Exhibit 28.3
Amended and Restated Credit Agreement (Supplemental Credit Agreement)
by and among Chattem, Inc., Signal Investment & Management Co.
and the Lenders identified therein.
AMENDED AND RESTATED CREDIT AGREEMENT
(SUPPLEMENTAL CREDIT AGREEMENT)
among
CHATTEM, INC.,
as Borrower,
Domestic Subsidiaries of Borrower,
as Guarantors,
THE LENDERS IDENTIFIED HEREIN,
AND
NATIONSBANK OF TENNESSEE, N.A.,
as Agent
DATED AS OF JUNE 26, 1997
TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS................................. 2
1.1 Definitions...................................................... 2
1.2 Computation of Time Periods and Other Definitional Provisions.... 7
1.3 Accounting Terms................................................. 8
SECTION 2 CREDIT FACILITIES................................................ 8
2.1 Term Loans....................................................... 8
2.2 Continuations and Conversions.................................... 10
2.3 Minimum Amounts.................................................. 10
2.4 Notes............................................................ 11
SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS........................... 11
3.1 Interest......................................................... 11
3.2 Place and Manner of Payments..................................... 11
3.3 Prepayments...................................................... 12
3.4 Fees............................................................. 14
3.5 Payment in full at Maturity...................................... 14
3.7 Pro Rata Treatment............................................... 15
3.8 Allocation of Payments After Event of Default.................... 15
3.9 Sharing of Payments.............................................. 16
3.10 Capital Adequacy................................................. 17
3.11 Inability To Determine Interest Rate............................. 17
3.12 Illegality....................................................... 17
3.13 Requirements of Law.............................................. 18
3.14 Taxes............................................................ 19
3.15 Indemnity........................................................ 21
3.16 Replacement of Lenders........................................... 22
SECTION 4 GUARANTY......................................................... 22
4.1 Guaranty of Payment.............................................. 22
4.2 Obligations Unconditional........................................ 23
4.3 Modifications.................................................... 23
4.4 Waiver of Rights................................................. 24
4.5 Reinstatement.................................................... 24
4.6 Remedies......................................................... 24
4.7 Limitation of Guaranty........................................... 25
4.8 Rights of Contribution........................................... 25
SECTION 5 CONDITIONS TO EXTENSIONS OF CREDIT............................... 26
5.1 Conditions to Extensions of Credit............................... 26
SECTION 6 REPRESENTATIONS AND WARRANTIES................................... 26
6.1 Financial Condition.............................................. 26
6.2 No Material Change............................................... 27
6.3 Organization and Good Standing................................... 27
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6.4 Due Authorization................................................ 27
6.5 No Conflicts..................................................... 27
6.6 Consents......................................................... 27
6.7 Enforceable Obligations.......................................... 28
6.8 No Default....................................................... 28
6.9 Ownership........................................................ 28
6.10 Indebtedness..................................................... 28
6.11 Litigation....................................................... 28
6.12 Taxes............................................................ 28
6.13 Compliance with Law.............................................. 29
6.14 ERISA............................................................ 29
6.15 Subsidiaries..................................................... 30
6.16 Use of Proceeds; Margin Stock.................................... 30
6.17 Government Regulation............................................ 30
6.18 Environmental Matters............................................ 31
6.19 Intellectual Property............................................ 32
6.20 Solvency......................................................... 32
6.21 Investments...................................................... 32
6.22 No Financing of Corporate Takeovers.............................. 32
6.23 Location of Collateral........................................... 33
6.24 Disclosure....................................................... 33
6.25 Licenses, etc.................................................... 33
6.26 No Burdensome Restrictions....................................... 33
6.27 Brokers' Fees.................................................... 33
6.28 Labor Matters.................................................... 33
6.29 Collateral Documents............................................. 33
6.30 Related Transactions............................................. 34
6.31 Representations and Warranties Incorporated from
Purchase Agreement............................................... 34
6.32 Senior Debt...................................................... 34
SECTION 7 AFFIRMATIVE COVENANTS............................................ 34
7.1 Information Covenants............................................ 34
7.2 Preservation of Existence and Franchises......................... 38
7.3 Books and Records................................................ 38
7.4 Compliance with Law.............................................. 38
7.5 Payment of Taxes and Other Indebtedness.......................... 38
7.6 Insurance........................................................ 38
7.7 Maintenance of Property.......................................... 39
7.8 Performance of Obligations....................................... 39
7.9 Collateral....................................................... 39
7.10 Use of Proceeds.................................................. 40
7.11 Audits/Inspections............................................... 40
7.12 Financial Covenants.............................................. 40
7.13 Additional Credit Parties........................................ 41
7.14 Interest Rate Protection Agreements.............................. 42
7.15 Ownership of Subsidiaries........................................ 42
7.16 Appraisal Reports................................................ 42
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SECTION 8 NEGATIVE COVENANTS............................................... 43
8.1 Indebtedness..................................................... 43
