7.6D.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Liquidity" means, at any time, an amount equal to the remainder of
(x) the aggregate amount of Revolving Loan Commitments of the Lenders at such
time less (y) the sum of (i) the aggregate principal amount of all outstanding
Revolving Loans and Swing Line Loans at such time plus (ii) the Letter of Credit
Usage at such time.
"Loan" or "Loans" means one or more of the Tranche B Term Loans,
Revolving Loans or Swing Line Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other documents
or certificates executed by Borrowers in favor of an Issuing Lender relating to,
the Letters of Credit), the Guaranties and the Collateral Documents.
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"Loan Party" means each Credit Agreement Party and any of Holdings'
Subsidiaries from time to time executing a Loan Document, and "Loan Parties"
means all such Persons, collectively.
"Margin Stock" has the meaning assigned to that term in Regulation U
(or any successor regulation) of the Board of Governors of the Federal Reserve
System as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, properties, assets or condition (financial or otherwise)
of Holdings and its Subsidiaries, taken as a whole or (ii) the impairment of the
legal ability of any Credit Agreement Party to perform, or of Administrative
Agent, Collateral Agent or Lenders to enforce, the Obligations.
"Material Contract" means any contract or arrangement to which
Holdings or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew would
reasonably be expected to have a Material Adverse Effect.
"Material Leasehold Property" means any Leasehold Property set forth
on Schedule 4.1I hereto and any Leasehold Property reasonably determined by
Administrative Agent after the Closing Date to be of material value as
Collateral or of material importance to the operations of Holdings or any of its
Subsidiaries; provided, however, that, no Leasehold Property with respect to
which the aggregate amount of all rents payable during any one Fiscal Year does
not exceed $500,000 shall be a "Material Leasehold Property".
"Maximum Consolidated Capital Expenditures Amount" has the meaning
assigned to that term in subsection 7.8A.
"Mortgage" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, substantially in the form of Exhibit XVII annexed hereto or in
such other form or with such changes thereto or omissions therefrom as may be
approved by Administrative Agent in its reasonable discretion, in each case with
such changes thereto as may be recommended by Administrative Agent's local
counsel based on local laws or customary local mortgage or deed of trust
practices, or (ii) at Administrative Agent's option, in the case of an
Additional Mortgaged Property, an amendment to an existing Mortgage, in form and
substance reasonably satisfactory to Administrative Agent, adding such
Additional Mortgaged Property to the Real Property Assets encumbered by such
existing Mortgage, in either case as such security instrument or amendment may
be amended, supplemented or otherwise modified from time to time. "Mortgages"
means all such instruments, including the Closing Date Mortgages and any
Additional Mortgages, collectively.
"Mortgaged Property" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means the National Association of Insurance Commissioners.
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"Net Asset Sale/Net Insurance Proceeds Payment Period" has the meaning
assigned to that term in subsection 2.4B(iii)(a).
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide costs incurred in
connection with such Asset Sale, including (i) income taxes reasonably estimated
to be actually payable within two years of the date of such Asset Sale as a
result of any gain recognized in connection with such Asset Sale and (ii)
payment of the outstanding principal amount of, premium or penalty, if any, and
interest on any Indebtedness (other than the Loans) that is secured by a Lien on
the stock or assets in question and that is repaid as a result of such Asset
Sale (or, in the case of the Asset Sale described in subsection 7.7(xviii), the
payment of the outstanding principal amount of, premium or penalty, if any, and
interest on any unsecured Indebtedness incurred to finance the construction and
development of the WRC Project).
"Net Equity Proceeds" means Cash proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses, from the issuance of
any common equity Securities of Holdings after the Closing Date.
"Net Indebtedness Proceeds" has the meaning assigned to that term in
subsection 2.4B(iii)(c).
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by Holdings or any of its Subsidiaries (a) under any business
interruption insurance policy or casualty insurance policy in respect of a
covered loss thereunder or (b) as a result of the taking of any assets of
Holdings or any of its Subsidiaries by any Person pursuant to the power of
eminent domain, condemnation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, in each
case net of any actual and documented costs incurred by Holdings or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Holdings or such Subsidiary in respect thereof, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of
receipt of such payments or proceeds as a result of any gain recognized in
connection with the receipt of such payment or proceeds and (ii) payment of the
outstanding amount of premium or penalty, if any, and interest of any
Indebtedness (other than the Loans) that is secured by a Lien on the stock or
assets in question and that is repaid as a result of receipt of such payments or
proceeds.
"Net Proceeds Amount" has the meaning assigned to that term in
subsection 2.4B(iii)(e).
"New Business" means any assets, product line or business acquired by
Company or any of its Subsidiaries pursuant to a Permitted Acquisition.
"Non-Consenting Lender" has the meaning assigned to that term in
subsection 2.10A(iii).
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"Non-US Lender" has the meaning assigned to that term in subsection
2.7B(iii)(a).
"Notes" means one or more of the Tranche B Term Notes, Revolving Notes
or Swing Line Note or any combination thereof.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit IV annexed hereto delivered by Borrowers to Administrative Agent
pursuant to subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit V annexed hereto delivered by Borrowers to Administrative
Agent pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"Notice of Issuance of Letter of Credit" means a notice substantially
in the form of Exhibit VI annexed hereto delivered by Borrowers to
Administrative Agent pursuant to subsection 3.1B(i) with respect to the proposed
issuance of a Letter of Credit.
"Obligations" means all obligations of every nature of each Loan Party
from time to time owed to Agents, Issuing Lenders, Lenders or their respective
Affiliates or any of them under the Loan Documents, whether for principal,
interest, reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnification or otherwise.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents and by its
principal financial officer or principal accounting officer or its treasurer;
provided that every Officers' Certificate with respect to the compliance with a
condition precedent to the making of any Loans hereunder shall include (i) a
statement that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signers, such condition
has been complied with.
"Operating Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"Other Investors" means, collectively, (i) RGIP, LLC, (ii) DP
Investors I, LLC, DP Investors II, LLC, ▇.▇. ▇▇▇▇▇▇ Capital Corporation and
Sixty Wall Street Fund, L.P. and (iii) any trust formed for the benefit of (and
to hold the investments of) the investors referred to in preceding clause (ii).
"Participant" has the meaning assigned to that term in Section 10.1C.
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"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA or any successor thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"Permitted Acquired Debt" has the meaning assigned to that term in
subsection 7.1(x).
"Permitted Acquisition" means the acquisition of assets, stock or
other equity interests of a business effected in accordance with the provisions
of subsection 7.7(xvi).
"Permitted Acquisition Cost" means, with respect to any Permitted
Acquisition, the sum (without duplication) of (i) all cash paid by Holdings or
any of its Subsidiaries in connection with any such Permitted Acquisition, (ii)
the fair market value of Holdings Common Stock (based on the good faith
determination of senior management of Holdings or, after an initial public
offering, the closing trading price of Holdings Common Stock on the date of such
Permitted Acquisition on the stock exchange on which such stock is listed)
issued as consideration pursuant to such Permitted Acquisition, (iii) the
aggregate amount (determined by using the face amount of the debt or the amount
payable up to and including maturity thereof, whichever is greater) of Permitted
Seller Notes issued by Company in connection with such Permitted Acquisition,
(iv) the amount of all Permitted Acquired Debt assumed in connection with such
Permitted Acquisition and (v) the aggregate amount of all Qualified Preferred
Stock issued by Holdings in connection with such Permitted Acquisition
(determined by using (x) the maximum liquidation preference thereof, (y) the
gross cash proceeds from the issuance thereof or (z) the fair market value (as
determined in good faith by senior management of Holdings) of the assets
received from the direct issuance thereof as consideration, whichever is
greatest).
"Permitted Additional Subordinated Indebtedness" means Indebtedness of
Company so long as (a) such Indebtedness has a Weighted Average Life to Maturity
greater than or equal to the Weighted Average Life to Maturity of the Senior
Subordinated Notes, (b) such Indebtedness is unsecured, (c) such Indebtedness
does not add guarantors or obligors which were not guarantors or obligors, as
the case may be, in respect of the Senior Subordinated Notes at any time, except
for such additional guarantors as shall have entered into counterparts of the
Subsidiaries Guaranty, (d) such Indebtedness has substantially the same (or,
from the perspective of the Lenders, more favorable) subordination provisions,
if any, as applied to the Senior Subordinated Notes, (e) the interest rate in
respect of such Indebtedness is not greater than the then prevailing market rate
for such Indebtedness (or such other interest rate as is satisfactory to
Administrative Agent and the Requisite Lenders), (f) all other terms of such
Indebtedness (including, without limitation, with respect to the amortization
schedules, redemption provisions, maturities, covenants, defaults and remedies),
are not, taken as a whole, materially less favorable to the Holdings and its
Subsidiaries than those previously existing with respect to the Senior
Subordinated Notes and (g) all of the Net Indebtedness Proceeds from the
incurrence of such Indebtedness are first used to the refinance any then
outstanding Senior Subordinated Notes before such Net Indebtedness Proceeds are
used for any other purpose.
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"Permitted Encumbrances" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA, any such Lien relating to or imposed in connection
with any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in each
case incurred in the ordinary course of business (a) for amounts not yet
overdue or (b) for amounts that are overdue and that (in the case of any
such amounts overdue for a period in excess of 30 days) are being contested
in good faith by appropriate proceedings, so long as (1) such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall
have been made for any such contested amounts, and (2) in the case of a
Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the
Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(v) leases or subleases granted to third parties in the ordinary
course of business and not interfering in any material respect with the
ordinary conduct of the business of Holdings or any of its Subsidiaries or
resulting in a material diminution in the value of any Collateral as
security for the Obligations;
(vi) easements, rights-of-way, restrictions, encroachments, and
other defects or irregularities in title, in each case which do not and
will not interfere in any material respect with the ordinary conduct of the
business of Holdings or any of its Subsidiaries or result in a material
diminution in the value of any Collateral as security for the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under any
lease not prohibited hereby, (b) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such lease
to any restriction or encumbrance referred to in the preceding clause (b);
(viii) Liens arising from filing UCC financing statements relating
solely to leases not prohibited by this Agreement;
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(ix) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(x) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(xi) Liens securing obligations (other than obligations representing
Indebtedness for borrowed money) under operating, reciprocal easement or
similar agreements entered into in the ordinary course of business of
Holdings and its Subsidiaries;
(xii) licenses of patents, trademarks and other intellectual property
rights granted by Holdings or any of its Subsidiaries in the ordinary
course of business and not interfering in any material respect with the
ordinary conduct of the business of Holdings or such Subsidiary;
(xiii) Liens existing on the Closing Date and described in the Closing
Date Mortgage Policies;
(xiv) Liens in existence on the Closing Date which are listed, and
the property subject thereto described, in Schedule 1.1(iii), plus renewals
and extensions of such Liens, provided that (x) the aggregate principal
amount of the Indebtedness, if any, secured by such Liens does not increase
from that amount outstanding at the time of any such renewal or extension
and (y) any such renewal or extension does not encumber any additional
assets or properties of Holdings or any of its Subsidiaries;
(xv) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of Company in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (i) any Indebtedness that is secured by such
Liens is permitted to exist under subsection 7.1(x), and (ii) such Liens
are not incurred in connection with, or in contemplation or anticipation
of, such Permitted Acquisition and do not attach to any other asset of
Holdings or any of its Subsidiaries;
(xvi) Liens solely on ▇▇▇▇ ▇▇▇▇▇▇▇ money deposits made in connection
with any letter of intent or purchase agreement; and
(xvii) such Liens affecting title to any Real Property Asset found
reasonable by the Administrative Agent.
"Permitted Group" means any group of investors if deemed to be a
"person" (as such term is used in Section 13(d)(3) of the Exchange Act) by
virtue of the Stockholders Agreement, as the same may be amended, modified or
supplemented from time to time, provided that (i) ▇▇▇▇ is party to the
Stockholders Agreement, (ii) the persons party to the Stockholders Agreement as
so amended, supplemented or modified from time to time that were not parties,
and are not Affiliates of persons who were parties, to the Stockholders
Agreement on December 21, 1998, together with their respective Affiliates
(collectively, the "New Investors") are not the direct or indirect Beneficial
Owners (determined without reference to the
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Stockholders Agreement) of more than 50% of the voting interest in Holdings'
equity Securities owned by all parties to the Stockholders Agreement as so
amended, supplemented or modified and (iii) the New Investors, individually or
in the aggregate, do not, directly or indirectly, have the right, pursuant to
the Stockholders Agreement (as so amended, supplemented or modified) or
otherwise to designate more than one-half of the directors of the Board of
Directors of Holdings or any direct or indirect parent entity of Holdings.
"Permitted Seller Note" means a promissory note containing
subordination provisions in substantially the form of, or no less favorable to
Lenders (in the reasonable judgment of Administrative Agent) than the
subordination provisions contained in, Exhibit X annexed hereto (subject, in any
given case, to any such modifications thereto as shall be agreed to by
Administrative Agent in its sole and absolute discretion and as shall not
materially and adversely affect the interests of Lenders), representing any
Indebtedness of Company incurred in connection with any Permitted Acquisition
payable to the seller in connection therewith, as such note may be amended,
supplemented or otherwise modified from time to time to the extent permitted
under subsection 7.14B; provided that no Permitted Seller Note shall (i) be
guaranteed by Holdings or any Subsidiary of Holdings or secured by any property
of Holdings or any of its Subsidiaries, (ii) bear cash interest at a rate
greater than 15% per annum or (iii) provide for any prepayment or repayment of
all or any portion of the principal thereof prior to the date which is six
months after the date of the final scheduled installment of principal of any of
the Loans, except to the extent any such prepayment or repayment is made
expressly subject to the payment restrictions set forth in subsection 7.5(x).
"Person" means and includes natural persons, corporations, limited
partnerships general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"Pledge Agreement" means the Pledge Agreement executed and delivered
by Holdings and its Domestic Subsidiaries (other than the Excluded Non-Profit
Subsidiary) and Collateral Agent on the Closing Date, substantially in the form
of Exhibit XI annexed hereto, as such Pledge Agreement may thereafter be
amended, supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"Pledge Agreement Collateral" means the "Collateral" as defined in the
Pledge Agreement.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"Preferred Stock" as applied to the capital stock of any Person, means
capital stock of such Person (other than common stock of such Person) of any
class or classes (however designed) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of capital
stock of any other class of such Person, and shall include Cumulative Preferred
Stock
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and, on and after the issuance thereof in accordance with the requirements
hereof, Qualified Preferred Stock.
"Pricing Certificate" has the meaning assigned to that term in the
definition of Applicable Leverage Ratio.
"Pricing Period" has the meaning assigned to that term in the
definition of Applicable Leverage Ratio.
"Pro Rata Share" means (i) with respect to all payments, computations
and other matters relating to the Tranche B Term Loan Commitment or the Tranche
B Term Loan of any Lender, the percentage obtained by dividing (x) the Tranche B
Term Loan Exposure of that Lender by (y) the aggregate Tranche B Term Loan
Exposure of all Lenders, (ii) with respect to all payments, computations and
other matters relating to the Revolving Loan Commitment or the Revolving Loans
of any Lender or any Letters of Credit issued or participations therein
purchased by any Lender or any participations in any Swing Line Loans purchased
by any Lender, the percentage obtained by dividing (x) the Revolving Loan
Exposure of that Lender by (y) the aggregate Revolving Loan Exposure of all
Lenders, and (iii) for all other purposes with respect to each Lender, the
percentage obtained by dividing (x) the sum of the Tranche B Term Loan Exposure
of that Lender plus the Revolving Loan Exposure of that Lender by (y) the
aggregate Tranche B Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders, in any such case as the applicable
percentage may be adjusted by assignments permitted pursuant to subsection 10.1.
The initial Pro Rata Share of each Lender for purposes of each of clauses (i),
(ii) and (iii) of the preceding sentence is set forth opposite the name of that
Lender in Schedule 2.1 annexed hereto.
"Proceedings" has the meaning assigned to that term in subsection
6.1(ix).
"Proposed Asset Sale Reinvestment Proceeds" has the meaning assigned
to that term in subsection 2.4B(iii)(a).
"Proposed Insurance Reinvestment Proceeds" has the meaning assigned to
that term in subsection 6.4C(ii).
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary in order to create
or perfect Liens on any IP Collateral.
"Qualified IPO" shall mean a bona fide underwritten sale to the public
of Holdings Common Stock (including Holdings Common Stock issued upon the
conversion or exchange of Cumulative Preferred Stock into or for Holdings Common
Stock) pursuant to a registration statement (other than on Form S-8 or any other
form relating to securities issuable under any benefit plan of Holdings or any
of its Subsidiaries, as the case may be) that is declared effective by the SEC
and such offering results in gross cash proceeds (exclusive of underwriter's
discounts and commissions and other expenses) of at least $150,000,000.
"Qualified Preferred Stock" means any Preferred Stock of Holdings, so
long as (i) the express terms that are applicable thereto shall provide that
dividends thereon shall not be
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required to be paid at any time (and to the extent) that such payment would be
prohibited by the terms of this Agreement or any other agreement of Holdings
relating to outstanding Indebtedness and (ii) such Preferred Stock, by the terms
applicable thereto (including the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event,
cannot mature and is not mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable, or required to be repurchased, at the
sole option of the holder thereof (including, without limitation, upon the
occurrence of any Potential Event of Default or Event of Default under
subsection 8.11), in whole or in part, on or prior to the date occurring June
30, 2010; provided that any Preferred Stock that would not constitute Qualified
Preferred Stock as provided above solely because the holders thereof have the
right to require Holdings to repurchase such Preferred Stock upon the occurrence
of a "change of control" or an "asset sale" shall constitute Qualified Preferred
Stock if the terms applicable thereto provide that Holdings may not repurchase
or redeem any such Preferred Stock pursuant to the documentation governing same
unless such repurchase or redemption complies with the requirements of
subsection 7.5.
"Quarterly Payment Date" means the last Business Day of each March,
June, September and December.
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Recorded Leasehold Interest" means a Leasehold Property with respect
to which a Record Document (as hereinafter defined) has been recorded in all
places necessary or desirable, in Administrative Agent's reasonable judgment, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrances of the affected real property. For purposes of this definition,
the term "Record Document" means, with respect to any Leasehold Property, (a)
the lease evidencing such Leasehold Property or a memorandum thereof, executed
and acknowledged by the owner of the affected real property, as lessor, or (b)
if such Leasehold Property was acquired or subleased from the holder of a
Recorded Leasehold Interest, the applicable assignment or sublease documents,
executed and acknowledged by such holder, in each case in form sufficient to
give such constructive notice upon recordation and otherwise in form reasonably
satisfactory to Administrative Agent.
"Reference Lenders" means JPMorgan Chase Bank, Bank One and Comerica.
"Refinancing" means the repayment in full of all Indebtedness
outstanding under the Existing Credit Agreement and the termination of any
commitments to lend or make any extensions of credit thereunder (other than
Existing Letters of Credit outstanding thereunder incorporated hereunder as
Letters of Credit pursuant to subsection 3.1D) and (ii) the payment of
Transaction Costs.
"Refinancing Documents" means the documents and instruments entered
into in connection with the refinancing of the Existing Credit Agreement
pursuant to subsection 4.1F.
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(iii).
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"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D (or any successor regulation) of the
Board of Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof establishing reserve requirements.
"Regulation T" means Regulation T (or any successor regulation) of the
Board of Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof establishing reserve requirements.
"Regulation U" means Regulation U (or any successor regulation) of the
Board of Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof establishing margin requirements.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Agreements" means, collectively, the Stockholders Agreement,
the Consulting Agreement, the Seller Contingent Note, the Senior Subordinated
Note Indenture, the Senior Subordinated Notes, the Cumulative Preferred Stock
Documents, the Refinancing Documents and, on and after the execution and
delivery thereof, the agreements and instruments governing the Permitted
Additional Subordinated Indebtedness.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
migration of any Hazardous Materials through the air, soil, surface water or
groundwater.
"Replacement Lender" has the meaning assigned to that term in
subsection 2.10B(ii).
"Requisite Lenders" means Lenders having or holding more than 50% of
the sum of (i) the aggregate Tranche B Term Loan Exposure of all Lenders and
(ii) the aggregate Revolving Loan Exposure of all Lenders.
"Responsible Officer" means any of the chairman of the board (if an
officer), the president, any senior or executive vice president, the general
counsel, its principal financial officer or principal accounting officer, the
secretary or the treasurer of Holdings or, as applicable, any Subsidiary of
Holdings.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
or other equity Securities of any Loan Party now or hereafter outstanding,
except, in the case of Holdings, a dividend payable solely in
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shares of that class of stock (or common stock of any other class) to the
holders of that class, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of stock or other equity Securities of any Loan Party now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock or other equity Securities of any Loan Party now or
hereafter outstanding, (iv) any payment or prepayment of principal of, premium,
if any, or interest on, or redemption, purchase, retirement, defeasance, sinking
fund or similar payment with respect to, any Subordinated Indebtedness, (v) any
conversion or exchange of the Cumulative Preferred Stock, except into or for
Holdings Common Stock or Qualified Preferred Stock and (vi) any payment by
Holdings or any of its Subsidiaries of the ▇▇▇▇ Management Fees to ▇▇▇▇ pursuant
to the ▇▇▇▇ Advisory Services Agreement, it being understood and agreed that in
no event shall the accumulation of dividends on the Cumulative Preferred Stock
be deemed to be a "Restricted Junior Payment".
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to Borrowers pursuant to subsection 2.1A(ii), to purchase
participations in Swing Line Loans pursuant to subsection 2.1A(iii) and to issue
and/or participate in Letters of Credit pursuant to Section 3, and "Revolving
Loan Commitments" means such commitments of all Lenders in the aggregate, as
same may be reduced as provided in subsection 2.4B(ii).
"Revolving Loan Commitment Termination Date" means the earlier of (i)
June 30, 2007 and (ii) the date of termination in whole of the Revolving Loan
Commitments pursuant to subsection 2.4B or Section 8.
"Revolving Loan Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) in
the event that Lender is an Issuing Lender, the aggregate Letter of Credit Usage
in respect of all Letters of Credit issued by that Lender (in each case net of
any participations purchased by other Lenders in such Letters of Credit or any
unreimbursed drawings thereunder) plus (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit plus (d) in the case of
Swing Line Lender, the aggregate outstanding principal amount of all Swing Line
Loans (net of any participations therein purchased by other Lenders) plus (e)
the aggregate amount of all participations purchased by that Lender in any
outstanding Swing Line Loans.
"Revolving Loans" means the Loans made by Lenders to Borrowers
pursuant to subsection 2.1A(ii).
"Revolving Notes" means any promissory notes of Borrowers issued (on a
joint and several basis) pursuant to subsection 2.1E to evidence the Revolving
Loans of any Lenders, substantially in the form of Exhibit I annexed hereto, as
they may be amended, supplemented or otherwise modified from time to time.
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"Secured Creditor" has the meaning assigned to that term in the
respective Collateral Documents.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Security Agreement" means the Security Agreement executed and
delivered by Holdings and its Domestic Subsidiaries (other than the Excluded
Non-Profit Subsidiary) and Collateral Agent on the Closing Date, substantially
in the form of Exhibit XII annexed hereto, as such Security Agreement may
thereafter be amended, supplemented or otherwise modified from time to time as
permitted thereunder and hereunder.
"Seller Contingent Note" means, collectively, the Promissory Notes,
each dated as of December 21, 1998, issued by Holdings to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as such notes may be amended from time to time thereafter to
the extent permitted under subsection 7.14A.
"Senior Leverage Ratio" means, at any time of determination, the ratio
of (i) Consolidated Senior Debt as of the last day of the Test Period then most
recently ended to (ii) Consolidated Adjusted EBITDA for the Test Period then
most recently ended, in each case as set forth in the most recent Compliance
Certificate delivered by Holdings to Administrative Agent pursuant to clause
(iii) of subsection 6.1; provided that for purposes of subsection 7.1(xiv),
subsections 7.5(ix) and (xiv) and subsection 7.7(xvi)(c), Consolidated Senior
Debt shall be determined in accordance with the relevant requirements of said
subsections and shall be as set forth in the Officer's Certificate delivered
pursuant to said subsections. For purposes of determining the Senior Leverage
Ratio in this Agreement, Consolidated Adjusted EBITDA shall be determined on a
pro forma basis in accordance with the provisions of subsection 7.6D.
"Senior Subordinated Note Indenture" means the indenture, dated as of
December 21, 1998, between Company, the Guarantors (as defined therein)
signatory thereto and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as trustee, pursuant to
which the Senior Subordinated Notes have been issued, as such indenture may be
amended, modified or supplemented from time to time to the extent permitted
under subsection 7.14B.
"Senior Subordinated Notes" means 10-3/8% Senior Subordinated Notes
due 2009 of Company issued pursuant to the Senior Subordinated Note Indenture in
an aggregate outstanding principal amount of approximately $245,000,000 (as such
amount may be reduced by repayments of principal thereof after the Closing
Date).
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"Shareholder Subordinated Note" means an unsecured junior subordinated
note issued by Holdings (and not guaranteed or supported in any way by any of
its Subsidiaries) containing subordination provisions substantially in the form
of, or no less favorable to Lenders (in the reasonable judgment of
Administrative Agent) than the subordination provisions contained in Exhibit X
annexed hereto, as such note may be amended, supplemented or otherwise modified
from time to time to the extent permitted under subsection 7.14B.
"Solvent" means, with respect to any Person, that as of the date of
determination (A) the aggregate value of such Person's assets, at fair value and
present fair saleable value, exceeds (i) its total liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities) and (ii) the
amount required to pay such liabilities as they become absolute and matured in
the normal course of business; (B) such Person has the ability to pay its debts
and liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities) as they become absolute and matured in the normal course of
business; (C) such Person does not have an unreasonably small amount of capital
with which to conduct its business; and (D) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Holdings or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Holdings or any of its Subsidiaries, (iii) the obligations of third party
insurers of Holdings or any of its Subsidiaries arising by virtue of the laws of
any jurisdiction requiring third party insurers, (iv) obligations with respect
to Capital Leases or Operating Leases of Holdings or any of its Subsidiaries,
(v) performance, payment, deposit or surety obligations of Holdings or any of
its Subsidiaries, in any case if required by law or governmental rule or
regulation or in accordance with custom and practice in the industry, (vi) any
other general insurance obligations of Company or any of its Subsidiaries, and
(vii) such other obligations of Borrowers and their respective Subsidiaries as
are reasonably acceptable to Administrative Agent and Issuing Lender and
otherwise permitted to exist pursuant to the terms of this Agreement; provided
that Standby Letters of Credit may not be issued for the purpose of supporting
(a) trade payables or (b) any Indebtedness constituting "antecedent debt" (as
that term is used in Section 547 of the Bankruptcy Code).
"Stockholders Agreement" means that certain Stockholders Agreement,
dated as of December 21, 1998, by and among Holdings, ▇▇▇▇, the Other Investors
and the Existing Shareholders, be amended, supplemented or otherwise modified
from time to time thereafter to the extent permitted under subsection 7.14A.
"Subordinated Indebtedness" means (i) the Indebtedness of Company
evidenced by the Senior Subordinated Notes, (ii) Indebtedness of Holdings
evidenced by any Shareholder Subordinated Note, (iii) Indebtedness of Company
evidenced by any Permitted Seller Notes, (iv) Permitted Additional Subordinated
Indebtedness and (v) any other Indebtedness of Holdings, Borrowers or any of
their respective Subsidiaries subordinated in right of payment to the
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Obligations pursuant to documentation containing maturities, amortization
schedules, covenants, defaults, remedies, subordination provisions and other
material terms in form and substance reasonably satisfactory to Administrative
Agent and Requisite Lenders.
"Subsidiaries Guaranty" means the Guaranty executed and delivered by
the Domestic Subsidiaries of Holdings (other than Borrowers and the Excluded
Non-Profit Subsidiary) on the Closing Date, substantially in the form of Exhibit
XIII annexed hereto, as such Subsidiaries Guaranty may thereafter be amended,
supplemented or otherwise modified from time to time as permitted thereunder and
hereunder.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"Subsidiary Borrower" has the meaning assigned to that term in the
introduction to this Agreement.
"Subsidiary Guarantors" means any Subsidiary of Holdings (other than
Borrowers and the Excluded Non-Profit Subsidiary) that executes a counterpart of
the Subsidiaries Guaranty on the Closing Date or from time to time thereafter
pursuant to the terms of this Agreement.
"Supplemental Collateral Agent" has the meaning assigned to that term
in subsection 9.1B.
"Swing Line Lender" means JPMorgan Chase Bank, or any Person serving
as a successor Administrative Agent hereunder, in its capacity as Swing Line
Lender hereunder.
"Swing Line Loan Commitment" means the commitment of Swing Line Lender
to make Swing Line Loans to Borrowers pursuant to subsection 2.1A(iii).
"Swing Line Loans" means the Loans made by Swing Line Lender to
Borrowers pursuant to subsection 2.1A(iii).
"Swing Line Note" means any promissory note of Borrowers issued (on a
joint and several basis) pursuant to subsection 2.1E to evidence the Swing Line
Loans of Swing Line Lender, substantially in the form of Exhibit II annexed
hereto, as it may be amended, supplemented or otherwise modified from time to
time.
"Syndication Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever
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and wherever imposed, levied, collected, withheld or assessed (including any
foreign withholding tax and the Michigan Single Business Tax); provided that
"Tax on the overall net income" of a Person shall be construed as a reference to
a tax imposed by the jurisdiction in which that Person is organized or in which
that Person's principal office (and/or, in the case of a Lender, its lending
office) is located or in which that Person (and/or, in the case of a Lender, its
lending office) is deemed to be doing business (unless such Person would be
treated as doing business in such jurisdiction solely as a result of entering
into the transactions contemplated by the Loan Documents) on all or part of the
net income, profits or gains (whether worldwide, or only insofar as such income,
profits or gains are considered to arise in or to relate to a particular
jurisdiction, or otherwise) of that Person including a franchise tax imposed in
lieu of a net income tax (and/or, in the case of a Lender, its lending office).
"Terminated Lender" has the meaning assigned to that term in
subsection 2.10A(iii).
"Test Period" means each period of four consecutive Accounting
Quarters then last ended, in each case taken as one accounting period.
"Title Company" means, collectively, Commonwealth Land Title Insurance
Company and/or one or more other title insurance companies reasonably
satisfactory to Arranger and Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
repaying any Refunded Swing Line Loans or reimbursing the applicable Issuing
Lender for any amount drawn under any Letter of Credit but not yet so applied)
plus (ii) the aggregate principal amount of all outstanding Swing Line Loans
plus (iii) the Letter of Credit Usage.
"Tranche B Term Loan" means a Loan made by a Lender to a Borrower as a
term loan pursuant to subsection 2.1A(i), and "Tranche B Term Loans" means any
such Loan or Loans, collectively.
"Tranche B Term Loan Commitment" means the commitment of a Lender to
make Tranche B Term Loans to Borrowers pursuant to subsection 2.1A(i), and
"Tranche B Term Loan Commitments" means such commitments of all Lenders in the
aggregate.
"Tranche B Term Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Tranche B Term Loans,
that Lender's Tranche B Term Loan Commitment and (ii) after the funding of the
Tranche B Term Loans, the outstanding principal amount of the Tranche B Term
Loans of that Lender.
"Tranche B Term Notes" means any promissory notes of Borrowers issued
(on a joint and several basis) pursuant to subsection 2.1E to evidence the
Tranche B Term Loans of any Lenders, substantially in the form of Exhibit III
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
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"Transaction Costs" means the fees, costs and expenses payable by
Credit Agreement Parties in connection with the transactions contemplated by the
Loan Documents.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"Voting Stock" means, as to any Person, any equity Securities of such
Person entitled (without regard to the occurrence of any contingency) to vote
for the election of members of the Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the then
outstanding principal amount of such Indebtedness into (ii) the product obtained
by multiplying (x) the amount of each then remaining installment or other
required scheduled payments of principal, including payment at final maturity,
in respect thereof, by (y) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment.
"WRC JV" has the meaning assigned to that term in subsection 7.3(xiv).
"WRC Project" means the development and construction of an office
building to serve as the world headquarters of Holdings and Company and related
facilities (including distribution facilities).
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Holdings to Lenders pursuant to clauses (i), (ii)
and (xii) of subsection 6.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(iv)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
Notwithstanding the foregoing, except as otherwise specifically provided herein,
all computations determining compliance with subsection 2.4 and Section 7,
including the definitions used therein, shall utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with
those used to prepare, the December 30, 2001 financial statements of Holdings
and its Subsidiaries delivered to the Lenders, without giving effect to purchase
accounting adjustments required or permitted by FAS 141 and its interpretations
(including non-cash write ups and non-cash charges relating to inventory, fixed
assets and in process research and development, in each case arising in
connection with any Permitted Acquisitions and non-cash charges relating to
intangibles and goodwill arising in connection with any Permitted Acquisitions).
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1.3 Other Definitional Provisions and Rules of Construction.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use herein of the word "include" or "including", when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter.
D. Each reference to an "Accounting Quarter period" of a specified
number of Accounting Quarters shall be a reference to a period of consecutive
Accounting Quarters of such number.
1.4 Changes in GAAP.
In the event that a change in GAAP or other accounting principles and
policies after December 30, 2001 affects in any material respect the
calculations of the compliance by Holdings and its Subsidiaries with the
covenants contained herein, Lenders and Credit Agreement Parties agree to
negotiate in good faith to amend the affected covenants (and related
definitions) to compensate for the effect of such changes so that the
restrictions, limitations and performance standards effectively imposed by such
covenants, as so amended, are substantially identical to the restrictions,
limitations and performance standards imposed by such covenants as in effect on
the date hereof; provided that until Requisite Lenders and Credit Agreement
Parties reach agreement with respect to such amendment, calculation of
compliance by Holdings and its Subsidiaries with the covenants contained herein
shall be determined in accordance with GAAP as in effect immediately prior to
such change.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments: Making of Loans; Register; Notes.
A. Commitments. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Credit Agreement
Parties herein set forth, each Lender hereby severally agrees to make the Loans
described in subsections 2.1A(i) and 2.1A(ii) and Swing Line Lender hereby
agrees to make the Loans described in subsection 2.1A(iii).
(i) Tranche B Term Loans. Each Lender with a Tranche B Term Loan
Commitment severally agrees to lend to one or both Borrowers (on a joint
and several basis) on the Closing Date an amount not exceeding its Pro Rata
Share of the aggregate
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amount of the Tranche B Term Loan Commitments to be used for the purposes
identified in subsection 2.5A. The amount of each Lender's Tranche B Term
Loan Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the aggregate amount of the Tranche B Term Loan Commitments is
$365,000,000; provided that the Tranche B Term Loan Commitments of Lenders
shall be adjusted to give effect to any assignments of the Tranche B Term
Loan Commitments pursuant to subsection 10.1B. Each Lender's Tranche B Term
Loan Commitment shall expire immediately and without further action on
August 31, 2002 if the Tranche B Term Loans are not made on or before that
date. Each Borrower may make only one borrowing under the Tranche B Term
Loan Commitments. The proceeds of each Tranche B Term Loan shall be made
available to Borrowers as directed by either of them (with the proceeds to
be used by one or both Borrowers as they may determine), it being
understood and agreed that Borrowers shall be jointly and severally
obligated with respect to each Tranche B Term Loan for the repayment
thereof and all amounts owing with respect thereto. Amounts borrowed under
this subsection 2.1A(i) and subsequently repaid or prepaid may not be
reborrowed.
(ii) Revolving Loans. Each Lender with a Revolving Loan Commitment
severally agrees, subject to the limitations set forth below with respect
to the maximum amount of Revolving Loans permitted to be outstanding from
time to time, to lend to one or both Borrowers (on a joint and several
basis) from time to time during the period from the Closing Date to but
excluding the Revolving Loan Commitment Termination Date an aggregate
amount not exceeding its Pro Rata Share of the aggregate amount of the
Revolving Loan Commitments to be used for the purposes identified in
subsections 2.5A and 2.5B. The original amount of each Lender's Revolving
Loan Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the aggregate original amount of the Revolving Loan Commitments
is $100,000,000; provided that the Revolving Loan Commitments of Lenders
shall be adjusted to give effect to any assignments of the Revolving Loan
Commitments pursuant to subsection 10.1B; and provided further, that the
amount of the Revolving Loan Commitments shall be reduced from time to time
by the amount of any reductions thereto made pursuant to subsections
2.4B(ii) and 2.4B(iii). Each Lender's Revolving Loan Commitment shall
expire on the Revolving Loan Commitment Termination Date and all Revolving
Loans and all other amounts owed hereunder with respect to the Revolving
Loans and the Revolving Loan Commitments shall be paid in full no later
than that date; provided that each Lender's Revolving Loan Commitment shall
expire immediately and without further action on August 31, 2002 if the
Tranche B Term Loans are not made on or before that date. Amounts borrowed
under this subsection 2.1A(ii) may be repaid and reborrowed to but
excluding the Revolving Loan Commitment Termination Date. The proceeds of
each Revolving Loan shall be made available to Borrowers as directed by
either of them (with the proceeds to be used by one or both Borrowers as
they may determine), it being understood and agreed that Borrowers shall be
jointly and severally obligated with respect to each Revolving Loan for the
repayment thereof and all amounts owing with respect thereto.
Anything contained in this Agreement to the contrary notwithstanding,
in no event shall the Total Utilization of Revolving Loan Commitments at any
time exceed the Revolving Loan Commitments then in effect.
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(iii) Swing Line Loans. Swing Line Lender hereby agrees, subject to
the limitations set forth below with respect to the maximum amount of Swing
Line Loans permitted to be outstanding from time to time, to make a portion
of the Revolving Loan Commitments available to one or both Borrowers (on a
joint and several basis) from time to time during the period from the
Closing Date to but excluding the Revolving Loan Commitment Termination
Date by making Swing Line Loans to one or both Borrowers (on a joint and
several basis) in an aggregate amount not exceeding the amount of the Swing
Line Loan Commitment to be used for the purposes identified in subsection
2.5B, notwithstanding the fact that such Swing Line Loans, when aggregated
with Swing Line Lender's outstanding Revolving Loans and Swing Line
Lender's Pro Rata Share of the Letter of Credit Usage then in effect, may
exceed Swing Line Lender's Revolving Loan Commitment. The original amount
of the Swing Line Loan Commitment is $25,000,000; provided that any
reduction of the Revolving Loan Commitments made pursuant to subsection
2.4B(ii) or 2.4B(iii) which reduces the aggregate Revolving Loan
Commitments to an amount less than the then current amount of the Swing
Line Loan Commitment shall result in an automatic corresponding reduction
of the Swing Line Loan Commitment to the amount of the Revolving Loan
Commitments, as so reduced, without any further action on the part of
either Borrower, Administrative Agent or Swing Line Lender. The Swing Line
Loan Commitment shall expire on the Revolving Loan Commitment Termination
Date and all Swing Line Loans and all other amounts owed hereunder with
respect to the Swing Line Loans shall be paid in full no later than that
date; provided that the Swing Line Loan Commitment shall expire immediately
and without further action on August 31, 2002 if the Tranche B Term Loans
are not made on or before that date. Amounts borrowed under this subsection
2.1A(iii) may be repaid and reborrowed to but excluding the Revolving Loan
Commitment Termination Date. The proceeds of each Swing Line Loan shall be
made available to Borrowers as directed by either of them (with the
proceeds to be used by one or both Borrowers as they may determine), it
being understood and agreed that Borrowers shall be jointly and severally
obligated with respect to each Swing Line Loan for the repayment thereof
and all amounts owing with respect thereto.
Anything contained in this Agreement to the contrary notwithstanding,
in no event shall the Total Utilization of Revolving Loan Commitments at any
time exceed the Revolving Loan Commitments then in effect.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Borrowers pursuant to subsection 2.4B(i), Swing Line Lender may, at
any time in its sole and absolute discretion, deliver to Administrative Agent
(with a copy to Borrowers), no later than 11:00 A.M. (New York City time) on the
first Business Day in advance of the proposed Funding Date, a notice (which
shall be deemed to be a Notice of Borrowing given by Borrowers) requesting
Lenders to make Revolving Loans that are Base Rate Loans on such Funding Date in
an amount equal to the amount of such Swing Line Loans (the "Refunded Swing Line
Loans") outstanding on the date such notice is given which Swing Line Lender
requests Lenders to prepay. Anything contained in this Agreement to the contrary
notwithstanding, (i) the proceeds of such Revolving Loans made by Lenders other
than Swing Line Lender shall be immediately delivered by Administrative Agent to
Swing Line Lender (and not to Borrowers) and applied to repay a corresponding
portion of the Refunded Swing Line Loans and (ii) on the day such
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Revolving Loans are made, Swing Line Lender's Pro Rata Share of the Refunded
Swing Line Loans shall be deemed to be paid with the proceeds of a Revolving
Loan made by Swing Line Lender, and such portion of the Swing Line Loans deemed
to be so paid shall no longer be outstanding as Swing Line Loans and shall no
longer be due under the Swing Line Note, if any, of Swing Line Lender but shall
instead constitute part of Swing Line Lender's outstanding Revolving Loans and
shall be due under the Revolving Note, if any, of Swing Line Lender. Borrowers
hereby authorize Administrative Agent and Swing Line Lender to charge Borrowers'
accounts with Administrative Agent and Swing Line Lender (up to the amount
available in each such account) in order to immediately pay Swing Line Lender
the amount of the Refunded Swing Line Loans to the extent the proceeds of such
Revolving Loans made by Lenders, including the Revolving Loan deemed to be made
by Swing Line Lender, are not sufficient to repay in full the Refunded Swing
Line Loans. If any portion of any such amount paid (or deemed to be paid) to
Swing Line Lender should be recovered by or on behalf of either Borrower from
Swing Line Lender in bankruptcy, by assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably shared among all
Lenders in the manner contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the request of
Swing Line Lender as provided in the immediately preceding paragraph in an
amount sufficient to repay any amounts owed to Swing Line Lender in respect of
any outstanding Swing Line Loans or (b) the Revolving Loan Commitments are
terminated at a time when any Swing Line Loans are outstanding, each Lender
shall be deemed to, and hereby agrees to, have purchased a participation in such
outstanding Swing Line Loans in an amount equal to its Pro Rata Share
(calculated, in the case of the foregoing clause (b), immediately prior to such
termination of the Revolving Loan Commitments) of the unpaid amount of such
Swing Line Loans, together with accrued interest thereon. Upon one Business
Day's notice from Swing Line Lender, each Lender shall deliver to Swing Line
Lender an amount equal to its respective participation in same day funds at the
Funding and Payment Office. In order to further evidence such participation (and
without prejudice to the effectiveness of the participation provisions set forth
above), each Lender agrees to enter into a separate participation agreement at
the request of Swing Line Lender in form and substance reasonably satisfactory
to Swing Line Lender. In the event any Lender fails to make available to Swing
Line Lender the amount of such Lender's participation as provided in this
paragraph, Swing Line Lender shall be entitled to recover such amount on demand
from such Lender together with interest thereon at the rate customarily used by
Swing Line Lender for the correction of errors among banks for three Business
Days and thereafter at the Base Rate. In the event Swing Line Lender receives a
payment of any amount in which other Lenders have purchased participations as
provided in this paragraph, Swing Line Lender shall promptly distribute to each
such other Lender its Pro Rata Share of such payment.
Anything contained herein to the contrary notwithstanding, each
Lender's obligation to make Revolving Loans for the purpose of repaying any
Refunded Swing Line Loans pursuant to the second preceding paragraph and each
Lender's obligation to purchase a participation in any unpaid Swing Line Loans
pursuant to the immediately preceding paragraph shall be absolute and
unconditional and shall not be affected by any circumstance, including (a) any
set-off, counterclaim, recoupment, defense or other right which such Lender may
have against Swing Line Lender, either Borrower or any other Person for any
reason whatsoever; (b) the occurrence or continuation of an Event of Default or
a Potential Event of Default; (c) any
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adverse change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Holdings or any of its Subsidiaries;
(d) any breach of this Agreement or any other Loan Document by any party
thereto; or (e) any other circumstance, happening or event whatsoever, whether
or not similar to any of the foregoing; provided that such obligations of each
Lender are subject to the condition that (X) Swing Line Lender has not received
a written notice from Administrative Agent or any Lender that has not been
rescinded that there is a Potential Event of Default or an Event of Default in
existence hereunder prior to the time such Refunded Swing Line Loan or Unpaid
Swing Line Loans were made or (Y) the satisfaction of any such condition not
satisfied had been waived in accordance with subsection 10.6 prior to or at the
time such Refunded Swing Line Loans or other unpaid Swing Line Loans were made.
B. Borrowing Mechanics. Tranche B Term Loans or Revolving Loans made
on any Funding Date (other than Revolving Loans made pursuant to a request by
Swing Line Lender pursuant to subsection 2.1A(iii) for the purpose of repaying
any Refunded Swing Line Loans or Revolving Loans made pursuant to subsection
3.3B for the purpose of reimbursing any Issuing Lender for the amount of a
drawing under a Letter of Credit issued by it) shall be in an aggregate minimum
amount of $500,000 and integral multiples of $100,000 in excess of that amount;
provided that Tranche B Term Loans or Revolving Loans made on any Funding Date
as Eurodollar Rate Loans with a particular Interest Period shall be in an
aggregate minimum amount of $1,000,000, and integral multiples of $100,000 in
excess of that amount. Swing Line Loans made on any Funding Date shall be in an
aggregate minimum amount of $100,000 and integral multiples of $100,000 in
excess of that amount. Whenever Borrowers desire that Lenders make Tranche B
Term Loans or Revolving Loans they shall deliver to Administrative Agent a
Notice of Borrowing no later than 12:00 Noon (New York City time) at least three
Business Days in advance of the proposed Funding Date (in the case of a
Eurodollar Rate Loan) or at least one Business Day in advance of the proposed
Funding Date (in the case of a Base Rate Loan). Whenever Borrowers desire that
Swing Line Lender make a Swing Line Loan, they shall deliver to Administrative
Agent a Notice of Borrowing no later than 12:00 Noon (New York City time) on the
proposed Funding Date. The Notice of Borrowing shall specify (i) the proposed
Funding Date (which shall be a Business Day), (ii) the amount and type of Loans
requested, (iii) in the case of Swing Line Loans, that such Loans shall be Base
Rate Loans, (iv) in the case of Tranche B Term Loans and Revolving Loans,
whether such Loans shall be Base Rate Loans or Eurodollar Rate Loans, and (v) in
the case of any Loans requested to be made as Eurodollar Rate Loans, the initial
Interest Period requested therefor. Tranche B Term Loans and Revolving Loans may
be continued as or converted into Base Rate Loans and Eurodollar Rate Loans in
the manner provided in subsection 2.2D. In lieu of delivering the
above-described Notice of Borrowing, either Borrower may give Administrative
Agent telephonic notice by the required time of any proposed borrowing under
this subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Administrative Agent on or
before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability
to Borrowers in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of either
Borrower or for otherwise acting in good faith under this subsection 2.1B, and
upon funding of Loans by Lenders in accordance with this Agreement pursuant to
any such telephonic notice Borrowers shall have effected Loans hereunder.
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Borrowers shall notify Administrative Agent prior to the funding of
any Loans in the event that any of the matters to which Borrowers are required
to certify in the applicable Notice of Borrowing is no longer true and correct
as of the applicable Funding Date, and the acceptance by either Borrower of the
proceeds of any Loans shall constitute a re-certification by Borrowers, as of
the applicable Funding Date, as to the matters to which Borrowers are required
to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and the relevant Borrower shall be bound to make a borrowing
in accordance therewith.
C. Disbursement of Funds. Tranche B Term Loans and Revolving Loans
under this Agreement shall be made by Lenders simultaneously and proportionately
to their respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender or Swing Line
Lender, as the case may be, of the proposed borrowing. Each Lender shall make
the amount of its Loan available to Administrative Agent not later than 1:00
P.M. (New York City time) on the applicable Funding Date, and Swing Line Lender
shall make the amount of its Swing Line Loan available to Administrative Agent
not later than 2:00 P.M. (New York City time) on the applicable Funding Date, in
each case in same day funds in Dollars, at the Funding and Payment Office.
Except as provided in subsection 2.1A(iii) or subsection 3.3B with respect to
Revolving Loans used to repay Refunded Swing Line Loans or to reimburse any
Issuing Lender for the amount of a drawing under a Letter of Credit issued by
it, upon satisfaction or waiver of the conditions precedent specified in
subsections 4.1 (in the case of Loans made on the Closing Date) and 4.2 (in the
case of all Loans), Administrative Agent shall make the proceeds of such Loans
available to the relevant Borrower or Borrowers on the applicable Funding Date
by causing an amount of same day funds in Dollars equal to the proceeds of all
such Loans received by Administrative Agent from Lenders or Swing Line Lender,
as the case may be, to be credited to the account(s) of the relevant Borrower or
Borrowers at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to the relevant Borrower or Borrowers a corresponding amount on
such Funding Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such amount
is paid to Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for
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three Business Days and thereafter at the Base Rate. If such Lender does not pay
such corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Borrowers and Borrowers jointly and
severally agree to pay immediately such corresponding amount to Administrative
Agent together with interest thereon, for each day from such Funding Date until
the date such amount is paid to Administrative Agent, at the rate of interest
then applicable to the Loan for which Administrative Agent has demanded payment.
Nothing in this subsection 2.1C shall be deemed to relieve any Lender from its
obligation to fulfill its Commitments hereunder or to prejudice any rights that
Borrowers may have against any Lender as a result of any default by such Lender
hereunder.
D. The Register.
(i) Administrative Agent (acting on behalf of Borrowers) shall
maintain, at its address referred to in subsection 10.8, a register for the
recordation of the names and addresses of Lenders and the Commitments and
Loans of each Lender from time to time (the "Register"). The Register shall
be available for inspection by Borrowers or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the Tranche B
Term Loan Commitment and Revolving Loan Commitment and Tranche B Term Loans
and Revolving Loans from time to time of each Lender, the Swing Line Loan
Commitment and the Swing Line Loans from time to time of Swing Line Lender,
and each repayment or prepayment in respect of the principal amount of the
Tranche B Term Loans or Revolving Loans of each Lender or the Swing Line
Loans of Swing Line Lender. Any such recordation shall be conclusive and
binding, on each Borrower and each Lender, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Commitments or Borrowers'
Obligations in respect of any applicable Loans.
(iii) Each Lender shall record on its internal records (including the
Notes held by such Lender) the amount of any Tranche B Term Loan and
Revolving Loan made by it and each payment in respect thereof. Any such
recordation shall be conclusive and binding on Borrowers, absent manifest
error; provided that failure to make any such recordation, or any error in
such recordation, shall not affect any Lender's Commitments or Borrowers'
Obligations in respect of any applicable Loans; and provided further, that
in the event of any inconsistency between the Register and any Lender's
records, the recordations in the Register shall govern and be conclusive
and binding on such Lender, absent manifest error.
(iv) Borrowers, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment or Loan shall
be effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the
Register as the owner
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thereof, and any request, authority or consent of any Person who, at the
time of making such request or giving such authority or consent, is listed
in the Register as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the corresponding Commitments
or Loans.
(v) Each Borrower hereby designates JPMorgan Chase Bank to serve as
such Borrower's agent solely for purposes of maintaining the Register as
provided in this subsection 2.1D, and each Borrower hereby agrees that, to
the extent JPMorgan Chase Bank serves in such capacity, JPMorgan Chase Bank
and its officers, directors, employees, agents and affiliates shall
constitute Indemnitees for all purposes under subsection 10.3.
E. Optional Notes. If so requested by any Lender by written notice to
Borrowers (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date or at any time thereafter, Borrowers shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to subsection
10.1) on the Closing Date (or, if such notice is delivered after the Closing
Date, promptly after Borrowers' receipt of such notice) a promissory note or
promissory notes to evidence such Lender's Tranche B Term Loan, Revolving Loans
or Swing Line Loans, substantially in the form of Exhibit III, Exhibit I or
Exhibit II annexed hereto, respectively, with appropriate insertions.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6 and
2.7, each Tranche B Term Loan and Revolving Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate. Subject to the provisions of subsection 2.7, each
Swing Line Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate. The applicable basis for determining
the rate of interest with respect to any Tranche B Term Loan or any Revolving
Loan shall be selected by Borrowers initially at the time a Notice of Borrowing
is given with respect to such Loan pursuant to subsection 2.1B. The basis for
determining the interest rate with respect to any Tranche B Term Loan or any
Revolving Loan may be changed from time to time pursuant to subsection 2.2D. If
on any day a Tranche B Term Loan or Revolving Loan is outstanding with respect
to which notice has not been delivered to Administrative Agent in accordance
with the terms of this Agreement specifying the applicable basis for determining
the rate of interest, then for that day that Loan shall bear interest determined
by reference to the Base Rate.
(i) Subject to the provisions of subsections 2.2E and 2.7, the
Tranche B Term Loans and Revolving Loans shall bear interest through
maturity as follows:
(a) if a Base Rate Loan, then at the sum of the Base Rate plus
the Applicable Base Rate Margin; or
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(b) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
(ii) Subject to the provisions of subsections 2.2E and 2.7, the Swing
Line Loans shall bear interest through maturity at the sum of the Base Rate
plus the Applicable Base Rate Margin for Revolving Loans.
B. Interest Periods. In connection with each Eurodollar Rate Loan,
Borrowers may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each, an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Borrowers' option, either a one, two, three or six-month period or (x) in
the case of any Revolving Loans to be made or maintained as a Eurodollar Rate
Loan, if deposits in the interbank Eurodollar market are generally available for
such period (as determined by each Lender making, converting to or continuing
such Eurodollar Rate Loan), a two-week period, (y) in the case of any Revolving
Loans to be made or maintained as a Eurodollar Rate Loan, if agreed to by each
Lender making, converting to or continuing such Eurodollar Rate Loan, a
nine-month or twelve-month period or (z) in the case of any Tranche B Term Loan
to be made or maintained as a Eurodollar Rate Loan, if agreed to by each Lender
making, converting to or continuing such Eurodollar Rate Loan, a two-week,
nine-month or twelve-month period; provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a Loan
initially made as a Eurodollar Rate Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods applicable
to a Eurodollar Rate Loan continued as such pursuant to a Notice of
Conversion/Continuation, each successive Interest Period shall commence on
the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is not
a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided that, if any Interest Period would otherwise expire
on a day that is not a Business Day but is a day of the month after which
no further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall,
subject to clause (v) of this subsection 2.2B, end on the last Business Day
of a calendar month;
(v) no Interest Period with respect to any portion of the Tranche B
Term Loans shall extend beyond June 30, 2008 and no Interest Period with
respect to any portion of the Revolving Loans shall extend beyond the
Revolving Loan Commitment Termination Date;
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(vi) no Interest Period with respect to any borrowing of Tranche B
Term Loans shall extend beyond a date on which a mandatory repayment of
such Tranche B Term Loans is required to be made under subsection 2.4A
unless the sum of (a) the aggregate principal amount of such Tranche B Term
Loans that are Base Rate Loans plus (b) the aggregate principal amount of
such Tranche B Term Loans that are Eurodollar Rate Loans with Interest
Periods expiring on or before such date equals or exceeds the principal
amount of such mandatory repayment of Tranche B Term Loans required to be
paid on such date;
(vii) Borrowers shall not select an Interest Period of longer than one
month prior to the end of the Initial Period;
(viii) there shall be no more than twenty (20) Interest Periods
outstanding at any time; and
(ix) in the event Borrowers fail to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Borrowers shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Swing Line Loans or any Revolving
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4B(i),
interest accrued on such Swing Line Loans or Revolving Loans through the date of
such prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Borrowers shall have the option (i) to convert at any time all or any part
of its outstanding Tranche B Term Loans or Revolving Loans equal to $500,000 and
integral multiples of $100,000 in excess of that amount from Loans bearing
interest at a rate determined by reference to one basis to Loans bearing
interest at a rate determined by reference to an alternative basis or (ii) upon
the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $1,000,000 and integral
multiples of $100,000 in excess of that amount as a Eurodollar Rate Loan;
provided, however, that a Eurodollar Rate Loan may only be converted into a Base
Rate Loan on the expiration date of an Interest Period applicable thereto; and
provided further, however, that Loans may not be continued as or converted to
Eurodollar Rate Loans with an Interest Period longer than one month prior to the
end of the Initial Period.
Borrowers shall deliver a Notice of Conversion/Continuation at any time
after the Closing Date to Administrative Agent no later than 12:00 Noon (New
York City time) at least one Business Day in advance of the proposed conversion
date (in the case of a conversion to a Base Rate Loan) and at least three
Business Days in advance of the proposed conversion/continuation date (in the
case of a conversion to, or a continuation of, a Eurodollar Rate Loan). A Notice
of Conversion/Continuation shall specify (i) the proposed
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conversion/continuation date (which shall be a Business Day), (ii) the amount
and type of the Loan to be converted/continued, (iii) the nature of the proposed
conversion/continuation, (iv) in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan, the requested Interest Period, and (v) unless the
Requisite Lenders otherwise agree, in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan, that no Potential Event of Default or
Event of Default has occurred and is continuing. In lieu of delivering the
above-described Notice of Conversion/Continuation, either Borrower may give
Administrative Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; provided that such notice
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/ continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/ continuation under this subsection 2.2D, Administrative
Agent shall promptly transmit such notice by telefacsimile or telephone to each
Lender.
Neither Administrative Agent nor any Lender shall incur any liability
to Borrowers in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of either
Borrower or for otherwise acting in good faith under this subsection 2.2D, and
upon conversion or continuation of the applicable basis for determining the
interest rate with respect to any Loans in accordance with this Agreement
pursuant to any such telephonic notice Borrowers shall have effected a
conversion or continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Borrowers shall
be bound to effect a conversion or continuation in accordance therewith.
E. Post-Maturity Interest. Any principal payments on the Loans not paid
when due and, to the extent permitted by applicable law, any interest payments
on the Loans or any fees or other amounts owed hereunder not paid when due, in
each case whether at stated maturity, by notice of prepayment, by acceleration
or otherwise, shall, if Requisite Lenders so elect in writing, thereafter bear
interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable at
maturity under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); provided that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in interest rate
is effective, such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
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F. Computation of Interest. Interest on the Loans shall be computed (i)
in the case of Base Rate Loans where interest is calculated by reference to the
rate of interest announced publicly by JPMorgan Chase Bank in New York, New
York, from time to time, as JPMorgan Chase Bank's base rate, on the basis of a
365-day or 366-day year, as the case may be, and (ii) in the case of all other
Loans, on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on any
Loan, the date of the making of such Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted
from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan
to such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar
Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate
Loan, as the case may be, shall be excluded; provided that if a Loan is repaid
on the same day on which it is made, one day's interest shall be paid on that
Loan.
2.3 Fees.
A. Commitment Fees. Borrowers jointly and severally agree to pay to
Administrative Agent, for distribution to each Lender in proportion to that
Lender's Pro Rata Share, commitment fees for the period from and including the
Closing Date to and excluding the Revolving Loan Commitment Termination Date
equal to the average of the daily excess of the Revolving Loan Commitments over
the sum of (i) the aggregate principal amount of outstanding Revolving Loans
(but not any outstanding Swing Line Loans) plus (ii) the Letter of Credit Usage
multiplied by the Applicable Commitment Fee Percentage then in effect, such
commitment fees to be calculated on the basis of a 360-day year and the actual
number of days elapsed and to be payable quarterly in arrears on each Quarterly
Payment Date, commencing on the first such date to occur after the Closing Date,
and on the Revolving Loan Commitment Termination Date.
B. Other Fees. Borrowers jointly and severally agree to pay to Arranger
and Administrative Agent such fees in the amounts and at the times separately
agreed upon between Holdings, Borrowers, Arranger and Administrative Agent.
2.4 Repayments, Prepayments and Reductions in Revolving Loan
Commitments; General Provisions Regarding Payments; Application of
Proceeds of Collateral and Payments Under Guaranties.
A. Scheduled Payments of Tranche B Term Loans.
Borrowers shall make principal payments on the Tranche B Term Loans in
installments on the dates and in the amounts set forth below:
==============================================================
SCHEDULED REPAYMENT
DATE OF TRANCHE B TERM
LOANS
--------------------------------------------------------------
September 30, 2002 $912,500
--------------------------------------------------------------
December 31, 2002 $912,500
--------------------------------------------------------------
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==============================================================
SCHEDULED REPAYMENT
DATE OF TRANCHE B TERM
LOANS
--------------------------------------------------------------
March 31, 2003 $ 912,500
--------------------------------------------------------------
June 30, 2003 $ 912,500
--------------------------------------------------------------
September 30, 2003 $ 912,500
--------------------------------------------------------------
December 31, 2003 $ 912,500
--------------------------------------------------------------
March 31, 2004 $ 912,500
--------------------------------------------------------------
June 30, 2004 $ 912,500
--------------------------------------------------------------
September 30, 2004 $ 912,500
--------------------------------------------------------------
December 31, 2004 $ 912,500
--------------------------------------------------------------
March 31, 2005 $ 912,500
--------------------------------------------------------------
June 30, 2005 $ 912,500
--------------------------------------------------------------
September 30, 2005 $ 912,500
--------------------------------------------------------------
December 31, 2005 $ 912,500
--------------------------------------------------------------
March 31, 2006 $ 912,500
--------------------------------------------------------------
June 30, 2006 $ 912,500
--------------------------------------------------------------
September 30, 2006 $ 912,500
--------------------------------------------------------------
December 31, 2006 $ 912,500
--------------------------------------------------------------
March 31, 2007 $ 912,500
--------------------------------------------------------------
June 30, 2007 $ 912,500
--------------------------------------------------------------
September 30, 2007 $86,687,500
--------------------------------------------------------------
December 31, 2007 $86,687,500
--------------------------------------------------------------
March 31, 2008 $86,687,500
--------------------------------------------------------------
June 30, 2008 $86,687,500
--------------------------------------------------------------
; provided that the scheduled installments of principal of the Tranche B Term
Loans set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the Tranche B Term Loans in accordance with subsection
2.4B(iv); and provided, further, that the Tranche B Term Loans and all other
amounts owed hereunder with respect to the Tranche B Term Loans shall be paid in
full no later than June 30, 2008 and the final installment payable by Borrowers
in respect of the Tranche B Term Loans on such date shall be in an amount, if
such amount is different from that specified above, sufficient to repay all
amounts owing by Borrowers under this Agreement with respect to the Tranche B
Term Loans.
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B. Prepayments and Reductions in Revolving Loan Commitments.
(i) Voluntary Prepayments. Either Borrower may, upon written or
telephonic notice to Administrative Agent on or prior to 12:00 Noon (New York
City time) on the date of prepayment, which notice, if telephonic, shall be
promptly confirmed in writing, at any time and from time to time prepay any
Swing Line Loan on any Business Day in whole or in part in an aggregate minimum
amount of $100,000 and integral multiples of $100,000 in excess of that amount.
Either Borrower may, upon written or telephonic notice on the date of
prepayment, in the case of Base Rate Loans, and three Business Days' prior
written or telephonic notice, in the case of Eurodollar Rate Loans, in each case
given to Administrative Agent by 12:00 Noon (New York City time) on the date
required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (which original written or telephonic notice to
Administrative Agent will promptly transmit by telefacsimile or telephone to
each Lender), at any time and from time to time prepay any Tranche B Term Loans
or Revolving Loans on any Business Day in whole or in part in an aggregate
minimum amount of $500,000 and integral multiples of $100,000 in excess of that
amount. Notice of prepayment having been given as aforesaid, the principal
amount of the Loans specified in such notice shall become due and payable on the
prepayment date specified therein. Any such voluntary prepayment shall be
applied as specified in subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments. Either
Borrower may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to Administrative Agent (which original
written or telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time to time
terminate in whole or permanently reduce in part, without premium or penalty,
the Revolving Loan Commitments in an amount up to the amount by which the
Revolving Loan Commitments exceed the Total Utilization of Revolving Loan
Commitments at the time of such proposed termination or reduction; provided that
any such partial reduction of the Revolving Loan Commitments shall be in an
aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in
excess of that amount. The applicable Borrower's notice to Administrative Agent
shall designate the date (which shall be a Business Day) of such termination or
reduction and the amount of any partial reduction, and such termination or
reduction of the Revolving Loan Commitments shall be effective on the date
specified in such Borrower's notice and shall reduce the Revolving Loan
Commitment of each Lender proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments and Mandatory Reductions of Revolving Loan
Commitments. The Loans shall be prepaid and/or the Revolving Loan Commitments
shall be permanently reduced in the amounts and under the circumstances set
forth below, all such prepayments and/or reductions to be applied as set forth
below or as more specifically provided in subsection 2.4B(iv).
(a) Prepayments and Reductions From Net Asset Sale Proceeds. No later
than the fifth Business Day following the date of receipt by Holdings or
any of its Subsidiaries of any Net Asset Sale Proceeds in respect of any
Asset Sale, Borrowers shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate amount equal to
such Net Asset Sale Proceeds; provided, however, that upon
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receipt by Holdings or any of its Subsidiaries of any such Net Asset Sales
Proceeds, so long as no Event of Default shall have occurred and be
continuing, and to the extent that the aggregate amount of Net Asset Sale
Proceeds and Net Insurance/Condemnation Proceeds from the Closing Date
through the date of determination does not exceed $75,000,000, Company may
deliver to Administrative Agent an Officers' Certificate setting forth (1)
that portion of such Net Asset Sale Proceeds (such portion being the
"Proposed Asset Sale Reinvestment Proceeds") that Company or any of its
Subsidiaries intends to reinvest (or enter into a contract to reinvest) in
equipment or other productive assets of the general type used in the
business (including capital stock of a corporation engaged in such
business) of Company and its Subsidiaries (such equipment and other assets
being "Eligible Assets") within 360 days of such date of receipt and (2)
the proposed use of such Proposed Asset Sale Reinvestment Proceeds and such
other information with respect to such reinvestment as Administrative Agent
may reasonably request, and Company shall, or shall cause one or more of
its Subsidiaries to, promptly apply such Proposed Asset Sale Reinvestment
Proceeds to such reinvestment purposes; provided, however, that at
Borrowers' option and pending such application, such Proposed Asset Sale
Reinvestment Proceeds may be applied to prepay outstanding Revolving Loans
(without a reduction in Revolving Loan Commitments) to the full extent
thereof. In addition, Borrowers shall, no later than 360 days after receipt
of such Proposed Asset Sale Reinvestment Proceeds that have not theretofore
been applied to the Obligations, make an additional prepayment of the Loans
(and/or the Revolving Loan Commitments shall be reduced) in the full amount
of all such Proposed Asset Sale Reinvestment Proceeds that have not
theretofore been so reinvested in Eligible Assets. Notwithstanding the
foregoing provisions of this subsection 2.4B(iii)(a), so long as no Event
of Default shall have occurred and be continuing, no mandatory prepayment
of Loans or mandatory reduction of Revolving Loan Commitments shall be
required pursuant to this subsection 2.4B(iii)(a) until each date on which
the sum of the Net Asset Sale Proceeds plus Net Insurance/Condemnation
Proceeds received during the period commencing on the later of (x) the
Closing Date and (y) the immediately preceding date on which a mandatory
repayment or commitment reduction was made pursuant to this subsection
2.4B(iii)(a) or subsection 2.4B(iii)(b) as a result of the receipt of Net
Asset Sale Proceeds and/or Net Insurance/Condemnation Proceeds not
reinvested as provided above or pursuant to subsection 6.4C, as applicable,
and ending on the date of determination (the "Net Asset Sale/Net Insurance
Proceeds Payment Period"), equals or exceeds $7,500,000. If Company is
required to apply any portion of Net Asset Sale Proceeds to prepay
Indebtedness evidenced by the Senior Subordinated Notes (under the terms of
the Senior Subordinated Note Indenture) or Permitted Additional
Subordinated Indebtedness (under the terms of the indenture governing the
same), then notwithstanding anything contained in this Agreement to the
contrary, Borrowers shall apply such Net Asset Sale Proceeds to the
prepayment of Tranche B Term Loans, if any, then to the prepayment of
Revolving Loans and/or the reduction of Revolving Loan Commitments, in each
case so as to eliminate or minimize any obligation to prepay any such
Indebtedness evidenced by the Senior Subordinated Notes and/or Permitted
Additional Subordinated Indebtedness, as the case may be.
(b) Prepayments and Reductions from Net Insurance/Condemnation
Proceeds. No later than the fifth Business Day following the date of
receipt by Administrative
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Agent or by Holdings or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds that are required to be applied to prepay
the Loans and/or reduce the Revolving Loan Commitments pursuant to the
provisions of subsection 6.4C, Borrowers shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an aggregate
amount equal to the amount of such Net Insurance/Condemnation Proceeds
minus (if (1) no Event of Default shall have occurred and be continuing and
(2) Holdings shall have delivered to Administrative Agent, on or before
such fifth Business Day, the Officers' Certificate described in subsection
6.4C(ii)), any Proposed Insurance Reinvestment Proceeds; provided, however,
that at Borrowers' option and pending such application, such Proposed
Insurance Reinvestment Proceeds may be applied to prepay outstanding
Revolving Loans (without a reduction in Revolving Loan Commitments) to the
full extent thereof. In addition, no later than 360 days after receipt of
any Proposed Insurance Reinvestment Proceeds, Borrowers shall prepay the
Loans and/or the Revolving Loan Commitments shall be permanently reduced in
an amount equal to the amount of any such Proposed Insurance Reinvestment
Proceeds that have not theretofore been applied to the costs of repairing,
restoring or replacing the applicable assets of Holdings or its
Subsidiaries or reinvested in Eligible Assets. Notwithstanding the
foregoing provisions of this subsection 2.4B(iii)(b), so long as no Event
of Default shall have occurred and be continuing, no mandatory prepayment
of Loans or mandatory reduction of Revolving Loan Commitments shall be
required pursuant to this subsection 2.4B(iii)(b) until each date on which
the sum of the Net Asset Sale Proceeds plus Net Insurance/Condemnation
Proceeds received during the Net Asset Sale/Net Insurance Proceeds Period
not reinvested pursuant to subsection 2.4B(iii)(a) or 6.4C, as applicable,
equals or exceeds $7,500,000.
(c) Prepayments and Reductions Due to Issuance of Debt. On the date of
receipt by Holdings or any of its Subsidiaries of the Cash proceeds of any
Indebtedness, including debt Securities of Holdings or any of its
Subsidiaries (other than the Loans and any other Indebtedness permitted
under subsection 7.1 (other than Indebtedness permitted under the basket in
subsection 7.1(xiv), to the extent that the aggregate principal amount of
such Indebtedness exceeds 110% of the aggregate outstanding principal
amount of the Senior Subordinated Notes then being refinanced with the
proceeds of such Indebtedness) (such proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses, being
the "Net Indebtedness Proceeds")), Borrowers shall prepay the Loans and/or
the Revolving Loan Commitments shall be permanently reduced in an aggregate
amount equal to such Net Indebtedness Proceeds; provided, however, that
payment or acceptance of the amounts provided for in this subsection
2.4B(iii)(c) shall not constitute a waiver of any Event of Default
resulting from the incurrence of such Indebtedness or otherwise prejudice
any rights or remedies of Agents or Lenders.
(d) Prepayments and Reductions from Adjusted Consolidated Excess Cash
Flow. In the event that there shall be Adjusted Consolidated Excess Cash
Flow for any Fiscal Year (commencing with Fiscal Year 2002), Borrowers
shall, no later than 90 days after the end of such Fiscal Year, prepay the
Loans and/or the Revolving Loan Commitments shall be permanently reduced in
an aggregate amount equal to 50% (or, if the Leverage Ratio is not more
than 2.75 to 1.0 on the last day of any such Fiscal Year as
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set forth in the Compliance Certificate delivered pursuant to subsection
6.1(iii) in respect of such Fiscal Year, 25%) of such Adjusted Consolidated
Excess Cash Flow.
(e) Calculations of Net Proceeds Amounts; Additional Prepayments and
Reductions Based on Subsequent Calculations. Concurrently with any
prepayment of the Loans and/or reduction of the Revolving Loan Commitments
pursuant to subsections 2.4B(iii)(a)-(d), Company shall deliver to
Administrative Agent an Officers' Certificate demonstrating the calculation
of the amount (the "Net Proceeds Amount") of the applicable Net Asset Sale
Proceeds, Net Insurance/Condemnation Proceeds, Net Indebtedness Proceeds or
the applicable Adjusted Consolidated Excess Cash Flow, as the case may be,
that gave rise to such prepayment and/or reduction. In the event that
Company shall subsequently determine that the actual Net Proceeds Amount
was greater than the amount set forth in such Officers' Certificate,
Borrowers shall promptly make an additional prepayment of the Loans
(and/or, if applicable, the Revolving Loan Commitments shall be permanently
reduced) in an amount equal to the amount of such excess, and Company shall
concurrently therewith deliver to Administrative Agent an Officers'
Certificate demonstrating the derivation of the additional Net Proceeds
Amount resulting in such excess.
(f) Prepayments Due to Reductions or Restrictions of Revolving Loan
Commitments. Borrowers shall from time to time prepay, first, the Swing
Line Loans and, second, the Revolving Loans to the extent necessary so that
the Total Utilization of Revolving Loan Commitments shall not at any time
exceed the Revolving Loan Commitments then in effect.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of Loans and Order of
Maturity. Any voluntary prepayments pursuant to subsection 2.4B(i) shall be
applied as specified by the applicable Borrower in the applicable notice of
prepayment; provided that in the event such Borrower fails to specify the
Loans to which any such prepayment shall be applied, such prepayment shall
be applied first to repay outstanding Swing Line Loans to the full extent
thereof, second to repay outstanding Revolving Loans to the full extent
thereof, and third to repay outstanding Tranche B Term Loans to the full
extent thereof. Any voluntary prepayments of the Tranche B Term Loans
pursuant to subsection 2.4B(i) shall be applied to reduce the scheduled
installments of principal of such Tranche B Term Loans set forth in
subsection 2.4A on a pro rata basis.
(b) Application of Mandatory Prepayments by Type of Loans. Any amount
(the "Applied Amount") required to be applied as a mandatory prepayment of
the Loans and/or a reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(d) shall be applied first, to prepay the Tranche
B Term Loans to the full extent thereof, second, to the extent of any
remaining portion of the Applied Amount, to prepay the Swing Line Loans to
the full extent thereof and to permanently reduce the Revolving Loan
Commitments by the amount of such prepayment, third, to the extent of any
remaining portion of the Applied Amount, to prepay the Revolving Loans to
the full extent thereof and to further permanently reduce the Revolving
Loan Commitments by
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the amount of such prepayment, and fourth, to the extent of any remaining
portion of the Applied Amount, to further permanently reduce the Revolving
Loan Commitments to the full extent thereof. Any mandatory prepayments of
the Tranche B Term Loans pursuant to subsection 2.4B(iii) shall be applied
on a pro rata basis to each scheduled installment of principal of the
Tranche B Term Loans as set forth in subsection 2.4A that is unpaid at the
time of such prepayment.
(c) Application of Prepayments to Base Rate Loans and Eurodollar Rate
Loans. Considering Tranche B Term Loans and Revolving Loans being prepaid
separately, any prepayment thereof shall be applied first to Base Rate
Loans to the full extent thereof before application to Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of any payments
required to be made by Borrowers pursuant to subsection 2.6D.
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by a Borrower of
principal, interest, fees and other Obligations hereunder and under the Notes
shall be made in Dollars in same day funds, without defense, setoff or
counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 1:00 P.M. (New York City time) on the date
due at the Funding and Payment Office for the account of Lenders; funds received
by Administrative Agent after that time on such due date shall be deemed to have
been paid by the applicable Borrower on the next succeeding Business Day. Each
Borrower hereby authorizes Administrative Agent to charge its account with
Administrative Agent in order to cause timely payment to be made to
Administrative Agent of all principal, interest, fees and expenses due hereunder
(subject to sufficient funds being available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except as
provided in subsection 2.2C, all payments in respect of the principal amount of
any Loan shall include payment of accrued interest on the principal amount being
repaid or prepaid, and all such payments (and, in any event, any payments in
respect of any Loan on a date when interest is due and payable with respect to
such Loan) shall be applied to the payment of interest before application to
principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments in respect of Tranche B Term Loans and Revolving Loans shall be
apportioned among all outstanding Loans to which such payments relate, in each
case proportionately to Lenders' respective Pro Rata Shares. Administrative
Agent shall promptly distribute to each Lender, at its primary address set forth
below its name on the appropriate signature page hereof or at such other address
as such Lender may request, its Pro Rata Share of all such payments received by
Administrative Agent and the commitment fees of such Lender when received by
Administrative Agent pursuant to subsection 2.3. Notwithstanding the foregoing
provisions of this subsection 2.4C(iii), if, pursuant to the provisions of
subsection 2.6C, any Notice of Conversion/Continuation is withdrawn as to any
Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its
Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give
effect thereto in apportioning payments received thereafter.
-57-
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest hereunder
or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing of
any Note held by it, or any part thereof (other than by granting participations
therein), that Lender will make a notation thereon of all Loans evidenced by
that Note and all principal payments previously made thereon and of the date to
which interest thereon has been paid; provided that the failure to make (or any
error in the making of) a notation of any Loan made under such Note shall not
limit or otherwise affect the obligations of Borrowers hereunder or under such
Note with respect to any Loan or any payments of principal or interest on such
Note.
D. Application of Proceeds of Collateral and Payments Under Guaranties.
(i) Application of Proceeds of Collateral. Except as provided in
subsections 2.4B(iii)(a) and 2.4B(iii)(b) with respect to prepayments from Net
Asset Sale Proceeds and Net Insurance/Condemnation Proceeds, all proceeds
received by Administrative Agent or Collateral Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
under any Collateral Document may, in the discretion of Administrative Agent or
Collateral Agent, as the case may be, be held by Administrative Agent or
Collateral Agent, as the case may be, as Collateral for, and/or (then or at any
time thereafter) applied in full or in part by Administrative Agent or
Collateral Agent, as the case may be, against, the applicable Obligations (as
defined in such Collateral Document) as provided in the respective Collateral
Documents.
(ii) Application of Payments Under Guaranties. All payments received by
Administrative Agent under either Guaranty shall be applied promptly from time
to time by Administrative Agent in the following order of priority:
(a) To the payment of the costs and expenses of any collection or
other realization under such Guaranty, including all expenses, liabilities
and advances made or incurred by Administrative Agent and its agents and
counsel in connection therewith, all in accordance with the terms of this
Agreement and such Guaranty;
(b) thereafter, to the extent of any excess such payments, to the
payment of all other Guarantied Obligations (as defined in such Guaranty)
for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such payments, to the
payment to Holdings or the applicable Subsidiary Guarantor or to whomsoever
may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
2.5 Use of Proceeds.
A. Tranche B Term Loans and Revolving Loans. The Tranche B Term Loans
and Revolving Loans incurred on the Closing Date (except those incurred on such
date for working capital purposes as permitted by subsection 2.5B) shall be
applied by Holdings and its
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Subsidiaries, as applicable, to fund the Refinancing and to pay fees and
expenses (not to exceed $6,000,000) incurred in connection therewith.
B. Revolving Loans and Swing Line Loans. Revolving Loans and Swing
Line Loans may be incurred on and after the Closing Date and shall be used by
Borrowers for working capital and general corporate purposes of Borrowers and
their Subsidiaries.
C. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by Holdings or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination
Date, Administrative Agent shall determine (which determination shall,
absent manifest error, be final, conclusive and binding upon all parties)
the interest rate that shall apply to the Eurodollar Rate Loans for which
an interest rate is then being determined for the applicable Interest
Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to Borrowers and each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest
Rate Determination Date with respect to any Eurodollar Rate Loans, that by
reason of circumstances affecting the interbank Eurodollar market adequate
and fair means do not exist for ascertaining the interest rate applicable
to such Loans on the basis provided for in the definition of Adjusted
Eurodollar Rate, Administrative Agent shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to each Borrower and
each Lender of such determination, whereupon (i) no Loans may be made as,
or converted to, Eurodollar Rate Loans until such time as Administrative
Agent notifies Borrowers and Lenders that the circumstances giving rise to
such notice no longer exist and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Borrowers with respect to the Loans in
respect of which such determination was made shall be deemed to be
rescinded by Borrowers.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the
event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties
hereto but shall be made only after consultation with Borrowers and
Administrative Agent) that the making, maintaining or continuation
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of its Eurodollar Rate Loans (i) has become unlawful as a result of
compliance by such Lender in good faith with any law, treaty, governmental
rule, regulation, guideline or order (or would conflict with any such
treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after the date of
this Agreement which materially and adversely affect the interbank
Eurodollar market or the position of such Lender in that market, then, and
in any such event, such Lender shall be an "Affected Lender" and it shall
on that day give notice (by telefacsimile or by telephone confirmed in
writing) to Borrowers and Administrative Agent of such determination (which
notice Administrative Agent shall promptly transmit to each other Lender).
Thereafter (a) the obligation of the Affected Lender to make Loans as, or
to convert Loans to, Eurodollar Rate Loans shall be suspended until such
notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Borrowers pursuant to a Notice of Borrowing or a Notice
of Conversion/ Continuation, the Affected Lender shall make such Loan as
(or convert such Loan to, as the case may be) a Base Rate Loan, (c) the
Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "Affected Loans") shall be terminated at the earlier to occur of
the expiration of the Interest Period then in effect with respect to the
Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan then being
requested by Borrowers pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Borrowers shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or
Notice of Conversion/Continuation as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to Administrative Agent
of such rescission on the date on which the Affected Lender gives notice of
its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except
as provided in the immediately preceding sentence, nothing in this
subsection 2.6C shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Loans as, or to convert Loans to,
Eurodollar Rate Loans in accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Borrowers joint and severally agree to compensate each Lender, promptly
upon written request by that Lender (which request shall set forth the
basis for requesting such amounts), for all reasonable losses, expenses and
liabilities (including any interest paid by that Lender to lenders of funds
borrowed by it to make or carry its Eurodollar Rate Loans and any loss,
expense or liability sustained by that Lender in connection with the
liquidation or re-employment of such funds but excluding loss of
anticipated profits with respect to any Loans) which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) a
borrowing of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Borrowing or a telephonic request for borrowing, or
a conversion to or continuation of any Eurodollar Rate Loan does not occur
on a date specified therefor in a Notice of Conversion/Continuation or a
telephonic request for conversion or continuation, (ii) if any prepayment
(including any prepayment pursuant to
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subsection 2.4B(i)) or other principal payment or any conversion of any of
its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Loan or (iii) if any prepayment of any
of its Eurodollar Rate Loans is not made on any date specified in a notice
of prepayment given by either Borrower.