8.2 Liens............................................................ 43
8.3 Nature of Business............................................... 44
8.4 Consolidation and Merger......................................... 44
8.5 Sale or Lease of Assets.......................................... 44
8.6 Advances, Investments and Loans.................................. 44
8.7 Dividends........................................................ 45
8.8 Transactions with Affiliates..................................... 45
8.9 Fiscal Year; Organizational Documents............................ 45
8.10 Prepayments of Indebtedness...................................... 45
8.11 Subordinated Debt................................................ 45
8.12 Limitations...................................................... 46
8.13 Sale Leasebacks.................................................. 46
8.14 Negative Pledges................................................. 46
8.15 Capital Expenditures............................................. 46
8.16 Operating Leases................................................. 46
8.17 Payment Blockage Notice.......................................... 46
SECTION 9 EVENTS OF DEFAULT................................................ 47
9.1 Events of Default................................................ 47
9.2 Acceleration; Remedies........................................... 49
SECTION 10 AGENCY PROVISIONS............................................... 50
10.1 Appointment...................................................... 50
10.2 Delegation of Duties............................................. 51
10.3 Exculpatory Provisions........................................... 51
10.4 Reliance on Communications....................................... 51
10.5 Notice of Default................................................ 52
10.6 Non-Reliance on Agent and Other Lenders.......................... 52
10.7 Indemnification.................................................. 53
10.8 Agent in Its Individual Capacity................................. 53
10.9 Successor Agent.................................................. 53
SECTION 11 MISCELLANEOUS................................................... 54
11.1 Notices.......................................................... 54
11.2 Right of Set-Off................................................. 54
11.3 Benefit of Agreement............................................. 54
11.4 No Waiver; Remedies Cumulative................................... 58
11.5 Payment of Expenses; Indemnification............................. 58
11.6 Amendments, Waivers and Consents................................. 58
11.7 Counterparts..................................................... 60
11.8 Headings......................................................... 60
11.9 Defaulting Lender................................................ 60
11.10 Survival of Indemnification and Representations and Warranties... 60
11.11 Governing Law; Venue............................................. 60
11.12 Waiver of Jury Trial............................................. 61
11.13 Time............................................................. 61
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11.14 Severability..................................................... 61
11.15 Entirety......................................................... 61
11.16 Binding Effect................................................... 61
SCHEDULES
Schedule 1.1(a) Commitment Percentages
Schedule 1.1(b) Existing Permitted Investments
Schedule 6.10 Indebtedness
Schedule 6.11 Litigation
Schedule 6.14 ERISA Matters
Schedule 6.15 Subsidiaries
Schedule 6.18 Environmental Matters
Schedule 6.19 Intellectual Property
Schedule 6.23(a) Real Property Locations
Schedule 6.23(b) Personal Property Locations
Schedule 6.23(c) Chief Executive Offices
Schedule 7.6 Insurance
Schedule 8.2 Liens
Schedule 8.8 Affiliate Transactions
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.2 Form of Notice of Continuation/Conversion
Exhibit 2.4(a) Form of Tranche A Supplemental Term Loan Note
Exhibit 2.4(b) Form of Tranche B Term Loan Note
Exhibit 7.1(d) Form of Officer's Certificate
Exhibit 7.13 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT
(SUPPLEMENTAL CREDIT FACILITY)
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Credit Agreement"), is
entered into as of June 26, 1997 among CHATTEM, INC., a Tennessee corporation
(the "Borrower"), each of the Borrower's Domestic Subsidiaries, individually a
"Guarantor" and collectively the "Guarantors"), the Supplemental Credit Lenders
(as defined herein), and NATIONSBANK OF TENNESSEE, N.A., as agent for the
Supplemental Credit Lenders (in such capacity, the "Agent").
RECITALS
WHEREAS, the Borrower and the Guarantors are party to a Credit Agreement
(the "New Credit Agreement") dated as of the date hereof pursuant to which
NationsBank of Tennessee, N.A., as agent, and certain other lenders named
therein have agreed to provide a $50 million credit facility to the Borrower to
replace and refinance certain $55 million credit facilities provided pursuant to
that certain New Credit Agreement dated as of April 29, 1996 (as amended or
modified from time to time, the "Prior New Credit Agreement"). The credit
facilities provided pursuant to the Prior New Credit Agreement replaced and
refinanced the credit facilities provided to the Borrower by the First National
Bank of Chicago, as agent and certain other lenders under the credit agreements
dated as of June 17, 1994;
WHEREAS, that certain Indenture dated as of August 3, 1994 among the
Borrower, as issuer, Signal Investment & Management Co., as guarantor, and
SouthTrust Bank of Alabama, National Association, as trustee (as the same may be
modified, supplemented or amended from time to time, the "Indenture"), permits
the Borrower to incur additional indebtedness that will be considered Senior
Debt (as defined in the Indenture) upon the satisfaction of a financial test set
forth in the Indenture;
WHEREAS, the Borrower, the Guarantors, the lenders named therein and
NationsBank, N.A., as agent are currently parties to that certain Credit
Agreement dated as of April 29, 1996 (as amended or modified from time to time,
the "Prior Supplemental Credit Agreement");
WHEREAS, the Borrower and the Guarantors have requested that the
Supplemental Credit Lenders provide, in addition to the credit facilities
provided under the New Credit Agreement, an amended and restated credit facility
(the "Supplemental Credit Facility") to replace the credit facilities provided
pursuant to the Prior Supplemental Credit Agreement;
WHEREAS, the Supplemental Credit Lenders have agreed to make the requested
Supplemental Credit Facility available to the Borrower on the terms and
conditions hereinafter set forth, including without limitation evidence that the
additional indebtedness incurred hereunder will constitute Senior Debt (as
defined in the Indenture) upon the incurrence thereof.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINITIONS.
Unless otherwise defined herein, capitalized terms used herein shall have
the meanings ascribed to such terms in the New Credit Agreement. In addition,
the following terms shall have the following meanings:
"Additional Credit Party" means each Person that becomes a Guarantor
after the Closing Date, as provided in Section 7.13.
"Agent" means NationsBank of Tennessee, N.A. or any successor
administrative agent appointed pursuant to Section 10.9.
"Applicable Percentage" means:
(a) For Tranche A Supplemental Term Loans, the appropriate applicable
percentages corresponding to the Leverage Ratio in effect as of the most
recent Calculation Date as shown below:
-------------------------------------------------------------------------------
Applicable
Percentage Applicable
For Percentage For
Pricing Leverage Eurodollar Base Rate
Level Ratio Loans Loans
-------------------------------------------------------------------------------
I Less Than 4.0 to 1.0 2.25% 1.25%
-------------------------------------------------------------------------------
II Greater Than or Equal
To 4.0 to 1.0 but Less
Than 4.5 to 1.0 2.50% 1.50%
-------------------------------------------------------------------------------
III Greater Than or Equal
To 4.5 to 1.0 but Less
Than 5.0 to 1.0 2.75% 1.75%
-------------------------------------------------------------------------------
IV Greater Than or Equal
To 5.0 to 1.0 3.00% 2.00%
-------------------------------------------------------------------------------
(a) For Tranche B Term Loans, the appropriate applicable percentages
corresponding to the Leverage Ratio in effect as of the most recent
Calculation Date as shown below:
2
-------------------------------------------------------------------------------
Applicable
Percentage Applicable
For Percentage For
Pricing Leverage Eurodollar Base Rate
Level Ratio Loans Loans
-------------------------------------------------------------------------------
I Less Than 4.0 to 1.0 2.75% 1.75%
-------------------------------------------------------------------------------
II Greater Than or Equal
To 4.0 to 1.0 but
Less Than 4.5 to 1.0 3.00% 2.00%
-------------------------------------------------------------------------------
III Greater Than or Equal
To 4.5 to 1.0
but Less Than 5.0 to 1.0 3.25% 2.25%
-------------------------------------------------------------------------------
IV Greater Than or Equal
To 5.0 to 1.0 3.50% 2.50%
-------------------------------------------------------------------------------
The Applicable Percentage for Tranche A Supplemental Term Loans and
Tranche B Terms Loans shall, in each case, be determined and
adjusted quarterly on the date (each a "Calculation Date") five
Business Days after the date by which the Borrower is required to
provide the officer's certificate in accordance with the provisions
of Section 7.1(d); provided, however that (i) the initial
Applicable Percentage for Tranche A Supplemental Term Loans and
Tranche B Term Loans shall be based on Pricing Level IV (as shown
above) and shall remain at Pricing Level IV until the first
Calculation Date subsequent to the Closing Date and, thereafter,
the Pricing Level shall be determined by the then current Leverage
Ratio, and (ii) if the Borrower fails to provide the officer's
certificate required by Section 7.1(d) on or before the most recent
Calculation Date or fails to deliver a copy of such officer's
certificate to the Agency Services Address as required by Section
7.1(d), the Applicable Percentage for Tranche A Supplemental Term
Loans and Tranche B Term Loans from such Calculation Date shall be
based on Pricing Level IV until such time that an appropriate
officer's certificate is provided whereupon the Pricing Level shall
be determined by the then current Leverage Ratio. Each Applicable
Percentage shall be effective from one Calculation Date until the
next Calculation Date. Any adjustment in the Applicable Percentage
shall be applicable to all existing Tranche A Supplemental Term
Loans and Tranche B Term Loans as well as any new Tranche A
Supplemental Term Loans and new Tranche B Term Loans made or issued.
"Borrower" means the Person identified as such in the heading hereof,
together with any successors and permitted assigns.
"Calculation Date" has the meaning set forth in the definition of
Applicable Percentage.
"Closing Date" means the date hereof.