E. Booking of Eurodollar Rate Loans. Subject to its obligations under
subsection 2.8, any Lender may make, carry or transfer Eurodollar Rate
Loans at, to, or for the account of any of its branch offices or the office
of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this subsection 2.6
and under subsection 2.7A shall be made as though that Lender had actually
funded each of its relevant Eurodollar Rate Loans through the purchase of a
Eurodollar deposit bearing interest at the rate obtained pursuant to clause
(i) of the definition of Adjusted Eurodollar Rate in an amount equal to the
amount of such Eurodollar Rate Loan and having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar
deposit from an offshore office of that Lender to a domestic office of that
Lender in the United States of America; provided, however, that each Lender
may fund each of its Eurodollar Rate Loans in any manner it sees fit and
the foregoing assumptions shall be utilized only for the purposes of
calculating amounts payable under this subsection 2.6 and under subsection
2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and
during the continuation of an Event of Default, unless the Requisite
Lenders otherwise consent, (i) Borrowers may not elect to have a Loan be
made or maintained as, or converted to, a Eurodollar Rate Loan after the
expiration of any Interest Period then in effect for that Loan and (ii)
subject to the provisions of subsection 2.6D, any Notice of Borrowing or
Notice of Conversion/Continuation given by Borrowers with respect to a
requested borrowing or continuation of, or a conversion into, a Eurodollar
Rate Loan that has not yet occurred shall be deemed to be rescinded by
Borrowers.
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its
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applicable lending office) of principal, interest, fees or any other amount
payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by or any other
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Borrowers jointly and severally agree
to pay promptly to such Lender, upon receipt of the statement referred to in the
next sentence, such additional amount or amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender in its sole discretion shall determine) as may be necessary to compensate
such Lender for any such increased cost or reduction in amounts received or
receivable hereunder; provided that notwithstanding anything to the contrary
contained in this subsection 2.7A, unless a Lender gives notice to the
respective Borrower that is obligated to pay an amount under this subsection
within six months after the later of (x) the date such Lender incurs such
increased cost or suffers such reduction in amounts received or receivable or
(y) the date such Lender has actual knowledge of the respective increased cost
or reduction in amounts received or receivable, then such Lender shall only be
entitled to be compensated for such amount by Borrowers pursuant to this
subsection 2.7A to the extent of the increased cost or reduction in amounts
received or receivable that is incurred or suffered, as the case may be, on or
after the date which occurs six months prior to such Lender giving notice to
such Borrower that is obligated to pay the respective amounts pursuant to this
subsection 2.7A. Such Lender shall deliver to Borrowers (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender under this
subsection 2.7A, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Borrowers
under this Agreement and the other Loan Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of a Borrower or by any federation or organization of which the United
States of America or any such jurisdiction is a member at the time of payment.
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(ii) Grossing-up of Payments. If a Borrower or any other Person is
required by law to make any deduction or withholding on account of any such Tax
from any sum paid or payable by such Borrower to Administrative Agent or any
Lender under any of the Loan Documents:
(a) such Borrower shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as such Borrower
becomes aware of it;
(b) such Borrower shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to pay
is imposed on such Borrower) for its own account or (if that liability is
imposed on Administrative Agent or such Lender, as the case may be) on
behalf of and in the name of Administrative Agent or such Lender;
(c) the sum payable by such Borrower in respect of which the
relevant deduction, withholding or payment is required shall be increased
to the extent necessary to ensure that, after the making of that deduction,
withholding or payment, Administrative Agent or such Lender, as the case
may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or
made; and
(d) within 30 days after paying any sum from which it is required by
law to make any deduction or withholding, and within 30 days after the due
date of payment of any Tax which it is required by clause (b) above to pay,
such Borrower shall deliver to Administrative Agent evidence satisfactory
to the other affected parties of such deduction, withholding or payment and
of the remittance thereof to the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to any
Lender under clause (c) above to the extent that such deduction,
withholding or payment as is mentioned therein shall result in an increase
in the rate of such deduction, withholding or payment from that in effect
at the date of this Agreement or at the date of such Assignment Agreement,
as the case may be, in respect of payments to such Lender of any Tax which
would not have been imposed but for such Lender's failure to provide a form
or certificate required to be provided by subsection 2.7B(iii). Borrowers
jointly and severally agree to indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of any Taxes
so levied or imposed and paid by such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any jurisdiction
other than the United States or any state or other political subdivision
thereof (for purposes of this subsection 2.7B(iii), a "Non-US Lender") or
that is otherwise a non-U.S. person as defined in Section 7701(a)(30) of
the Internal Revenue Code shall deliver to Administrative Agent for
transmission to Borrowers , on or prior to the Closing Date (in the case of
each Lender listed on the signature pages hereof) or on or prior to the
date of
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the Assignment Agreement pursuant to which it becomes a Lender (in the case
of each other Lender), and at such other times as may be necessary in the
determination of a Borrower or Administrative Agent (each in the reasonable
exercise of its discretion), (1) two original copies of Internal Revenue
Service Form W-8ECI or W-8BEN (with respect to a complete exemption under
an income tax treaty) (or any successor forms), properly completed and duly
executed by such Lender, together with any other certificate or statement
of exemption required under the Internal Revenue Code or the regulations
issued thereunder to establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to any
payments to such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents or (2) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the Internal
Revenue Code and cannot deliver either Internal Revenue Service Form W-8ECI
or W-8BEN (with respect to a complete exemption under an income tax treaty)
pursuant to clause (1) above, a Certificate re Non-Bank Status together
with two original copies of Internal Revenue Service Form W-8 BEN (with
respect to the portfolio interest exception) (or any successor form),
properly completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder to establish certifying
that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such Lender of
interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or other
evidence with respect to United States federal income tax withholding
matters pursuant to subsection 2.7B(iii)(a) hereby agrees, from time to
time after the initial delivery by such Lender of such forms, certificates
or other evidence, whenever a lapse in time or change in circumstances or
change in law renders such forms, certificates or other evidence obsolete
or inaccurate in any material respect, that such Lender shall promptly (1)
deliver to Administrative Agent for transmission to Borrowers two new
original copies of Internal Revenue Service Form W-8ECI or W-8BEN (with
respect to a complete exemption under an income tax treaty) (or any
successor forms), or a Certificate re Non-Bank Status and two original
copies of Internal Revenue Service Form W-8 BEN (with respect to the
portfolio interest exception (or any such successor form), as the case may
be, properly completed and duly executed by such Lender, in order to
confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States federal income tax with
respect to payments to such Lender under the Loan Documents or (2) notify
Administrative Agent and Borrowers of its inability to deliver any such
forms or certificates in which case such Lender shall not be required to
deliver any such form or certificate re Non-Bank Status pursuant to this
section 2.7B.
(c) Borrowers shall not be required to pay any additional amount to
any Non-US Lender under clause (c) of subsection 2.7B(ii) with respect to a
payment required to be made pursuant to the Loan Documents if such Lender
shall have failed to satisfy the requirements of clause (a) or (b) of this
subsection 2.7B(iii) with respect to such payment; provided that if such
Lender shall have satisfied the requirements of subsection 2.7B(iii)(a) on
the Closing Date (in the case of each Lender listed on the signature pages
hereof) or on the date of the Assignment Agreement pursuant to which it
became a
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Lender (in the case of each other Lender), nothing in this subsection
2.7B(iii)(c) shall relieve Borrowers of their obligations to pay any
additional amounts pursuant to clause (c) of subsection 2.7B(ii) in the
event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence
at a subsequent date establishing the fact that such Lender is not subject
to withholding as described in subsection 2.7B(iii)(a).
(d) If a Borrower pays any additional amount under clause (c) of
subsection 2.7B(ii) to a Lender and such Lender determines in its sole
discretion that it has actually received or realized in connection
therewith any refund or any reduction of, or credit against, its Taxes in
or with respect to the taxable year in which the additional amount is paid,
such Lender shall pay to such Borrower an amount that such Lender shall, in
its sole discretion, determine is equal to the net benefit, after tax,
which was obtained by such Lender in such year as a consequence of such
refund, reduction or credit.
C. Capital Adequacy Adjustment. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or 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 applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Borrowers
from such Lender of the statement referred to in the next sentence, Borrowers
jointly and severally agree to pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction; provided that notwithstanding anything to
the contrary contained above in this subsection 2.7C, unless a Lender gives
notice to the respective Borrower that it is obligated to pay an amount under
this subsection within six months after the later of (x) the date such Lender
suffers the respective reduction in return on capital or (y) the date such
Lender has actual knowledge of the respective reduction in return on capital,
then such Lender shall only be entitled to be compensated for such amount by
Borrowers pursuant to this subsection 2.7C to the extent of the reduction in
return on capital that is suffered on or after the date which occurs six months
prior to such Lender giving notice to such Borrower that it is obligated to pay
the respective amounts pursuant to this subsection 2.7C. Such Lender shall
deliver to Borrowers (with a copy to Administrative Agent) a written statement,
setting forth in reasonable detail the basis of the calculation of such
additional amounts, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
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2.8 Obligation of Lenders and Issuing Lenders to Mitigate.
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Borrowers jointly
and severally agree to pay all incremental expenses incurred by such Lender or
Issuing Lender as a result of utilizing such other lending or letter of credit
office as described in clause (i) above. A certificate as to the amount of any
such expenses payable by Borrowers pursuant to this subsection 2.8 (setting
forth in reasonable detail the basis for requesting such amount) submitted by
such Lender or Issuing Lender to Borrowers (with a copy to Administrative Agent)
shall be conclusive absent manifest error.
2.9 Defaulting Lenders.
Anything contained herein to the contrary notwithstanding, in the
event that any Lender (a "Defaulting Lender") defaults (a "Funding Default") in
its obligation to fund any Revolving Loan (a "Defaulted Revolving Loan") in
accordance with subsection 2.1, then (i) during any Default Period (as defined
below) with respect to such Defaulting Lender, such Defaulting Lender shall be
deemed not to be a "Lender" for purposes of voting on any matters (including the
granting of any consents or waivers) with respect to any of the Loan Documents
(except such matters as require the written consent of each Lender pursuant to
subsection 10.6), (ii) to the extent permitted by applicable law, until such
time as the Default Excess (as defined below) with respect to such Defaulting
Lender shall have been reduced to zero, (a) any voluntary prepayment of the
Revolving Loans pursuant to subsection 2.4B(i) shall, if the applicable Borrower
making such prepayment so directs at the time of making such voluntary
prepayment, be applied to the Revolving Loans of other Lenders as if such
Defaulting Lender had no Revolving Loans outstanding and the Revolving Loan
Exposure of such Defaulting Lender were zero, and (b) any mandatory prepayment
of the Revolving Loans pursuant to subsection 2.4B(iii) shall, if the applicable
Borrower making such prepayment so directs at the time of making such mandatory
prepayment, be applied to the Revolving Loans of other Lenders (but not to the
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Revolving Loans of such Defaulting Lender) as if such Defaulting Lender had
funded all Defaulted Revolving Loans of such Defaulting Lender, it being
understood and agreed that a Borrower shall be entitled to retain any portion of
any mandatory prepayment of the Revolving Loans that is not paid to such
Defaulting Lender solely as a result of the operation of the provisions of this
clause (b), (iii) such Defaulting Lender's Revolving Loan Commitment and
outstanding Revolving Loans and such Defaulting Lender's Pro Rata Share of the
Letter of Credit Usage shall be excluded for purposes of calculating the
commitment fee payable to Lenders pursuant to subsection 2.3A in respect of any
day during any Default Period with respect to such Defaulting Lender, and such
Defaulting Lender shall not be entitled to receive any commitment fee pursuant
to subsection 2.3A with respect to such Defaulting Lender's Revolving Loan
Commitment in respect of any Default Period with respect to such Defaulting
Lender, and (iv) the Total Utilization of Revolving Loan Commitments as at any
date of determination shall be calculated as if such Defaulting Lender had
funded all Defaulted Revolving Loans of such Defaulting Lender.
For purposes of this Agreement, (I) "Default Period" means, with
respect to any Defaulting Lender, the period commencing on the date of the
applicable Funding Default and ending on the earliest of the following dates:
(A) the date on which all Revolving Loan Commitments are canceled or terminated
and/or the Obligations are declared or become immediately due and payable, (B)
the date on which (1) the Default Excess with respect to such Defaulting Lender
shall have been reduced to zero (whether by the funding by such Defaulting
Lender of any Defaulted Revolving Loans of such Defaulting Lender or by the
non-pro rata application of any voluntary or mandatory prepayments of the
Revolving Loans in accordance with the terms of this subsection 2.9 or by a
combination thereof) and (2) such Defaulting Lender shall have delivered to
Borrowers and Administrative Agent a written reaffirmation of its intention to
honor its obligations under this Agreement with respect to its Revolving Loan
Commitment, and (C) the date on which Borrowers, Administrative Agent and
Requisite Lenders waive all Funding Defaults of such Defaulting Lender in
writing, and (II) "Default Excess" means, with respect to any Defaulting Lender,
the excess, if any, of such Defaulting Lender's Pro Rata Share of the aggregate
outstanding principal amount of Revolving Loans of all Lenders (calculated as if
all Defaulting Lenders (other than such Defaulting Lender) had funded all of
their respective Defaulted Revolving Loans) over the aggregate outstanding
principal amount of Revolving Loans of such Defaulting Lender.
No Commitment of any Lender shall be increased or otherwise affected,
and, except as otherwise expressly provided in this subsection 2.9, performance
by Borrowers of their respective obligations under this Agreement and the other
Loan Documents shall not be excused or otherwise modified, as a result of any
Funding Default or the operation of this subsection 2.9. The rights and remedies
against a Defaulting Lender under this subsection 2.9 are in addition to other
rights and remedies which Borrowers may have against such Defaulting Lender with
respect to any Funding Default and which Administrative Agent or any Lender may
have against such Defaulting Lender with respect to any Funding Default.
2.10 Removal or Replacement of a Lender.
A. Anything contained in this Agreement to the contrary
notwithstanding, in the event that:
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(i) (a) any Lender (an "Increased-Cost Lender") shall give
notice to Borrowers that such Lender is an Affected Lender or that such
Lender is entitled to receive payments under subsection 2.7 or subsection
3.6, (b) the circumstances which have caused such Lender to be an
Affected Lender or which entitle such Lender to receive such payments
shall remain in effect, and (c) such Lender shall fail to withdraw such
notice within five Business Days after Borrowers' request for such
withdrawal; or
(ii) (a) any Lender shall become a Defaulting Lender, (b) the
Default Period for such Defaulting Lender shall remain in effect, and (c)
such Defaulting Lender shall fail to cure the default as a result of
which it has become a Defaulting Lender within five Business Days after
Borrowers' request that it cure such default; or
(iii) (a) in connection with any proposed amendment,
modification, termination, waiver or consent with respect to any of the
provisions of this Agreement as contemplated by clauses (i) through (v)
of the first proviso to subsection 10.6B, the consent of Requisite
Lenders shall have been obtained but the consent of one or more of such
other Lenders (each, a "Non-Consenting Lender") whose consent is required
shall not have been obtained, and (b) the failure to obtain
Non-Consenting Lenders' consents does not result solely from the exercise
of Non-Consenting Lenders' rights (and the withholding of any required
consents by Non-Consenting Lenders) pursuant to the second proviso to
subsection 10.6B;
then, and in each such case, Borrowers shall have the right, at their option, to
remove or replace the applicable Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the "Terminated Lender") to the extent permitted by
subsection 2.10B.
B. Borrowers may, by giving written notice to Administrative Agent
and any Terminated Lender of their election to do so:
(i) elect to (a) terminate the Revolving Loan Commitment, if
any, of such Terminated Lender upon receipt by such Terminated Lender of
such notice and (b) prepay on the date of such termination any
outstanding Loans made by such Terminated Lender, together with accrued
and unpaid interest thereon and any other amounts payable to such
Terminated Lender hereunder pursuant to subsection 2.3, subsection 2.6,
subsection 2.7 or subsection 3.6 or otherwise; provided that, in the
event such Terminated Lender has any Loans outstanding at the time of
such termination, the written consent of Administrative Agent and
Requisite Lenders (which consent shall not be unreasonably withheld or
delayed) shall be required in order for Borrowers to make the election
set forth in this clause (i); or
(ii) elect to cause such Terminated Lender (and such Terminated
Lender hereby irrevocably agrees) to assign its outstanding Loans and its
Revolving Loan Commitment, if any, in full to one or more Eligible
Assignees (each, a "Replacement Lender") in accordance with the
provisions of subsection 10.1B; provided that (a) on the date of such
assignment, the relevant Borrower or Borrowers shall pay any amounts
payable to such Terminated Lender pursuant to subsection 2.3, subsection
2.6, subsection 2.7 or subsection 3.6 or otherwise as if it were a
prepayment and (b) in the event such
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Terminated Lender is a Non-Consenting Lender, each Replacement Lender
shall consent, at the time of such assignment, to each matter in respect
of which such Terminated Lender was a Non-Consenting Lender;
provided that (X) Borrowers may not make either of the elections set forth in
clauses (i) or (ii) above with respect to any Non-Consenting Lender unless
Borrowers also make one of such elections with respect to each other Terminated
Lender which is a Non-Consenting Lender and (Y) Borrowers may not make either of
such elections with respect to any Terminated Lender that is an Issuing Lender
unless, prior to the effectiveness of such election, the relevant Borrower or
Borrowers shall have caused each outstanding Letter of Credit issued by such
Issuing Lender to be canceled.
C. Upon the prepayment of all amounts owing to any Terminated
Lender and the termination of such Terminated Lender's Revolving Loan
Commitment, if any, pursuant to clause (i) of subsection 2.10B, (i) Schedule 2.1
shall be deemed modified to reflect any corresponding changes in the Revolving
Loan Commitments and (ii) such Terminated Lender shall no longer constitute a
"Lender" for purposes of this Agreement; provided that any rights of such
Terminated Lender to indemnification under this Agreement (including under
subsections 2.6D, 2.7, 3.6, 10.2 and 10.3) shall survive as to such Terminated
Lender.
SECTION 3.
LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein.
A. Letters of Credit. In addition to Borrowers requesting that
Lenders make Revolving Loans pursuant to subsection 2.1A(ii) and that Swing Line
Lender make Swing Line Loans pursuant to subsection 2.1A(iii), Borrowers may
request, in accordance with the provisions of this subsection 3.1, from time to
time during the period from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date, that one or more Lenders issue Letters of Credit
for the joint and several account of Borrowers for the purposes specified in the
definitions of Commercial Letters of Credit and Standby Letters of Credit;
provided that all such Commercial Letters of Credit shall provide for sight
drawings. Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of Borrowers herein set forth, any one
or more Lenders may, but (except as provided in subsection 3.1B(ii)) shall not
be obligated to, issue such Letters of Credit in accordance with the provisions
of this subsection 3.1; provided that Borrowers shall not request that any
Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $60,000,000;
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(iii) any Standby Letter of Credit having an expiration date
later than the earlier of (a) five Business Days prior to the Revolving
Loan Commitment Termination Date and (b) the date which is one year from
the date of issuance of such Standby Letter of Credit; provided that the
immediately preceding clause (b) shall not prevent any Issuing Lender
from agreeing that a Standby Letter of Credit will automatically be
extended for one or more successive periods not to exceed one year each
unless such Issuing Lender elects not to extend for any such additional
period; and provided, further that such Issuing Lender shall elect not to
extend such Standby Letter of Credit if it has knowledge that an Event of
Default has occurred and is continuing (and has not been waived in
accordance with subsection 10.6) at the time such Issuing Lender must
elect whether or not to allow such extension; provided, however, that
notwithstanding clause (a) but subject to the other restrictions of this
subsection, Borrowers may request the issuance (on a date prior to five
Business Days prior to the Revolving Loan Commitment Termination Date) of
a Standby Letter of Credit having an expiration date later than five
Business Days prior to the Revolving Loan Commitment Termination Date if
Borrowers, at the time of such request, make arrangements in form and
substance satisfactory to Issuing Lender thereof to cash collateralize
such Letter of Credit, provided that Issuing Lender shall be under no
obligation to issue such a Letter of Credit if it shall reasonably
determine that such cash collateralization arrangements could reasonably
be expected to be less favorable to Issuing Lender than the reimbursement
arrangements hereunder with respect to other Letters of Credit; or
(iv) any Commercial Letter of Credit having an expiration date
(a) later than the earlier of (X) the date which is 30 days prior to the
Revolving Loan Commitment Termination Date and (Y) the date which is 180
days from the date of issuance (on a date prior to 30 days prior to the
Revolving Loan Commitment Termination Date) of such Commercial Letter of
Credit or (b) that is otherwise unacceptable to the applicable Issuing
Lender in its reasonable discretion; provided, however, that
notwithstanding clause (X) but subject to the other restrictions of this
subsection, Borrowers may request the issuance (on a date prior to 30
days prior to the Revolving Loan Commitment Termination Date) of a
Commercial Letter of Credit having an expiration date later than the time
set forth in clause (X) if Borrowers, at the time of such request, make
arrangements in form and substance satisfactory to Issuing Lender thereof
to cash collateralize such Letter of Credit, provided that Issuing Lender
shall be under no obligation to issue such a Letter of Credit if it shall
reasonably determine that such cash collateralization arrangements could
reasonably be expected to be less favorable to Issuing Lender than the
reimbursement arrangements hereunder with respect to other Letters of
Credit.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Borrowers desire the issuance
of a Letter of Credit, they shall deliver to Administrative Agent a
Notice of Issuance of Letter of Credit substantially in the form of
Exhibit VI annexed hereto no later than 11:00 A.M. (New York City time)
at least three Business Days (in the case of Standby Letters of Credit)
or five Business Days (in the case of Commercial Letters of Credit), or
in each case such shorter period as may be agreed to by the applicable
Issuing Lender in any
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particular instance, in advance of the proposed date of issuance. The
Notice of Issuance of Letter of Credit shall specify (a) the proposed
date of issuance (which shall be a Business Day), (b) whether the Letter
of Credit is to be a Standby Letter of Credit or a Commercial Letter of
Credit, (c) the face amount of the Letter of Credit, (d) the expiration
date of the Letter of Credit, (e) the name and address of the
beneficiary, and (f) either the verbatim text of the proposed Letter of
Credit or the proposed terms and conditions thereof, including a precise
description of any documents to be presented by the beneficiary which, if
presented by the beneficiary prior to the expiration date of the Letter
of Credit, would require Issuing Lender to make payment under the Letter
of Credit; provided that the applicable Issuing Lender, in its reasonable
discretion, may require changes in the text of the proposed Letter of
Credit or any such documents; and provided, further that no Letter of
Credit shall require payment against a conforming draft to be made
thereunder on the same business day (under the laws of the jurisdiction
in which the office of Issuing Lender to which such draft is required to
be presented is located) that such draft is presented if such
presentation is made after 10:00 A.M. (in the time zone of such office of
Issuing Lender) on such business day.
Borrowers shall notify the applicable Issuing Lender (and Administrative
Agent, if Administrative Agent is not such Issuing Lender) prior to the
issuance of any Letter of Credit in the event that any of the matters to
which Borrowers are required to certify in the applicable Notice of
Issuance of Letter of Credit is no longer true and correct as of the
proposed date of issuance of such Letter of Credit, and upon the issuance
of any Letter of Credit Borrowers shall be deemed to have re-certified,
as of the date of such issuance, as to the matters to which Borrowers are
required to certify in the applicable Notice of Issuance of Letter of
Credit.
(ii) Determination of Issuing Lender. Upon receipt by
Administrative Agent of a Notice of Issuance of Letter of Credit pursuant
to subsection 3.1B(i) requesting the issuance of a Letter of Credit, in
the event Administrative Agent elects to issue such Letter of Credit,
Administrative Agent shall promptly so notify Borrowers, and
Administrative Agent shall be Issuing Lender with respect thereto. In the
event that Administrative Agent, in its sole discretion, elects not to
issue such Letter of Credit, Administrative Agent shall promptly so
notify Borrowers, whereupon Borrowers may request any other Lender to
issue such Letter of Credit by delivering to such Lender a copy of the
applicable Notice of Issuance of Letter of Credit. Any Lender so
requested to issue such Letter of Credit shall promptly notify Borrowers
and Administrative Agent whether or not, in its sole discretion, it has
elected to issue such Letter of Credit, and any such Lender which so
elects to issue such Letter of Credit shall be Issuing Lender with
respect thereto. In the event that all other Lenders shall have declined
to issue such Letter of Credit, notwithstanding the prior election of
Administrative Agent not to issue such Letter of Credit, Administrative
Agent shall be obligated to issue such Letter of Credit and shall be
Issuing Lender with respect thereto, notwithstanding the fact that the
Letter of Credit Usage with respect to such Letter of Credit and with
respect to all other Letters of Credit issued by Administrative Agent,
when aggregated with Administrative Agent's outstanding Revolving Loans
and Swing Line Loans, may exceed Administrative Agent's Revolving Loan
Commitment then in effect.
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(iii) Issuance of Letter of Credit. Upon satisfaction or waiver
(in accordance with subsection 10.6) of the conditions set forth in
subsection 4.3, the applicable Issuing Lender shall issue the requested
Letter of Credit in accordance with such Issuing Lender's standard
operating procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter of
Credit the applicable Issuing Lender shall promptly notify Administrative
Agent and each other Lender of such issuance, which notice shall be
accompanied by a copy of such Letter of Credit. Promptly after receipt of
such notice (or, if Administrative Agent is Issuing Lender, together with
such notice), Administrative Agent shall notify each Lender of the amount
of such Lender's respective participation in such Letter of Credit,
determined in accordance with subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of each
calendar quarter ending after the Closing Date, so long as any Letter of
Credit shall have been outstanding during such calendar quarter, each
Issuing Lender shall deliver to each other Lender a report setting forth
for such calendar quarter the daily aggregate amount available to be
drawn under the Letters of Credit issued by such Issuing Lender that were
outstanding during such calendar quarter.
C. Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender having a
Revolving Loan Commitment shall be deemed to, and hereby agrees to, have
irrevocably purchased from the respective Issuing Lender a participation in such
Letter of Credit and any drawings honored thereunder in an amount equal to such
Lender's Pro Rata Share (with respect to the Revolving Loan Commitments) of the
maximum amount which is or at any time may become available to be drawn
thereunder. On the Revolving Loan Commitment Termination Date, each Issuing
Lender shall be deemed to, and hereby agrees to, irrevocably repurchase from
each Lender such Lender's participation in the Letters of Credit issued by such
Issuing Lender pursuant to the last proviso to subsection 3.1A(iii) or the last
proviso to subsection 3.1A(iv) to the extent any such Letter of Credit remains
outstanding and any amounts remain undrawn thereunder.
D. Existing Letters of Credit. Schedule 3.1D hereto contains a
description of all letters of credit issued pursuant to the Existing Credit
Agreement and outstanding on the Closing Date. Each such letter of credit,
including any extension or renewal thereof (each, as amended from time to time
in accordance with the terms hereof and thereof, an "Existing Letter of Credit")
shall constitute a "Letter of Credit" for all purposes of this Agreement,
issued, for purposes of subsection 3.1, on the Closing Date. In addition, each
letter of credit designated as a "Standby Letter of Credit" or "Commercial
Letter of Credit" on Schedule 3.1D shall constitute a "Standby Letter of Credit"
or "Commercial Letter of Credit", as the case may be, for all purposes of this
Agreement. Notwithstanding anything to the contrary contained above in this
subsection 3.1, any Lender hereunder to the extent it has issued an Existing
Letter of Credit shall constitute the "Issuing Lender" with respect to such
Letter of Credit for all purposes of this Agreement.
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3.2 Letter of Credit Fees.
Borrowers jointly and severally agree to pay the following amounts
with respect to Letters of Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its
own account, equal to 1/4 of 1% per annum of the daily amount available
to be drawn under such Standby Letter of Credit and (b) a letter of
credit fee, payable to Administrative Agent for the account of Lenders
having Revolving Loan Exposure, equal to the product of (x) the
Applicable Eurodollar Rate Margin for Revolving Loans then in effect and
(y) the daily amount available to be drawn under such Standby Letter of
Credit, each such fronting fee or letter of credit fee to be payable
quarterly in arrears on each Quarterly Payment Date and upon the first
day on or after the Revolving Loan Commitment Termination Date upon which
no Letters of Credit remain outstanding and be computed on the basis of a
360-day year for the actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its
own account, equal to 1/4 of 1 % per annum of the daily amount available
to be drawn under such Commercial Letter of Credit and (b) a letter of
credit fee, payable to Administrative Agent for the account of Lenders
having Revolving Loan Exposure, equal to the product of (x) the
Applicable Eurodollar Rate Margin for Revolving Loans then in effect and
(y) the daily amount available to be drawn under such Commercial Letter
of Credit, each such fronting fee or letter of credit fee to be payable
quarterly in arrears on each Quarterly Payment Date and upon the first
day on or after the Revolving Loan Commitment Termination Date upon which
no Letters of Credit remain outstanding and be computed on the basis of a
360-day year for the actual number of days elapsed; and
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clauses (i) and (ii) above),
documentary and processing charges payable directly to the applicable
Issuing Lender for its own account in accordance with such Issuing
Lender's standard schedule for such charges in effect at the time of such
issuance, amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clauses (i) and
(ii) of this subsection 3.2, the daily amount available to be drawn under any
Letter of Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by Administrative Agent of any amount
described in clause (i)(b) or (ii)(b) of this subsection 3.2, Administrative
Agent shall distribute to each Lender its Pro Rata Share (with respect to its
Revolving Loan Commitment) of such amount.
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of
Credit.
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, Issuing
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Lender issuing such Letter of Credit shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. Reimbursement by Borrowers of Amounts Paid Under Letters of
Credit. In the event an Issuing Lender has determined to honor a drawing under a
Letter of Credit issued by it, such Issuing Lender shall immediately notify
Borrowers and Administrative Agent, and Borrowers shall reimburse, on a joint
and several basis, such Issuing Lender on or before the Business Day immediately
following the date on which such drawing is honored (the "Reimbursement Date")
in an amount in Dollars and in same day funds equal to the amount of such
honored drawing; provided that, anything contained in this Agreement to the
contrary notwithstanding, (i) unless Borrowers shall have notified
Administrative Agent and such Issuing Lender prior to 11:00 A.M. (New York City
time) on the date such drawing is honored that Borrowers intend to reimburse
such Issuing Lender for the amount of such honored drawing with funds other than
the proceeds of Revolving Loans, Borrowers shall be deemed to have given a
timely Notice of Borrowing to Administrative Agent requesting Lenders to make
Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount
in Dollars equal to the amount of such honored drawing and (ii) subject to
satisfaction or waiver of the conditions specified in subsection 4.2B, Lenders
shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans
in the amount of such honored drawing, the proceeds of which shall be applied
directly by Administrative Agent to reimburse such Issuing Lender for the amount
of such honored drawing; and provided, further that if for any reason proceeds
of Revolving Loans are not received by such Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such honored drawing, Borrowers shall
reimburse, on a joint and several basis, such Issuing Lender, on demand, in an
amount in same day funds equal to the excess of the amount of such honored
drawing over the aggregate amount of proceeds of such Revolving Loans, if any,
which are so received. Nothing in this subsection 3.3B shall be deemed to
relieve any Lender from its obligation to make Revolving Loans on the terms and
conditions set forth in this Agreement, and Borrowers shall retain any and all
rights they may have against any Lender resulting from the failure of such
Lender to make such Revolving Loans under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters
of Credit.
(i) Payment by Lenders. In the event that Borrowers shall fail
for any reason to reimburse any Issuing Lender as provided in subsection
3.3B in an amount equal to the amount of any drawing honored by such
Issuing Lender under a Letter of Credit issued by it, such Issuing Lender
shall promptly notify each other Lender of the unreimbursed amount of
such honored drawing and of such other Lender's respective participation
therein based on such Lender's Pro Rata Share of the Revolving Loan
Commitments. Each Lender shall make available to such Issuing Lender an
amount equal to its respective participation, in Dollars and in same day
funds, at the office of such Issuing Lender specified in such notice, not
later than 12:00 Noon (New York City time) on the first business day
(under the laws of the jurisdiction in which such office of such Issuing
Lender is located) after the date notified by such Issuing Lender. In the
event that any Lender fails to make available to such Issuing Lender on
such business day the amount of such Lender's participation in such
Letter of Credit as provided in this subsection 3.3C,
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such Issuing Lender shall be entitled to recover such amount on demand
from such Lender together with interest thereon at the rate customarily
used by such Issuing Lender for the correction of errors among banks for
three Business Days and thereafter at the Base Rate. Nothing in this
subsection 3.3 shall be deemed to prejudice the right of any Lender to
recover from any Issuing Lender any amounts made available by such Lender
to such Issuing Lender pursuant to this subsection 3.3 in the event that
it is determined by the final judgment of a court of competent
jurisdiction that the payment with respect to a Letter of Credit by such
Issuing Lender in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part of such
Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
Borrowers. In the event any Issuing Lender shall have been reimbursed by
other Lenders pursuant to subsection 3.3C(i) for all or any portion of
any drawing honored by such Issuing Lender under a Letter of Credit
issued by it, such Issuing Lender shall distribute to each other Lender
which has paid all amounts payable by it under subsection 3.3C(i) with
respect to such honored drawing such other Lender's Pro Rata Share of all
payments subsequently received by such Issuing Lender from Borrowers in
reimbursement of such honored drawing when such payments are received.
Any such distribution shall be made to a Lender at its primary address
set forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Borrowers. Borrowers jointly and
severally agree to pay to each Issuing Lender, with respect to drawings
honored under any Letters of Credit issued by it, interest on the amount
paid by such Issuing Lender in respect of each such honored drawing from
the date such drawing is honored to but excluding the date such amount is
reimbursed by Borrowers (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate equal
to (a) for the period from the date such drawing is honored to but
excluding the Reimbursement Date, the Base Rate plus the Applicable Base
Rate Margin for Revolving Loans then in effect and (b) thereafter, a rate
which is 2% per annum in excess of the rate of interest otherwise payable
under this Agreement with respect to Revolving Loans that are Base Rate
Loans. Interest payable pursuant to this subsection 3.3D(i) shall be
computed on the basis of a 365-day or 366 day year, as the case may be,
for the actual number of days elapsed in the period during which it
accrues and shall be payable on demand or, if no demand is made, on the
date on which the related drawing under a Letter of Credit is reimbursed
in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing honored under a
Letter of Credit issued by it, (a) such Issuing Lender shall distribute
to each other Lender, out of the interest received by such Issuing Lender
in respect of the period from the date such drawing is honored to but
excluding the date on which such Issuing Lender is reimbursed for the
amount of such drawing (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B), the amount that
such other Lender would have been entitled to receive
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in respect of the letter of credit fee that would have been payable in
respect of such Letter of Credit for such period pursuant to subsection
3.2 if no drawing had been honored under such Letter of Credit, and (b)
in the event such Issuing Lender shall have been reimbursed by other
Lenders pursuant to subsection 3.3C(i) for all or any portion of such
honored drawing, such Issuing Lender shall distribute to each other
Lender which has paid all amounts payable by it under subsection 3.3C(i)
with respect to such honored drawing such other Lender's Pro Rata Share
of any interest received by such Issuing Lender in respect of that
portion of such honored drawing so reimbursed by other Lenders for the
period from the date on which such Issuing Lender was so reimbursed by
other Lenders to but excluding the date on which such portion of such
honored drawing is reimbursed by Borrowers. Any such distribution shall
be made to a Lender at its primary address set forth below its name on
the appropriate signature page hereof or at such other address as such
Lender may request.
3.4 Obligations Absolute.
The joint and several obligation of Borrowers to reimburse each
Issuing Lender for drawings honored under the Letters of Credit issued by it and
to repay any Revolving Loans made by Lenders pursuant to subsection 3.3B and the
obligations of Lenders under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other right
which either Borrower or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for
whom any such transferee may be acting), any Issuing Lender or other
Lender or any other Person or, in the case of a Lender, against either
Borrower, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between Holdings or one of its Subsidiaries and
the beneficiary for which any Letter of Credit was procured);
(iii) any draft or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Holdings or
any of its Subsidiaries;
(v) any breach of this Agreement or any other Loan Document by
any party thereto;
(vi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing; or
(vii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
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provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted bad faith, gross
negligence or willful misconduct of such Issuing Lender under the circumstances
in question.
3.5 Indemnification; Nature of Issuing Lenders' Duties.
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Borrowers hereby jointly and severally agree to protect,
indemnify, pay and save harmless each Issuing Lender from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable fees, expenses and disbursements of counsel and allocated
costs of internal counsel) which such Issuing Lender may incur or be subject to
as a consequence, direct or indirect, of (i) the issuance of any Letter of
Credit by such Issuing Lender, other than as a result of (a) the bad faith,
gross negligence or willful misconduct of such Issuing Lender or (b) subject to
the following clause (ii), the wrongful dishonor by such Issuing Lender of a
proper demand for payment made under any Letter of Credit issued by it or (ii)
the failure of such Issuing Lender to honor a drawing under any such Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority (all
such acts or omissions herein called "Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Borrowers and any
Issuing Lender, Borrowers assume all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) so long as such Issuing Lender
complies with its responsibilities under subsection 3.3A, failure of the
beneficiary of any such Letter of Credit to comply fully with any conditions
required in order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Borrowers.
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Notwithstanding anything to the contrary contained in this
subsection 3.5, each Borrower shall retain any and all rights it may have
against any Issuing Lender for any liability arising out of the bad faith, gross
negligence or willful misconduct of such Issuing Lender.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by any
Issuing Lender or Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than any
Tax on the overall net income of such Issuing Lender or Lender) with
respect to the issuing or maintaining of any Letters of Credit or the
purchasing or maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such being
imposed on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement in respect of any Letters of Credit issued by any Issuing
Lender or Participations therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter of credit office) regarding this Section 3
or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Borrowers jointly and severally agree to pay
promptly to such Issuing Lender or Lender, upon receipt of the statement
referred to in the next sentence, such additional amount or amounts as may be
necessary to compensate such Issuing Lender or Lender for any such increased
cost or reduction in amounts received or receivable hereunder. Such Issuing
Lender or Lender shall deliver to Borrowers a written statement, setting forth
in reasonable detail the basis for calculating the additional amounts owed to
such Issuing Lender or Lender under this subsection 3.6, which statement shall
be conclusive and binding upon all parties hereto absent manifest error.
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SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of
Letters of Credit hereunder are subject to the satisfaction of the
following conditions.
4.1 Conditions To Tranche B Term Loans and Revolving Loans on
the Closing Date.
The obligations of Lenders to make the Tranche B Term Loans and
any Revolving Loans to be made on the Closing Date are, in addition to
the conditions precedent specified in subsection 4.2, subject to prior or
concurrent satisfaction of the following conditions:
A. Loan Party Documents. On or before the Closing Date, Holdings
shall, and shall cause each other Loan Party to, deliver to Lenders (or to
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following with respect
to Holdings or such Loan Party, as the case may be, each, unless otherwise
noted, dated the Closing Date:
(i) Certified copies of the Certificate or Articles of
Incorporation of such Person, together with a good standing certificate
from the Secretary of State of its jurisdiction of incorporation and each
other state in which such Person is qualified as a foreign corporation to
do business (except any such other state or states in which the failure
to be qualified could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect (provided that no such
state shall be a state in which Closing Date Mortgaged Property of the
applicable Loan Party is located)) and, to the extent generally
available, a certificate or other evidence of good standing as to payment
of any applicable franchise or similar taxes from the appropriate taxing
authority of each of such jurisdictions, each dated a recent date prior
to the Closing Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Closing Date by such Person's corporate secretary or an assistant
secretary;
(iii) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and performance of the
Loan Documents and Related Agreements to which it is a party, certified
as of the Closing Date by the corporate secretary or an assistant
secretary of such Person as being in full force and effect without
modification or amendment;
(iv) Signature and incumbency certificates of the officers of
such Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which such
Person is a party; and
(vi) Such other documents as Arranger or Administrative Agent
may reasonably request.
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B. No Material Adverse Effect. Since December 30, 2001, nothing
shall have occurred (and neither Agents nor Lenders shall have become aware of
any facts or conditions not previously known, whether as a result of their due
diligence investigations or otherwise) which Agents or Requisite Lenders shall
determine (i) has had, or would reasonably be expected to have a material
adverse effect on the rights or remedies of Lenders or Agents, or on the legal
ability of any Loan Party to perform its obligations to them hereunder or under
any other Loan Document or (ii) has had, or would reasonably be expected to
have, a Material Adverse Effect.
C. Corporate, Capital Structure and Ownership. The corporate
organizational structure of Holdings and its Subsidiaries shall be as set forth
on Schedule 4.1C annexed hereto.
D. Proceeds of Debt. Holdings shall have provided evidence
reasonably satisfactory to Arranger and Administrative Agent that the proceeds
of the Loans incurred on the Closing Date shall have been used to (i) repay in
full all outstanding Indebtedness under the Existing Credit Agreement and (ii)
pay related transaction fees and expenses incurred by Holdings and its
Subsidiaries in connection with this Credit Agreement.
E. Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, or Arranger and its counsel
shall be reasonably satisfactory in form and substance to Administrative Agent
and Arranger and such counsel, and Administrative Agent, Arranger and such
counsel shall have received all such counterpart originals or certified copies
of such documents as Administrative Agent or Arranger may reasonably request.
F. Matters Relating to Existing Indebtedness of Holdings and its
Subsidiaries.
(i) Termination of Existing Credit Agreement and Related Liens;
Existing Letters of Credit. On the Closing Date, Holdings and its
Subsidiaries shall have (a) repaid in full all Indebtedness outstanding
under the Existing Credit Agreement, (b) terminated any commitments to
lend or make other extensions of credit thereunder, (c) delivered to
Arranger and Administrative Agent all documents or instruments necessary
to release all Liens securing Indebtedness or other obligations of
Holdings and its Subsidiaries thereunder (including termination of the
Minnesota Note (as defined in the Existing Credit Agreement)) and (d)
caused any Existing Letters of Credit outstanding thereunder to be
incorporated hereunder as Letters of Credit pursuant to subsection 3.1D.
(ii) No Existing Indebtedness to Remain Outstanding. Arranger
and Administrative Agent shall have received an Officers' Certificate of
Holdings stating that, after giving effect to the transactions described
in this subsection 4.1F, Holdings and its Subsidiaries shall have no
Indebtedness outstanding to any Persons other than (w) Indebtedness under
the Loan Documents, (x) the Senior Subordinated Notes, (y) Indebtedness
among the Loan Parties and (z) Indebtedness set forth on Schedule
7.1(vii) annexed hereto.
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G. Necessary Governmental Authorizations and Consents; Expiration
of Waiting Periods, Etc. Holdings and its Subsidiaries shall have obtained all
Governmental Authorizations and all consents of other Persons, in each case that
are necessary in connection with the Refinancing and the other transactions
contemplated by the Loan Documents and the Related Agreements, and the continued
operation of the business conducted by Holdings and its Subsidiaries in
substantially the same manner as conducted prior to the consummation of the
Refinancing, and each of the foregoing shall be in full force and effect, in
each case other than those the failure to obtain or maintain which, either
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect. All applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose adverse conditions on the
Refinancing. No action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be
pending, and the time for any applicable agency to take action to set aside its
consent on its own motion shall have expired.
H. Consummation of Refinancing.
(i) All conditions to the Refinancing shall have been satisfied
pursuant to documentation reasonably satisfactory to Arranger and
Administrative Agent or the fulfillment of such conditions shall have
been waived with the consent of Arranger and Administrative Agent (such
consent not to be unreasonably withheld); and
(ii) Arranger and Administrative Agent shall have received an
Officers' Certificate of Holdings to the effect set forth in clause (i)
above and stating that Holdings and Borrowers will proceed to consummate
the Refinancing immediately upon the making of the initial Tranche B Term
Loans and Revolving Loans.
I. Closing Date Mortgages; Closing Date Mortgage Policies; Etc.
Agents shall have received from Holdings, each Borrower and each
Subsidiary Guarantor, as applicable:
(i) Closing Date Mortgages. Fully executed and notarized
Mortgages (each a "Closing Date Mortgage" and, collectively, the "Closing
Date Mortgages"), in proper form for recording in all appropriate places
in all applicable jurisdictions, encumbering each Real Property Asset
listed in Schedule 4.1I annexed hereto (each, a "Closing Date Mortgaged
Property" and, collectively, the "Closing Date Mortgaged Properties");
(ii) Opinions of Local Counsel. An opinion of counsel (which
counsel shall be reasonably satisfactory to Arranger and Administrative
Agent) in each state in which a Closing Date Mortgaged Property is
located with respect to the enforceability of the form(s) of Closing Date
Mortgages to be recorded in such state and such other matters as Arranger
and Administrative Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Arranger and Administrative Agent;
provided, however, that Arranger and Administrative Agent may determine
in their reasonable discretion that an opinion of counsel in any one or
more of such states shall not be required hereunder;
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(iii) Landlord Consents and Estoppels; Recorded Leasehold
Interests. In the case of each Closing Date Mortgaged Property consisting
of a Leasehold Property, (a) a Landlord Consent and Estoppel with respect
thereto and (b) evidence that such Leasehold Property is a Recorded
Leasehold Interest;
(iv) Title Insurance. (a) ALTA mortgagee title insurance
policies or unconditional commitments therefor (the "Closing Date
Mortgage Policies") issued by the Title Company with respect to the
Closing Date Mortgaged Properties listed in Part A of Schedule 4.1I
annexed hereto, in amounts not less than the respective amounts
designated therein with respect to any particular Closing Date Mortgaged
Properties, insuring fee simple title to, or a valid leasehold interest
in, each such Closing Date Mortgaged Property vested in such Loan Party
and assuring Administrative Agent that the applicable Closing Date
Mortgages create valid and enforceable First Priority mortgage Liens on
the respective Closing Date Mortgaged Properties encumbered thereby,
which Closing Date Mortgage Policies (1) shall include an endorsement for
mechanics' liens, for future advances (in each case, if available) under
this Agreement and for any other matters reasonably requested by Arranger
or Administrative Agent and (2) shall provide for affirmative insurance
and such reinsurance as Administrative Agent may reasonably request, all
of the foregoing in form and substance reasonably satisfactory to
Arranger and Administrative Agent; and (b) evidence reasonably
satisfactory to Arranger and Administrative Agent that such Loan Party
has (i) delivered to the Title Company all certificates and affidavits
required by the Title Company in connection with the issuance of the
Closing Date Mortgage Policies and (ii) paid to the Title Company or to
the appropriate governmental authorities all expenses and premiums of the
Title Company in connection with the issuance of the Closing Date
Mortgage Policies and all recording and stamp taxes (including mortgage
recording and intangible taxes) payable in connection with recording the
Closing Date Mortgages in the appropriate real estate records;
(v) Copies of Documents Relating to Title Exceptions. Copies of
all recorded documents listed as exceptions to title or otherwise
referred to in the Closing Date Mortgage Policies or in the title reports
delivered pursuant to subsection 4.1I(iv); and
(vi) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a surveyor's note on a survey or a report
from a flood hazard search firm or a letter from an insurance broker or a
municipal engineer, as to whether (1) any Closing Date Mortgaged Property
is a Flood Hazard Property and (2) the community in which any such Flood
Hazard Property is located is participating in the National Flood
Insurance Program, (b) if there are any such Flood Hazard Properties,
such Loan Party's written acknowledgment of receipt of written
notification from Administrative Agent (1) as to the existence of each
such Flood Hazard Property and (2) as to whether the community in which
each such Flood Hazard Property is located is participating in the
National Flood Insurance Program, and (c) in the event any such Flood
Hazard Property is located in a community that participates in the
National Flood Insurance Program, evidence that Holdings and/or Borrowers
have obtained flood insurance in respect of such Flood Hazard Property to
the extent required under the applicable regulations of the Board of
Governors of the Federal Reserve System.
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J. Security Interests in Personal and Mixed Property. To the extent
not otherwise satisfied pursuant to subsection 4.1I, each of Arranger and
Administrative Agent shall have received evidence satisfactory to it that
Holdings, Borrowers and the Guarantors shall have taken or caused to be taken
all such actions, executed and delivered or caused to be executed and delivered
all such agreements, documents and instruments, and made or caused to be made
all such filings and recordings (other than the filing or recording of items
described in clauses (iii), (iv) and (v) below) that may be necessary or, in the
reasonable opinion of Arranger and Administrative Agent, desirable in order to
create in favor of Collateral Agent, for the benefit of Secured Creditors, a
valid and (upon such filing and recording) perfected First Priority security
interest in the entire personal and mixed property Collateral. Such actions
shall include the following:
(i) Schedules to Collateral Documents. Delivery to Administrative
Agent of accurate and complete schedules to all of the applicable
Collateral Documents.
(ii) Stock Certificates and Instruments. Delivery to Administrative
Agent of (a) certificates (which certificates shall be accompanied by
irrevocable undated stock or other transfer powers, duly endorsed in blank
and otherwise satisfactory in form and substance to Administrative Agent)
representing all capital stock pledged pursuant to the Pledge Agreement and
(b) all promissory notes or other instruments (duly endorsed, where
appropriate, in a manner satisfactory to Administrative Agent) evidencing
any Pledge Agreement Collateral;
(iii) Lien Searches and UCC Termination Statements. Delivery to
Arranger and Administrative Agent of (a) the results of a recent search, by
a Person reasonably satisfactory to Arranger and Administrative Agent, of
all effective UCC financing statements and fixture filings and all judgment
and tax lien filings which may have been made with respect to any personal
or mixed property of any Loan Party, together with copies of all such
filings disclosed by such search, and (b) UCC termination statements duly
executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC financing
statements or fixture filings disclosed in such search (other than any such
financing statements or fixture filings in respect of Liens permitted to
remain outstanding pursuant to the terms of this Agreement).
(iv) UCC Financing Statements and Fixture Filings. Delivery to
Administrative Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Loan Party with respect
to all personal and mixed property Collateral of such Loan Party, for
filing in all jurisdictions as may be necessary or, in the opinion of
Arranger and Administrative Agent, desirable to perfect the security
interests created in such Collateral pursuant to the Collateral Documents;
and
(v) PTO Cover Sheets, Etc. Delivery to Administrative Agent of all
cover sheets or other documents or instruments required to be recorded with
the PTO in order to create or perfect Liens in respect of any U.S. patents,
federally registered trademarks or copyrights, or applications for any of
the foregoing, included among the IP Collateral.
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K. Financial Statements; Pro Forma Balance Sheet. On or before the
Closing Date, Lenders shall have received from Holdings (i) audited consolidated
balance sheets of Holdings and its Subsidiaries for Fiscal Years 2000 and 2001
and the related audited consolidated statements of income, stockholders' equity
and cash flows of Holdings and its Subsidiaries for each such foregoing Fiscal
Year, and (ii) unaudited consolidated financial statements of Holdings and its
Subsidiaries for the three-month period ended March 24, 2002, consisting of a
consolidated balance sheet and the related consolidated statement of income,
stockholders' equity and cash flows for such period, all in reasonable detail
and certified by the principal financial officer or principal accounting officer
of Holdings that they fairly present, in all material respects, the financial
condition of Holdings and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments and the
absence of footnotes.
L. Financial Projections. Lenders shall have received financial
projections reasonably satisfactory in form and substance to Agents and Lenders
for Holdings and its Subsidiaries for the period from the Closing Date through
December 31, 2008.
M. Solvency Certificate. On the Closing Date, Arranger, Administrative
Agent and Lenders shall have received a Financial Condition Certificate dated
the Closing Date, substantially in the form of Exhibit XIV annexed hereto (with
such changes thereto as shall be approved by Administrative Agent and Arranger
in the exercise of their reasonable discretion) and with appropriate
attachments, in each case demonstrating that, after giving effect to the
consummation of the Refinancing and the other transactions contemplated by the
Loan Documents, Holdings and its Subsidiaries will be Solvent.
N. Evidence of Insurance. Arranger and Administrative Agent shall have
received a certificate from Holdings' insurance broker or other evidence
satisfactory to it that all insurance required to be maintained pursuant to
subsection 6.4 is in full force and effect and that Administrative Agent on
behalf of Lenders has been named as additional insured and/or loss payee
thereunder to the extent required under subsection 6.4.
O. Opinions of Counsel to Loan Parties. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of Ropes & ▇▇▇▇, counsel for Loan Parties, and of
Miller, Canfield, Paddock & Stone, P.L.C., special Michigan counsel for Loan
Parties, in form and substance reasonably satisfactory to Administrative Agent
and Arranger and its counsel, dated as of the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit XV and Exhibit
XVI annexed hereto, respectively, and as to such other matters as Administrative
Agent or Arranger and acting on behalf of Lenders may reasonably request and
(ii) evidence satisfactory to Administrative Agent and Arranger that Holdings
has requested such counsel to deliver such opinions to Lenders.
P. Fees and Expenses. Borrowers shall have paid to Arranger and
Administrative Agent, for distribution (as appropriate) to Arranger,
Administrative Agent and Lenders, the fees payable on the Closing Date referred
to in subsection 2.3 and all reasonable expenses for which invoices have been
presented on or before the Closing Date.
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Q. Representations and Warranties; Performance of Agreements. Each
Credit Agreement Party shall have delivered to Arranger and Administrative Agent
an Officers' Certificate, in form and substance reasonably satisfactory to
Arranger and Administrative Agent, to the effect that the representations and
warranties in Section 5 hereof are true, correct and complete in all material
respects on and as of the Closing Date to the same extent as though made on and
as of that date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations and warranties
were true, correct and complete in all material respects on and as of such
earlier date) and that Credit Agreement Parties shall have performed in all
material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by them on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by
Arranger, Administrative Agent and Requisite Lenders.
Notwithstanding anything herein to the contrary, it is understood and
agreed that the documents and other items set forth on Schedule 6.12
(Post-Closing Deliveries) annexed hereto shall be delivered after the Closing
Date in accordance with and to the extent required under subsection 6.12.
4.2 Conditions to All Loans.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received on or before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, the principal financial officer, the principal accounting officer or
the treasurer of each Borrower or by any authorized employee of each Borrower
designated by any of the above-described officers on behalf of such Borrower in
a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event of
Default;
(iii) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it on that Funding Date;
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(iv) The making of the Loans requested on such Funding Date shall not
violate any law including Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System; and
(v) There shall not be pending or, to the knowledge of any Credit
Agreement Party, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Holdings or any of its
Subsidiaries or any property of Holdings or any of its Subsidiaries that
has not been disclosed by any Credit Agreement Party in writing pursuant to
subsection 5.6 or 6.1(ix) prior to the making of the last preceding Loans
(or, in the case of the initial Loans, prior to the execution of this
Agreement), and there shall have occurred no development not so disclosed
in any such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the reasonable opinion
of Administrative Agent or of Requisite Lenders, would be expected to have
a Material Adverse Effect; and no injunction or other restraining order
shall have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with respect to
any action, suit or proceeding seeking to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of,
the transactions contemplated by this Agreement or the making of Loans
hereunder.
4.3 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the principal
financial officer, the principal accounting officer or the treasurer of each
Borrower or by any authorized employee of each Borrower designated by any of the
above-described officers on behalf of such Borrower in a writing delivered to
Administrative Agent, together with all other information specified in
subsection 3.1B(i) and such other documents or information as the applicable
Issuing Lender may reasonably require in connection with the issuance of such
Letter of Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
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SECTION 5.
CREDIT AGREEMENT PARTIES' REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce Issuing Lenders to issue Letters of Credit and to induce
other Lenders to purchase participations therein, the Credit Agreement Parties
represent and warrant to each Lender, on the date of this Agreement, on each
Funding Date and on the date of issuance of each Letter of Credit, that the
following statements are true, correct and complete:
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Each Loan Party is a corporation,
partnership or limited liability company organized, validly existing and in good
standing under the laws of its jurisdiction of organization as specified in
Schedule 5.1 annexed hereto. Each Loan Party has all requisite corporate,
partnership or limited liability company power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents and Related Agreements to which it
is a party and to carry out the transactions contemplated thereby.
B. Qualification and Good Standing. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and would not reasonably be expected to have a Material Adverse Effect.
C. Conduct of Business. Holdings and its Subsidiaries are engaged only
in the businesses permitted to be engaged in pursuant to subsection 7.13.
D. Subsidiaries. All of the Subsidiaries of Holdings as of the Closing
Date are identified in Schedule 5.1 annexed hereto. The equity Securities of
each of Holdings' Subsidiaries any portion of the equity Securities of which is
pledged under the Collateral Documents are duly authorized, validly issued,
fully paid and nonassessable and none of such equity Securities constitutes
Margin Stock. Each of the Subsidiaries of Holdings is a corporation, partnership
or limited liability company organized, validly existing and in good standing
under the laws of its respective jurisdiction of organization, has all requisite
corporate, partnership or limited liability company power and authority to own
and operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, in each case except where failure to be
so qualified or in good standing or a lack of such corporate, partnership or
limited liability company power and authority has not had and will not have a
Material Adverse Effect. Schedule 5.1 annexed hereto (as so supplemented)
correctly sets forth, as of the Closing Date, the ownership interest of Holdings
and each of its Subsidiaries in each of the Subsidiaries of Holdings identified
therein.
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5.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance
of the Loan Documents and the Related Agreements have been duly authorized by
all necessary corporate action on the part of each Loan Party that is a party
thereto.
B. No Conflict. The execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not (i) violate any provision of any
law or any governmental rule or regulation applicable to Holdings or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Holdings
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Holdings or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Holdings or any of
its Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Holdings or any of its Subsidiaries
(other than any Liens created under any of the Loan Documents in favor of
Collateral Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of Holdings or any of its Subsidiaries (except for such approvals or
consents which will be obtained on or before the Closing Date and disclosed in
writing to Lenders), except in the case of any violation, conflict, breach,
default, result or requirement pursuant to the foregoing clauses (i) through
(iv) resulting from the execution, delivery and performance of the Related
Agreements, to the extent any such violation, conflict, breach, default, result
or requirement would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
C. Governmental Consents. The execution, delivery and performance by
Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents do not
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority or
regulatory body except to the extent obtained or made and except for those
filings that are required to be made to perfect Liens under the Collateral
Documents. The execution, delivery and performance by Loan Parties of the
Related Agreements to which they are parties and the consummation of the
transactions contemplated by the such Related Agreements do not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body except (i) to the extent obtained or made or (ii) where the failure to
obtain or make any of the foregoing, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect.
D. Binding Obligation. Each of the Loan Documents and Related
Agreements has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
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5.3 Financial Condition.
Holdings has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheets of Holdings and its Subsidiaries for each of Fiscal Years 2000
and 2001 and the related audited consolidated statements of income,
stockholders' equity and cash flows of Holdings and its Subsidiaries for each
such foregoing Fiscal Year and (ii) the unaudited consolidated balance sheet of
Holdings and its Subsidiaries for the three-month period ended March 24, 2002
and the related unaudited consolidated statement of income, stockholders' equity
and cash flows of Holdings and its Subsidiaries for such period. All such
statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position (on a consolidated basis) of the
entities described in such financial statements as at the respective dates
thereof and the results of operations and cash flows (on a consolidated basis)
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments and the absence of footnotes. On the
Closing Date, Holdings and its Subsidiaries do not (and will not following the
funding of the initial Loans) have any Contingent Obligation, contingent
liability or liability for taxes, long-term lease or unusual forward or
long-term commitment required to be reported in connection with GAAP that is not
reflected in the foregoing financial statements for the Fiscal Year 2001 or the
notes thereto and which in any such case is material in relation to the
business, operations, properties, assets or condition (financial or otherwise)
of Holdings or any of its Subsidiaries.
The financial projections delivered to Agents and Lenders pursuant to
subsection 4.1L are based on good-faith estimates and assumptions made by the
management of Holdings, and on the Closing Date such management believe that
said projections were reasonable, it being recognized by Lenders, however, that
projections as to future events are not to be viewed as facts and that the
actual results during the period or periods covered by said projections probably
will differ from the projected results and that the differences may be material.
5.4 No Material Adverse Change.
Since December 31, 2001, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect.
5.5 Title to Properties: Liens; Real Property.
A. Title to Properties; Liens. Holdings and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property), (iii) valid licenses in (in the case of licensed
intangible properties), or (iv) good title to (in the case of all other personal
property), all of their respective material properties and assets reflected in
the most recent financial statements referred to in subsection 5.3 or in the
most recent financial statements delivered pursuant to subsection 6.1, in each
case subject to Permitted Encumbrances and Liens permitted under subsection 7.2
and except for assets disposed of since the date of such financial statements in
the ordinary course of business or as otherwise permitted under subsection 7.7.
Except as otherwise permitted by this Agreement, all such properties and assets
are free and clear of Liens.
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B. Real Property. As of the Closing Date, Schedule 5.5 annexed hereto
contains a true, accurate and complete list of (i) all Real Property Assets
owned in fee simple by any Loan Party, with each such Real Property Asset owned
by the Loan Party specified opposite such Real Property Asset on Schedule 5.5
and (ii) all leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any thereof)
affecting each Real Property Asset of any Loan Party, regardless of whether such
Loan Party is the landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment, except in the
case of clause (i) or (ii), as the case may be, all corporate stores owned in
fee simple by any Loan Party and all leases, subleases and assignments of leases
affecting any corporate store of any Loan Party. As of the Closing Date, except
as specified in Schedule 5.5 annexed hereto, each agreement referenced in clause
(ii) of the immediately preceding sentence is in full force and effect and no
Credit Agreement Party has any knowledge of any default that has occurred and is
continuing thereunder (except where the consequences, direct or indirect, of
such default or defaults, if any, would not reasonably be expected to have a
Material Adverse Effect), and each such agreement constitutes the legally valid
and binding obligation of each applicable Loan Party, enforceable against such
Loan Party in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.
5.6 Litigation; Adverse Facts.
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of any Credit Agreement Party, threatened
against or affecting Holdings or any of its Subsidiaries or any property of
Holdings or any of its Subsidiaries and that, individually or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect. Neither
Holdings nor any of its Subsidiaries (i) is in violation of any applicable laws
(including Environmental Laws) that, individually or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect, or (ii) is
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect.
5.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3, all federal, state
and other material tax returns and reports of Holdings and its Subsidiaries
required to be filed by any of them have been timely filed, and all taxes shown
on such tax returns to be due and payable and all assessments, fees and other
governmental charges upon Holdings and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. No Credit Agreement Party knows
of any written proposed material tax assessment against Holdings or any of its
Subsidiaries which is not being actively contested by Holdings or such
Subsidiary in good faith and by appropriate
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proceedings; provided that such reserves or other appropriate provisions, if
any, as shall be required in conformity with GAAP shall have been made or
provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements.
A. Neither Holdings nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not reasonably be expected to have a
Material Adverse Effect.
B. Neither Holdings nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, compliance with
which would reasonably be expected to result in a Material Adverse Effect.
5.9 Governmental Regulation.
Neither Holdings nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 Securities Activities.
A. Neither Holdings nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than
25% of the value of the assets (either of Holdings only or of Holdings and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 Employee Benefit Plans.
A. Holdings and each of its Subsidiaries are in compliance in all
material respects with all applicable provisions and requirements of ERISA and
the regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed in all material respects all their
obligations under each Employee Benefit Plan. Each Employee Benefit Plan which
is intended to qualify under Section 401(a) of the Internal Revenue Code has
received a determination letter from the Internal Revenue Service to the effect
that it meets the requirements of Sections 401(a) and 501(a) of the Code.
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B. No ERISA Event has occurred or, to the knowledge of Holdings, any
of its Subsidiaries or any of their respective ERISA Affiliates, is reasonably
expected to occur which has or would reasonably be expected to have a Material
Adverse Effect.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code, the aggregate liabilities with respect to health or welfare
benefits (through the purchase of insurance or otherwise) provided or promised
for any retired or former employee of Holdings or any of its Subsidiaries do not
have a Material Adverse Effect.
D. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans, does not exceed
$2,000,000.
E. As of the most recent valuation date for each Multiemployer Plan
for which the actuarial report is available, the potential liability of
Holdings, its Subsidiaries and their respective ERISA Affiliates for a complete
withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of
ERISA), when aggregated with such potential liability for a complete withdrawal
from all Multiemployer Plans, based on information available pursuant to Section
4221(e) of ERISA, does not have a Material Adverse Effect.
5.12 Certain Fees.
Except as set forth on Schedule 5.12 annexed hereto, no broker's or
finder's fee or commission will be payable with respect to this Agreement or any
of the transactions contemplated hereby, and Credit Agreement Parties hereby
indemnify Lenders on a joint and several basis against, and agree that they will
hold Lenders harmless from, any claim, demand or liability for any such broker's
or finder's fees alleged to have been incurred in connection herewith or
therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
5.13 Environmental Protection.
(i) Neither Holdings nor any of its Subsidiaries, nor any of their
respective Facilities or operations is subject to any outstanding (a)
Environmental Claim or (b) written order, consent decree or settlement
agreement with any Person relating to (i) any Environmental Law or (ii) any
Hazardous Materials Activity that, in the case of (a) or (b), individually
or in the aggregate, would reasonably be expected to have a Material
Adverse Effect;
(ii) Neither Holdings nor any of its Subsidiaries has received any
letter or written request for information from any governmental agency
under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. (S)9604) or any comparable state
law with respect to any liability or liabilities that, individually or in
the aggregate, would reasonably be expected to have a Material Adverse
Effect;
(iii) There are no and have been no conditions, occurrences, or
Hazardous Materials Activities which could reasonably be expected to form
the basis of an
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Environmental Claim against Holdings or any of its Subsidiaries that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect;
(iv) Holdings has designated certain executives to monitor and
maintain compliance with Environmental Laws and correct any incidents of
noncompliance;
(v) Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws would not,
individually or in the aggregate, reasonably be expected to give rise to a
Material Adverse Effect; and
(vi) No event or condition has occurred or is occurring with respect
to Holdings or any of its Subsidiaries relating to any Environmental Law,
any Release of Hazardous Materials, or any Hazardous Materials Activity
which individually or in the aggregate has had or would reasonably be
expected to have a Material Adverse Effect.
5.14 Employee Matters.
There is no strike or work stoppage in existence or threatened
involving Holdings or any of its Subsidiaries that would reasonably be expected
to have a Material Adverse Effect.
5.15 Solvency.
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
5.16 Matters Relating to Collateral.
A. Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 4.1I, 4.1J,
6.8 and 6.9B and (ii) the delivery to Collateral Agent of any Pledge Agreement
Collateral not delivered to Collateral Agent at the time of execution and
delivery of the applicable Collateral Document (all of which Pledge Agreement
Collateral has been so delivered to the extent required by the respective
Collateral Documents) are effective to create in favor of Collateral Agent for
the benefit of Secured Creditors, as security for the respective Secured
Obligations (as defined in the applicable Collateral Document in respect of any
Collateral), a valid and perfected First Priority Lien on all of the Collateral,
and all filings and other actions necessary or desirable to perfect and maintain
the perfection and First Priority status of such Liens have been duly made or
taken and remain in full force and effect, other than the filing of any UCC
financing statements delivered to Collateral Agent for filing (but not yet
filed) and the periodic filing of UCC continuation statements in respect of UCC
financing statements filed by or on behalf of Collateral Agent.
B. Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Collateral Agent pursuant to
any of the Collateral Documents or (ii) the exercise by Collateral Agent of any
rights or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable
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law), except for filings or recordings contemplated by subsection 5.16A and
except as may be required, in connection with the disposition of any Pledge
Agreement Collateral, by laws generally affecting the offering and sale of
securities.
C. Absence of Third-Party Filings. Except such as may have been filed
in favor of Collateral Agent as contemplated by subsection 5.16A, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office, except with respect to Permitted Encumbrances and Liens
permitted under subsection 7.2A, and (ii) no effective filing covering all or
any part of the IP Collateral is on file in the PTO.
D. Margin Regulations. The pledge of the Pledge Agreement Collateral
pursuant to the Collateral Documents does not violate Regulation T, U or X of
the Board of Governors of the Federal Reserve System.
E. Legal Names; Type of Organization (and Whether a Registered
Organization); Jurisdiction of Organization; etc. Schedule 5.16 attached hereto
contains the exact legal name of Holdings, the Borrowers and each Subsidiary
Guarantor, the type of organization of Holdings, the Borrowers and each
Subsidiary Guarantor, whether or not Holdings, the Borrowers and each Subsidiary
Guarantor is a registered organization, the jurisdiction of organization of
Holdings, the Borrowers and each Subsidiary Guarantor, and the organizational
identification number (if any) of Holdings, the Borrowers and each Subsidiary
Guarantor. To the extent that Holdings, the Borrowers or any Subsidiary
Guarantor does not have an organizational identification number on the date
hereof and later obtains one, Holdings, the Borrowers or such Subsidiary
Guarantor shall promptly thereafter notify Collateral Agent of such
organizational identification number and shall take all actions reasonably
satisfactory to Collateral Agent to the extent necessary to maintain the
security interest of Collateral Agent in the Collateral intended to be granted
hereby fully perfected and in full force and effect.
F. Information Regarding Collateral. All information supplied to
Administrative Agent or Collateral Agent by or on behalf of any Loan Party with
respect to any of the Collateral (in each case taken as a whole with respect to
any particular Collateral) is accurate and complete in all material respects.
5.17 Related Agreements.
Holdings and/or Borrowers have delivered to Lenders complete and
correct copies of each Related Agreement and of all exhibits and schedules
thereto.
5.18 Disclosure.
All representations and warranties of Holdings or any of its
Subsidiaries and all information contained in the Confidential Information
Memorandum or in any Loan Document or in any other document, certificate or
written statement furnished to Lenders by or on behalf of Holdings or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement, taken as a whole, are true and correct in all material respects and
do not omit to state a material fact (known to any Credit Agreement Party, in
the case of any document not furnished by it) necessary in order to make the
statements contained herein or therein (taken as a
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whole) not misleading in light of the circumstances in which the same were made.
Any projections and pro forma financial information contained in such materials
are based upon good faith estimates and assumptions believed by Holdings and
Borrowers to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There are no facts known (or which should
upon the reasonable exercise of diligence be known) to any Credit Agreement
Party (other than matters of a general economic nature) that, individually or in
the aggregate, would reasonably be expected to result in a Material Adverse
Effect and that have not been disclosed herein or in such other documents,
certificates and statements furnished to Lenders for use in connection with the
transactions contemplated hereby.
5.19 Subordination of Senior Subordinated Notes, Permitted Seller
Notes, Shareholder Subordinated Notes and Permitted Additional
Subordinated Indebtedness.
The subordination provisions of the Senior Subordinated Notes, any
Permitted Seller Notes and Shareholder Subordinated Notes and, on and after the
execution and delivery thereof, each of the agreements or instruments relating
to the Permitted Additional Subordinated Indebtedness, are enforceable against
Holdings, the Borrowers, the respective Subsidiary Guarantors and the holders
thereof, and the Loans and other Obligations hereunder and under the other Loan
Documents (including, without limitation, each Guaranty) are and will be within
the definition of "Senior Indebtedness", "Senior Debt" or "Designated Senior
Debt" (or any similar terms in any of such cases), as applicable, included in
such provisions.
SECTION 6.
CREDIT AGREEMENT PARTIES' AFFIRMATIVE COVENANTS
Credit Agreement Parties covenant and agree that, so long as any of
the Commitments hereunder shall remain in effect and until payment in full of
all of the Loans and other Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen and are not yet due and payable) and the cancellation or expiration of
all Letters of Credit, unless Requisite Lenders shall otherwise give prior
written consent, each Credit Agreement Party shall perform, and shall cause each
of its respective Subsidiaries to perform, all covenants in this Section 6.
6.1 Financial Statements and Other Reports.
Holdings will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Holdings will deliver to Administrative Agent, with
sufficient copies for each Lender (and Administrative Agent will, after receipt
thereof, deliver to each Lender):
(i) Quarterly Financials: as soon as available and in any event
within 45 days after the end of each Accounting Quarter (other than for
the fourth Accounting Quarter in each Fiscal Year), (a) the consolidated
balance sheet of Holdings and its Subsidiaries as
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at the end of such Accounting Quarter and the related consolidated
statements of income, stockholders' equity and cash flows of Holdings and
its Subsidiaries for such Accounting Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Accounting
Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year,
all in reasonable detail and certified by the principal financial officer
or principal accounting officer of Holdings that they fairly present, in
all material respects, the financial condition of Holdings and its
Subsidiaries as at the dates indicated and the results of their operations
and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments and the absence of
footnotes, and (b) a narrative report describing the operations of Holdings
and its Subsidiaries in the form prepared for presentation to senior
management for such Accounting Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Accounting
Quarter, it being understood that (x) the delivery by Holdings of its Form
10-Q as filed with the Securities and Exchange Commission shall satisfy the
requirements of this subsection 6.1(i) and (y) the delivery by Company of
its Form 10-Q as filed with the Securities and Exchange Commission shall
satisfy the requirements of Holdings under (but only under) preceding
clause (b) of this subsection 6.1(i);
(ii) Year-End Financials: as soon as available and in any event within
90 days after the end of each Fiscal Year, (a) the consolidated balance
sheet of Holdings and its Subsidiaries as at the end of such Fiscal Year
and the related consolidated statements of income, stockholders' equity and
cash flows of Holdings and its Subsidiaries for such Fiscal Year, setting
forth in each case in comparative form the corresponding figures for the
previous Fiscal Year and the corresponding figures from the Financial Plan
for the Fiscal Year covered by such financial statements, all in reasonable
detail and certified by the principal financial officer or principal
accounting officer of Holdings that they fairly present, in all material
respects, the financial condition of Holdings and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated, (b) a narrative report describing the
operations of Holdings and its Subsidiaries in the form prepared for
presentation to senior management for such Fiscal Year, and (c) in the case
of such consolidated financial statements, a report thereon of an
Independent Public Accountant, which report shall be unqualified, shall
express no doubts about the ability of Holdings and its Subsidiaries to
continue as a going concern, and shall state that such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of Holdings and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows
for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards, it being understood
that (x) the delivery by Holdings of its Form 10-K as filed with the
Securities and Exchange Commission shall satisfy the requirements of this
subsection 6.1(ii) and (y) the delivery by Company of its Form 10-K as
filed with the Securities and Exchange Commission shall satisfy the
requirements of Holdings under (but only under) preceding clause (b) of
this subsection 6.1(ii);
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(iii) Officers' and Compliance Certificates: together with each
delivery of financial statements of Holdings and its Subsidiaries pursuant
to subdivisions (i) and (ii) above, (a) an Officers' Certificate of
Holdings stating that the signers have reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Holdings and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officers' Certificate, of
any condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Holdings or any of its Subsidiaries has taken, is taking and proposes to
take with respect thereto; and (b) a Compliance Certificate of Holdings
demonstrating in reasonable detail compliance during and at the end of the
applicable accounting periods with the restrictions contained in Section 7,
in each case to the extent compliance with such restrictions is required to
be tested at the end of the applicable accounting period;
(iv) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Holdings and its Subsidiaries
delivered pursuant to subdivisions (i), (ii) or (xii) of this subsection
6.1 will differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such subdivisions had
no such change in accounting principles and policies been made, then (1)
together with the first delivery of financial statements pursuant to
subdivision (i), (ii) or (xii) of this subsection 6.1 following such
change, consolidated financial statements of Holdings and its Subsidiaries
for (y) the current Fiscal Year to the effective date of such change and
(z) the full Fiscal Year immediately preceding the Fiscal Year in which
such change is made, in each case prepared on a pro forma basis as if such
change had been in effect during such periods, and (2) together with each
delivery of financial statements pursuant to subdivision (i), (ii) or (xii)
of this subsection 6.1 following such change, a written statement of the
principal accounting officer or principal financial officer of Holdings
setting forth the differences (including any differences that would affect
any calculations relating to the financial covenants set forth in
subsection 7.6) which would have resulted if such financial statements had
been prepared without giving effect to such change;
(v) Accountants' Certification: together with each delivery of
consolidated financial statements of Holdings and its Subsidiaries pursuant
to subdivision (ii) above, a written statement by the independent certified
public accountants giving the report thereon (a) stating that their audit
examination has included a review of the terms of this Agreement and the
other Loan Documents as they relate to accounting matters, (b) stating
whether, in connection with their audit examination, any condition or event
that constitutes an Event of Default or Potential Event of Default of a
financial nature has come to their attention and, if such a condition or
event has come to their attention, specifying the nature and period of
existence thereof; provided that such accountants shall not be liable by
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of
their
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audit examination, and (c) stating that based on their audit examination
nothing has come to their attention that causes them to believe either or
both that the information contained in the certificates delivered therewith
pursuant to subdivision (iii) above is not correct or that the matters set
forth in the Compliance Certificates delivered therewith pursuant to clause
(b) of subdivision (iii) above for the applicable Fiscal Year are not
stated in accordance with the terms of this Agreement;
(vi) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Holdings by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Holdings and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their annual audit;
(vii) SEC Filings and Press Releases: promptly upon their becoming
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Holdings to analysts
or its security holders or by any Subsidiary of Holdings to analysts or its
security holders other than Holdings or another Subsidiary of Holdings, (b)
all regular and periodic reports and all registration statements (other
than on Form S-8 or a similar form) and prospectuses, if any, filed by
Holdings or any of its Subsidiaries with any securities exchange or with
the Securities and Exchange Commission or any governmental or private
regulatory authority, and (c) all press releases and other written,
publicly announced notices by Holdings or any of its Subsidiaries
concerning material developments in the business of Holdings or any of its
Subsidiaries;
(viii) Events of Default, etc.: promptly upon any Responsible Officer
of any Credit Agreement Party obtaining knowledge (a) of any condition or
event that constitutes an Event of Default or Potential Event of Default,
or becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a claimed
Event of Default or Potential Event of Default, (b) that any Person has
given any notice to Holdings or any of its Subsidiaries or taken any other
action with respect to a claimed default or event or condition of the type
referred to in subsection 8.2, (c) of any condition or event that would be
required to be disclosed in a current report filed by any Credit Agreement
Party with the Securities and Exchange Commission on Form 8-K (Items 1, 2,
4, 5 and 6 of such Form as in effect on the date hereof) if such Credit
Agreement Party were required to file such reports under the Exchange Act,
or (d) of the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse
Effect, an Officers' Certificate specifying the nature and period of
existence of such condition, event or change, or specifying the notice
given or action taken by any such Person and the nature of such claimed
Event of Default, Potential Event of Default, default, event or condition,
and what action Holdings or any of its Subsidiaries has taken, is taking
and proposes to take with respect thereto;
(ix) Litigation or Other Proceedings: promptly upon any Responsible
Officer of any Credit Agreement Party obtaining knowledge of (a) the
institution of, or non-
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frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Holdings or any of its Subsidiaries or
any property of Holdings or any of its Subsidiaries (collectively,
"Proceedings") not previously disclosed in writing by any Credit
Agreement Party to Lenders or (b) any material development in any
Proceeding that, in any case:
(1) if adversely determined, would reasonably be
expected to have a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to any Credit Agreement Party to enable Lenders
and their counsel to evaluate such matters;
(x) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of (x) any ERISA Event (other
than an ERISA Event concerning a Multiemployer Plan) or (y) any ERISA
Event concerning a Multiemployer Plan which would reasonably be
expected to result in a material liability to Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates, a written
notice specifying the nature thereof, what action Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(xi) ERISA Notices: with reasonable promptness, copies of
(a) if requested by the Requisite Lenders, each Schedule B (Actuarial
Information) to any annual report (Form 5500 Series) filed by Holdings,
any of its Subsidiaries or any of their respective ERISA Affiliates
with the Internal Revenue Service with respect to each Pension Plan, as
Administrative Agent shall reasonably request; (b) all notices received
by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event
which would reasonably be expected to result in a material liability to
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates; and (c) copies of such other documents or governmental
reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(xii) Financial Plans: as soon as practicable and in any
event no later than 45 days after the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year and the
next succeeding Fiscal Year (the "Financial Plan" for such Fiscal
Years), including (a) a forecasted consolidated balance sheet and
forecasted consolidated statements of income and cash flows of Holdings
and its Subsidiaries for each such Fiscal Year, together with a pro
forma Compliance Certificate for the first such Fiscal Year and an
explanation of the significant assumptions on which such forecasts are
based, and (b) such other information regarding such projections as
Administrative Agent may reasonably request;
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(xiii) Insurance: together with each delivery of financial
statements of Holdings and its Subsidiaries pursuant to subdivision
(ii), a report in form and substance satisfactory to Administrative
Agent outlining all material changes made to insurance coverage
maintained as of the Closing Date or the date of the most recent such
report by Holdings and its Subsidiaries;
(xiv) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Holdings, a written notice setting forth with respect to
such Person (a) the date on which such Person became a Subsidiary of
Holdings and (b) the ownership and debt and equity capitalization of
such Subsidiary;
(xv) Material Contracts: promptly, and in any event within
ten Business Days after any Material Contract of Holdings or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Holdings or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto; and
(xvi) Other Information: with reasonable promptness, such
other information and data with respect to Holdings or any of its
Subsidiaries as from time to time may be reasonably requested by
Administrative Agent or any Lender (acting through the Administrative
Agent).
6.2 Corporate Existence, etc.
Except as permitted under subsection 7.7, Holdings will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its corporate, partnership or limited liability company, as the
case may be, existence and all rights and franchises material to its business;
provided, however that neither Holdings nor any of its Subsidiaries shall be
required to preserve any such right or franchise if the Board of Directors of
Holdings or such Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of Holdings or such Subsidiary,
as the case may be, and that the loss thereof is not disadvantageous in any
material respect to Holdings, such Subsidiary or Lenders.