"Commitments" means the Revolving Committed Amount, the Tranche A
Term Loan Committed Amount, the Tranche A Supplemental Term Loan
Committed Amount and the Tranche B Term Loan Committed Amount.
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"Credit Documents" means collectively, the Supplemental Credit
Documents and the New Credit Agreement Documents.
"Credit Party Obligations" means, without duplication, (a) all of the
obligations of the Credit Parties to the Supplemental Credit
Lenders and the Agent, whenever arising, under this Credit
Agreement, the Tranche A Supplemental Term Loan Notes, the Tranche
B Term Loan Notes, the Collateral Documents or any of the other
Supplemental Credit Documents to which the Borrower or any other
Credit Party is a party (including, but not limited to, any
interest accruing after the occurrence of a Bankruptcy Event with
respect to any Credit Party, regardless of whether such interest is
an allowed claim under the Bankruptcy Code) and (b) all liabilities
and obligations owing from a Credit Party to any Supplemental
Credit Lender, or any Affiliate of a Supplemental Credit Lender,
arising under interest rate protection agreements, foreign currency
exchange agreements, commodity purchase or option agreements or
other interest or exchange rate or commodity price hedging
agreements (collectively, the "Hedging Agreements").
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, at such time
(a) has failed to make a Loan or purchase a Participation Interest required
pursuant to the terms of this Credit Agreement or the New Credit Agreement
(b) has failed to pay to the Agent or any Lender an amount owned by such
Lender pursuant to the terms of this Credit Agreement or the New Credit
Agreement or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver or similar official.
"Effective Date" means the date on which the conditions set forth
in Section 5.1 of the New Credit Agreement shall have been fulfilled (or
waived in the sole discretion of the Lenders) and on which the initial
Loans shall have been made.
"Event of Default" has the meaning specified in Section 9.1.
"Extension of Credit" means, as to any Lender, the making of a Loan
by such Lender (or a participation therein by a Lender).
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to Section 1.3.
"Guarantor" means each of the Domestic Subsidiaries of the Borrower
and each Additional Credit Party which has executed a Joinder Agreement,
together with their successors and assigns.
"Hedging Agreements" has the meaning set forth in the definition of
Credit Party Obligations.
"Interest Payment Date" means (a) as to Base Rate Loans, the last day
of each fiscal quarter of the Borrower and on the Tranche A Supplemental
Term Loan Maturity Date or Tranche B Term Loan Maturity Date, as
applicable, and (b) as to Eurodollar Loans, on the last
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day of each applicable Interest Period and on the Tranche A Supplemental
Term Loan Maturity Date or the Tranche B Term Loan Maturity Date, as
applicable.
"Interest Period" means as to Eurodollar Loans, a period of one, two
or three months' duration, as the Borrower may elect, commencing, in each
case, on the date of the borrowing (including continuations and conversions
thereof); provided, however, (a) if any Interest Period would end on a day
which is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day (except that where the next succeeding Business
Day falls in the next succeeding calendar month, then on the next preceding
Business Day), (b) no Interest Period shall extend beyond the Tranche A
Supplemental Term Loan Maturity Date or the Tranche B Term Loan Maturity
Date, as applicable, (c) with regard to Tranche A Supplemental Term Loans
and Tranche B Term Loans, as applicable, no Interest Period shall extend
beyond any Principal Amortization Payment Date unless the portion of the
Tranche A Supplemental Term Loans and Tranche B Term Loans, as applicable
comprised of Base Rate Loans together with the portion of the Tranche A
Supplemental Term Loans and Tranche B Term Loans, as applicable comprised
of Eurodollar Loans with Interest Periods expiring prior to the date such
Principal Amortization Payment is due, is at least equal to the amount of
such Principal Amortization Payment due on such date and (d) where an
Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is to
end, such Interest Period shall end on the last Business Day of such
calendar month.
"Joinder Agreement" means a Joinder Agreement substantially in the
form of Exhibit 7.13.
"Lender" means collectively, the Supplemental Credit Lenders and the
New Credit Agreement Lenders.
"Loan" or "Loans" means the Revolving Loans, the Swingline Loans, the
Tranche A Term Loans, the Tranche A Supplemental Term Loans and/or the
Tranche B Term Loans (or a portion of any Revolving Loan, the Tranche A Term
Loans, the Tranche A Supplemental Term Loans and/or the Tranche B Term
Loans), individually or collectively, as appropriate.
"New Credit Agreement Documents" means the New Credit Agreement, the
Notes (other than the Tranche A Supplemental Term Loan Notes and Tranche B
Term Loan Notes), the Collateral Documents, the Fee Letter and all other
related agreements and documents issued or delivered hereunder or thereunder
or pursuant hereto or thereto.
"New Credit Agreement Lenders" means any of the Persons identified
as a "New Credit Agreement Lender" on the signature pages to the New Credit
Agreement, and any Person which may become a New Credit Agreement Lender by
way of assignment in accordance with the terms of the New Credit Agreement,
together with their successors and permitted assigns.