6.3 Payment of Taxes and Claims; Tax Consolidation.
A. Holdings will, and will cause each of its Subsidiaries to,
pay all federal, state and other material taxes, assessments and other like
governmental charges imposed upon it or any of its properties or assets or in
respect of any of its income, businesses or franchises before any material
penalty accrues thereon, and all claims (including claims for labor, services,
materials and supplies) for sums that have become due and payable and by law
have or may become a Lien upon any of its properties or assets, prior to the
time when any penalty or fine shall be incurred with respect thereto; provided
that no such charge or claim need be paid if it is being contested in good faith
by appropriate proceedings promptly instituted and diligently conducted, so long
as (1) such reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made therefor and (2) in the case of a
charge or claim which has or may become a Lien against any of the Collateral,
such contest proceedings
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conclusively operate to stay the sale of any portion of the Collateral to
satisfy such charge or claim.
B. Holdings will not, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than any of its Subsidiaries).
6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/ Condemnation Proceeds.
A. Maintenance of Properties. Holdings will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear and damage by casualty
excepted, all material properties used or useful in the business of Holdings and
its Subsidiaries and from time to time will make or cause to be made all
repairs, renewals and replacements thereof which are useful, customary or
appropriate for companies in similar businesses.
B. Insurance. Holdings will maintain or cause to be
maintained, with financially sound and reputable insurers, such public liability
insurance, third party property damage insurance, business interruption
insurance and casualty insurance with respect to liabilities, losses or damage
in respect of the assets, properties and businesses of Holdings and its
Subsidiaries as may customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for corporations similarly situated in the industry.
Without limiting the generality of the foregoing, Holdings will maintain or
cause to be maintained flood insurance with respect to each Flood Hazard
Property that is located in a community that participates in the National Flood
Insurance Program, in each case in compliance with any applicable regulations of
the Board of Governors of the Federal Reserve System. Each such policy of
insurance related to property damage, casualty or business interruption shall
(a) name Administrative Agent for the benefit of Lenders as an additional
insured thereunder as its interests may appear and (b) in the case of each
business interruption and property damage insurance policy, contain a loss
payable clause or endorsement, reasonably satisfactory in form and substance to
Administrative Agent, that names Administrative Agent for the benefit of Lenders
as the loss payee thereunder for any covered loss in excess of $1,000,000 and
provides for at least 30 days, prior written notice to Administrative Agent of
any modification or cancellation of such policy.
C. Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by Holdings
or any of its Subsidiaries of any business interruption insurance
proceeds constituting Net Insurance/ Condemnation Proceeds, (a) so long
as no Event of Default shall have occurred and be continuing, Holdings
or such Subsidiary may retain and apply such Net Insurance/Condemnation
Proceeds for working capital purposes of Company and its Subsidiaries,
and (b) if an Event of Default shall have occurred and be continuing,
Borrowers shall within five Business Days of the receipt thereof apply
an amount equal
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to such Net Insurance/Condemnation Proceeds to prepay the Loans (and/or
the Revolving Loan Commitments shall be reduced) as provided in
subsection 2.4B(iii)(b);
(ii) Casualty Insurance/Condemnation Proceeds. Within five
Business Days of receipt by Holdings or any of its Subsidiaries of any
Net Insurance/Condemnation Proceeds other than from business
interruption insurance, (a) so long as no Event of Default shall have
occurred and be continuing and so long as the aggregate amount of Net
Asset Sale Proceeds and Net Insurance/Condemnation Proceeds received
from the Closing Date to the date of determination does not exceed
$75,000,000, Holdings may deliver to Administrative Agent an Officers'
Certificate setting forth (1) that portion of such Net
Insurance/Condemnation Proceeds (the "Proposed Insurance Reinvestment
Proceeds") that Company or any of its Subsidiaries intends to use (or
enter into a contract to use) within 360 days of such date of receipt
to pay or reimburse the costs of repairing, restoring or replacing the
assets in respect of which such Net Insurance/Condemnation Proceeds
were received or to reinvest in Eligible Assets and (2) the proposed
use of the Proposed Insurance Reinvestment Proceeds and such other
information with respect to such proposed use as Administrative Agent
may reasonably request, and Company shall, or shall cause one or more
of its Subsidiaries to, promptly apply such Proposed Insurance
Reinvestment Proceeds to pay or reimburse the costs of repairing,
restoring or replacing the assets in respect of which such Proposed
Insurance Reinvestment Proceeds were received or to reinvestment in
Eligible Assets, provided that if such Proposed Insurance Reinvestment
Proceeds are not so applied within 360 days after the date of receipt
thereof, then to the extent the sum of the Net Asset Sale Proceeds plus
Net Insurance/Condemnation Proceeds received during the Net Asset
Sale/Net Insurance Proceeds Period not reinvested pursuant to
subsection 2.4B(iii)(a) or this subsection 6.4C(ii), as applicable,
equals or exceeds $7,500,000, such Proposed Insurance Reinvestment
Proceeds shall be applied to prepay the Loans (and/or the Revolving
Loan Commitments shall be reduced) as provided in subsection
2.4B(iii)(b), and (b) if an Event of Default shall have occurred and be
continuing, Borrowers shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in subsection
2.4B(iii)(b).
(iii) Net Insurance/Condemnation Proceeds Received by
Administrative Agent. Within five Business Days of receipt by
Administrative Agent of any Net Insurance/Condemnation Proceeds as loss
payee, (a) if and to the extent a Borrower would have been required to
apply such Net Insurance/Condemnation Proceeds (if it had received them
directly) to prepay the Loans and/or reduce the Revolving Loan
Commitments, Administrative Agent shall, and Borrowers hereby authorize
Administrative Agent to, apply such Net Insurance/Condemnation Proceeds
to prepay the Loans (and/or the Revolving Loan Commitments shall be
reduced) as provided in subsection 2.4B(iii)(b), and (b) to the extent
the foregoing clause (a) does not apply, Administrative Agent shall
deliver such Net Insurance/Condemnation Proceeds to Company, and
Company shall, or shall cause one or more of its Subsidiaries to,
promptly apply such Net Insurance/Condemnation Proceeds (other than any
business interruption insurance proceeds) to the costs of repairing,
restoring, or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or to reinvestment in
Eligible Assets.
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6.5 Inspection Rights; Audits of Inventory and Accounts
Receivable; Lender Meeting.
A. Inspection Rights. Holdings shall, and shall cause each of
its Subsidiaries to, permit any authorized representatives designated by any
Lender to visit and inspect any of the properties of Holdings or any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Holdings or Borrowers may, if they so choose, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours as may be requested; provided,
however, that (x) no more than one such audit and inspection shall occur during
any Fiscal Year unless an Event of Default has occurred and is continuing and
(y) each Lender shall at all times coordinate with Administrative Agent the
frequency and timing of such visits and inspections so as to reasonably minimize
the burden imposed on Holdings and its Subsidiaries.
B. Lender Meeting. Credit Agreement Parties will, upon the
request of Arranger, Administrative Agent or Requisite Lenders, participate in a
meeting of Administrative Agent and Lenders once during each Fiscal Year to be
held at Holdings' corporate offices (or at such other location as may be agreed
to by Credit Agreement Parties and Administrative Agent) at such time as may be
agreed to by Credit Agreement Parties and Administrative Agent.
6.6 Compliance with Laws, etc.
Holdings shall comply, and shall cause each of its
Subsidiaries to comply, with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority (including all
Environmental Laws), except where noncompliance would not reasonably be expected
to cause, individually or in the aggregate, a Material Adverse Effect.
6.7 Environmental Review and Investigation, Disclosure, Etc.;
Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental
Laws.
A. Environmental Review and Investigation. Credit Agreement
Parties agree that Administrative Agent may, (i) at any time a fact, event or
condition arises that, in Administrative Agent's reasonable discretion,
Administrative Agent determines could give rise to environmental liabilities at
any Facility that would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, retain, at Borrowers' expense, an
independent professional consultant to review any environmental audits,
investigations, analyses and reports relating to Hazardous Materials at such
Facility prepared by or for Borrowers and (ii) in the event (a) Administrative
Agent reasonably believes that any Credit Agreement Party has breached any
representation, warranty or covenant contained in subsection 5.6 (as such
subsection pertains to environmental matters), 5.13, 6.6 (as such subsection
pertains to environmental matters) or 6.7 or that there has been a material
violation of Environmental Laws at any Facility or by Holdings or any of its
Subsidiaries at any other location, conduct its own investigation of such breach
or violation or (b) an Event of Default has occurred and is continuing and the
repayment of any amount due hereunder has been accelerated, conduct its own
investigation of any Facility. For
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purposes of conducting an investigation pursuant to clause (ii) of the preceding
sentence, Credit Agreement Parties hereby grant to Administrative Agent and its
agents, employees, consultants and contractors the right to enter into or onto
any Facilities currently owned, leased, operated or used by Holdings or any of
its Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith (to the extent, at any Facility
leased by Holdings or any of its Subsidiaries, such actions are permitted by the
owner of such Facility). Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by Holdings and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing operations at such Facility or
to cause any damage or loss to any property at such Facility. Each Credit
Agreement Party and Administrative Agent hereby acknowledge and agree that any
report of any investigation conducted at the request of Administrative Agent
pursuant to this subsection 6.7A will be obtained and shall be used by
Administrative Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the Loans and to protect Lenders' security
interests, if any, created by the Loan Documents. Administrative Agent agrees to
deliver a copy of any such report to Holdings with the understanding that Credit
Agreement Parties acknowledge and agree that (x) they will indemnify and hold
harmless Administrative Agent and each Lender from any costs, losses or
liabilities relating to any Credit Agreement Party's use of or reliance on such
report, (y) neither Administrative Agent nor any Lender makes any representation
or warranty with respect to such report, and (z) by delivering such report to
Holdings, neither Administrative Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report.
B. Environmental Disclosure. Holdings will deliver to
Administrative Agent, with sufficient copies for each Lender (and Administrative
Agent will, after receipt thereof, deliver to each Lender):
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all material environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Holdings or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to environmental matters at any Facility that would
reasonably be expected to have a Material Adverse Effect.
(ii) Notice of Certain Releases, Remedial Actions, Etc.
Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any
federal, state or local governmental or regulatory agency under any
applicable Environmental Laws unless such Release would not reasonably
be expected to result in a Material Adverse Effect, (b) any remedial
action taken by any Credit Agreement Party or any other Person in
response to (1) any Hazardous Materials Activities the existence of
which would reasonably be expected to result in one or more
Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (2) any Environmental Claims of which
Holdings or any of its Subsidiaries has notice that, individually or in
the aggregate, would reasonably be expected to result in a Material
Adverse Effect, and (c) any Credit Agreement Party's discovery of any
occurrence or condition on any real property adjoining or in the
vicinity of any Facility
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that would reasonably be expected to cause such Facility or any part
thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws, which
would reasonably be expected to have a Material Adverse Effect.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof by Holdings or any of its Subsidiaries, a copy of any and all
material written communications with respect to (a) any Environmental
Claims that, individually or in the aggregate, would reasonably be
expected to give rise to a Material Adverse Effect, (b) any Release
required to be reported to any federal, state or local governmental or
regulatory agency unless such Release would not reasonably be expected
to result in a Material Adverse Effect, and (c) any request for
information from any governmental agency that suggests such agency is
investigating whether Holdings or any of its Subsidiaries may be
potentially responsible for any Hazardous Materials Activity unless
such Hazardous Materials Activity could not reasonably be expected to
have a Material Adverse Effect.
(iv) Notice of Certain Proposed Actions Having Environmental
Impact. Prompt written notice describing in reasonable detail (a) any
proposed acquisition of stock, assets, or property by Holdings or any
of its Subsidiaries that could reasonably be expected to (1) expose
Holdings or any of its Subsidiaries to, or result in, Environmental
Claims that would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or (2) affect the ability of
Holdings or any of its Subsidiaries to maintain in full force and
effect all material Governmental Authorizations required under any
Environmental Laws for their respective operations and (b) any proposed
action to be taken by Holdings or any of its Subsidiaries to modify
current operations in a manner that would reasonably be expected to
subject Holdings or any of its Subsidiaries to any material additional
obligations or requirements under any Environmental Laws where such
obligations or reimbursements would reasonably be expected to have a
Material Adverse Effect.
(v) Other Information. With reasonable promptness, such
other documents and information as from time to time may be reasonably
requested by Administrative Agent or any Lender (acting through the
Administrative Agent) in relation to any matters disclosed pursuant to
this subsection 6.7.
C. Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws. Holdings shall
operate and maintain, and shall cause each of its Subsidiaries to operate and
maintain, all Facilities, and shall conduct, and shall cause each of its
Subsidiaries to conduct, all Hazardous Materials Activity undertaken in
connection with the maintenance or operation of such Facilities, in compliance
with applicable Environmental Laws, except for such noncompliance as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
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6.8 Execution of Subsidiaries Guaranty and Personal Property
Collateral Documents by Future Subsidiaries.
A. Execution of Subsidiaries Guaranty and Personal Property
Collateral Documents. In the event that any Person becomes a Domestic Subsidiary
of Holdings after the date hereof, Holdings will promptly notify Administrative
Agent of that fact and cause such Subsidiary to execute and deliver to
Collateral Agent counterparts of the Subsidiaries Guaranty, Pledge Agreement and
Security Agreement and to take all such further actions and execute all such
further documents and instruments (including actions, documents and instruments
comparable to those described in subsection 4.1J) as may be reasonably necessary
or, in the reasonable opinion of Administrative Agent, desirable to create in
favor of Collateral Agent, for the benefit of Secured Creditors, a valid and
perfected First Priority Lien on all of the personal and mixed property assets
of such Subsidiary described in the applicable forms of Collateral Documents.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Holdings
shall deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation
(or equivalent organizational documents), together with a good standing
certificate from the Secretary of State of the jurisdiction of its organization
and, to the extent requested by Administrative Agent, each other state in which
such Person is qualified as a foreign entity to do business and, to the extent
generally available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the appropriate taxing
authority of each of such jurisdictions, each to be dated a recent date prior to
their delivery to Administrative Agent, (ii) a copy of such Subsidiary's Bylaws
(or equivalent organizational documents), certified by its secretary or an
assistant secretary as of a recent date prior to their delivery to
Administrative Agent, (iii) a certificate executed by the secretary or an
assistant secretary of such Subsidiary as to (a) the fact that the attached
resolutions of the Board of Directors of such Subsidiary approving and
authorizing the execution, delivery and performance of such Loan Documents are
in full force and effect and have not been modified or amended and (b) the
incumbency and signatures of the officers of such Subsidiary executing such Loan
Documents, and (iv) to the extent requested by Administrative Agent, a favorable
opinion of counsel to such Subsidiary, in form and substance reasonably
satisfactory to Administrative Agent and its counsel, as to (a) the due
organization and good standing of such Subsidiary, (b) the due authorization,
execution and delivery by such Subsidiary of such Loan Documents, (c) the
enforceability of such Loan Documents against such Subsidiary, (d) such other
matters (including matters relating to the creation and perfection of Liens in
any Collateral pursuant to such Loan Documents) as Administrative Agent may
reasonably request, all of the foregoing to be reasonably satisfactory in form
and substance to Administrative Agent and its counsel.
6.9 Conforming Leasehold Interests; Matters Relating to
Additional Real Property Collateral.
A. Conforming Leasehold Interests. Upon the request of
Administrative Agent or the Requisite Lenders, Holdings shall use commercially
reasonable efforts to, or shall cause such Subsidiary to use commercially
reasonable efforts to, cause each Material Leasehold Property of Holdings or
such Subsidiary to be a Conforming Leasehold Interest.
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B. Additional Mortgages, Etc. From and after the Closing Date, upon
the request of Administrative Agent or the Requisite Lenders at any time or from
time to time, Holdings, each Borrower and each Subsidiary Guarantor, as the case
may be, shall (i) grant to Collateral Agent, a First Priority Lien securing the
Obligations in respect of any Real Property Asset owned in fee by such Loan
Party and all Material Leasehold Properties of such Loan Party (other than any
such Real Property Asset the encumbrancing of which requires the consent of any
applicable lessor or the then-existing senior lienholder, where Holdings and its
Subsidiaries are unable, after exercising commercially reasonable efforts, to
obtain such lessor's or senior lienholder's consent (any such non-excluded Real
Property Asset described above being an "Additional Mortgaged Property")) and
(ii) deliver to Administrative Agent the following:
(i) Additional Mortgage. A fully executed and notarized Mortgage (an
"Additional Mortgage"), in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering the interest of such
Loan Party in such Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to such
Loan Party, in form and substance satisfactory to Administrative Agent and
its counsel, as to the due authorization, execution and delivery by such
Loan Party of such Additional Mortgage and such other matters as
Administrative Agent may reasonably request, and (b) if required by
Administrative Agent, an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent) in the state in which such
Additional Mortgaged Property is located with respect to the enforceability
of such Additional Mortgage and such other matters as Administrative Agent
may reasonably request, in each case in form and substance reasonably
satisfactory to Administrative Agent;
(iii) Landlord Consent and Estoppel: Recorded Leasehold Interest. In
the case of an Additional Mortgaged Property consisting of a Leasehold
Property, (a) a Landlord Consent and Estoppel and (b) evidence that such
Leasehold Property is a Recorded Leasehold Interest;
(iv) Title Insurance. (a) If required by Administrative Agent, an
ALTA mortgagee title insurance policy or an unconditional commitment
therefor (an "Additional Mortgage Policy") issued by the Title Company with
respect to such Additional Mortgaged Property, in an amount reasonably
satisfactory to Administrative Agent, insuring fee simple title to, or a
valid leasehold interest in, such Additional Mortgaged Property vested in
such Loan Party and assuring Administrative Agent that such Additional
Mortgage creates a valid and enforceable First Priority mortgage Lien on
such Additional Mortgaged Property, subject only to a standard survey
exception, which Additional Mortgage Policy (1) shall include an
endorsement for mechanics' liens, for future advances (in each case, if
available) under this Agreement and for any other matters reasonably
requested by Administrative Agent and (2) shall provide for affirmative
insurance and such reinsurance as Administrative Agent may reasonably
request, all of the foregoing in form and substance reasonably satisfactory
to Administrative Agent; and (b) evidence satisfactory to Administrative
Agent that such Loan Party has (i) delivered to the Title Company all
certificates and affidavits required by the Title Company in connection
with the issuance of the Additional Mortgage Policy
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and (ii) paid to the Title Company or to the appropriate governmental
authorities all expenses and premiums of the Title Company in connection
with the issuance of the Additional Mortgage Policy and all recording and
stamp taxes (including mortgage recording and intangible taxes) payable in
connection with recording the Additional Mortgage in the appropriate real
estate records; provided, however, that Administrative Agent shall allow
for such reasonable revisions to the applicable Mortgage and shall
otherwise take such steps as are reasonable and customary to minimize
recording, mortgage recording, stamp, documentary and intangible taxes, at
Borrowers' cost;
(v) Title Report. If no Additional Mortgage Policy is required with
respect to such Additional Mortgaged Property, a title report issued by the
Title Company with respect thereto, last updated not more than 30 days
prior to the date such Additional Mortgage is to be recorded and reasonably
satisfactory in form and substance to Administrative Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies of all
recorded documents listed as exceptions to title or otherwise referred to
in the Additional Mortgage Policy or title report delivered pursuant to
clause (iv) or (v) above;
(vii) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a surveyor's note on a survey or a report from
a flood hazard search firm or a letter from an insurance broker or a
municipal engineer, as to (1) whether such Additional Mortgaged Property is
a Flood Hazard Property and (2) if so, whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (b) if such Additional Mortgaged Property is a Flood
Hazard Property, such Loan Party's written acknowledgment of receipt of
written notification from Administrative Agent (1) that such Additional
Mortgaged Property is a Flood Hazard Property and (2) as to whether the
community in which such Flood Hazard Property is located is participating
in the National Flood Insurance Program, and (c) in the event such
Additional Mortgaged Property is a Flood Hazard Property that is located in
a community that participates in the National Flood Insurance Program,
evidence that Holdings or any of its Subsidiaries has obtained flood
insurance in respect of such Flood Hazard Property to the extent required
under the applicable regulations of the Board of Governors of the Federal
Reserve System; and
(viii) Environmental Audit. If required by Administrative Agent,
reports and other information, in form, scope and substance reasonably
satisfactory to Administrative Agent and prepared by environmental
consultants reasonably satisfactory to Administrative Agent, concerning any
environmental hazards or liabilities to which Holdings or any of its
Subsidiaries may be subject with respect to such Additional Mortgaged
Property.
C. Real Estate Appraisals. In the event that Administrative Agent or
the Requisite Lenders determines in its or their reasonable discretion (whether
as a result of a position taken by an applicable bank regulatory agency or
official, or otherwise) that real estate appraisals satisfying the requirements
set forth in 12 C.F.R., Part 34-Subpart C, or any successor or similar statute,
rule, regulation, guideline or order (any such appraisal, a "Required
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Appraisal") are or were required to be obtained, or should be obtained, in
connection with any property subject to a Mortgage then, within 90 days after
receiving written notice thereof from Administrative Agent or the Requisite
Lenders, as the case may be, Holdings shall cause such Required Appraisal to be
delivered, at the expense of Holdings and the Borrowers, to Administrative
Agent, which Required Appraisal, and the respective appraiser, shall be
reasonably satisfactory to Administrative Agent.
6.10 Interest Rate Protection.
Borrowers shall maintain in effect one or more Interest Rate Agreements
with respect to their floating rate Indebtedness (including, without limitation,
their Indebtedness under this Agreement), each such Interest Rate Agreement to
be in form and substance reasonably satisfactory to Administrative Agent, to the
extent necessary in order that after giving effect thereto at least 25% of the
aggregate principal amount of the consolidated Indebtedness of Holdings and its
Subsidiaries bears interest at a fixed rate of interest.
6.11 Additional Foreign Subsidiary Collateral.
If, following a change in the relevant provisions of the Internal Revenue
Code, counsel for Holdings acceptable to Administrative Agent does not within 30
days after a request from Administrative Agent or Requisite Lenders deliver
evidence, in form and substance satisfactory to Administrative Agent with
respect to any Foreign Subsidiary which has not already had all of its capital
stock pledged pursuant to the Collateral Documents, that (i) a pledge of 65% or
more of the total combined voting power of all classes of capital stock of such
Foreign Subsidiary entitled to vote and (ii) the entering into by such Foreign
Subsidiary of a guaranty in substantially the form of the Subsidiaries Guaranty,
in any such case would cause the undistributed earnings of such Foreign
Subsidiary as determined for Federal income tax purposes to be treated as a
deemed dividend to such Foreign Subsidiary's United States parent for Federal
income tax purposes, then: in the case of a failure to deliver the evidence
described in clause (i) above, that portion of such Foreign Subsidiary's
outstanding capital stock so issued by such Foreign Subsidiary, in each case not
theretofore pledged pursuant to the Collateral Documents, shall be pledged to
Collateral Agent pursuant to the Collateral Documents (or another pledge
agreement in substantially similar form, if necessary), and in the case of a
failure to deliver the evidence described in clause (ii) above, such Foreign
Subsidiary shall execute and deliver the Subsidiaries Guaranty and other
Collateral Documents (or other guaranty and security agreements in substantially
similar form, if necessary), granting Collateral Agent a security interest in
all of such Foreign Subsidiary's real, mixed and personal property and securing
the Obligations, in each case to the extent that such pledge of capital stock
and entry into such guaranty and related documents is permitted by the laws of
the applicable foreign jurisdictions.
6.12 Post-Closing Deliveries.
Holdings and/or Borrowers shall cause any actions set forth on Schedule
6.12 annexed hereto to be taken within the time period(s) specified on such
Schedule 6.12 and in form and substance reasonably satisfactory to
Administrative Agent and Arranger.
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SECTION 7.
CREDIT AGREEMENT PARTIES' NEGATIVE COVENANTS
Credit Agreement Parties covenant and agree that, so long as any of
the Commitments hereunder shall remain in effect and until payment in full of
all of the Loans and other Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen and are not yet due and payable) and the cancellation or expiration of
all Letters of Credit, unless Requisite Lenders shall otherwise give prior
written consent, Credit Agreement Parties shall perform, and shall cause each of
their respective Subsidiaries to perform, all covenants in this Section 7.
7.1 Indebtedness.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Borrowers may become and remain liable with respect to the
Obligations;
(ii) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon any
matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iii) Borrowers and their respective Subsidiaries may become and
remain liable with respect to (a) Indebtedness in respect of Capital Leases
and (b) Indebtedness secured by Liens permitted under subsection 7.2A(iv),
provided that the aggregate amount of Indebtedness described in clauses (a)
and (b), when added to the aggregate outstanding amount of Permitted
Acquired Debt consisting of Capital Lease obligations and purchase money
Indebtedness incurred pursuant to subsection 7.1(x), shall not exceed
$40,000,000 at any time outstanding;
(iv) either Borrower may become and remain liable with respect to
Indebtedness to any Subsidiary Guarantor, and any Subsidiary Guarantor may
become and remain liable with respect to Indebtedness to either Borrower or
any other Subsidiary Guarantor; provided that (a) all such intercompany
Indebtedness shall be evidenced by promissory notes pledged to Collateral
Agent pursuant to the Pledge Agreement, and (b) any payment by any such
Subsidiary of a Borrower under any guaranty of the Obligations shall result
in a pro tanto reduction of the amount of any intercompany Indebtedness
owed by such Subsidiary to such Borrower or to any of such Subsidiary
Guarantors for whose benefit such payment is made;
(v) (a) either Borrower and any wholly owned Subsidiary of either
Borrower may become and remain liable with respect to Indebtedness to any
wholly owned Foreign Subsidiary, and (b) any Foreign Subsidiary (x) may
remain liable with respect to Indebtedness to either Borrower or to any of
the Subsidiary Guarantors set forth on Schedule 7.1(v) annexed hereto in
amounts not to exceed the respective amounts set forth on such Schedule and
(y) may become and remain liable with respect to additional
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Indebtedness to either Borrower or any Subsidiary Guarantor so long as the
aggregate outstanding amount of such Indebtedness under this clause (y)
does not exceed the limits on such Indebtedness set forth in subsection
7.3(xiii); provided that (1) all intercompany Indebtedness described in
clause (b) shall be evidenced by promissory notes pledged to Collateral
Agent pursuant to the Pledge Agreement, and (2) all intercompany
Indebtedness described in clause (a) owed by either Borrower or any
Subsidiary Guarantor to any wholly owned Foreign Subsidiary shall be
subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable promissory notes or an intercompany
subordination agreement;
(vi) Company may become and remain liable with respect to
Indebtedness evidenced by the Senior Subordinated Notes;
(vii) Holdings and its Subsidiaries, as applicable, may remain liable
with respect to Indebtedness described in Schedule 7.1(vii)
annexed hereto;
(viii) Holdings may become and remain liable with respect to
Shareholder Subordinated Notes issued in lieu of cash payments permitted
under subsection 7.5(ix) to repurchase capital stock of Holdings held by
any shareholders of Holdings (other than ▇▇▇▇ and the Other Investors),
provided, that the aggregate principal amount of Shareholder Subordinated
Notes shall not exceed $5,000,000 at any time outstanding;
(ix) Company may become and remain liable with respect to Permitted
Seller Notes issued as consideration in Permitted Acquisitions; provided
that the aggregate principal amount of Permitted Seller Notes at any time
outstanding shall not exceed $10,000,000;
(x) Subject to the applicable restrictions of subsections 7.1(iii)
and 7.1(xv), Company or any Subsidiary of Company acquired pursuant to a
Permitted Acquisition may become or remain liable with respect to
Indebtedness of a Subsidiary of Company existing at the time of acquisition
by Company or a Subsidiary of a Subsidiary or assets pursuant to a
Permitted Acquisition ("Permitted Acquired Debt"), provided that (a) such
Indebtedness was not incurred in connection with or in anticipation or
contemplation of such Permitted Acquisition, (b) such Indebtedness does not
constitute debt for borrowed money (other than debt for borrowed money
incurred in connection with industrial revenue or industrial development
bond financings), it being understood and agreed that Capital Lease
obligations and purchase money Indebtedness shall not constitute debt for
borrowed money for purposes of this clause (x), and (c) at the time of such
Permitted Acquisition such Indebtedness does not exceed the total value of
the assets of the Subsidiary so acquired, or of the assets so acquired, as
the case may be; provided, however, that (a) the aggregate amount of any
such Permitted Acquired Debt consisting of Capital Lease obligations and
purchase money Indebtedness, together with the aggregate amount of other
Indebtedness of the type permitted under subsection 7.1(iii), in each case
at any time outstanding, shall not exceed $40,000,000, and (ii) the
aggregate amount of any such Indebtedness other than Capital Lease
obligations and purchase money Indebtedness, together with (a) other
Indebtedness of the type permitted under subsection 7.1(xv) and (b) the
maximum aggregate liability, contingent or otherwise, with
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respect to Contingent Obligations incurred pursuant to subsection 7.4(xii),
in each case at any time outstanding, shall not exceed $50,000,000;
(xi) Foreign Subsidiaries of Company may become and remain liable
with respect to Indebtedness under lines of credit extended after the
Closing Date to any such Foreign Subsidiary by Persons other than Holdings
or any of its Subsidiaries, the proceeds of which Indebtedness are used for
such Foreign Subsidiary's working capital purposes, provided that the
aggregate principal amount of all such Indebtedness outstanding at any time
for all such Foreign Subsidiaries (such Indebtedness being the "Foreign
Subsidiary Working Capital Indebtedness") shall not exceed $5,000,000;
(xii) Company and the Subsidiary Guarantors may become and remain
liable with respect to Indebtedness incurred to finance the WRC Project
directly or under a Capital Lease entered into with the WRC JV, provided
the aggregate amount of such Indebtedness shall not exceed at any time
outstanding $45,000,000 less permanent repayments of the amount thereof
made after the incurrence thereof and less the amount of any outstanding
Contingent Obligations of the type permitted under subsection 7.4(xi);
(xiii) Holdings may remain liable with respect to the Seller
Contingent Note, provided that (x) the maximum principal amount thereof
shall not exceed $15,000,000 at any one time outstanding and (y) in no
event shall interest thereon accrue at a rate in excess of 8% per annum;
(xiv) Company may become and remain liable for Permitted Additional
Subordinated Indebtedness, provided that (x) no Potential Event of Default
or Event of Default is in existence at the time of any incurrence thereof
and immediately after giving effect thereto, (y) Holdings shall have
delivered to Administrative Agent an Officer's Certificate (together with
supporting calculations), in form and substance reasonably satisfactory to
Administrative Agent, certifying as to pro forma compliance with the
financial covenants set forth in subsections 7.6A, 7.6B and 7.6C (for such
purpose as if such Permitted Additional Subordinated Indebtedness (and all
other indebtedness incurred after the last day of the Test Period then last
ended and then outstanding) had been incurred (and the proceeds thereof
applied), and the Senior Subordinated Notes refinanced with the proceeds of
such Permitted Additional Subordinated Indebtedness had been refinanced, in
each case on the first day of the Test Period then last ended and taking
account of any additional adjustments required by subsection 7.6D) and (z)
the aggregate principal amount thereof, when added to the aggregate
principal amount of the Senior Subordinated Notes then outstanding (after
giving effect to any repayment of principal thereof with the proceeds of
the incurrence of such Permitted Additional Subordinated Indebtedness),
shall not exceed $400,000,000 at any one time outstanding; and
(xv) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness in addition to the Indebtedness otherwise permitted
under this subsection; provided that the aggregate outstanding principal
amount of the Indebtedness incurred pursuant to this clause (xv), together
with (a) the maximum aggregate liability, contingent or otherwise, with
respect to Contingent Obligations incurred pursuant to subsection
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7.4(xii) and (b) the amount of any Indebtedness of the type permitted under
subsection 7.1(x) (other than Capital Lease obligations and purchase money
Indebtedness), shall not exceed $50,000,000 at any time outstanding.
7.2 Liens and Related Matters.
A. Prohibition on Liens. Holdings shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or permit
to exist any Lien on or with respect to any property or asset of any kind of
Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or
any income or profits therefrom, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the Uniform
Commercial Code of any State or under any similar recording or notice statute,
except:
(i) Permitted Encumbrances;
(ii) Liens created pursuant to the Collateral Documents in favor of
Collateral Agent for the benefit of Secured Creditors securing Loan
Parties' obligations under this Agreement and/or under Interest Rate
Agreements with any Secured Creditors (including the Existing Swap
Agreement);
(iii) Liens arising in connection with Capital Leases permitted under
subsection 7.1(iii)(a); provided that no such Lien shall extend to or cover
any Collateral or assets other than the assets subject to such Capital
Leases;
(iv) Liens securing Indebtedness permitted by subsection 7.1(iii)(b)
incurred (a) to finance the acquisition, construction or improvement of any
real property or tangible personal property assets acquired or held by
Company or any of its Subsidiaries in the ordinary course of business;
provided that (1) such Liens shall be created within 180 days after the
acquisition, construction or improvement of such assets, and (2) the
principal amount of Indebtedness secured by any such Liens shall at no time
exceed 100%, and the proceeds of such Indebtedness shall be used to provide
not less than 75%, of the original purchase price of such asset or the
amount expended to construct or improve such asset, as the case may be; or
(b) to renew, extend or refinance any Indebtedness described in clause (a);
provided that the amount of any such Indebtedness does not exceed the
amount of Indebtedness so renewed, extended or refinanced which is unpaid
and outstanding immediately prior to such renewal, extension or
refinancing; and provided further, that in the case of clause (a) or (b),
(1) such Liens attach solely to the assets financed with such Indebtedness,
(2) no recourse may be had under the Indebtedness secured by such Lien
against any Person other than the borrower of such Indebtedness for the
payment of principal, interest, fees, costs or premium on such Indebtedness
or for any claim based thereon, and (3) the financial covenants under any
Indebtedness secured by such Liens are, in each case, no more restrictive
than those set forth in this Agreement;
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(v) Liens securing Indebtedness financing the WRC Project
permitted under subsection 7.1(xii); provided that no such Lien shall
extend to or cover any Collateral or assets other than the assets
constituting the WRC Project; and
(vi) Other Liens securing Indebtedness in an aggregate amount
not to exceed $50,000,000 at any time outstanding.
B. No Further Negative Pledges. Except (i) with respect to property
encumbered by a Permitted Encumbrance or to secure payment of particular
Indebtedness or to be sold pursuant to an executed agreement with respect to an
Asset Sale and (ii) for restrictions and encumbrances permitted pursuant to
clauses (d), (j) and (k) of subsection 7.2C below, neither Holdings nor any of
its Subsidiaries shall enter into any agreement (other than the Senior
Subordinated Note Indenture, any other agreement prohibiting only the creation
of Liens securing Subordinated Indebtedness or any Cumulative Preferred Stock
Document) prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.
C. No Restrictions on Subsidiary Distributions to Holdings or Other
Subsidiaries. Except as provided herein, Holdings will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Holdings or any
other Subsidiary of Holdings, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Holdings or any other Subsidiary of Holdings, (iii) make loans or
advances to Holdings or any other Subsidiary of Holdings, or (iv) transfer any
of its property or assets to Holdings or any other Subsidiary of Holdings,
except for such encumbrances or restrictions existing under or by reason of (a)
applicable law, (b) this Agreement and the other Credit Documents, (c) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of Borrowers or any of their respective Subsidiaries, (d)
customary provisions restricting assignment of any agreement entered into by
Borrowers or any of their respective Subsidiaries in the ordinary course of
business, (e) the Senior Subordinated Note Indenture, (f) customary provisions
restricting the transfer of assets subject to Liens permitted under subsections
7.2A(iii) and 7.2A(iv), (g) any Cumulative Preferred Stock Document, (h) any
agreement or instrument governing Permitted Acquired Debt, which encumbrance or
restriction is not applicable to any Person or the properties or assets of any
Person, other than the Person or the properties or assets of the Person acquired
pursuant to the respective Permitted Acquisition and so long as the respective
encumbrances or restrictions were not created (or made more restrictive) in
connection with or in anticipation of the respective Permitted Acquisition, (i)
any Permitted Seller Note, (j) any restriction or encumbrance with respect to a
Subsidiary imposed pursuant to an agreement which has been entered into for the
sale or disposition of all or substantially all of the capital stock or assets
of such Subsidiary, so long as such sale or disposition of all or substantially
all of the capital stock or assets of such Subsidiary is permitted under this
Agreement, (k) restrictions applicable to any Joint Venture that is a Subsidiary
existing at the time of the acquisition thereof as a result of an Investment
pursuant to subsection 7.3 or a Permitted Acquisition effected in accordance
with subsection 7.7(xvi), provided that the restrictions applicable to the
respective such Joint Venture are not made worse, or more burdensome, from the
perspective of Borrowers and its Subsidiaries, than those as in effect
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immediately before giving effect to the consummation of the respective
Investment or Permitted Acquisition, (l) any document or instrument evidencing
Foreign Subsidiary Working Capital Indebtedness permitted under subsection
7.1(xi) so long as such encumbrance or restriction only applies to the Foreign
Subsidiary of Holdings incurring such Indebtedness and (m) any agreement or
instrument governing Permitted Additional Subordinated Indebtedness.
7.3 Investments; Joint Ventures.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Holdings and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii) Foreign Subsidiaries of Holdings may make and own Investments in
Foreign Cash Equivalents;
(iii) Holdings may continue to own the Investments owned by it as of
the Closing Date in Company, and Company and its Subsidiaries may continue
to own the Investments owned by them as of the Closing Date in any
Subsidiaries of Company and make additional Investments in Subsidiary
Borrower and/or Subsidiaries of the Company that are Subsidiary Guarantors;
(iv) Holdings and its Subsidiaries may own Investments in their
respective Subsidiaries to the extent that such Investments reflect an
increase in the value of such Subsidiaries;
(v) Borrowers and their respective Subsidiaries may make
intercompany loans to the extent permitted under subsections 7.1(iv) and
7.1(v);
(vi) Borrowers and their respective Subsidiaries may make
Consolidated Capital Expenditures permitted by subsection 7.8;
(vii) Borrowers and their respective Subsidiaries may continue to own
the Investments owned by them and described in Schedule 7.3(vii) annexed
hereto;
(viii) Holdings, the Borrowers and their respective Subsidiaries may
make loans and advances to employees, officers, executives or consultants
to Borrowers and their respective Subsidiaries in the ordinary course of
business of Borrowers (subject to applicable law) and their respective
Subsidiaries as presently conducted for the purpose of purchasing capital
stock of Holdings, so long as the aggregate principal amount of such loans
and advances outstanding at any time shall not exceed $10,000,000;
(ix) Borrowers and their respective Subsidiaries may acquire and hold
receivables owing to them, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms (including the dating of receivables) of any such Borrower or
Subsidiary;
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(x) Borrowers and their respective Subsidiaries may acquire and own
Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of Franchisees, suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(xi) Borrowers and their respective Subsidiaries may make and own
Investments consisting of deposits made in the ordinary course of business
consistent with past practices to secure the performance of leases;
(xii) Holdings may make equity contributions to the capital of
Company;
(xiii) Borrowers and their Domestic Subsidiaries may make and own
Investments in Foreign Subsidiaries of Company on any date in an amount not
to exceed the Foreign Subsidiary Investment Basket Amount on such date,
provided that (x) at no time may equity Investments in Foreign Subsidiaries
exceed 50% of the then Foreign Subsidiary Investment Basket Amount and (y)
each such Investment is subject to the Lien in favor of Collateral Agent
as, and to the extent required by, the Collateral Documents;
(xiv) Company and its Subsidiaries may (x) make and own Investments in
a Person formed solely to develop, own and construct the WRC Project (the
"WRC JV"), so long as (I) the aggregate amount of all Investments made
pursuant to this subclause (x) of this clause (xiv) shall not exceed
$5,000,000 at any one time outstanding and (II) each such Investment is
subject to the Lien in favor of Collateral Agent under the Collateral
Documents and (y) make and own additional Investments in the WRC JV
constituting Contingent Obligations permitted pursuant to subsection
7.4(xi) (or direct obligations arising as a result of the maturity of the
Indebtedness corresponding to such Contingent Obligations), so long as each
such Investment (except to the extent constituting a Contingent Obligation)
is subject to the Lien in favor of Collateral Agent under the Collateral
Documents;
(xv) Borrowers and their respective Subsidiaries may make and own
Investments consisting of notes received in connection with any asset sale;
provided that the aggregate principal amount of such notes at any time
outstanding (including all such notes outstanding on the Closing Date)
shall not exceed $30,000,000;
(xvi) Borrowers and their respective Subsidiaries may make and own
Investments in any Person which (a) (1) result in the creation of an
account arising in the ordinary course of such Borrower's or such
Subsidiary's business or (2) result from the restructure, reorganization or
similar composition of trade account obligations which arose in the
ordinary course of business and which are owing to such Borrower or such
Subsidiary from financially distressed debtors, and (b) are, in each case,
subject to the Lien in favor of Collateral Agent under the Collateral
Documents;
(xvii) Holdings and its Subsidiaries may make and own Investments
permitted under subsection 7.7(x), (xi) and (xiii);
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(xviii) Borrowers and their respective Subsidiaries may make and own
Investments in wholly owned Domestic Subsidiaries of Company consisting of
intercompany Indebtedness of such Subsidiaries converted to equity
Investments, provided that the underlying intercompany Indebtedness was
permitted hereunder at the time of such conversion;
(xix) Company and its Subsidiaries may make and own Investments in
Subsidiaries acquired pursuant to Permitted Acquisitions under subsection
7.7(xvi);
(xx) Company and its Subsidiaries may make and own Investments in
Franchisees (whether foreign or domestic) on any date in an amount not to
exceed at any time the Franchisee Investment Basket Amount on such date,
provided that (x) each such Investment is subject to the Lien in favor of
Collateral Agent under the Collateral Documents, (y) at no time may
Investments in foreign Franchisees exceed 50% of the then Franchisee
Investment Basket Amount and (z) at no time may equity Investments in
Franchisees exceed 50% of the then Franchisee Investment Basket Amount; and
(xxi) Company and its Subsidiaries may make and own Investments
consisting of loans and advances to Franchisees to fund the purchase by
such Franchisees of computer hardware and installation costs in respect to
the Domino's PULSE System, so long as (a) the aggregate principal amount of
such loans and advances shall not exceed $10,000,000 at any one time
outstanding, (b) each such loan or advance shall be evidenced by a
promissory note and (c) no such loan or advance may be made after December
31, 2005; and
(xxii) Borrowers and their respective Subsidiaries may make and own
other Investments in an aggregate amount not to exceed at any time
$30,000,000 (provided, that (x) no more than $15,000,000 of Investments
made in reliance on this subsection (xxii) may be of a type described in
preceding subsections (i) through (xxi) of this Section 7.3 and (y) no
Investments may be made and owned in reliance on this subsection (xxii) in
respect of Investments of a type described in preceding subsection (viii)
of this Section 7.3).