"Non-Excluded Taxes" has the meaning set forth in Section 3.14.
5
"Note" or "Notes" means the Revolving Loan Notes, the Swingline Note,
the Tranche A Term Loan Notes, the Tranche A Supplemental Term Loan Notes
and/or the Tranche B Term Loan Notes, individually or collectively, as
appropriate.
"Notice of Continuation/Conversion" means a request by the Borrower to
continue an existing Eurodollar Loan to a new Interest Period or to convert
a Eurodollar Loan to a Base Rate Loan or a Base Rate Loan to a Eurodollar
Loan, in the form of Exhibit 2.2.
"Participation Interest" means the Extension of Credit by a Lender
by way of the purchase of a participation in any Loans as provided in
Section 3.9.
"Principal Amortization Payment" means a principal payment on the
Tranche A Supplemental Term Loans and Tranche B Terms Loans as set forth
in Section 2.1(c).
"Principal Amortization Payment Date" means the date a Principal
Amortization Payment is due.
"Required Lenders" means Lenders whose aggregate Credit Exposure (as
hereinafter defined) constitutes at least 67% of the Credit Exposure of all
Lenders at such time; provided, however, that if any Lender shall be a
Defaulting Lender at such time then there shall be excluded from the
determination of Required Lenders the aggregate principal amount of Credit
Exposure of such Lender at such time. For purposes of the preceding
sentence, the term "Credit Exposure" as applied to each Lender shall mean
(a) at any time prior to the termination of the Commitments, the sum of
(i) the Revolving Loan Commitment Percentage of such Lender multiplied by
the Revolving Committed Amount, plus (ii) the Tranche A Term Loan Commitment
Percentage of such Lender multiplied by the aggregate principal amount of
Tranche A Term Loans outstanding at such time, plus (iii) the Tranche A
Supplemental Term Loan Commitment Percentage of such Lender multiplied by
the aggregate principal amount of Tranche A Supplemental Term Loans
outstanding at such time, plus (iv) the Tranche B Term Loan Commitment
Percentage of such Lender multiplied by the aggregate principal amount of
Tranche B Term Loans outstanding at such time and (b) at any time after the
termination of the Commitments, the sum of the principal balance of the
outstanding Loans of such Lender.
"Supplemental Credit Documents" means this Credit Agreement, the
Tranche A Supplemental Term Loan Notes, the Tranche B Term Loan Notes,
any Joinder Agreement, the Collateral Documents, the Fee Letter and all
other related agreements and documents issued or delivered hereunder or
thereunder.
"Supplemental Credit Lenders" means any of the Persons identified as a
"Supplemental Credit Lender" on the signature pages hereto, and any Person
which may become a Supplemental Credit Lender by way of assignment in
accordance with the terms hereof, together with their successors and
permitted assigns.
"Term Loans" means the Tranche A Term Loans, the Tranche A
Supplemental Term Loans and the Tranche B Term Loans.
"Tranche A Supplemental Term Loans" means the Tranche A Supplemental
Term Loans made to the Borrower pursuant to Section 2.1 hereof.
6
"Tranche A Supplemental Term Loan Committed Amount" means TEN MILLION
DOLLARS ($10,000,000).
"Tranche A Supplemental Term Loan Commitment Percentage" means for a
Supplemental Credit Lender, the percentage identified as its Tranche A
Supplemental Term Loan Commitment Percentage on Schedule 1.1(a) as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Tranche A Supplemental Term Loan Maturity Date" means June 26, 2002.
"Tranche A Supplemental Term Loan Note" or "Tranche A Supplemental Term
Loan Notes" means the promissory notes of the Borrower in favor of the
Supplemental Credit Lenders having a Tranche A Supplemental Term Loan
Commitment Percentage evidencing the Term A Supplemental Term Loans provided
pursuant to Section 2.1, individually or collectively, as appropriate, as
such promissory notes may be amended, modified, supplemented, extended,
renewed or replaced from time to time in the form of Exhibit 2.4(a).
"Tranche B Term Loans" means the Tranche B Term Loans made to the
Borrower pursuant to Section 2.1 hereof.
"Tranche B Term Loan Committed Amount" means THIRTY-FIVE MILLION
DOLLARS ($35,000,000).
"Tranche B Term Loan Commitment Percentage" means, for a Supplemental
Credit Lender, the percentage identified as its Tranche B Term Loan
Commitment Percentage on Schedule 1.1(a), as such percentage may be modified
in connection with any assignment made in accordance with the provisions of
Section 11.3.
"Tranche B Term Loan Maturity Date" means February 14, 2004.
"Tranche B Term Loan Note" or "Tranche B Term Loan Notes" means the
promissory notes of the Borrower in favor of the Supplemental Credit Lenders
having a Tranche B Term Loan Commitment Percentage evidencing the Tranche B
Term Loans provided pursuant to Section 2.1, individually or collectively,
as appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time as evidenced
in the form of Exhibit 2.4(b).
1.2 COMPUTATION OF TIME PERIODS AND OTHER DEFINITIONAL PROVISIONS.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.
7
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Supplemental
Credit Lenders hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis. All financial statements delivered to the Supplemental Credit
Lenders hereunder shall be accompanied by a statement from the Borrower that
GAAP has not changed since the most recent financial statements delivered by the
Borrower to the Supplemental Credit Lenders or if GAAP has changed describing
such changes in detail and explaining how such changes affect the financial
statements. All calculations made for the purposes of determining compliance
with this Credit Agreement shall (except as otherwise expressly provided herein)
be made by application of GAAP applied on a basis consistent with the most
recent annual or quarterly financial statements delivered pursuant to Section
7.1 (or, prior to the delivery of the first financial statements pursuant to
Section 7.1, consistent with the financial statements described in Section
5.1(c) of the New Credit Agreement); provided, however, if (a) the Borrower
shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) either Agent or the Required Lenders
shall so object in writing within 60 days after delivery of such financial
statements (or after the Supplemental Credit Lenders have been informed of the
change in GAAP affecting such financial statements, if later), then such
calculations shall be made on a basis consistent with the most recent financial
statements delivered by the Borrower to the Supplemental Credit Lenders as to
which no such objection shall have been made.
SECTION 2
CREDIT FACILITIES
2.1 TERM LOANS.
(a) Tranche A Supplemental Term Loans. Subject to the terms and
conditions set forth herein, each Supplemental Credit Lender that
has a Tranche A Supplemental Term Loan Commitment Percentage
severally agrees on the date hereof, to make a term loan
(collectively, the "Tranche A Supplemental Term Loans") to the
Borrower, in Dollars, in an amount equal to such Supplemental
Credit Lender's Tranche A Supplemental Term Loan Commitment
Percentage of the Tranche A Supplemental Term Loan Committed
Amount; provided that the aggregate amount of such Tranche A
Supplemental Term Loans made on the date hereof shall not exceed
the Tranche A Supplemental Term Loan Committed Amount. Once repaid,
Tranche A Supplemental Term Loans cannot be reborrowed.
(b) Tranche B Term Loans. Subject to the terms and conditions set forth
herein, each Supplemental Credit Lender that has a Tranche B Term
Loan Commitment Percentage severally agrees on the date hereof, to
make a term loan (collectively, the "Tranche B Terms Loans") to the
Borrower, in Dollars, in an amount equal to such Supplemental
Credit Lender's Tranche B Term Loan Commitment Percentage of the
Tranche B Term Loan Committed Amount; provided that the aggregate
amount of such Tranche B Term Loans made on the date hereof shall
not exceed the Tranche B Term Loan Committed Amount. Once repaid,
Tranche B Term Loans cannot be reborrowed.
8
(c) Funding of Term Loans. On the Effective Date, each Supplemental
Credit Lender will make its Tranche A Supplemental Term Loan Commitment
Percentage of the Tranche A Supplemental Term Loan Committed Amount and
its Tranche B Term Loan Commitment Percentage of the Tranche B Term Loan
Committed Amount available to the Agent by deposit, in Dollars and in
immediately available funds, at the offices of the Agent at its
principal office in Charlotte, North Carolina or at such other address
as the Agent may designate in writing. The amount of the Tranche A
Supplemental Term Loans and Tranche B Term Loans will then be made
available to the Borrower by the Agent by crediting the account of the
Borrower on the books of such office of the Agent, to the extent the
amount of such Tranche A Supplemental Term Loans and Tranche B
Supplemental Term Loans are made available to the Agent. All Tranche A
Supplemental Term Loans and Tranche B Term Loans on the date hereof
shall be Base Rate Loans. Thereafter, all or any portion of the Tranche
A Supplemental Term Loans and Tranche B Term Loans may be converted into
Eurodollar Loans in accordance with the terms of Section 2.2.