7.4 Contingent Obligations.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company (other than Subsidiary Borrower) may
become and remain liable with respect to Contingent Obligations in respect
of the Subsidiaries Guaranty, and Holdings may become and remain liable
with respect to Contingent Obligations in respect of the Holdings Guaranty;
(ii) Borrowers may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit;
(iii) Borrowers may become and remain liable with respect to
Contingent Obligations under Hedge Agreements (x) required under subsection
6.10 and (y)
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providing protection against fluctuations in currency values in connection
with a Borrower's or any of its Subsidiaries' operations, so long as
management of such Borrower or such Subsidiary, as the case may be, has
determined that the entering into of any such Hedge Agreement is a bona
fide hedging activity (and is not for speculative purposes) and is in the
ordinary course of business;
(iv) Borrowers and their respective Subsidiaries may become and
remain liable with respect to Contingent Obligations in respect of (a)
customary indemnification and purchase price adjustment obligations
incurred in connection with Asset Sales or other sales of assets, (b)
standard contractual indemnities entered into by Holdings and Company in
favor of an underwriter (and any additional Persons satisfactory to
Administrative Agent or the Arranger) pursuant to a customary underwriting
agreement in respect to an initial public offering of common stock of
Holdings or an offering by Company of Permitted Additional Subordinated
Indebtedness, (c) endorsements of instruments for deposit or collection in
the ordinary course of business, and (d) standard contractual indemnities
entered into in the ordinary course of business;
(v) Borrowers and their respective Subsidiaries may become and
remain liable with respect to Contingent Obligations under guarantees in
the ordinary course of business of the obligations of suppliers, customers,
Franchisees and licensees of Borrowers and their respective Subsidiaries;
(vi) Holdings and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 7.4 annexed
hereto;
(vii) Subsidiary Guarantors may become and remain liable with respect
to Contingent Obligations arising under their subordinated guaranties of
(x) the Senior Subordinated Notes as set forth in the Senior Subordinated
Note Indenture and (y) in respect of the Permitted Additional Subordinated
Indebtedness as evidenced by documentation consistent with the definition
of Permitted Additional Subordinated Indebtedness;
(viii) Borrowers and their respective Subsidiaries may become and
remain liable with respect to Contingent Obligations consisting of
guarantees of obligations of any Subsidiary of either Borrower under any
worker's compensation or casualty self-insurance program of such Subsidiary
administered in accordance with applicable law;
(ix) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations consisting of (a) guarantees by Holdings
and its Subsidiaries of Indebtedness, leases and other contractual
obligations permitted to be incurred by either Borrower or its wholly owned
Domestic Subsidiaries and (b) guarantees by Foreign Subsidiaries of
Holdings of Indebtedness, leases and other contractual obligations
permitted to be incurred by other wholly owned Foreign Subsidiaries of
Holdings;
(x) Subject to the limitations set forth in subsection 7.1(xi),
Company may become and remain liable with respect to Contingent Obligations
consisting of guaranties by Company of Foreign Subsidiary Working Capital
Indebtedness (including letters of
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credit issued for the account of Company and its Subsidiaries and in favor
of lenders in respect of any such Foreign Subsidiary Working Capital
Indebtedness);
(xi) Company and any Subsidiary Guarantor may become and remain liable
with respect to Contingent Obligations consisting of guarantees of any
Indebtedness of the WRC JV incurred to finance the acquisition, development
and construction of the WRC Project, so long as the principal aggregate
amount of the Indebtedness so guaranteed does not exceed at any time the
remainder of (x) $45,000,000 less (y) the aggregate amount of the
Indebtedness of Company and the Subsidiary Guarantors incurred pursuant
subsection 7.1(xii) and outstanding at such time; and
(xii) Borrowers and their respective Subsidiaries may become and remain
liable with respect to Contingent Obligations not otherwise permitted under
this subsection; provided that the maximum aggregate liability, contingent
or otherwise, of Borrowers and their respective Subsidiaries in respect of
all such Contingent Obligations, together with (a) the aggregate
outstanding principal amount of Indebtedness of Borrowers and their
respective Subsidiaries incurred pursuant to subsection 7.1(xv) and (b) the
outstanding amount of any indebtedness of the type permitted under
subsection 7.1(x) (other than Capital Lease obligations and purchase money
Indebtedness), shall at no time exceed $50,000,000.
7.5 Restricted Junior Payments.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that:
(i) (x) any wholly-owned Subsidiary of a Borrower can pay dividends
to either Borrower or any wholly owned Subsidiary of either Borrower and
(y) any non-wholly-owned Subsidiary of Company may pay cash dividends to
its shareholders generally so long as Company or its respective Subsidiary
which owns the equity interest in the Subsidiary paying such cash dividends
receives at least its proportionate share thereof (based upon its relative
holding of the equity interests in the Subsidiary paying such cash
dividends and taking into account the relative preferences, if any, of the
various classes of equity interests of such Subsidiary);
(ii) so long as no Default or Event of Default then exists or would
result therefrom, Company may make Restricted Junior Payments to Holdings,
and Holdings may make Restricted Junior Payments in the aggregate amount
not to exceed the sum of $15,000,000 plus the amount of the accrued
interest on the Seller Contingent Note, to the extent necessary, to pay any
Contingent Obligation, Indebtedness or accrued interest under the Seller
Contingent Note in accordance with its terms (as in effect as of the
Closing Date);
(iii) so long as no Default or Event of Default then exists or would
result therefrom, Company may (in accordance with each of the following
separate baskets in clauses (w), (x), (y) and (z)) repurchase Senior
Subordinated Notes, provided, that the
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aggregate amount of such Restricted Junior Payment shall not exceed: (w)
the Excess Proceeds Amount, (x) the aggregate amount of Net Equity Proceeds
received by Holdings from the sale or issuance of Holdings Common Stock;
(y) the net Cash proceeds of Permitted Additional Subordinated
Indebtedness; and (z) an aggregate amount of $30,000,000;
(iv) Company may make regularly scheduled payments of interest in
respect of (x) the Senior Subordinated Notes in accordance with the terms
of, and only to the extent required by, and subject to the subordination
provisions contained in, the Senior Subordinated Notes and the Senior
Subordinated Note Indenture and (y) the Permitted Additional Subordinated
Indebtedness in accordance with the terms of, and only to the extent
required by, and subject to the subordination provisions contained in, the
Permitted Additional Subordinated Indebtedness and the instruments and
agreements governing the same;
(v) if payments are required to be made by Holdings under the
Recapitalization Agreement (as defined in the Existing Credit Agreement and
as in effect on the Closing Date), Company may make Restricted Junior
Payments to Holdings to the extent necessary to enable Holdings to make
such payments;
(vi) Company may make Restricted Junior Payments to Holdings, and
Holdings may make Restricted Junior Payments (a) in an aggregate amount not
to exceed (x) at any time prior to a Qualified IPO, $1,500,000 in any
Fiscal Year, to the extent necessary to permit Holdings to pay general
administrative costs and expenses (including professional fees and director
indemnities) and (y) at any time on and after a Qualified IPO, $5,000,000
in any Fiscal Year, to the extent necessary to permit Holdings to pay
general administrative costs and expenses (including professional fees and
director indemnities) and such other bona fide costs and expenses
associated with Holdings being a "public company" and (b) to the extent
necessary to permit Holdings to discharge the consolidated tax liabilities
of Holdings and its Subsidiaries;
(vii) so long as no Event of Default under subsection 8.1, 8.6 or 8.7
shall have occurred and be continuing, (x) Holdings and its Subsidiaries
may make payments of the ▇▇▇▇ Management Fees owing under the ▇▇▇▇ Advisory
Services Agreement when and as due, provided that the portion of such fee
that accrued but was not payable during the existence and continuation of
such Event of Default shall be permitted to be paid at such time as such
Event of Default has been cured or waived and no other Event of Default is
then in existence and (y) on and after the consummation of a Qualified IPO,
Holdings may prepay in full the ▇▇▇▇ Management Fees owing to ▇▇▇▇ over the
term of the ▇▇▇▇ Advisory Services Agreement, so long as (I) such
prepayment is made solely with Net Equity Proceeds received by Holdings
from the sale or issuance of Holdings Common Stock and (II) the aggregate
amount of the ▇▇▇▇ Management Fees so prepaid does not exceed $10,000,000;
(viii) Company may make Restricted Junior Payments to Holdings to the
extent necessary to permit payments by Holdings of fees owing under the
Consulting Agreement in accordance with the terms thereof;
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(ix) so long as no Potential Event of Default or Event of Default then
exists or would result therefrom, Company may make Restricted Junior
Payments to Holdings to the extent required for Holdings to make, and
Holdings may make, Restricted Junior Payments in an aggregate amount not to
exceed $25,000,000 (as such amount may be reduced from time to time as a
result of the application of the second proviso appearing in subsection
7.5(xiii) and clause (z) of the proviso appearing in subsection 7.5(xiv))
in the aggregate to the extent necessary to make repurchases of capital
stock (and options or warrants to purchase such capital stock) of Holdings
held by any shareholder of Holdings (other than ▇▇▇▇ and the Other
Investors) and/or to make payments of principal and/or interest under (and
in accordance with the terms of) Shareholder Subordinated Notes permitted
under subsection 7.1(viii) (subject, however, to the subordination
provisions contained in such Shareholder Subordinated Notes), provided that
(x) Company and Holdings may make additional Restricted Junior Payments for
the purposes described above in this subsection 7.5(ix) in an aggregate
amount not to exceed $15,000,000, in which case the aggregate amount of
Restricted Junior Payments otherwise permitted to be made under subsection
7.5(xiii) below (without regard to the second proviso therein) shall be
reduced on a dollar-for-dollar basis by the amount of Restricted Junior
Payments incurred in reliance on this clause (x) and (y) notwithstanding
the foregoing, in no event shall any Restricted Junior Payments be made
pursuant to this subsection 7.5(ix) for the purpose of repurchasing capital
stock or other equity Securities of Holdings held by Franchisees unless (I)
Holdings shall have delivered to Administrative Agent an Officer's
Certificate (together with supporting calculations), in form and substance
reasonably satisfactory to Administrative Agent, certifying as to
compliance with a Senior Leverage Ratio of less than 2.25:1.0 but greater
than or equal to 2.00:1.0 (determined on a pro forma basis, as if all
indebtedness incurred after the last day of the Test Period then last ended
and then outstanding (including any indebtedness incurred to finance such
repurchases) had been incurred on the first day of the Test Period then
last ended and taking account of any additional adjustments required by
subsection 7.6D), in which case the aggregate amount of Restricted Junior
Payments made to repurchase capital stock or other equity Securities of
Franchisees pursuant to this subsection 7.5(ix) shall not exceed
$15,000,000 (or, if less, the aggregate amount permitted to be used at any
time to make Restricted Junior Payments pursuant to this subsection 7.5(ix)
without regard to this proviso) or (II) Holdings shall have delivered to
Administrative Agent an Officer's Certificate (together with supporting
calculations), in form and substance reasonably satisfactory to
Administrative Agent, certifying as to compliance with a Senior Leverage
Ratio of less than 2.00:1.0 (determined on a pro forma basis, as if any
indebtedness all indebtedness incurred after the last day of the Test
Period then last ended and then outstanding (including any indebtedness
incurred to finance such repurchases) had been incurred on the first day of
the Test Period then last ended and taking account of any additional
adjustments required by subsection 7.6D), in which case the aggregate
amount of Restricted Junior Payments made to repurchase capital stock or
other equity Securities of Franchisees pursuant to this subsection 7.5(ix)
shall not exceed $40,000,000 (or, if less, the aggregate amount permitted
to be used at any time to make Restricted Junior Payments pursuant to this
subsection 7.5(ix) without regard to this proviso);
(x) so long as no Event of Default is then in existence or would
result therefrom, Company may make scheduled interest and principal
payments in respect of
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Permitted Seller Notes permitted under subsection 7.l(ix) in accordance
with the terms of such Permitted Seller Notes;
(xi) so long as no Event of Default is then in existence or would
result therefrom, Holdings may redeem Cumulative Preferred Stock with an
aggregate liquidation preference not to exceed Net Equity Proceeds received
by Holdings after the Closing Date from the issuance of Holdings Common
Stock;
(xii) Holdings may pay regularly accruing dividends with respect to
Qualified Preferred Stock through the issuance of additional shares of
Qualified Preferred Stock (but not in cash) in accordance with the terms of
the documentation governing the same;
(xiii) so long as no Potential Event of Default or Event of Default
then exists or would result therefrom, Company may make Restricted Junior
Payments to Holdings to the extent necessary to enable Holdings to, and
Holdings may repurchase the capital stock of Holdings from a Franchisee of
Company in connection with the Permitted Acquisition of such Franchisee,
provided that the aggregate amount of such repurchases shall not exceed
$25,000,000 (as such amount may be reduced from time to time as a result of
the application of clause (x) of the proviso appearing in subsection
7.5(ix) and clause (z) of the proviso appearing in subsection 7.5(xiv)),
provided further that Company and Holdings may make additional Restricted
Junior Payments for the purposes described above in this subsection
7.5(xiii) in an aggregate amount not to exceed $15,000,000, in which case
the aggregate amount of Restricted Junior Payments otherwise permitted to
be made under subsection 7.5(ix) above (without regard to the proviso
therein) shall be reduced on a dollar-for-dollar basis by the amount of
Restricted Junior Payments made in reliance on this proviso; and
(xiv) at any time after the consummation of a Qualified IPO, Company
may make Restricted Junior Payments to Holdings to the extent necessary to
enable Holdings to, and Holdings may repurchase the capital stock of
Holdings from any holder thereof, provided that (w) no Potential Event of
Default or Event of Default then exists or would result therefrom
(including as a result of the concurrent reduction of the restricted
payment baskets set forth in subsections 7.5(ix) and (xiii) as contemplated
by clause (z) below), (x) Holdings shall have delivered to Administrative
Agent an Officer's Certificate (together with supporting calculations), in
form and substance reasonably satisfactory to Administrative Agent,
certifying as to compliance with a Senior Leverage Ratio of less than
1.75:1.0 (determined on a pro forma basis, as if all indebtedness incurred
after the last day of the Test Period then last ended and then outstanding
(including any indebtedness incurred to finance such repurchases) had been
incurred on the first day of the Test Period then last ended and taking
account of any additional adjustments required by subsection 7.6D), (y) the
aggregate amount of such repurchases shall not exceed (i) at all times
during the period commencing on the Closing Date through and including
December 31, 2003, $20,000,000, (ii) at all times during the period
commencing on January 1, 2004 through and including December 31, 2004,
$35,000,000 and (iii) at all times after December 31, 2004, $50,000,000 and
(z) the aggregate amount of repurchases made pursuant to this clause (xiv)
shall apply (I) 50% to reduce the aggregate amount of Restricted Junior
Payments otherwise permitted to be made under subsection 7.5(ix)
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(without regard to the proviso therein) and (II) 50% to reduce the
aggregate amount of Restricted Junior Payments otherwise permitted to be
made under subsection 7.5(xiii) (without regard to the second proviso
therein).
7.6 Financial Covenants.
A. Minimum Interest Coverage Ratio. Holdings shall not permit the ratio
of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Cash Interest Expense
for any Test Period ending during any of the Accounting Quarters set forth below
to be less than the correlative ratio indicated:
=================================================================================
MINIMUM INTEREST
ACCOUNTING QUARTER COVERAGE RATIO
---------------------------------------------------------------------------------
3/rd/ Accounting Quarter of Fiscal
Year 2002 2.50x
---------------------------------------------------------------------------------
4/th/ Accounting Quarter of Fiscal Year
2002 2.50x
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
1/st/ Accounting Quarter of Fiscal Year
2003 2.50x
---------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal
Year 2003 2.50x
---------------------------------------------------------------------------------
3/rd/ Accounting Quarter of Fiscal Year
2003 2.50x
---------------------------------------------------------------------------------
4/th/ Accounting Quarter of Fiscal Year
2003 2.75x
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
1/st/ Accounting Quarter of Fiscal Year
2004 2.75x
---------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal
Year 2004 2.75x
---------------------------------------------------------------------------------
3/rd/ Accounting Quarter of Fiscal Year
2004 2.75x
---------------------------------------------------------------------------------
4/th/ Accounting Quarter of Fiscal Year
2004 3.00x
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
1/st/ Accounting Quarter of Fiscal Year
2005 3.00x
---------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal
Year 2005 3.00x
---------------------------------------------------------------------------------
3/rd/ Accounting Quarter of Fiscal Year
2005 3.00x
---------------------------------------------------------------------------------
4/th/ Accounting Quarter of Fiscal Year
2005 3.25x
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
1/st/ Accounting Quarter of Fiscal Year
2006 3.25x
---------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal
Year 2006 3.25x
---------------------------------------------------------------------------------
3/rd/ Accounting Quarter of Fiscal Year
2006 3.25x
---------------------------------------------------------------------------------
4/th/ Accounting Quarter of Fiscal Year 3.50x
---------------------------------------------------------------------------------
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=================================================================================
MINIMUM INTEREST
ACCOUNTING QUARTER COVERAGE RATIO
---------------------------------------------------------------------------------
2006
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
1/st/ Accounting Quarter of Fiscal Year
2007 3.50x
---------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal
Year 2007 3.50x
---------------------------------------------------------------------------------
3/rd/ Accounting Quarter of Fiscal Year
2007 3.50x
---------------------------------------------------------------------------------
4/th/ Accounting Quarter of Fiscal Year
2007 3.50x
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
1/st/ Accounting Quarter of Fiscal Year
2008 3.50x
---------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal
Year 2008 3.50x
---------------------------------------------------------------------------------
B. Maximum Leverage Ratio. Holdings shall not permit the Leverage Ratio
on the last day of any Test Period ending during any of the Accounting Quarters
set forth below to exceed the correlative ratio indicated:
==================================================================================
MAXIMUM LEVERAGE
ACCOUNTING QUARTER RATIO
----------------------------------------------------------------------------------
3/rd/ Accounting Quarter of Fiscal Year
2002 4.00x
----------------------------------------------------------------------------------
4/th/ Accounting Quarter of Fiscal Year
2002 4.00x
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
1/st/ Accounting Quarter of Fiscal Year
2003 4.00x
----------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal
Year 2003 4.00x
----------------------------------------------------------------------------------
3/rd/ Accounting Quarter of Fiscal Year
2003 4.00x
----------------------------------------------------------------------------------
4/th/ Accounting Quarter of Fiscal Year
2003 3.75x
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
1/st/ Accounting Quarter of Fiscal Year
2004 3.75x
----------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal
Year 2004 3.75x
----------------------------------------------------------------------------------
3/rd/ Accounting Quarter of Fiscal Year
2004 3.75x
----------------------------------------------------------------------------------
4/th/ Accounting Quarter of Fiscal Year
2004 3.50x
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
1/st/ Accounting Quarter of Fiscal Year
2005 3.50x
----------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal
Year 2005 3.50x
----------------------------------------------------------------------------------
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===================================================================================
MAXIMUM LEVERAGE
ACCOUNTING QUARTER RATIO
-----------------------------------------------------------------------------------
3/rd/ Accounting Quarter of Fiscal Year
2005 3.50x
-----------------------------------------------------------------------------------
4/th/ Accounting Quarter of Fiscal Year
2005 3.25x
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
1/st/ Accounting Quarter of Fiscal Year
2006 3.25x
-----------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal
Year 2006 3.25x
-----------------------------------------------------------------------------------
3/rd/ Accounting Quarter of Fiscal Year
2006 3.25x
-----------------------------------------------------------------------------------
4/th/ Accounting Quarter of Fiscal Year
2006 3.00x
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
1/st/ Accounting Quarter of Fiscal Year
2007 3.00x
-----------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal
Year 2007 3.00x
-----------------------------------------------------------------------------------
3/rd/ Accounting Quarter of Fiscal Year
2007 3.00x
-----------------------------------------------------------------------------------
4/th/ Accounting Quarter of Fiscal Year
2007 3.00x
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
1/st/ Accounting Quarter of Fiscal Year
2008 3.00x
-----------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal
Year 2008 3.00x
-----------------------------------------------------------------------------------
C. Maximum Senior Leverage Ratio. Holdings shall not permit the Senior
Leverage Ratio on the last day of any Test Period ending during any of the
Accounting Quarters set forth below to exceed the correlative ratio indicated:
-----------------------------------------------------------------------------------
ACCOUNTING QUARTER MAXIMUM SENIOR LEVERAGE RATIO
------------------ -----------------------------
-----------------------------------------------------------------------------------
3rd Accounting Quarter of 3.00x
Fiscal Year 2002
-----------------------------------------------------------------------------------
4th Accounting Quarter of 3.00x
Fiscal Year 2002
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
1st Accounting Quarter of 3.00x
Fiscal Year 2003
-----------------------------------------------------------------------------------
2/nd/ Accounting Quarter of 3.00x
Fiscal Year 2003
-----------------------------------------------------------------------------------
3rd Accounting Quarter of 3.00x
Fiscal Year 2003
-----------------------------------------------------------------------------------
4th Accounting Quarter of 2.75x
Fiscal Year 2003
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
1st Accounting Quarter of 2.75x
Fiscal Year 2004
-----------------------------------------------------------------------------------
-125-
-----------------------------------------------------------------------------------
Fiscal Year 2004
-----------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal 2.75x
Year 2004
-----------------------------------------------------------------------------------
3rd Accounting Quarter of 2.75x
Fiscal Year 2004
-----------------------------------------------------------------------------------
4th Accounting Quarter of 2.50x
Fiscal Year 2004
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
1st Accounting Quarter of 2.50x
Fiscal Year 2005
-----------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal 2.50x
Year 2005
-----------------------------------------------------------------------------------
3rd Accounting Quarter of 2.50x
Fiscal Year 2005
-----------------------------------------------------------------------------------
4th Accounting Quarter of 2.25x
Fiscal Year 2005
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
1st Accounting Quarter of 2.25x
Fiscal Year 2006
-----------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal 2.25x
Year 2006
-----------------------------------------------------------------------------------
3rd Accounting Quarter of 2.25x
Fiscal Year 2006
-----------------------------------------------------------------------------------
4th Accounting Quarter of 2.25x
Fiscal Year 2006
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
1st Accounting Quarter of 2.25x
Fiscal Year 2007
-----------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal 2.25x
Year 2007
-----------------------------------------------------------------------------------
3rd Accounting Quarter of 2.25x
Fiscal Year 2007
-----------------------------------------------------------------------------------
4th Accounting Quarter of 2.25x
Fiscal Year 2007
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
1st Accounting Quarter of 2.25x
Fiscal Year 2008
-----------------------------------------------------------------------------------
2/nd/ Accounting Quarter of Fiscal 2.25x
Year 2008
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
D. Certain Calculations. With respect to any period during which a
Permitted Acquisition occurs, for purposes of determining compliance with the
financial covenants set forth in this subsection 7.6, Consolidated Adjusted
EBITDA and Consolidated Cash Interest Expense shall be calculated with respect
to such periods and such New Business on a pro forma basis, taking into account,
in the case of a determination of Consolidated Adjusted EBITDA, factually
supportable and identifiable cost savings and expenses which would be accounted
for as an adjustment pursuant to Article 11 of Regulation S-X promulgated under
the Securities Act and as interpreted by the staff of the Securities and
Exchange Commission as of December 30, 2001, which pro forma adjustments shall
be certified by the principal financial officer or principal accounting officer
of Holdings using the historical financial statements of the New Business so
acquired or to be acquired and the consolidated financial statements of Holdings
and
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its Subsidiaries which shall be reformulated (i) as if such Permitted
Acquisition, and any acquisitions which have been consummated during such
period, any Indebtedness or other liabilities incurred in connection with any
such acquisition and any permitted cost savings and expenses had been
consummated, incurred or realized, as the case may be, at the beginning of such
period (and assuming that such Indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant acquisition at the
weighted average of the interest rates applicable to outstanding Loans during
such period), and (ii) otherwise in conformity with certain procedures to be
agreed upon between Administrative Agent, Holdings and Company, all such
calculations to be in form and substance reasonably satisfactory to
Administrative Agent.
7.7 Restriction on Fundamental Changes; Asset Sales and
Recapitalizations.
Holdings shall not, and shall not permit any of its Subsidiaries to,
issue any capital stock or other equity interests or enter into any transaction
of merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer
any liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor
or sublessor), transfer or otherwise dispose of, in one transaction or a series
of transactions, all or any part of its business, property or assets, whether
now owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) any Subsidiary of a Borrower may be merged with or into either
Borrower or any wholly owned Subsidiary Guarantor, or be liquidated, wound
up or dissolved, or all or any part of its business, property or assets may
be conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to either Borrower or any wholly
owned Subsidiary Guarantor; provided that, in the case of such a merger
involving Company, Company shall be the continuing or surviving
corporation, in the case of such a merger involving Subsidiary Borrower
(other than a merger of Company and Subsidiary Borrower), Subsidiary
Borrower shall be the continuing or surviving corporation, and in the case
of any other such merger, such wholly owned Subsidiary Guarantor shall be
the continuing or surviving corporation;
(ii) any Foreign Subsidiary of Company may be merged with or into any
wholly owned Foreign Subsidiary, or be liquidated, wound up or dissolved,
or all or any part of its business, property or assets may be conveyed,
sold, leased, transferred or otherwise disposed of, in one transaction or a
series of transactions, to any wholly owned Foreign Subsidiary; provided
that (i) in the case of such a merger, such wholly owned Foreign Subsidiary
shall be the continuing or surviving corporation and (ii) in each case, the
stock of such wholly owned Foreign Subsidiary is pledged pursuant to, and
to the extent required under, the Collateral Documents;
(iii) Borrowers and their respective Subsidiaries may make Consolidated
Capital Expenditures permitted under subsection 7.8;
-127-
(iv) Borrowers and their respective Subsidiaries may dispose of
obsolete, uneconomical, negligible, worn out or surplus property (including
Intellectual Property) in the ordinary course of business;
(v) Borrowers and their respective Subsidiaries may sell, lease,
license or otherwise dispose of assets in transactions that do not
constitute or are excluded from the definition of Asset Sales (including,
without limitation, inventory and other assets acquired for resale to
Franchisees in the ordinary course of business); provided that the
consideration received for such assets shall be in an amount at least equal
to the fair market value thereof;
(vi) subject to subsection 7.12, Borrowers and their respective
Subsidiaries may make Asset Sales of assets having a fair market value not
in excess of $75,000,000; provided that (x) the consideration received for
such assets shall be in an amount at least equal to the fair market value
thereof and (y) the proceeds of such Asset Sales shall be applied as
required by subsection 2.4B(iii)(a);
(vii) Borrowers and their respective Subsidiaries may sell or
discount, in each case without recourse, accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof;
(viii) Borrowers and their respective Subsidiaries may sell or
exchange specific items of equipment, so long as the purpose of each such
sale or exchange is to acquire (and results within 90 days of such sale or
exchange in the acquisition of) replacement items of equipment which are
the functional equivalent of the item of equipment so sold or exchanged;
(ix) Borrowers and their respective Subsidiaries may, in the
ordinary course of business, license as licensee or licensor patents,
trademarks, copyrights and know-how to or from third Persons, so long as
any such license by a Borrower or any of its Subsidiaries in its capacity
as licensor is (x) permitted to be assigned pursuant to the Collateral
Documents (to the extent that a security interest in such patents,
trademarks, copyrights and know-how is granted thereunder) and (y) does not
otherwise prohibit the granting of a Lien by such Borrower or any of its
Subsidiaries pursuant to the Collateral Documents in the Intellectual
Property covered by such license;
(x) Borrowers and their respective Subsidiaries may sell or
otherwise transfer inventory to their respective Subsidiaries for resale by
such Subsidiaries, and Subsidiaries of Borrowers may sell or otherwise
transfer inventory to either Borrower for resale by such Borrower so long
as the security interest granted to Collateral Agent pursuant to the
Collateral Documents in the inventory so transferred shall remain in full
force and effect and perfected (to at least the same extent as in effect
immediately prior to such transfer);
(xi) Borrowers may contribute cash to one or more wholly owned
Domestic Subsidiaries that is a Subsidiary Guarantor;
-128-
(xii) Borrowers and their respective Domestic Subsidiaries may
transfer cash and other assets (other than inventory) to wholly owned
Foreign Subsidiaries in accordance with Section 7.3(xiii);
(xiii) Company and any Domestic Subsidiary of Company may transfer
cash and other assets to Company, Subsidiary Borrower or any other wholly
owned Domestic Subsidiary of Company that is a Subsidiary Guarantor, so
long as the security interests granted to Collateral Agent of Lenders
pursuant to the Collateral Documents in the assets so transferred shall
remain in full force and effect and perfected (to at least the same extent
as in effect immediately prior to such transfer);
(xiv) Company and its Subsidiaries may, at any time prior to December
31, 2005, license software necessary to operate the Domino's PULSE System
to their Franchisees in the ordinary course of business;
(xv) Holdings may issue (x) Holdings Common Stock and (y) Qualified
Preferred Stock, so long as, with respect to each issuance thereof,
Holdings receives equivalent consideration therefor (as determined in good
faith by Holdings);
(xvi) either Borrower or any wholly-owned Subsidiary of a Borrower
may make acquisitions of assets and businesses (including acquisitions of
the capital stock or other equity interests of another Person), provided
that:
(a) immediately prior to and after giving effect to any such
acquisition, Borrowers and their respective Subsidiaries shall be in
compliance with the provisions of subsection 7.13 hereof;
(b) if such acquisition is structured as a stock acquisition,
then either (A) the Person so acquired becomes a wholly owned
Subsidiary of either Borrower or (B) such Person is merged with and
into either Borrower or a wholly owned Subsidiary of either Borrower
(with such Borrower or such wholly owned Subsidiary being the
surviving corporation in such merger), and in any case, all of the
provisions of subsection 6.8 have been complied with in respect of
such Person;
(c) (1) Holdings shall be in compliance with the covenants set
forth in subsection 7.6 hereof (determined on a pro forma basis, as if
the acquisition had been consummated, and any indebtedness incurred to
finance such acquisition (and all other indebtedness incurred after
the last day of the Test Period then last ended and then outstanding)
had been incurred, in each case on the first day of the Test Period
then last ended and taking account of any additional adjustments
required by subsection 7.6D), (2) at the time of such acquisition (and
immediately after giving effect thereto), the Liquidity shall exceed
$20,000,000, (3) no Event of Default or Potential Event of Default
shall have occurred and be continuing at the time of such acquisition
or shall be caused thereby; and (4) Holdings shall have delivered to
Administrative Agent an Officer's Certificate (together with
supporting information therefor), in form and substance reasonably
satisfactory to
-129-
Administrative Agent, certifying as to the foregoing; provided that,
notwithstanding the foregoing, in the event that the Permitted
Acquisition Cost of the proposed acquisition is less than or equal to
$5,000,000, the requirement to provide an Officer's Certificate
pursuant to, this clause (c) shall not be applicable; and
(d) any assets acquired pursuant to such acquisition shall be
subject to a First Priority Lien in favor of Collateral Agent on
behalf of Lenders pursuant to the Collateral Documents; and
(xvii) Borrowers and their respective Subsidiaries may issue capital
stock to the extent permitted by subsection 7.12(ii); and
(xviii) Company or any of the Subsidiary Guarantors may sell the
property constructed by it pursuant to the WRC Project to the WRC JV and
lease-back such property from the WRC JV, so long as (x) the proceeds of
such sale are entirely cash and in amount at least equal to 80% of the
aggregate amount expended by Company and its Subsidiaries to acquire,
construct and develop such property, (y) the Indebtedness of Company or
such Subsidiary under the Capital Lease arising under such sale-leaseback
transaction is permitted under subsection 7.1(xii) and (z) after the
application of the net sale proceeds from such Asset Sale to the repayment
of any Indebtedness incurred pursuant to Section 7.1(xii) to finance the
WRC Project, the Net Asset Sale Proceeds from such Asset Sale are applied
to prepay Loans and/or reduce the Revolving Loan Commitments and/or
reinvested as, and to the extent, required by subsection 2.4B(iii)(a).
To the extent the Requisite Lenders waive the provisions of this Section 7.7
with respect to the sale or other disposition of any Collateral, or any
Collateral is sold or otherwise disposed of as permitted by this Section 7.7,
such Collateral (unless transferred to Holdings or a Subsidiary thereof) shall
be sold or otherwise disposed of free and clear of the Liens created by the
Collateral Documents and Administrative Agent shall take such actions
(including, without limitation, directing Collateral Agent to take such actions)
to effectuate the release and discharge of such Collateral so sold or otherwise
disposed of and such other actions as are appropriate in connection therewith.
7.8 Consolidated Capital Expenditures.
A. Credit Agreement Parties shall not, and shall not permit their
respective Subsidiaries to, make or incur Consolidated Capital Expenditures, in
any Fiscal Year indicated below, in an aggregate amount in excess of the
corresponding amount (as adjusted in accordance with the provisos hereto, the
"Maximum Consolidated Capital Expenditures Amount") set forth in the table below
opposite such Fiscal Year; provided that (i) for the Maximum Consolidated
Capital Expenditures set forth in the table below opposite Fiscal Year 2002 such
amount shall be applicable only for the period from the Closing Date to the end
of such Fiscal Year and (ii) the Maximum Consolidated Capital Expenditures
Amount for any Fiscal Year shall be increased by an amount equal to the excess,
if any, of the Maximum Consolidated Capital Expenditures Amount for the previous
Fiscal Years (after adjustment in accordance with this proviso) over the actual
amount of Consolidated Capital Expenditures for such previous Fiscal Years:
-130-
Maximum Consolidated
Fiscal Year Capital Expenditures
----------- --------------------
2002 $40,000,000
2003 $60,000,000
2004 $61,800,000
2005 $63,700,000
2006 $65,600,000
2007 $67,600,000
2008 $69,600,000
B. Notwithstanding anything in this subsection to the contrary, so
long as no Event of Default or Potential Event of Default shall have occurred
and be continuing or shall be caused thereby, Borrowers and their respective
Subsidiaries may make Consolidated Capital Expenditures at any time in an
aggregate amount equal to the Excess Proceeds Amount at such time (which
Consolidated Capital Expenditures shall not be included in any determination of
Consolidated Capital Expenditures under subsections 7.8A and 7.8C).
C. Notwithstanding anything in this subsection to the contrary, so
long as no Event of Default or Potential Event of Default shall have occurred
and be continuing or shall be caused thereby, Borrowers and their respective
Subsidiaries may make Consolidated Capital Expenditures at any time in an
aggregate amount not to exceed $50,000,000 in respect to the WRC Project (which
Consolidated Capital Expenditures shall not be included in any determination of
Consolidated Capital Expenditures under subsections 7.8A and 7.8B).
7.9 Sales and Lease-Backs.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Holdings or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Holdings
or any of its Subsidiaries) or (ii) which Holdings or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Holdings or any of its Subsidiaries
to any Person (other than Holdings or any of its Subsidiaries) in connection
with such lease; provided that Company or any of the Subsidiary Guarantors may
sell the property constructed by it pursuant to the WRC Project to the WRC JV
and lease-back such property from the WRC JV in accordance with the requirements
of subsection 7.7(xviii).
7.10 Sale or Discount of Receivables.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable;
provided, however, that Borrowers and their respective Subsidiaries may, in the
exercise of their reasonable business judgment in connection with
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efforts to collect amounts owed thereunder, discount or sell (to the extent
permitted under subsection 7.7(vii)) for less than the face value thereof any
accounts receivable.
7.11 Transactions with Shareholders and Affiliates.
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Holdings or with any Affiliate of Holdings or of any such holder, on terms that
are less favorable to Holdings or that Subsidiary, as the case may be, than
those that might be obtained at the time from Persons who are not such a holder
or Affiliate; provided that the foregoing restriction shall not apply to (i) any
transaction between Holdings and any of its wholly owned Subsidiaries or between
any of its wholly owned Subsidiaries, (ii) any payment from Company to Holdings
expressly permitted under subsection 7.5, (iii) any payment by Holdings or any
of its Subsidiaries of fees owing under the Consulting Agreement in accordance
with the terms thereof, (iv) any employment agreement entered into by Holdings
or any of its Subsidiaries in the ordinary course of business, (v) any issuance
of capital stock of Holdings in connection with employment arrangements, stock
options and stock ownership plans of Holdings or any of its Subsidiaries entered
into in the ordinary course of business, (vi) any of the Recapitalization
Transactions (as defined in the Existing Credit Agreement), (vii) reasonable and
customary fees paid to members of the Boards of Directors of Holdings and its
Subsidiaries, (viii) so long as no Event of Default under subsection 8.1, 8.6 or
8.7 is then in existence or would result from the payment thereof, (x) any
payment by Holdings or any of its Subsidiaries of ▇▇▇▇ Management Fees under the
▇▇▇▇ Advisory Services Agreement as and when due, provided if any such fees
cannot be paid as provided above as a result of the existence of such an Event
of Default, such fees shall continue to accrue and shall be permitted to be paid
at such time as all such Events of Default have been cured or waived and no
other Event of Default is then in existence and (y) any prepayment by Holdings
of the ▇▇▇▇ Management Fees owing to ▇▇▇▇ over the term of the ▇▇▇▇ Advisory
Services Agreement to the extent permitted by subsection 7.5(vii)(y) and (ix)
the reimbursement of ▇▇▇▇ for its reasonable out-of-pocket expenses under the
▇▇▇▇ Advisory Services Agreement incurred in connection with performing
management services to Holdings and its Subsidiaries.
7.12 Disposal of Subsidiary Stock.
Except for any sale of 100% of the capital stock or other equity
Securities of any of its Subsidiaries in compliance with the provisions of
subsection 7.7(vi), Holdings shall not:
(i) directly or indirectly sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock or other equity Securities of any
of its Subsidiaries, except to qualify directors if required by applicable
law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock or other equity Securities of any of its Subsidiaries (including such
Subsidiary), except (x) to Company or another Subsidiary of Holdings
(subject to the restrictions on such disposition otherwise imposed
hereinunder) or (y) to qualify directors if required by applicable law.
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7.13 Conduct of Business.
From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company and its Subsidiaries on the Closing Date and
similar or related or supportive businesses and (ii) such other lines of
business as may be consented to by Requisite Lenders. Holdings shall engage in
no business and have no assets (including Intellectual Property) other than (i)
owning the stock of Company, (ii) the issuance of and activities related to the
maintenance and servicing of the Shareholder Subordinated Notes as permitted
hereunder, (iii) the entering into, and the performance of its obligations
under, the Holdings Guaranty, the Pledge Agreement, the Security Agreement, the
Related Agreements to which it is a party and the ▇▇▇▇ Advisory Services
Agreement, (iv) the receipt of Cash dividends or Cash distributions from Company
in accordance with the provisions hereof and (v) activities associated with
expenses paid with any dividends paid to Holdings which are permitted under
subsection 7.5; provided that notwithstanding the foregoing, Holdings may engage
in activities incidental to (a) the maintenance of its corporate existence in
compliance with applicable law, (b) legal, tax and accounting matters in
connection with any of the foregoing activities and (c) entering into, and
performing its obligations under, this Agreement and the Loan Documents to which
it is a party. Notwithstanding anything to the contrary contained above in this
Section 7.13 or elsewhere in this Agreement, the Excluded Non-Profit Subsidiary
shall not engage in any business other than (i) the collection and application
of payments from Franchisees of Holdings and its Subsidiaries to be used for the
advertising and promotion of the business of Holdings, its Subsidiaries and
their respective Franchisees, (ii) the incurrence (and servicing) of
intercompany Indebtedness from Company in an aggregate outstanding principal
amount not to exceed $5,000,000 at any one time outstanding, so long as (x) the
proceeds therefrom are used solely for the advertising and promotion of the
business of Holdings, its Subsidiaries and their respective Franchises and (y)
such intercompany Indebtedness is evidenced by a promissory note pledged to
Collateral Agent pursuant to the Pledge Agreement and (iii) those activities
that are incidental to (x) the maintenance of its corporate existing compliance
with applicable law and (y) tax and accounting matters in connection with any of
the foregoing activities.