(c) Amortization. The principal amount of the Tranche A Supplemental
Term Loans and Tranche B Term Loans shall be repaid in quarterly
payments in the amounts and on the dates set forth below:
TRANCHE A
SUPPLEMENTAL TERM TRANCHE B
LOAN TERM LOAN
PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL
AMORTIZATION AMORTIZATION AMORTIZATION AMORTIZATION
PAYMENT DATES PAYMENT PAYMENT DATES PAYMENT
----------------- ---------------- ------------- -------------
September 30,1997 $410,000.00 September 30, 1997 $ 87,500.00
December 31, 1997 $410,000.00 December 31, 1997 $ 87,500.00
March 31, 1998 $410,000.00 March 31, 1998 $ 87,500.00
June 30,1998 $410,000.00 June 30, 1998 $ 87,500.00
September 30,1998 $410,000.00 September 30, 1998 $ 87,500.00
December 31, 1998 $466,666.67 December 31, 1998 $ 87,500.00
March 31, 1999 $466,666.67 March 31,1999 $ 87,500.00
June 30, 1999 $466,666.67 June 30, 1999 $ 87,500.00
September 30 ,1999 $466,666.66 September 30,1999 $ 87,500.00
December 31,1999 $550,000.00 December 31, 1999 $ 87,500.00
March 31,2000 $550,000.00 March 31, 2000 $ 87,500.00
June 30, 2000 $550,000.00 June 30, 2000 $ 87,500.00
September 30, 2000 $550,000.00 September 30, 2000 $ 87,500.00
December 31, 2000 $550,000.00 December 31, 2000 $ 87,500.00
March 31,2001 $550,000.00 March 31,2001 $ 87,500.00
June 30, 2001 $550,000.00 June 30, 2001 $ 87,500.00
September 30, 2001 $550,000.00 September 30,2001 $1,000,000.00
December 31, 2001 $550,000.00 December 31, 2001 $3,250,000.00
March 31,2002 $550,000.00 March 31, 2002 $3,250,000.00
June 26,2002 $583,333.33 June 30, 2002 $3,250,000.00
September 30, 2002 $3,250,000.00
December 31, 2002 $3,250,000.00
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TRANCHE A
SUPPLEMENTAL TERM TRANCHE B
LOAN TERM LOAN
PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL
AMORTIZATION AMORTIZATION AMORTIZATION AMORTIZATION
PAYMENT DATES PAYMENT PAYMENT DATES PAYMENT
----------------- ---------------- ------------- -------------
March 31, 2003 $3,250,000.00
June 30, 2003 $3,250,000.00
September 31, 2003 $3,250,000.00
December 31, 2003 $3,250,000.00
February 14, 2004 $3,350,000.00
Total $10,000,000.00 Total $35,000,000.00
2.2 CONTINUATIONS AND CONVERSIONS.
Subject to the terms of Section 5.1, the Borrower shall have the option, on
any Business Day, to continue in existence Eurodollar Loans for a subsequent
Interest Period, to convert Base Rate Loans into Eurodollar Loans or to convert
Eurodollar Loans into Base Rate Loans; provided, however, that (a) each such
continuation or conversion must be requested by the Borrower pursuant to a
written Notice of Continuation/Conversion, in the form of Exhibit 2.2, in
compliance with the terms set forth below, (b) except as provided in Section
3.12, Eurodollar Loans may only be continued or converted into Base Rate Loans
on the last day of the Interest Period applicable thereto, (c) Eurodollar Loans
may not be continued nor may Base Rate Loans be converted into Eurodollar Loans
during the existence and continuation of a Default or Event of Default and (d)
any request to extend a Eurodollar Loan that fails to comply with the terms
hereof or any failure to request an extension of a Eurodollar Loan at the end of
an Interest Period shall constitute a request for a conversion to a Base Rate
Loan on the last day of the applicable Interest Period. Each continuation or
conversion must be requested by the Borrower no later than 11:00 a.m. (i) one
Business Day prior to the date for a requested conversion of a Eurodollar Loan
to a Base Rate Loan or (ii) three Business Days prior to the date for a
requested extension of a Eurodollar Loan or conversion of a Base Rate Loan to a
Eurodollar Loan, in each case pursuant to a written Notice of
Continuation/Conversion submitted to the Agent which shall set forth (A) whether
the Loans to be continued or converted are Tranche A Supplemental Term Loans or
Tranche B Term Loans, (B) whether the Borrower wishes to continue or convert
such Loans and (C) if the request is to continue a Eurodollar Loan or convert a
Base Rate Loan to a Eurodollar Loan, the Interest Period applicable thereto.
2.3 MINIMUM AMOUNTS.
Each request for a conversion or continuation shall be subject to the
requirements that (a) each Eurodollar Loan shall be in a minimum amount of
$1,000,000 and in integral multiples of $500,000 in excess thereof, (b) each
Base Rate Loan shall be in a minimum amount of the lesser of $1,000,000 (and
integral multiples of $500,000 in excess thereof) or the then remaining
principal balance of the Tranche A Supplemental Term Loan or Tranche B Term
Loan, if less, as applicable, and (c) no more than ten Eurodollar Loans shall,
in the aggregate, be outstanding under the New Credit Agreement and hereunder at
any one time. For the purposes of this Section, all Eurodollar Loans with the
same Interest Periods shall be considered as one Eurodollar Loan, but Eurodollar
Loans with different Interest Periods, even if they begin on the same date,
shall be considered as separate Eurodollar Loans.
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2.4 NOTES.
(a) Tranche A Supplemental Term Loan Notes. The Tranche A Supplemental
Term Loans made by the Supplemental Credit Lenders having a Tranche A
Supplemental Term Loan Commitment Percentage shall be evidenced by a
duly executed promissory note of the Borrower to each such Supplemental
Credit Lender in the face amount of its Tranche A Supplemental Term Loan
Commitment Percentage of the Tranche A Supplemental Term Loan Committed
Amount in substantially the form of Exhibit 2.4(a).