7.14 Amendments or Waivers of Certain Agreements; Amendments of
Documents Relating to Subordinated Indebtedness; Designation
of "Designated Senior Debt".
A. Amendments or Waivers of Certain Agreements. No Credit Agreement
Party or any of its Subsidiaries will agree to any amendment to, or waive any of
its rights under, the ▇▇▇▇ Advisory Services Agreement or any Related Agreement
(other than any Related Agreement evidencing or governing any Subordinated
Indebtedness or any Cumulative Preferred Stock Document) after the Closing Date
if any such amendment or waiver would, individually or in the aggregate,
reasonably be expected to be materially adverse to Lenders without in each case
obtaining the prior written consent of Requisite Lenders to such amendment or
waiver.
B. Amendments of Documents Relating to Subordinated Indebtedness, etc.
(i) Credit Agreement Parties shall not, and shall not permit any of their
respective Subsidiaries to, amend or otherwise change the terms of any
Subordinated Indebtedness, or make any payment consistent with an amendment
thereof or change thereto, if the effect of such
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amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions of such Subordinated Indebtedness (or of any guaranty
thereof), or change any collateral therefor (other than to release such
collateral), or if the effect of such amendment or change, together with all
other amendments or changes made, is to increase materially the obligations of
the obligor thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would reasonably be expected to be materially adverse to any Loan Party or
Lenders.
(ii) Credit Agreement Parties shall not, and shall not permit any of
their respective Subsidiaries to, amend or otherwise change the terms of any
Cumulative Preferred Stock Document, or make any payment consistent with an
amendment thereof or change thereto, if the effect of such amendment or change
is to increase the dividend rate on the Cumulative Preferred Stock, change (to
earlier dates) any dates upon which dividends are due thereon, change any event
of default or condition to an event of default with respect thereto (other than
to eliminate any such event of default or increase any grace period related
thereto), change the redemption provisions thereof, or if the effect of such
amendment or change, together with all other amendments or changes made, is to
confer any additional rights on the holders of such Cumulative Preferred Stock
which would reasonably be expected to be materially adverse to any Loan Party or
Lenders.
C. Designation of "Designated Senior Debt". Neither Holdings nor any
of its Subsidiaries shall designate any Indebtedness as "Senior Debt",
"Designated Senior Debt" or "Senior Indebtedness" (or any similar term) (as such
term or terms are defined in the Senior Subordinated Note Indenture and, on and
after the execution and delivery thereof, any agreement relating to Permitted
Additional Subordinated Indebtedness) for purposes of the Senior Subordinated
Note Indenture and, on and after the execution and delivery thereof, any
agreement relating to Permitted Additional Subordinated Indebtedness, without
the prior written consent of Requisite Lenders.
7.15 Change of Legal Names; Type of Organization (and Whether a
Registered Organization); Jurisdiction of Organization; etc.
Neither Holdings, Borrowers nor any Subsidiary Guarantor shall change
its legal name, its type of organization, its status as a registered
organization (in the case of a registered organization), its jurisdiction of
organization, its location, or its organizational identification number (if
any), except that any such changes shall be permitted (so long as not in
violation of the applicable requirements of the Collateral Documents and so long
as same do not involve (x) a registered organization ceasing to constitute same
or (y) Holdings, Borrowers or any Subsidiary Guarantor changing its jurisdiction
of organization or location from the United States or a State thereof to a
jurisdiction of organization or location, as the case may be, outside the United
States or a State thereof) if (i) it shall have given to Collateral Agent not
less than 15 days' prior written notice of each change to the information listed
on Schedule 5.16 (as adjusted for any subsequent changes thereto previously made
in accordance with this sentence), together with a supplement
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to Schedule 5.16 which shall correct all information contained therein for
Holdings, Borrowers or the respective Subsidiary Guarantor, and (ii) in
connection with the respective such change or changes, it shall have taken all
action reasonably requested by Collateral Agent to maintain the security
interests of Collateral Agent in the Collateral intended to be granted hereby
pursuant to the Collateral Documents at all times fully perfected and in full
force and effect.
7.16 Fiscal Year.
-----------
Holdings and Borrowers shall not change their Fiscal Year-end from the
Sunday nearest to December 31.
SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
8.1 Failure to Make Payments When Due.
Failure by either Borrower to pay any installment of principal of any
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; failure by either
Borrower to pay when due any amount payable to an Issuing Lender in
reimbursement of any drawing under a Letter of Credit; or failure by either
Borrower to pay any interest on any Loan or any fee or any other amount due
under this Agreement within three days after the date due; or
8.2 Default in Other Agreements.
(i) Failure of Holdings or any of its Subsidiaries to pay when due
any principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an individual principal amount of $5,000,000
or more or with an aggregate principal amount of $10,000,000 or more, in each
case beyond the end of any grace period provided therefor; or (ii) breach or
default by Holdings or any of its Subsidiaries with respect to any other
material term of (a) one or more items of Indebtedness or Contingent Obligations
in the individual or aggregate principal amounts referred to in clause (i) above
or (b) any loan agreement, mortgage, indenture or other agreement relating to
such item(s) of Indebtedness or Contingent Obligation(s), if the effect of such
breach or default is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder
or holders) to cause, that Indebtedness or Contingent Obligation(s) to become or
be declared due and payable prior to its stated maturity or the stated maturity
of any underlying obligation, as the case may be (upon the giving or receiving
of notice, lapse of time, both, or otherwise); or
8.3 Breach of Certain Covenants.
Failure of any Credit Agreement Party to perform or comply with any
term or condition contained in subsection 2.5 or 6.2 or Section 7 of this
Agreement; provided, however, that such failure with respect to the covenants
contained in subsections 7.1, 7.2, 7.3 and 7.4 shall
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not constitute an Event of Default for ten days after such failure so long as
Credit Agreement Parties are diligently pursuing the cure of such failure; or
8.4 Breach of Warranty.
Any representation, warranty, certification or other statement made by
Holdings or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Holdings or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
8.5 Other Defaults Under Loan Documents.
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) a Responsible Officer of such Loan Party becoming aware of such
default or (ii) receipt by Holdings and/or such Loan Party of notice from
Administrative Agent or any Lender of such default; or
8.6 Involuntary Bankruptcy, Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Holdings or any of its Subsidiaries
(other than Immaterial Subsidiaries) in an involuntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against Holdings or any of its Subsidiaries
(other than Immaterial Subsidiaries) under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Holdings or any of its Subsidiaries
(other than Immaterial Subsidiaries), or over all or a substantial part of its
property, shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of Holdings or
any of its Subsidiaries (other than Immaterial Subsidiaries) for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Holdings or any of its Subsidiaries (other than Immaterial
Subsidiaries), and any such event described in this clause (ii) shall continue
for 60 days unless dismissed, bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Holdings or any of its Subsidiaries (other than Immaterial
Subsidiaries) shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a
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substantial part of its property; or Holdings or any of its Subsidiaries (other
than Immaterial Subsidiaries) shall make any assignment for the benefit of
creditors; or (ii) Holdings or any of its Subsidiaries (other than Immaterial
Subsidiaries) shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the Board
of Directors of Holdings or any of its Subsidiaries (or any committee thereof)
shall adopt any resolution or otherwise authorize any action to approve any of
the actions referred to in clause (i) above or this clause (ii); or
8.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $5,000,000 or (ii)
in the aggregate at any time an amount in excess of $10,000,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage without any material reservations of
right) shall be entered or filed against Holdings or any of its Subsidiaries or
any of their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days (or in any event later than five
days prior to the date of any proposed sale thereunder); or
8.9 Dissolution.
Any order, judgment or decree shall be entered against Holdings or any
of its Subsidiaries decreeing the dissolution or split up of Holdings or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 Employee Benefit Plans.
There shall exist one or more ERISA Events which, individually or in
the aggregate, has or would reasonably be expected to have a Material Adverse
Effect; or
8.11 Change in Control.
(i) Holdings shall cease to own directly 100% of the capital stock of
Company; or (ii) Company shall cease to own directly 100% of the capital stock
of Subsidiary Borrower; or (iii) at any time prior to the consummation of a
Qualified IPO, ▇▇▇▇ and the Other Investors, collectively, shall beneficially
own less than any other Person or "group" (within the meaning of Rules 13d-3 and
13d-5 under the Securities Exchange Act of 1934, as in effect on the Closing
Date) other than a Permitted Group on a fully diluted basis of the economic and
voting interest in Holdings' Voting Stock; or (iv) a majority of the members of
the Board of Directors of Holdings, Company or Subsidiary Borrower shall not be
Continuing Directors; or (v) at any time prior to the consummation of a
Qualified IPO, ▇▇▇▇ shall (a) cease to have a presently exercisable right to
vote more of the issued and outstanding Voting Stock of Holdings than any one of
the Other Investors, or (b) cease to beneficially own a greater percentage of
the economic value of Holdings' Voting Stock than the percentage beneficially
owned by any one of the Other Investors; or (vi) at any time prior to the
consummation of a Qualified IPO, the ratio of (a) either (x) the percentage of
the issued and outstanding Voting Stock of Holdings or (y) the percentage of the
economic value of Voting Stock of Holdings, in each case held by ▇▇▇▇ at any
time, to (b) either (x) the percentage of the issued and outstanding Voting
Stock of Holdings or (y) the
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percentage of the economic value of Voting Stock of Holdings, in each case held
by ▇▇▇▇ on the Closing Date, shall at any time be less than .40:1.0; or (vii) at
any time on or after the consummation of a Qualified IPO, any Person or "group"
(within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934, as in
effect on the date hereof) (other than ▇▇▇▇ and the Other Investors) shall (a)
have acquired beneficial ownership of 30% or more on a fully diluted basis of
the economic and voting interest in Holdings' capital stock or (b) have obtained
the power (whether or not exercised) to elect a majority of Holdings' directors;
or (viii) a "Change of Control" under the Senior Subordinated Note Indenture,
any other Subordinated Indebtedness or any Preferred Stock or any documentation
governing the same (including, without limitation, the any Cumulative Preferred
Stock Document) shall occur; or
8.12 Invalidity of Guaranties; Failure of Security; Repudiation of
Obligations.
At any time after the execution and delivery thereof, (i) any Guaranty
for any reason, other than the satisfaction in full of all Obligations (other
than inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen and are not yet due and payable), shall
cease to be in full force and effect (other than in accordance with its terms)
or shall be declared to be null and void, (ii) any Collateral Document shall
cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen and are not yet due and payable) or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or Collateral Agent shall not have or shall cease to
have a valid and perfected First Priority Lien in any Collateral purported to be
covered thereby in which the security interest granted to the Collateral Agent
is at that time required to be perfected by the Collateral Documents having a
fair market value, individually or in the aggregate, exceeding $5,000,000, in
each case for any reason other than the failure of Collateral Agent,
Administrative Agent or any Lender to take any action within its control, or
(iii) any Loan Party shall contest the validity or enforceability of any Loan
Document in writing or deny in writing that it has any further liability,
including with respect to future advances by Lenders, under any Loan Document to
which it is a party; or
THEN (i) upon the occurrence of any Event of Default described in
subsection 8.6 or 8.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans, (b) an amount equal to the maximum amount that may at any
time be drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit), and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by each Credit Agreement Party, and the obligation of each
Lender to make any Loan, the obligation of Administrative Agent to issue any
Letter of Credit and the right of any Lender to issue any Letter of Credit
hereunder shall thereupon terminate, and (ii) upon the occurrence and during the
continuation of any other Event of Default, Administrative Agent shall, upon the
written request or with the written consent of Requisite Lenders, by written
notice to Borrowers, declare all or any portion of the amounts described in
clauses (a) through (c) above to be, and the same shall forthwith become,
immediately due and payable, and the obligation of each Lender to make any Loan,
the
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obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate;
provided that the foregoing shall not affect in any way the obligations of
Lenders under subsection 3.3C(i) or the obligations of Lenders to purchase
participations in any unpaid Swing Line Loans as provided in subsection
2.1A(iii).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Collateral Agent pursuant to the terms of
the Cash Collateral Account (as defined in the Security Agreement) and shall be
applied as therein provided.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
clause (ii) of such paragraph Borrowers shall pay all arrears of interest and
all payments on account of principal which shall have become due otherwise than
as a result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Borrowers, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit any Credit Agreement Party, and such
provisions shall not at any time be construed so as to grant any Credit
Agreement Party the right to require Lenders to rescind or annul any
acceleration hereunder or to preclude Administrative Agent, Collateral Agent or
Lenders from exercising any of the rights or remedies available to them under
any of the Loan Documents, even if the conditions set forth in this paragraph
are met.
SECTION 9.
AGENTS
9.1 Appointment.
A. Appointment of Agents. ▇.▇. ▇▇▇▇▇▇ Securities Inc. is hereby
appointed Arranger hereunder, and each Lender hereby authorizes Arranger to act
as its agent in accordance with the terms of this Agreement and the other Loan
Documents. JPMorgan Chase Bank is hereby appointed Administrative Agent
hereunder and under the other Loan Documents and each Lender hereby authorizes
Administrative Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents. Bank One is hereby appointed Syndication
Agent hereunder. Comerica is hereby appointed Documentation Agent hereunder.
Each Lender hereby authorizes and confirms the appointment by Administrative
Agent of JPMorgan Chase Bank as Collateral Agent under the Collateral Documents
and each Lender hereby authorizes Collateral Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents. Each
Agent hereby agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. The provisions of this
Section 9 are solely for the benefit of Agents and Lenders and no Loan Party
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shall have any rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties under this Agreement, each Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Holdings or any of its Subsidiaries. Arranger, without consent of or
notice to any party hereto, may assign any and all of its rights or obligations
hereunder to any of its Affiliates. As of the date on which Arranger notifies
Borrowers that it has concluded its primary syndication of the Loans and
Commitments, all obligations of ▇.▇. ▇▇▇▇▇▇ Securities, Inc., in its capacity as
Arranger hereunder, shall terminate. Bank One, in its capacity as Syndication
Agent, shall have no obligations hereunder. Comerica, in its capacity as
Documentation Agent, shall have no obligations hereunder.
B. Appointment of Supplemental Collateral Agents. It is the purpose
of this Agreement and the other Loan Documents that there shall be no violation
of any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Administrative Agent deems that by
reason of any present or future law of any jurisdiction it may not exercise any
of the rights, powers or remedies granted herein or in any of the other Loan
Documents or take any other action which may be desirable or necessary in
connection therewith, it may be necessary that Administrative Agent appoint an
additional individual or institution as a separate trustee, co-trustee,
collateral agent or collateral co-agent (any such additional individual or
institution being referred to herein individually as a "Supplemental Collateral
Agent" and collectively as "Supplemental Collateral Agents").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from any Credit Agreement Party or
any other Loan Party be required by any Supplemental Collateral Agent so
appointed by Administrative Agent for more fully and certainly vesting in and
confirming to him or it such rights, powers, privileges and duties, such Credit
Agreement Party shall, or shall cause such Loan Party to, execute, acknowledge
and deliver any and all such instruments promptly upon request by Administrative
Agent. In case any Supplemental Collateral Agent, or a successor thereto, shall
die, become incapable of acting, resign or be removed, all the rights, powers,
privileges and
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duties of such Supplemental Collateral Agent, to the extent permitted by law,
shall vest in and be exercised by Administrative Agent until the appointment of
a new Supplemental Collateral Agent.
9.2 Powers and Duties; General Immunity.
▇. ▇▇▇▇▇▇; Duties Specified. Each Lender irrevocably authorizes each
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Each Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Loan Documents. Each Agent
may exercise such powers, rights and remedies and perform such duties by or
through its agents or employees. No Agent shall have, by reason of this
Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon any Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by any Agent to Lenders or by or on behalf
of any Loan Party to any Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of any Loan Party or any other Person liable for
the payment of any Obligations, nor shall any Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
outstanding Loans or the Letter of Credit Usage or the component amounts
thereof.
C. Exculpatory Provisions. None of Agents nor any of their respective
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the Loan Documents except to the extent caused by such Agent's gross negligence
or willful misconduct. Each Agent shall be entitled to refrain from any act or
the taking of any action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until such Agent shall have received instructions in respect thereof from
Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6) and, upon receipt of such instructions from
Requisite Lenders (or such other Lenders, as the case may be), such Agent shall
be entitled to act or (where so instructed) refrain from acting, or to exercise
such power,
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discretion or authority, in accordance with such instructions. Without prejudice
to the generality of the foregoing, (i) each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Holdings and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against any Agent as a result of such Agent acting or (where
so instructed) refraining from acting under this Agreement or any of the other
Loan Documents in accordance with the instructions of Requisite Lenders (or such
other Lenders as may be required to give such instructions under subsection
10.6).
D. Agent Entitled to Act as Lender. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. Any Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Holdings or any of its Subsidiaries or
Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from Holdings and its Subsidiaries for
services in connection with this Agreement and otherwise without having to
account for the same to Lenders.
9.3 Representations and Warranties; No Responsibility for Appraisal
of Creditworthiness.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Holdings and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Holdings and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto (except as provided in subsection 6.1), whether coming into its
possession before the making of the Loans or at any time or times thereafter,
and no Agent shall have any responsibility with respect to the accuracy of or
the completeness of any information provided to Lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by any Credit Agreement Party, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as such Agent in any
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way relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. If any indemnity furnished to any Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished; provided
that in no event shall this sentence require any Lender to indemnify any Agent
against any liability, obligation, loss, damage, penalty, action, judgment,
suit, cost, expense or disbursement in excess of such Lender's Pro Rata Share
thereof; and provided further, that this sentence shall not be deemed to require
any Lender to indemnify any Agent against any liability, obligation, loss,
damage, penalty, action, judgment, suit, cost, expense or disbursement described
in the proviso to the immediately preceding sentence.
9.5 Successor Administrative Agent and Swing Line Lender.
A. Successor Administrative Agent. Administrative Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and each
Borrower, and Administrative Agent may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to
Borrowers and Administrative Agent and signed by Requisite Lenders. Upon any
such notice of resignation or any such removal, Requisite Lenders shall have the
right, upon five Business Days' notice to Borrowers, to appoint a successor
Administrative Agent with the consent (so long as no Event of Default is then in
existence) of each Borrower (which consent shall not be unreasonably withheld or
delayed). Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Administrative Agent and the
retiring or removed Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this Section 9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement.
B. Successor Swing Line Lender. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of JPMorgan Chase Bank or its successor as Swing Line
Lender, and any successor Administrative Agent appointed pursuant to subsection
9.5A shall, upon its acceptance of such appointment, become the successor Swing
Line Lender for all purposes hereunder. In such event (i) the relevant Borrower
or Borrowers shall prepay any outstanding Swing Line Loans made by the retiring
or removed Administrative Agent in its capacity as Swing Line Lender, (ii) upon
such prepayment, the retiring or removed Administrative Agent and Swing Line
Lender shall surrender any Swing Line Note held by it to Borrowers for
cancellation, and (iii) if so requested by the successor Administrative Agent
and Swing Line Lender in accordance with subsection 2.1E, Borrowers shall issue
a new Swing Line Note to the successor Administrative Agent and Swing Line
Lender substantially in the form of Exhibit II annexed hereto, in the principal
amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
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9.6 Collateral Documents and Guaranty.
Each Lender hereby further authorizes Collateral Agent, on behalf of
and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of the Lenders under
the Guaranties, and each Lender agrees to be bound by the terms of each
Collateral Document and each Guaranty; provided that Collateral Agent shall not
enter into or consent to any material amendment, modification, termination or
waiver of any provision contained in any Collateral Document or Guaranty without
the prior consent of Requisite Lenders (or such other Lenders as may be required
to give such instructions under subsection 10.6); provided further, however,
that, without further written consent or authorization from Lenders, Collateral
Agent may execute any documents or instruments necessary to (a) release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted by this Agreement or as permitted or required
under the Collateral Documents or to which Requisite Lenders (or such other
Lenders as may be required to give such consent under subsection 10.6) have
otherwise consented or (b) release any Subsidiary Guarantor from the
Subsidiaries Guaranty if all of the capital stock or other equity interests of
such Subsidiary Guarantor is or are sold to any Person pursuant to a sale or
other disposition permitted hereunder or to which Requisite Lenders (or such
other Lenders as may be required to give such consent under subsection 10.6)
have otherwise consented; provided, however, that nothing in this subsection
shall require consent to release from the Subsidiaries Guaranty any Person
which, immediately after such sale, shall be a Domestic Subsidiary of Holdings
which is obligated to and will enter into the Subsidiaries Guaranty. Anything
contained in any of the Loan Documents to the contrary notwithstanding, Credit
Agreement Parties, Administrative Agent, Collateral Agent and each Lender hereby
agree that (X) no Lender shall have any right individually to realize upon any
of the Collateral under any Collateral Document or to enforce any Guaranty, it
being understood and agreed that all powers, rights and remedies under the
Collateral Documents and the Guaranties may be exercised solely by
Administrative Agent and/or Collateral Agent for the benefit of Secured
Creditors in accordance with the terms thereof, and (Y) in the event of a
foreclosure by Collateral Agent on any of the Collateral pursuant to a public or
private sale, Collateral Agent or any Secured Creditor may be the purchaser of
any or all of such Collateral at any such sale and Collateral Agent, as agent
for and representative of Secured Creditors (but not any Secured Creditor or
Secured Creditors in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any collateral payable by Collateral Agent at such sale.
SECTION 10.
MISCELLANEOUS
10.1 Assignments and Participations in Loans and Letters of Credit.
A. General. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby (including any Affiliate of the Issuing Lender that
issues any Letter of Credit), except that (i) none of the Credit Agreement
Parties may assign or otherwise transfer any of its respective
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rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by any of the Credit Agreement Parties
without such consent shall be null and void); provided that (x) the Subsidiary
Borrower may merge with and into the Company in accordance with the requirements
of subsection 7.7(i) and (y) Company may assign all of its rights, interest and
obligations hereunder and under the other Loan Documents to which it is a party
to a newly-formed wholly-owned direct Subsidiary of Company ("NewCo Borrower"),
so long as (i) concurrently therewith, Company shall have assigned, contributed
and transferred substantially all of its assets and other liabilities to Newco
Borrower (including the capital stock of Subsidiary Borrower but excluding the
capital stock of NewCo Borrower), (ii) immediately after giving effect thereto,
Company shall have merged with and into Holdings (with Holdings as the surviving
corporation of such merger), (iii) Holdings shall have pledged all of the
capital stock of Newco Borrower to Collateral Agent pursuant to the Pledge
Agreement as security for the Guaranteed Obligations, (iv) the Requisite Lenders
shall have approved (x) an amendment to this Agreement permitting the foregoing
transactions (and making appropriate technical modifications to give effect to
the modified corporate structure) and (y) the form of the assignment, assumption
and contribution agreement required to effect the foregoing transactions, (v) no
Event of Default is then in existence and (vi) no Event of Default under, and as
defined in the Senior Subordinated Note Indenture, is then in existence or would
result from the foregoing transactions and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
any Issuing Lender that issues any Letter of Credit), Participants (to the
extent provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of Administrative Agent,
Arranger, Issuing Lenders and the Lenders) any legal or equitable right, remedy
or claim under or by reason of this Agreement.
B. Amounts and Terms of Assignments. (i) Subject to the conditions
set forth in paragraph B(ii) below, any Lender may assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it) with the prior written consent (such consent not to be unreasonably withheld
or delayed) of: (a) the Borrowers, provided that no consent of the Borrowers
shall be required for an assignment to a Lender, an Affiliate of a Lender, an
Approved Fund (as defined below) or, if an Event of Default has occurred and is
continuing, any other assignee; and (b) Administrative Agent, provided that no
consent of Administrative Agent shall be required for an assignment to an
assignee that is a Lender, an Affiliate of a Lender or an Approved Fund of any
Lender immediately prior to giving effect to such assignment, except in the case
of an assignment of a Revolving Loan Commitment to an assignee that is not a
Lender with a Revolving Loan Exposure.
(ii) Assignments shall be subject to the following additional
conditions: (a) except in the case of an assignment to a Lender, an Affiliate of
a Lender or an Approved Fund of any Lender or an assignment of the entire
remaining amount of the assigning Lender's Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment Agreement with respect to such assignment is
delivered to Administrative Agent) shall not be less than $5,000,000 for the
Revolving Loan Commitments (and related Obligations) or $1,000,000 for Tranche B
Term
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Loans unless each of the Borrowers and Administrative Agent otherwise consent,
provided that (1) no such consent of the Borrowers shall be required if an Event
of Default has occurred and is continuing and (2) such amounts shall be
aggregated in respect of each Lender and its affiliates or Approved Funds, if
any; (b) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, provided that this Section 10.1B(ii)(b) shall not be construed
to prohibit assignment of a proportionate part of all the assigning Lender's
rights and obligations in respect of one Class of Commitments or Loans; (c) the
parties to each assignment shall execute and deliver to Administrative Agent an
Assignment Agreement, together with a processing and recordation fee of $3,500;
provided that in the event of a concurrent assignment to two or more assignees
that are Affiliates of one another, or two or more Approved Funds managed by the
same investment advisor or affiliated investment advisors, only one such $3500
processing and recordation fee shall be payable; (d) the assignee, if it shall
not be a Lender, shall deliver to Administrative Agent an Administrative
Questionnaire; and (e) in the case of an assignment by a Lender to a CLO managed
by such Lender or an Affiliate of such Lender, unless such assignment (or an
assignment by a CLO managed by the same manager or an Affiliate of such manager)
shall have been approved by the Company (the Company hereby agreeing that such
approval, if requested, will not be unreasonably withheld or delayed), the
assigning Lender shall retain the sole right to approve any amendment,
modification or waiver of any provision of this Agreement, provided that the
Assignment Agreement between such Lender and such CLO may provide that such
Lender will not, without the consent of such CLO, agree to any amendment,
modification or waiver described in the first proviso to subsection 10.6B that
affects such CLO.
For the purposes of this Section 10.1B, the terms "Approved Fund" and
"CLO" have the following meanings:
"Approved Fund" means (a) a CLO and (b) with respect to any Lender
that is a fund which invests in bank loans and similar extensions of
credit, any other fund that invests in bank loans and similar extensions of
credit and is managed by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"CLO" means any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary
course of its business and is administered or managed by a Lender or an
Affiliate of such Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph B(iv) of this Section, from and after the effective date specified in
each Assignment Agreement the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment Agreement, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment Agreement covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.6, 2.7, 3.6 and 10.3). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this subsection 10.1B
shall be
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treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection
10.1C.
(iv) Upon its receipt of a duly completed Assignment Agreement
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in subsection
10.1B(ii) and any written consent to such assignment required by subsection
10.1B(i), Administrative Agent shall accept such Assignment Agreement and record
the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
C. Participations. (i) Any Lender may, without the consent of or
notice to any Loan Party, Administrative Agent, Arranger, any Issuing Lender or
Swing Line Lender, sell participations to one or more banks or other entities (a
"Participant") in all or a portion of such Lender's rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided that (a) such Lender's obligations under this Agreement shall
remain unchanged, (b) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (c) the Loan Parties,
Administrative Agent, Arranger, Issuing Lenders and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to subsection 10.6B that
affects such Participant. Subject to paragraph C(ii) of this Section, each
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.6, 2.7 and 3.6 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to subsection 10.1B. To the extent
permitted by law, each Participant also shall be entitled to the benefits and
limitations of Section 10.4 as though it were a Lender, provided such
Participant agrees to be subject to Section 10.5 as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Sections 2.7 and 3.6 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrowers' prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.7 unless
the Borrowers are notified of the participation sold to such Participant.
D. Assignments to Federal Reserve Bank and Fund Trustees. Any Lender
may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank, and
this subsection shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto. In the case of any
Lender that is a fund that invests in bank loans, such Lender may, without the
consent of Borrowers, or Administrative
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Agent, assign or pledge all or portion of its rights under this Agreement,
including the Loans and Notes or any other instrument evidencing its rights as a
Lender under this Agreement, to any holder of, trustee for, or any other
representative of holders of, obligations owed or securities issued, by such
fund, as security for such obligations or securities; provided that (x) any
foreclosure or similar action by such trustee or representative shall be subject
to the provisions of this Section 10.1 concerning assignments and (y) no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
E. Information. Each Lender may furnish any information concerning
Holdings and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
F. Representations of Lenders. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (A) of the definition thereof; (ii) that it has experience
and expertise in the making of or investing in loans such as the Loans; and
(iii) that it will make its Loans for its own account in the ordinary course of
its business and without a view to distribution of such Loans within the meaning
of the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 Expenses.
If the transactions contemplated hereby are consummated, Borrowers
jointly and severally agree to pay promptly (i) all the actual and reasonable
costs and expenses of Agents in connection with the preparation of the Loan
Documents and any consents, amendments (requested by or for the benefit of any
Loan Party), waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for any Loan Party (including any opinions
requested by Lenders as to any legal matters arising hereunder) and of any Loan
Party's performance of and compliance with all agreements and conditions on its
part to be performed or complied with under this Agreement and the other Loan
Documents including with respect to confirming compliance with environmental,
insurance and solvency requirements; (iii) the reasonable fees, expenses and
disbursements of counsel to Arranger and counsel to Administrative Agent (in
each case including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Loan Documents and
any consents, amendments (requested by or for the benefit of any Loan Party),
waivers or other modifications thereto and any other documents or matters
requested by any Loan Party; (iv) all the reasonable costs and reasonable
expenses of Administrative Agent and Collateral Agent in connection with the
creation and perfection of Liens in favor of Collateral Agent on behalf of
Lenders pursuant to any Collateral Document, including filing and recording
fees, expenses and taxes, stamp or documentary taxes, search fees, title
insurance premiums, and reasonable fees, expenses and disbursements of counsel
to Arranger, counsel to Administrative Agent and counsel to Collateral Agent and
of counsel providing any opinions that Arranger, Administrative
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Agent, Collateral Agent or Requisite Lenders may request in respect of the
Collateral Documents or the Liens created pursuant thereto; (v) all the
reasonable costs and reasonable expenses (including the reasonable fees,
expenses and disbursements of any auditors, accountants or appraisers and any
environmental or other consultants, advisors and agents employed or retained by
Administrative Agent or Arranger and their respective counsel) of obtaining and
reviewing any appraisals provided for under subsection 6.9C and any
environmental audits or reports provided for under subsection 6.9B(viii); (vi)
all the reasonable costs and reasonable expenses (including the reasonable fees,
expenses and disbursements of any consultants, advisors and agents employed or
retained by Administrative Agent or Collateral Agent and its counsel) in
connection with the custody or preservation of any of the Collateral; (vii) all
other reasonable costs and expenses incurred by Arranger or Administrative Agent
in connection with the syndication of the Loans and/or the Commitments and the
negotiation, preparation and execution of the Loan Documents and any consents,
amendments (requested by or for the benefit of any Loan Party), waivers or other
modifications thereto and the transactions contemplated thereby; and (viii)
after the occurrence of an Event of Default, all costs and expenses, including
reasonable attorneys' fees (including allocated costs of internal counsel) and
costs of settlement, incurred by Arranger, Administrative Agent, any Issuing
Lender and any Lender in enforcing any Obligations of or in collecting any
payments due from any Loan Party hereunder or under the other Loan Documents by
reason of such Event of Default (including in connection with the sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranties) or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings.
10.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 10.2, whether
or not the transactions contemplated hereby are consummated, Borrowers jointly
and severally agree to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Agents (including Collateral Agent), Issuing
Lenders and Lenders, and the officers, partners, directors, trustees, employees,
agents and affiliates of any of Agents (including Collateral Agent), Issuing
Lenders and Lenders (collectively called the "Indemnitees"), from and against
any and all Indemnified Liabilities (as hereinafter defined); provided that no
Borrower shall have any obligation to any Indemnitee hereunder with respect to
any Indemnified Liabilities to the extent such Indemnified Liabilities arise
from the gross negligence, bad faith or willful misconduct of that Indemnitee.
As used herein, "Indemnified Liabilities" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct,
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indirect or consequential and whether based on any federal, state or foreign
laws, statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the Related
Agreements or the transactions contemplated hereby or thereby (including
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds thereof or the issuance of Letters of Credit hereunder or the use or
intended use of any thereof, or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Guaranties)), or (ii) any Environmental
Claim or any Hazardous Materials Activity relating to or arising from, directly
or indirectly, any past or present activity, operation, land ownership, or
practice of Holdings or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, each Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 Set-Off; Security Interest in Deposit Accounts.
(a) 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 and during
the continuance of any Event of Default each Lender is hereby authorized by each
Borrower at any time or from time to time subject to the consent of Collateral
Agent, without notice to either Borrower or to any other Person (other than
Collateral Agent), any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts or payroll accounts) and any other Indebtedness
at any time held or owing by that Lender to or for the credit or the account of
such Borrower against and on account of the obligations and liabilities of
Borrowers which are then due and payable to that Lender under this Agreement,
the Letters of Credit and participations therein and the other Loan Documents,
including all claims of any nature or description arising out of or connected
with this Agreement, the Letters of Credit and participations therein or any
other Loan Document, irrespective of whether or not that Lender shall have made
any demand hereunder, which are then due and payable. Each Borrower hereby
further grants to Collateral Agent and each Lender a security interest in all
deposits and accounts maintained with Collateral Agent or such Lender as
security for the Obligations.
(b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY TIME THAT THE
LOANS OR ANY OTHER OBLIGATION SHALL BE SECURED BY REAL PROPERTY LOCATED IN
CALIFORNIA, NO LENDER SHALL EXERCISE A RIGHT OF SETOFF, LENDER'S LIEN OR
COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY
PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY NOTE UNLESS IT IS
TAKEN WITH THE CONSENT OF THE REQUISITE LENDERS OR, TO THE EXTENT REQUIRED BY
SUBSECTION 10.6 OF THIS AGREEMENT, ALL OF THE LENDERS, AT ALL TIMES
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PRIOR TO THE TIME ON WHICH ALL OBLIGATIONS HAVE BEEN PAID IN FULL, IF SUCH
SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO SECTIONS 580a, 580b,
580d AND 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR SECTION 2924 OF THE
CALIFORNIA CIVIL CODE, IF APPLICABLE, OR OTHERWISE) AFFECT OR IMPAIR THE
VALIDITY, PRIORITY, OR ENFORCEABILITY OF THE LIENS GRANTED TO COLLATERAL AGENT
PURSUANT TO THE COLLATERAL DOCUMENTS OR THE ENFORCEABILITY OF THE NOTES AND
OTHER OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY LENDER OF ANY
SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE PARTIES AS REQUIRED ABOVE,
SHALL BE NULL AND VOID. THIS SUBSECTION (b) SHALL BE SOLELY FOR THE BENEFIT OF
EACH OF THE LENDERS HEREUNDER.
10.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall, whether by
voluntary payment (other than a voluntary prepayment of Loans made and applied
in accordance with the terms of this Agreement), by realization upon security,
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit, fees and other amounts then due and owing to that Lender hereunder or
under the other Loan Documents (collectively, the "Aggregate Amounts Due" to
such Lender) which is greater than the proportion received by any other Lender
in respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (i) notify Administrative
Agent and each other Lender of the receipt of such payment and (ii) apply a
portion of such payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided that if all or part of such proportionately greater payment
received by such purchasing Lender is thereafter recovered from such Lender upon
the bankruptcy or reorganization of either Borrower or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Each Borrower expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Borrowers to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
10.6 Amendments and Waivers.
A. No failure or delay by Administrative Agent, Arranger, any Issuing
Lender or any Lender in exercising any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of Administrative
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Agent, Arranger, any Issuing Lender and Lenders hereunder are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any of
the Credit Agreement Parties or any of their respective Subsidiaries therefrom
shall in any event be effective unless the same shall be permitted by paragraph
(b) of this Section 10.6, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. Without
limiting the generality of the foregoing, the making of a Loan or issuance of a
Letter of Credit shall not be construed as a waiver of any Potential Event of
Default or Event of Default, regardless of whether Administrative Agent,
Arranger, any Lender or any Issuing Lender may have had notice or knowledge of
such Potential Event of Default or Event of Default at the time.
B. Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Credit Agreement Parties and the Requisite Lenders or by the Credit
Agreement Parties and Administrative Agent with the consent of the Requisite
Lenders; provided that no such agreement shall (i) increase the Commitment of
any Lender without the written consent of such Lender (it being understood that
waivers or modifications of conditions precedent, covenants, Potential Events of
Defaults or Events of Default or of a mandatory reduction in the Revolving Loan
Commitments shall not constitute an increase of the Commitment of any Lender,
and that an increase in the available portion of any Commitment of any Lender
shall not constitute an increase in the Commitment of such Lender), (ii) reduce
the principal amount of any Loan or reimbursement obligation in respect of any
Letter of Credit or reduce the rate of interest thereon (except in connection
with the waiver of applicability of any post-default increases in interest
rates), or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby (it being understood that any amendment or
modification to a definition used in the computation of compliance with the
financial covenants contained in this Agreement shall not constitute a reduction
in any rate of interest or fees for purposes of this clause (ii),
notwithstanding the fact that such amendment or modification actually results in
such a reduction), (iii) postpone the scheduled date of payment of the principal
amount of any Loan or reimbursement obligation in respect of any Letter of
Credit, or any interest thereon, or any fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change subsections 3.3C(ii) or Section 10.5 in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this Section
10.6B (except for technical amendments with respect to additional extensions of
credit pursuant to this Agreement which afford the protections to such
additional extensions of credit of the type provided to the Tranche B Term Loans
and the Revolving Loan Commitments on the Closing Date) or the percentage set
forth in the definition of "Requisite Lenders" or any other provision of any
Loan Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder (it being understood that, with
the consent of the Requisite Lenders, additional extensions of credit pursuant
to this Agreement (including extensions of credit to refinance, in whole or in
part, then outstanding Loans hereunder) may be included in the determination of
the Requisite Lenders on substantially the same basis as the extensions of
Tranche B Term Loans and Revolving Loan Commitments are included on the Closing
Date), without the written consent of each Lender (or each Lender of such Class,
as the case may be), (vi) release any Guarantor from its Guarantee (except as
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expressly provided in the relevant Guarantee), or limit its liability in respect
of such Guarantee, without the written consent of each Lender, (vii) release all
or substantially all of the Collateral from the Liens of the Collateral
Documents, without the written consent of each Lender, (viii) change any
provisions of any Loan Document in a manner that by its terms adversely affects
the rights in respect of payments due to Lenders holding Loans of any Class
differently than those holding Loans of any other Class, without the written
consent of Lenders holding a majority in interest of the outstanding Loans and
unused Commitments of each adversely affected Class (in addition to any consent
required under any other clause of this Section) (it being understood, however,
that no such consent shall be required in cases where additional extensions of
credit pursuant to this Agreement (including extensions of credit to refinance,
in whole or in part, then outstanding Loans hereunder) are being afforded
substantially the same treatment afforded to the Tranche B Term Loans or
Revolving Loans pursuant to this Agreement as originally in effect), (ix) amend,
modify or waive the conditions precedent in Sections 4.1 and 4.2 to the making
of any Revolving Loan or otherwise affect the rights of the Revolving Loan
Lenders thereunder, without the written consent of Revolving Loan Lenders
holding a majority of Revolving Loan Commitments and (x) amend, waive or modify
the approval rights of the Lenders with respect to a nine or twelve month
Interest Period as provided in subsection 2.2B, without the written consent of
each Lender affected thereby; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of Administrative Agent,
Arranger, any Issuing Lender or Swing Line Lender hereunder without the prior
written consent of Administrative Agent, Arranger, each affected Issuing Lender
or Swing Line Lender, as the case may be.
10.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 Notices.
A. Except in the case of notices and other communications expressly
permitted to be given by telephone (and subject to paragraph (b) below), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(i) if to any of Holdings, Company and Subsidiary Borrower, to
Domino's, Inc., 30 ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention
of ▇▇▇ ▇▇▇▇▇▇▇, Vice President and Treasurer (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(ii) if to Administrative Agent, to JPMorgan Chase Bank, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to JPMorgan Chase Bank, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. (212)
270-7594);
(iii) if to an Issuing Lender, (x) in the case of JPMorgan, to it at
JPMorgan Chase
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Bank, Letters of Credit Department, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇) and (y) in
the case of Bank One, to it at Bank One, NA, Letters of Credit Department,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇: IL1-0236, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of
▇▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(iv) if to Swing Line Lender, to JPMorgan Chase Bank, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇; and
(v) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
B. All notices and other communications provided for herein shall
be deemed to have been given when delivered in person or by courier service,
upon receipt of telefacsimile or telex, or three Business Days after depositing
it in the United States mail with postage prepaid and properly addressed;
provided that notices to Arranger or Administrative Agent shall not be effective
until received.
C. Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by Administrative Agent; provided that the foregoing shall not apply to
notices pursuant to Section 2.
D. Administrative Agent, Company or Subsidiary Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.
E. Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto.
10.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to
the contrary, agreements of Credit Agreement Parties set forth in subsections
2.6D, 2.7, 3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set
forth in subsections 9.2C, 9.4 and 10.5 shall survive the payment of the Loans,
the cancellation or expiration of the Letters of Credit and the reimbursement of
any amounts drawn thereunder, and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Administrative Agent, Collateral
Agent or any Lender in the exercise of any power, right or privilege hereunder
or under any other Loan
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Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
None of Administrative Agent, Collateral Agent or any Lender shall be
under any obligation to marshal any assets in favor of either Borrower or any
other party or against or in payment of any or all of the Obligations. To the
extent that a Borrower or Borrowers make(s) a payment or payments to
Administrative Agent, Collateral Agent or Lenders (or to Administrative Agent
for the benefit of Lenders), or Administrative Agent, Collateral Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 Severability.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 Headings.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
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10.15 Applicable Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
10.16 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither any
Credit Agreement Party's rights or obligations hereunder nor any interest
therein may be assigned or delegated by such Credit Agreement Party without the
prior written consent of all Lenders.
10.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY CREDIT AGREEMENT PARTY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH CREDIT AGREEMENT PARTY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO SUCH CREDIT AGREEMENT PARTY AT ITS ADDRESSES PROVIDED IN
ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH CREDIT AGREEMENT PARTY IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN THE
COURTS OF ANY OTHER JURISDICTION; AND
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(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
10.18 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/ BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party hereto acknowledges that this waiver
is a material inducement to enter into a business relationship, that each has
already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
10.19 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with prudent lending or investing practices, it being understood and
agreed by each Credit Agreement Party that in any event a Lender may make
disclosures to Affiliates of such Lender or disclosures reasonably required by
any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any Loans or any
participations therein or by any direct or indirect contractual counterparties
(or the professional advisors thereto) in swap agreements (provided that such
swap counterparties and advisors are advised of and agree to be bound by the
provisions of this subsection 10.19) or disclosures required or requested by any
governmental agency or representative thereof or by the NAIC or pursuant to
legal process; provided that, unless specifically prohibited by applicable law
or court order, each Lender shall notify Holdings of any request by any
governmental agency or representative thereof (other than any such request in
connection with any examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public information
prior to disclosure of
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such information; and provided further that in no event shall any Lender be
obligated or required to return any materials furnished by Holdings or any of
its Subsidiaries.
10.20 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Holdings, each
Borrower and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
SECTION 11.
HOLDINGS GUARANTY.
11.1 Guaranty.
In order to induce each Agent, Collateral Agent, each Issuing Lender
and the Lenders to enter into this Agreement and to extend credit hereunder, and
to induce the other Guaranteed Creditors to enter into and/or maintain Interest
Rate Agreements and Currency Agreements (including the Existing Swap Agreement)
and in recognition of the direct benefits to be received by Holdings from the
proceeds of the Loans, the issuance of the Letters of Credit and the entering
into and/or maintenance of such Interest Rate Agreements and Currency
Agreements, Holdings hereby agrees with the Guaranteed Creditors as follows:
Holdings hereby unconditionally and irrevocably guarantees as primary obligor
and not merely as surety the full and prompt payment when due, whether upon
maturity, acceleration or otherwise, of any and all of the Guaranteed
Obligations to the Guaranteed Creditors. If any or all of the Guaranteed
Obligations to the Guaranteed Creditors becomes due and payable hereunder,
Holdings, unconditionally and irrevocably, promises to pay such indebtedness to
Administrative Agent and/or the other Guaranteed Creditors, or order, on demand,
together with any and all expenses which may be incurred by Administrative Agent
and the other Guaranteed Creditors in collecting any of the Guaranteed
Obligations. If claim is ever made upon any Guaranteed Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrowers), then and in such event
Holdings agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon Holdings, notwithstanding any revocation of this Guaranty
or other instrument evidencing any liability of either Borrower, and Holdings
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
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11.2 Bankruptcy.
Additionally, Holdings unconditionally and irrevocably guarantees the
payment of any and all of the Guaranteed Obligations to the Guaranteed Creditors
whether or not due or payable by the Borrowers upon the occurrence of any of the
events specified in subsection 8.6 or subsection 8.7, and irrevocably and
unconditionally promises to pay such indebtedness to the Guaranteed Creditors,
or order, on demand, in lawful money of the United States.
11.3 Nature of Liability.
The liability of Holdings hereunder is primary, absolute and
unconditional, exclusive and independent of any security for or other guaranty
of the Guaranteed Obligations, whether executed by any other guarantor or by any
other party, and the liability of Holdings hereunder shall not, to the maximum
extent permitted by applicable law, be affected or impaired by (a) any direction
as to application of payment by the Borrowers or by any other party, or (b) any
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the Guaranteed Obligations, or (c) any payment on or in reduction of
any such other guaranty or undertaking, or (d) any dissolution, termination or
increase, decrease or change in personnel by the Loan Parties, or (e) any
payment made to any Guaranteed Creditor on the Guaranteed Obligations which any
such Guaranteed Creditor repays to either Borrower pursuant to court order in
any bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and Holdings waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding, or (f) any action or
inaction by the Guaranteed Creditors as contemplated in subsection 11.5, or (g)
any invalidity, irregularity or enforceability of all or any part of the
Guaranteed Obligations or of any security therefor.
11.4 Independent Obligation.
The obligations of Holdings hereunder are independent of the
obligations of any other guarantor, any other party or either Borrower, and a
separate action or actions may be brought and prosecuted against Holdings
whether or not action is brought against any other guarantor, any other party or
either Borrower and whether or not any other guarantor, any other party or
either Borrower be joined in any such action or actions. Holdings waives, to the
fullest extent permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof. Any payment by
either Borrower or other circumstance which operates to toll any statute of
limitations as to such Borrower shall operate to toll the statute of limitations
as to Holdings.
11.5 Authorization.
Holdings authorizes the Guaranteed Creditors without notice or demand
(except as shall be required by applicable statute or law and cannot be waived),
and without affecting or impairing its liability hereunder, from time to time
to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations (including any increase or decrease in the
principal amount thereof or the rate of interest or fees thereon), any
security therefor, or any liability incurred directly or
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indirectly in respect thereof, and the Guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, impair, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against either
Borrower, any other Loan Party or others or otherwise act or refrain from
acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrowers, other Loan Parties or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of either Borrower to its creditors other
than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of either Borrower to the Guaranteed Creditors
regardless of what liability or liabilities of such Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Loan Document, any Interest Rate
Protection Agreement or any of the instruments or agreements referred to
herein or therein, or otherwise amend, modify or supplement this Agreement,
any other Loan Document, any Interest Rate Agreement or Currency Agreement
or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Guaranty.
11.6 Reliance.
It is not necessary for any Guaranteed Creditor to inquire into the
capacity or powers of Holdings or any of its Subsidiaries or the officers,
directors, partners or agents acting or purporting to act on their behalf, and
any Guaranteed Obligations made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
11.7 Subordination.
Any indebtedness of either Borrower now or hereafter owing to Holdings
is hereby subordinated to the Guaranteed Obligations of such Borrower owing to
the Guaranteed
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Creditors; and if Administrative Agent so requests at a time when an Event of
Default exists, all such indebtedness of either Borrower to Holdings shall be
collected, enforced and received by Holdings for the benefit of the Guaranteed
Creditors and be paid over to Administrative Agent on behalf of the Guaranteed
Creditors on account of the Guaranteed Obligations of such Borrower to the
Guaranteed Creditors, but without affecting or impairing in any manner the
liability of Holdings under the other provisions of this Guaranty. Prior to the
transfer by Holdings of any note or negotiable instrument evidencing any such
indebtedness of either Borrower to Holdings, Holdings shall ▇▇▇▇ such note or
negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, Holdings hereby
agrees with the Guaranteed Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code or otherwise)
until all Guaranteed Obligations have been irrevocably paid in full in cash.
11.8 Waiver.
A. Holdings waives any right (except as shall be required by applicable
statute or law and cannot be waived) to require any Guaranteed Creditor to (i)
proceed against either Borrower, any other guarantor or any other party, (ii)
proceed against or exhaust any security held from either Borrower, any other
guarantor or any other party or (iii) pursue any other remedy in any Guaranteed
Creditor's power whatsoever. Holdings waives any defense based on or arising out
of any defense of either Borrower, any other guarantor or any other party, other
than payment of the Guaranteed Obligations to the extent of such payment, based
on or arising out of the disability of either Borrower, Holdings, any other
guarantor or any other party, or the validity, legality or unenforceability of
the Guaranteed Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of either Borrower other than payment of the
Guaranteed Obligations to the extent of such payment. The Guaranteed Creditors
may, at their election, foreclose on any security held by Administrative Agent,
Collateral Agent or any other Guaranteed Creditor by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by applicable law), or exercise
any other right or remedy the Guaranteed Creditors may have against either
Borrower or any other party, or any security, without affecting or impairing in
any way the liability of Holdings hereunder except to the extent the Guaranteed
Obligations have been paid. Holdings waives any defense arising out of any such
election by the Guaranteed Creditors, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of Holdings against either Borrower or any other party or any security.
B. Holdings waives (except as shall be required by applicable statue or
law and cannot be waived) all presentments, demands for performance, protests
and notices, including without limitation notices of nonperformance, notices of
protest, notices of dishonor, notices of acceptance of this Guaranty, and
notices of the existence, creation or incurring of new or additional Guaranteed
Obligations. Holdings assumes all responsibility for being and keeping itself
informed of the Borrowers' financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
and the nature, scope and extent of the risks which Holdings assumes and incurs
hereunder, and agrees that neither Administrative Agent nor any of the other
Guaranteed Creditors shall have any duty to advise Holdings of information known
to them regarding such circumstances or risks.
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11.9 Maximum Liability.
It is the desire and intent of Holdings and the Guaranteed Creditors that
this Guaranty shall be enforced against Holdings to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. If, however, and to the extent that, the
obligations of Holdings under this Guaranty shall be adjudicated to be invalid
or unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of Holdings' obligations under this Guaranty shall
be deemed to be reduced and Holdings shall pay the maximum amount of the
Guaranteed Obligations which would be permissible under applicable law.
SECTION 12.
NATURE OF BORROWERS' OBLIGATIONS.
12.1 Nature of Obligations.
Notwithstanding anything to the contrary contained elsewhere in this
Agreement, it is understood and agreed by the various parties to this Agreement
that all Obligations to repay principal of, interest on, and all other amounts
with respect to, outstanding Loans and Letter of Credit Usage (including,
without limitation, all fees, indemnities, taxes and other Obligations in
connection therewith or in connection with the related Commitments) shall
constitute the joint and several obligations of Borrowers. Each Borrower
acknowledges and agrees that it is receiving direct benefits as a result of the
extensions of credit to Borrowers hereunder, and that the Lenders may proceed
against either or both of Borrowers with respect to any Obligations hereunder
for the payment in full thereof.
12.2 Independent Obligation.
With respect to the Obligations, the obligations of each Borrower with
respect thereto are independent of the obligations of the other Borrower or any
other guarantor, and a separate action or actions may be brought and prosecuted
against either Borrower, whether or not the other Borrower or any other
guarantor is joined in any such action or actions. Each Borrower waives, to the
fullest extent permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof. Any payment by
either Borrower or other circumstance which operates to toll any statute of
limitations as to such Borrower shall, to the fullest extent permitted by law,
operate to toll the statute of limitations as to each Borrower.
12.3 Authorization.
With respect to the Obligations, each of the Borrowers authorizes each
Agent, Collateral Agent and the Lender without notice or demand (except as shall
be required by applicable statute and cannot be waived), and without affecting
or impairing its liability hereunder, from time to time to: (a) exercise or
refrain from exercising any rights against the other Borrower or any guarantor
or others or otherwise act or refrain from acting; (b) release or substitute the
other Borrower, endorsers, guarantors or other obligors; (c) settle or
compromise any of the Obligations of the other Borrower or any other Loan Party,
any security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof
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or hereof, and may subordinate the payment of all or any part thereof to the
payment of any liability (whether due or not) of either Borrower to its
creditors other than the Lenders; (d) apply any sums paid by the other Borrower
or any other Person, howsoever realized to any liability or liabilities of such
Borrower or other Person regardless of what liability or liabilities of such
Borrower or other Person remain unpaid; and/or (e) consent to or waive any
breach of, or act, omission or default under, this Agreement or any of the
instruments or agreements referred to herein, or otherwise, by the other
Borrower or any other Person.
12.4 Reliance.
It is not necessary for any Agent or any other Lender to inquire into the
capacity or powers of Holdings, either Borrower or any of their respective
Subsidiaries or the officers, directors, partners or agent acting or purporting
to act on its behalf, and any Obligations made or created in reliance upon the
professed exercise of such powers shall constitute the obligations of the
Borrowers hereunder.
12.5 Contribution; Subrogation.
(a) To the extent that either Borrower shall make a payment or payments
under this Agreement or any of the other Credit Documents of all or any of the
Obligations relating to Tranche B Term Loans (with all such payments by either
Borrower being herein called "Borrower Term Loan Payments") which, taking into
account all other Borrower Term Loan Payments then previously or concurrently
made by the other Borrower, exceeds the amount which such Borrower would
otherwise have paid if each Borrower had paid its Term Loan Percentage of the
aggregate Obligations relating to Tranche B Term Loans satisfied by Borrower
Term Loan Payments, then, following the indefeasible payment in full in cash of
all of the Obligations and the termination of the Commitments, such Borrower
shall be entitled to receive contribution and indemnification payments from, and
be reimbursed by, the other Borrower for the amount of such excess.
(b) To the extent that either Borrower shall make a payment or payments
under this Agreement of all or any of the Obligations relating to Revolving
Loans and/or Swing Line Loans (with all such payments by a Borrower being herein
called "Borrower Revolver Payments") which, taking into account all other
Borrower Revolver Payments then previously or concurrently made by the other
Borrower, exceeds the amount which such Borrower would otherwise have paid if
each Borrower had paid its Revolving Loan Percentage of the aggregate
Obligations relating to Revolving Loans and Swing Line Loans satisfied by
Borrower Revolver Payments, then, following the indefeasible payment in full in
cash of all of the Obligations and the termination of the Commitments, such
Borrower shall entitled to receive contribution and indemnification payments
from, and be reimbursed by, the other Borrower for the amount of such excess.
(c) To the extent that either Borrower shall make a payment or payments
under this Agreement or any of the other Credit Documents of all or any of the
Obligations relating to Letters of Credit issued for the benefit of the other
Borrower or any of its Subsidiaries (or their respective creditors, customers,
suppliers, etc.), then the respective Borrower shall, following the indefeasible
payment in full in cash of all of the Obligations and the termination of the
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Commitments, be entitled to receive contribution and indemnification from, and
be reimbursed by, the other Borrower for the amount of each such payment (it
being understood that if each Borrower has made payments of the type described
above with respect to Obligations relating to Letters of Credit issued for the
benefit of the other Borrower or any of its Subsidiaries (or their respective
creditors, customers, suppliers, etc.), then the amounts so paid by each
Borrower shall be netted in determining the amount of contribution and
indemnification owed by either Borrower to the other Borrower pursuant to this
clause (c)).
(d) As used herein, the (I) "Term Loan Percentage" of (x) Company shall be
100% (constituting the percentage of the aggregate principal amount of Tranche B
Term Loans incurred by the Company on the Closing Date and (y) of Subsidiary
Borrower shall be 0% (representing the percentage of the aggregate principal
amount of Tranche B Term Loans incurred by Subsidiary Borrower on the Closing
Date) and (II) "Revolving Percentage" of each Borrower shall be a percentage the
numerator of which is the aggregate proceeds of Revolving Loans and Swing Line
Loans actually disbursed to (or received by) such Borrower and/or its
Subsidiaries on or after the Closing Date and the denominator of which is the
sum of the numerators as used in determining the Revolving Percentage for each
of Company and Subsidiary Borrower.
(e) All determinations of contribution rights pursuant to this subsection
12.5 shall be determined by Holdings in good faith. In determining whether any
amounts are Obligations relating to (x) Tranche B Term Loans, (y) Revolving
Loans and/or Swing Line Loans or (z) Letters of Credit, (i) all principal,
unpaid drawings, interest, increased costs and regularly accruing fees directly
relating to Obligations as described in preceding clause (x), (y) or (z) shall
be allocated to the respective category of Obligations and (ii) any other
Obligations shall be allocated to the respective categories of Obligations as
determined in good faith by Holdings, provided that if the respective Obligation
is not directly allocable to any of such categories of Obligations described in
preceding clauses (x), (y) and (z), same shall be allocated amongst the three
categories of Obligations described above pro rata based upon the relative then
outstanding principal amounts (or, in the case of Obligations relating to
Letters of Credit, the then amount of Letter of Credit Usage) of the various
categories of Obligations as described above. Holdings and each Borrower agree
to maintain records to enable them to determine the Revolving Percentages, as
well as all other facts needed to determine the relative rights of contribution,
pursuant to this subsection 12.5.
(f) Each of the Borrowers hereby agrees that, to the extent any court
determines that the contribution, indemnity and reimbursement rights provided
above in this subsection 12.5 are not fair and equitable to each of the
Borrowers, then such court may (and is hereby authorized to) adjust the
contribution, indemnity and reimbursement rights of Borrowers as determined by
such court to be necessary or desirable to more fairly provide for contribution,
indemnification and reimbursement rights as between Borrowers, it being the
intention of each of the Borrowers that such adjustment shall in any event be
made if, and to the extent, any such adjustment would prevent the joint and
several nature of their obligations hereunder from constituting a fraudulent
transfer or conveyance for purposes of the Bankruptcy Code, the Uniform
Fraudulent Conveyance Act or any similar Federal or state law.
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(g) This subsection 12.5 is intended only to define the relative rights of
Borrowers and nothing set forth in this subsection 12.5 is intended to or shall
impair the obligations of Borrowers, jointly and severally, to pay any amounts
as and when the same shall become due and payable in accordance with the terms
of this Agreement.
(h) The rights of the parties under this subsection 12.5 (and any rights
of subrogation a Borrower may have with respect to the other Borrower as a
result of any payments by it hereunder or under any other Loan Document) shall
be exercisable only upon the full and indefeasible payment of the Obligations in
cash and the termination of this Agreement and the other Loan Documents.
(i) The parties hereto acknowledge that the rights of contribution,
indemnification and reimbursement hereunder shall constitute assets of either
Borrower to which such contribution, indemnification and reimbursement is owing.
12.6 Waiver.
Each Borrower waives any right to require any Agent, Collateral Agent or
the Lenders to (i) proceed against the other Borrower, any guarantor or any
other party, (ii) proceed against or exhaust any security held from the other
Borrower, any guarantor or any other party or (iii) pursue any other remedy in
any Agent's, Collateral Agent's or the Lenders' power whatsoever. Each Borrower
waives any defense based on or arising out of any defense of the other Borrower,
any guarantor or any other party other than payment in full in cash of the
respective Obligations, including, without limitation, any defense based on or
arising out of the disability of the other Borrower, any guarantor or any other
party, or the unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the other Borrower,
in each case other than as a result of the payment in full in cash of the
respective Obligations. The Agents, Collateral Agent and the Lender may, at
their election, foreclose on any security held by any Agent, Collateral Agent or
the Secured Creditors by one or more judicial or non-judicial sales, whether or
not every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy any
Agent, Collateral Agent and the Lenders may have against either Borrower or any
other party, or any security, without affecting or impairing in any way the
liability of either Borrower hereunder except to the extent the respective
Obligations have been paid in full in cash. Each Borrower waives, to the fullest
extent permitted by law, any defense arising out of any such election by any
Agent, Collateral Agent and the Lenders even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of such Borrower against the other Borrower or any other guarantor or
party or any security.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
TISM, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
DOMINO'S, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
DOMINO'S FRANCHISE HOLDING CO.
(f/k/a Bluefence, Inc.)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
JPMorgan Chase Bank, individually and as
Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as Arranger
By: /s/ ▇▇▇▇ Sell
---------------------------------------
Title: Vice President
BANK ONE, NA, individually and as
Syndication Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Title: Managing Director
COMERICA BANK, individually and as
Documentation Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
Title: Vice President
THE BANK OF NEW YORK, as Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
STANDARD FEDERAL BANK, N.A., as Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
--------------------------------------
Title: Vice President
NATIONAL CITY BANK, as Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Assistant Vice President
FLEET NATIONAL BANK, as Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇
--------------------------------------
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
as Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
CREDIT INDUSTRIEL ET COMMERCIAL,
as Lender
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
--------------------------------------
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Title: Vice President
MIZUHO CORPORATE BANK, LTD.,
as Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Title: Vice President
KZH CNC LLC,
as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇
-----------------------------------------
Title: Authorized Agent
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PRIME INCOME TRUST,
as Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Title: Executive Director
KZH CYPRESSTREE-1 LLC,
as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇
-----------------------------------------
Title: Authorized Agent
KZH ING-2 LLC,
as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇
-----------------------------------------
Title: Authorized Agent
KZH STERLING LLC,
as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇
-----------------------------------------
Title: Authorized Agent
SCHEDULE 1.1(i)
Add-Backs to Consolidated Adjusted EBITDA
1. Any payments under the Bain Advisory Services Agreement.
2. Any payments under the Consulting Agreement.
Non-recurring cash restructuring charges incurred in connection with Permitted
Acquisitions.
SCHEDULE 1.1(iii)
Existing Liens
1. The Company has granted leasehold interests in the following owned store
properties to franchisees of the Company:
Store City, County, State
----- -------------------
1103 ▇▇▇ Arbor, Washtenaw County, Michigan
1108 Ypsilanti, Washtenaw County, Michigan
1120 Ypsilanti, Washtenaw County, Michigan
1437 Bardstown, ▇▇▇▇▇▇ County, Kentucky
4154 Riverdale, ▇▇▇▇▇▇▇ County, Georgia
5456 Goodlettsville, Tennessee
5709 Atlanta, ▇▇▇▇▇▇ County, Georgia
5730 ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ County, Georgia
5731 Riverdale, ▇▇▇▇▇▇▇ County, Georgia
5732 Forest Park, Clayton County, Georgia
5734 ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ County, Georgia
5780 Hinesville, Liberty County, Georgia
6601 ▇▇▇▇▇▇, ▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇▇ County, Texas
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
6706 San Antonio, Bexar County, Texas
2. Mortgage granted to Domino's, Inc. by Domino's Pizza, Inc. conveying
property located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.*
*To be discharged as part of the post-closing deliveries list on Schedule 6.12.
SCHEDULE 2.1
Lender Commitments
Initial Term Loan Revolving Loan
Lender Commitment Commitment
------ ---------- -----------
JPMorgan Chase Bank $ 312,500,000.00 $ 20,000,000.00
Comerica Bank $ 16,000,000.00 $ 23,000,000.00
Bank One, N.A. $ 7,500,000.00 $ 20,000,000.00
The Bank of New York $ 7,000,000.00 $ 9,000,000.00
Standard Federal Bank, N.A. $ 9,000,000.00
National City Bank $ 4,000,000.00 $ 4,000,000.00
Fleet National Bank $ 2,000,000.00 $ 3,000,000.00
Credit Lyonnais New York Branch $ 2,000,000.00 $ 4,000,000.00
Credit Industriel et Commercial $ 1,000,000.00 $ 4,000,000.00
Mizuho Corporate Bank, Ltd. $ 1,000,000.00 $ 4,000,000.00
KZH CNC LLC (Conseco) $ 5,000,000.00
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Prime Income Trust $ 4,000,000.00
KZH Cypresstree-1 LLC (American Express) $ 1,000,000.00
KZH ING-2 LLC (American Express) $ 1,000,000.00
KZH Sterling LLC (American Express) $ 1,000,000.00
-------------------------------------------------------------------------------
Total $ 365,000,000.00 $ 100,000,000.00
SCHEDULE 3.1D
Existing Letters of Credit
BENEFICIARY BACKGROUND AMOUNT EXP DATE
----------- ---------- ------ --------
Opus Northwest, LLC Washington distribution center $ 750,000.00 08/08/02
Variable Annuity Life Insurance Co Colorado distribution center 900,000.00 12/18/02
Variable Annuity Life Insurance Co Louisiana distribution center 900,000.00 12/18/02
Variable Annuity Life Insurance Co Florida distribution center 600,000.00 12/18/02
Variable Annuity Life Insurance Co North Carolina distribution center 1,000,000.00 12/18/02
National Union Fire Franchise captive insurance program 250,000.00 02/14/03
Royal Indemnity Company Self-insurance program 8,000,000.00 02/22/03
Reliance Insurance Appeal and other bonds 600,000.00 04/15/03
Arundel Crossing VI, LLC Maryland distribution center 2,907,036.00 07/13/03
----------------
$15,907,036.00
================
SCHEDULE 4.1C
Organization Structure and Subsidiaries of Holdings
Company Structure
TISM, INC.
Domino's, Inc.
Domino's Pizza Domino's Franchise
LLC Holding Co.
Domino's Pizza Domino's Pizza Domino's Pizza Domino's Pizza
International, Inc. International Government PMC, Inc.
Payroll Services, Services Division,
Inc. Inc.
Domino's Pizza Domino's Pizza Domino's Pizza Domino's Pizza of Domino's Pizza Domino's Pizza Int'l
Home Delivery France S.A.S. NS Co. Canada, Inc. Distribution GmbH Servicos De Gestao
{Spain} {France} {Canada} {inactive} {inactive} De Franchising, LDA
{inactive}
Domino's Pizza Domino's Nat'l North American
California LLC Advertising Assurance and
Fund Inc. Indemnity
Company, LTD
{Bermuda}
Domino's Pizza Europe
(Domino's Pizza Europe
owns 70% equity
interest)
Beheer
(Netherlands)
SCHEDULE 4.1I
Closing Date Mortgaged Properties
1. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
2. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
3. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
4. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
5. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
6. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
SCHEDULE 5.1
Names, Jurisdictions of Organization, Good Standing and Ownership Interests
in respect to Loan Parties and Subsidiaries
Entity Ownership Jurisdiction of Organization
------ --------- ----------------------------
Domino's, Inc. TISM, Inc. Delaware
Domino's Franchise Holding Co., f/k/a Domino's, Inc. Michigan
Bluefence, Inc.
Domino's Pizza LLC Domino's, Inc. Michigan
Domino's Pizza International, Inc. Domino's Pizza LLC Delaware
Domino's Pizza Government Services Domino's Pizza LLC Texas
Division, Inc.
Domino's Pizza International Payroll Domino's Pizza LLC Florida
Services, Inc.
Domino's Pizza PMC, Inc. Domino's Pizza LLC Michigan
Domino's Pizza California LLC Domino's Pizza LLC California
Domino's National Advertising Fund Inc. Domino's Pizza LLC Michigan
North American Assurance and Indemnity Domino's Pizza LLC Bermuda
Company, Ltd.
Domino's Pizza of Canada, Inc. Domino's Pizza International, Inc. Canada
Domino's Pizza NS Co. Domino's Pizza International, Inc. Canada
Domino's Pizza Distribution GmbH Domino's Pizza International, Inc. Germany
Domino's Pizza International -- Domino's Pizza International, Inc. Madeira
Servicos de Gestao de Franchising, LDA
Domino's Pizza Home Delivery Domino's Pizza International, Inc. Spain
Domino's Pizza France S.A.S. Domino's Pizza International, Inc. France
Domino's Pizza Europe Domino's Pizza International, Inc. Netherlands
Beheer Domino's Pizza Europe Netherlands
* All entities are wholly owned subsidiaries except for Beheer which is 70%
owned by Domino's Pizza Europe.
SCHEDULE 5.5
Real Property
1. 30 ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
4. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
5. ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
6. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
9. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
10. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
11. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
13. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
14. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
15. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
16. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
17. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
18. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
19. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
20. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
21. BB ▇▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
22. ▇▇-▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
23. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
24. ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
25. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
26. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇
27. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇, ▇▇
28. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇
29. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇
30. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
31. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, #▇▇▇
▇▇▇▇▇▇, ▇▇
32. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇
▇▇▇▇, ▇▇
33. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
34. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE 5.12
Certain Fees
None.
SCHEDULE 5.16
Legal Names
Entity Type of Jurisdiction Registered Organizational Owner Owner Location
------ ------- ------------ ----------- --------------- ----- ----- --------
Organization of Organization Identification
------------ -- ------------ ---------------
Organization Number
------------ ------
TISM, Inc. Corporation Michigan Yes 299672 Domino's Domino's 30 ▇▇▇▇▇ ▇▇▇▇▇
Pizza LLC Pizza LLC ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇
Domino's Inc. Corporation Delaware Yes 2282121
Domino's Company Michigan Yes 520768
Franchise
Holding Co., f/k/a
Bluefence, Inc.
Domino's Pizza Limited Michigan Yes B62203 Domino's Pizza Domino's
LLC Liability LLC Pizza LLC
Company 5216 W. Mohave
Domino's Pizza Corporation Delaware Yes 0943841
International, Inc.
Phoenix, AZ
Domino's Pizza Corporation Texas Yes 117002400 85043
Government
Services Division,
Inc.
Entity Leases, Subleases or
------ --------------------
Assignments of
--------------
Leases
------
TISM, Inc. Yes
Domino's Inc.
Domino's
Franchise
Holding Co., f/k/a
Bluefence, Inc.
Domino's Pizza Yes
LLC
Domino's Pizza
International, Inc.
Domino's Pizza
Government
Services Division,
Inc.
Entity Type of Jurisdiction Registered Organizational Owner Owner Location Leases,
------ ------- ------------ ---------- -------------- ----- ----- -------- -------
Organization of Organization Identification Subleases or
------------ -- ------------ -------------- ------------
Organization Number Assignments of
------------ ------ --------------
Leases
------
Domino's Pizza Corporation Florida Yes S04920 Domino's Pizza Domino's Pizza
International LLC LLC
Payroll Services,
Inc.
Domino's Pizza PMC, Corporation Michigan Yes 20627A
Inc.
Hayward,
Domino's Pizza Limited California Yes 199932110016 CA 94544
California LLC Liability
Company
SCHEDULE 6.12
Post-Closing Deliveries
1. Closing Date Mortgage Policies for each Closing Date Mortgaged Property to
be delivered within 15 days from the Closing Date.
2. Evidence of merger from Domino's Pizza, Inc. to Domino's, Inc.; executed
quitclaim deeds from Domino's Inc. to Domino's Pizza LLC , formerly known
as Domino's Pizza I LLC, and evidence of name change from Domino's Pizza I
LLC to Domino's Pizza LLC for each of the Closing Date Mortgaged
Properties, in form satisfactory to Title Company to enable recording of
the Closing Date Mortgages and issuance of Closing Date Mortgage Policies
to be delivered within 15 days from the Closing Date.
3. Evidence of discharge of Mortgage granted to Domino's, Inc. by Domino's
Pizza, Inc. conveying property located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ to be delivered within 15 days from the Closing Date.
4. Additional information required pursuant to Section 5.5 to be added to
Schedule 5.5 to be delivered within five days from the Closing Date.
SCHEDULE 7.1(v)
Permitted Indebtedness
Obligor Payee Amount
Domino's Pizza France S.A.S. Domino's Pizza International, Inc. $6,773,750
SCHEDULE 7.1(vii)
Certain Existing Indebtedness
Obligor Payee Amount
------- ----- ------
Domino's Pizza International, Inc. ABN AMRO Bank $387,428
SCHEDULE 7.3(vii)
Certain Existing Investments
None.
SCHEDULE 7.4
Certain Existing Contingent Obligations
1. Seller Contingent Notes.
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS .............................................................................. 2
1.1 Certain Defined Terms.................................................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement....... 39
1.3 Other Definitional Provisions and Rules of Construction.................................. 40
1.4 Changes in GAAP.......................................................................... 40
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS ............................................... 40
2.1 Commitments: Making of Loans; Register; Notes............................................ 40
2.2 Interest on the Loans.................................................................... 47
2.3 Fees..................................................................................... 51
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments; General
Provisions Regarding Payments; Application of Proceeds of Collateral and Payments Under
Guaranties............................................................................... 51
2.5 Use of Proceeds.......................................................................... 58
2.6 Special Provisions Governing Eurodollar Rate Loans....................................... 59
2.7 Increased Costs; Taxes; Capital Adequacy................................................. 61
2.8 Obligation of Lenders and Issuing Lenders to Mitigate.................................... 66
2.9 Defaulting Lenders....................................................................... 66
2.10 Removal or Replacement of a Lender....................................................... 67
SECTION 3. LETTERS OF CREDIT ........................................................................ 69
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein............ 69
3.2 Letter of Credit Fees.................................................................... 73
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit....................... 73
3.4 Obligations Absolute..................................................................... 76
3.5 Indemnification; Nature of Issuing Lenders' Duties....................................... 77
3.6 Increased Costs and Taxes Relating to Letters of Credit.................................. 78
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT ................................................ 79
4.1 Conditions To Tranche B Term Loans and Revolving Loans on the Closing Date............... 79
4.2 Conditions to All Loans.................................................................. 85
4.3 Conditions to Letters of Credit.......................................................... 86
SECTION 5. CREDIT AGREEMENT PARTIES' REPRESENTATIONS AND WARRANTIES ................................. 87
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries............ 87
5.2 Authorization of Borrowing, etc.......................................................... 88
(i)
Page
----
5.3 Financial Condition...................................................................... 89
5.4 No Material Adverse Change............................................................... 89
5.5 Title to Properties: Liens; Real Property................................................ 89
5.6 Litigation; Adverse Facts................................................................ 90
5.7 Payment of Taxes......................................................................... 90
5.8 Performance of Agreements; Materially Adverse Agreements................................. 91
5.9 Governmental Regulation.................................................................. 91
5.10 Securities Activities.................................................................... 91
5.11 Employee Benefit Plans................................................................... 91
5.12 Certain Fees............................................................................. 92
5.13 Environmental Protection................................................................. 92
5.14 Employee Matters......................................................................... 93
5.15 Solvency................................................................................. 93
5.16 Matters Relating to Collateral........................................................... 93
5.17 Related Agreements....................................................................... 94
5.18 Disclosure............................................................................... 94
5.19 Subordination of Senior Subordinated Notes, Permitted Seller Notes, Shareholder
Subordinated Notes and Permitted Additional Subordinated Indebtedness.................... 95
SECTION 6. CREDIT AGREEMENT PARTIES' AFFIRMATIVE COVENANTS .......................................... 95
6.1 Financial Statements and Other Reports................................................... 95
6.2 Corporate Existence, etc................................................................. 100
6.3 Payment of Taxes and Claims; Tax Consolidation........................................... 100
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/ Condemnation
Proceeds................................................................................. 101
6.5 Inspection Rights; Audits of Inventory and Accounts Receivable; Lender Meeting........... 103
6.6 Compliance with Laws, etc................................................................ 103
6.7 Environmental Review and Investigation, Disclosure, Etc.; Actions Regarding Hazardous
Materials Activities, Environmental Claims and Violations of Environmental Laws.......... 103
6.8 Execution of Subsidiaries Guaranty and Personal Property Collateral Documents by
Future Subsidiaries...................................................................... 106
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real Property Collateral.. 106
6.10 Interest Rate Protection................................................................. 109
6.11 Additional Foreign Subsidiary Collateral................................................. 109
6.12 Post-Closing Deliveries.................................................................. 109
SECTION 7. CREDIT AGREEMENT PARTIES' NEGATIVE COVENANTS ............................................. 110
7.1 Indebtedness............................................................................. 110
7.2 Liens and Related Matters................................................................ 113
7.3 Investments; Joint Ventures.............................................................. 115
(ii)
Page
----
7.4 Contingent Obligations ............................................................................ 117
7.5 Restricted Junior Payments ........................................................................ 119
7.6 Financial Covenants ............................................................................... 123
7.7 Restriction on Fundamental Changes; Asset Sales and Recapitalizations ............................. 127
7.8 Consolidated Capital Expenditures ................................................................. 130
7.9 Sales and Lease-Backs ............................................................................. 131
7.10 Sale or Discount of Receivables ................................................................... 131
7.11 Transactions with Shareholders and Affiliates ..................................................... 132
7.12 Disposal of Subsidiary Stock ...................................................................... 132
7.13 Conduct of Business ............................................................................... 133
7.14 Amendments or Waivers of Certain Agreements; Amendments of
Documents Relating to Subordinated Indebtedness; Designation of
"Designated Senior Debt" .......................................................................... 133
7.15 Change of Legal Names; Type of Organization (and Whether a Registered
Organization); Jurisdiction of Organization; etc .................................................. 134
7.16 Fiscal Year ....................................................................................... 135
SECTION 8. EVENTS OF DEFAULT ................................................................................. 135
8.1 Failure to Make Payments When Due ................................................................. 135
8.2 Default in Other Agreements ....................................................................... 135
8.3 Breach of Certain Covenants ....................................................................... 135
8.4 Breach of Warranty ................................................................................ 136
8.5 Other Defaults Under Loan Documents ............................................................... 136
8.6 Involuntary Bankruptcy, Appointment of Receiver, etc .............................................. 136
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc ................................................ 136
8.8 Judgments and Attachments ......................................................................... 137
8.9 Dissolution ....................................................................................... 137
8.10 Employee Benefit Plans ............................................................................ 137
8.11 Change in Control ................................................................................. 137
8.12 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations ......................... 138
SECTION 9. AGENTS ............................................................................................ 139
9.1 Appointment ....................................................................................... 139
9.2 Powers and Duties; General Immunity ............................................................... 141
9.3 Representations and Warranties; No Responsibility for Appraisal of Creditworthiness ............... 142
9.4 Right to Indemnity ................................................................................ 142
9.5 Successor Administrative Agent and Swing Line Lender .............................................. 143
9.6 Collateral Documents and Guaranty. ................................................................ 144
SECTION 10. MISCELLANEOUS ..................................................................................... 144
10.1 Assignments and Participations in Loans and Letters of Credit ..................................... 144
10.2 Expenses .......................................................................................... 148
10.3 Indemnity ......................................................................................... 149
(iii)
Page
----
10.4 Set-Off; Security Interest in Deposit Accounts .............................................. 150
10.5 Ratable Sharing ............................................................................. 151
10.6 Amendments and Waivers ...................................................................... 151
10.7 Independence of Covenants ................................................................... 153
10.8 N::otices ................................................................................... 153
10.9 S::urvival of Representations, Warranties and Agreements .................................... 154
10.10 F::ailure or Indulgence Not Waiver; Remedies Cumulative ..................................... 154
10.11 M::arshalling; Payments Set Aside ........................................................... 155
10.12 S::everability .............................................................................. 155
10.13 O::bligations Several; Independent Nature of Lenders' Rights ................................ 155
10.14 H::eadings .................................................................................. 155
10.15 A::pplicable Law ............................................................................ 156
10.16 S::uccessors and Assigns .................................................................... 156
10.17 C::onsent to Jurisdiction and Service of Process ............................................ 156
10.18 W::aiver of Jury Trial ...................................................................... 157
10.19 C::onfidentiality ........................................................................... 157
10.20 C::ounterparts; Effectiveness ............................................................... 158
SECTION 11. ::HOLDINGS GUARANTY ........................................................................... 158
11.1 G::uaranty .................................................................................. 158
11.2 B::ankruptcy ................................................................................ 159
11.3 N::ature of Liability ....................................................................... 159
11.4 I::ndependent Obligation .................................................................... 159
11.5 A::uthorization ............................................................................. 159
11.6 R::eliance .................................................................................. 160
11.7 S::ubordination ............................................................................. 160
11.8 W::aiver .................................................................................... 161
11.9 M::aximum Liability ......................................................................... 162
SECTION 12. ::NATURE OF BORROWERS' OBLIGATIONS ............................................................ 162
12.1 N::ature of Obligations ..................................................................... 162
12.2 I::ndependent Obligation .................................................................... 162
12.3 A::uthorization ............................................................................. 162
12.4 R::eliance .................................................................................. 163
12.5 C::ontribution; Subrogation ................................................................. 163
12.6 W::aiver .................................................................................... 165
(iv)
SCHEDULES
Schedule 1.1(i) - Add-backs to Consolidated Adjusted EBITDA
Schedule 1.1(iii) - Liens
Schedule 2.1 - Lender Commitments
Schedule 3.1D - Existing Letters of Credit
Schedule 4.1C - Organizational Structure and Subsidiaries of Holdings
Schedule 4.1I - Closing Date Mortgaged Properties
Schedule 5.1 - Names; Jurisdiction of Organizations, Good Standing, etc.
Schedule 5.5 - Real Property
Schedule 5.12 - Fees
Schedule 5.16 - Legal Names; Type of Organization (and Whether a Registered
Organization); Jurisdiction of Organization; etc.
Schedule 6.12 - Post-Closing Deliveries
Schedule 7.1(v) - Permitted Indebtedness
Schedule 7.1(vii) - Existing Indebtedness
Schedule 7.3(vii) - Investments
Schedule 7.4 - Contingent Obligations
EXHIBITS
Exhibit I - Form of Revolving Note
Exhibit II - Form of Swing Line Note
Exhibit III - Form of Tranche B Term Note
Exhibit IV - Form of Notice of Borrowing
Exhibit V - Form of Notice of Conversion/Continuation
Exhibit VI - Form of Notice of Issuance of Letter of Credit
Exhibit VII - Form of Assignment Agreement
Exhibit VIII - Form of Certificate re Non-Bank Status
Exhibit IX - Form of Compliance Certificate
Exhibit X - Form of Subordination Provisions
Exhibit XI - Form of Pledge Agreement
Exhibit XII - Form of Security Agreement
Exhibit XIII - Form of Subsidiaries Guaranty
Exhibit XIV - Form of Financial Condition Certificate
Exhibit XV - Form of Opinion of Ropes & ▇▇▇▇
Exhibit XVI - Form of Opinion of Miller, Canfield, Paddock & Stone,
P.L.C.
Exhibit XVII - Form of Mortgage
(v)