(b) Tranche B Term Loan Notes. The Tranche B Term Loans made by the
Supplemental Credit Lenders having a Tranche B Term Loan Commitment
Percentage shall be evidenced by a duly executed promissory note of the
Borrower to each such Supplemental Credit Lender in the face amount of
its Tranche B Term Loan Commitment Percentage of the Tranche B Term Loan
Committed Amount in substantially the form of Exhibit 2.4(b).
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS
3.1 INTEREST.
(a) Interest Rate. All Base Rate Loans shall accrue interest at the
Adjusted Base Rate and all Eurodollar Loans shall accrue interest at the
Adjusted Eurodollar Rate.
(b) Default Rate of Interest. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Tranche A Supplemental Term Loans and
Tranche B Term Loans and any other amounts owing hereunder or under the
other Credit Documents (including without limitation fees and expenses)
shall bear interest, payable on demand, at a per annum rate equal to 4%
plus the rate which would otherwise be applicable (or if no rate is
applicable, then the rate for Revolving Loans that are Base Rate Loans
plus four percent (4%) per annum).
(c) Interest Payments. Interest on Tranche A Supplemental Term Loans
and Tranche B Term Loans shall be due and payable in arrears on each
Interest Payment Date. If an Interest Payment Date falls on a date which
is not a Business Day, such Interest Payment Date shall be deemed to be
the next succeeding Business Day (subject to accrual of interest for the
period of such extension), except that in the case of Eurodollar Loans
where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding day.
3.2 PLACE AND MANNER OF PAYMENTS.
All payments of principal, interest, fees, expenses and other amounts to be
made by a Credit Party under this Credit Agreement shall be received not later
than 2:00 p.m. on the date when due, in Dollars and in immediately available
funds, by the Agent at its offices at NationsBank Plaza, Charlotte, North
Carolina. Payments received after such time shall be deemed to have been
received on the next Business Day. Payments received after such time shall be
deemed to have been received on the next Business Day. The Borrower shall, at
the time it makes any payment under this Credit Agreement,
11
specify to the Agent, the Tranche A Supplement Term Loans, Tranche B Term
Loans, fees or other amounts payable by the Borrower hereunder to which
such payment is to be applied (and in the event that it fails to specify,
or if such application would be inconsistent with the terms hereof, the
Agent shall, subject to Section 3.7, distribute such payment to the
Supplemental Credit Lenders in such manner as the Agent may deem
appropriate). The Agent will distribute such payments to the applicable
Supplemental Credit Lenders on the date received if any such payment is
received prior to 2:00 p.m.; otherwise the Agent will distribute such
payment to the applicable Supplemental Credit Lenders on the next
succeeding Business Day. Whenever any payment hereunder shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (subject to accrual of
interest and fees for the period of such extension), except that in the
case of Eurodollar Loans, if the extension would cause the payment to be
made in the next following calendar month, then such payment shall instead
be made on the next preceding Business Day.
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the right to prepay
Tranche A Supplemental Term Loans and Tranche B Term Loans in whole or
in part from time to time without premium or penalty; provided, however,
that (i) Eurodollar Loans may only be prepaid on three Business Days'
prior written notice to the Agent and any prepayment of Eurodollar Loans
will be subject to Section 3.15; (ii) Base Rate Loans may only be
prepaid after written notice (confirmed by a telephone call from the
Borrower) to the Agent not later than 11:00 a.m. on the Business Day of
the applicable prepayment; (iii) each such partial prepayment shall be
(A) in the case of the Tranche A Supplemental Term Loans in the minimum
principal amount of $1,000,000 and integral multiples of $1,000,000 in
excess thereof and (B) in the case of Tranche B Term Loans in the
minimum principal amount of $1,000,000 and integral multiples of
$1,000,000 in excess thereof; (iv) voluntary prepayments with respect to
the Term Loans shall be applied pro rata between the outstanding Tranche
A Term Loans, Tranche A Supplemental Term Loans and Tranche B Term Loans
(pro rata among the remaining Principal Amortization Payments in inverse
order of maturity thereof); and (v) any prepayment of Tranche A
Supplemental Term Loans and Tranche B Term Loans made within one year of
the Closing Date shall be subject to the prepayment penalty provisions of
Section 3.3(d) hereof.
(b) Mandatory Prepayments.
(i) Excess Cash Flow. Within 10 days after the date the audited
financial statements are required to be delivered pursuant to
Section 7.1(a), the Borrower shall make a prepayment of the Loans in
an amount equal to 75% of the Excess Cash Flow earned during such
prior fiscal year (to be applied as set forth in Section 3.3(c) below).
(ii) Asset Dispositions. Immediately upon receipt by the Borrower
or any of its Subsidiaries of proceeds from any Asset Disposition, the
Borrower shall forward 100% of the Net Cash Proceeds of such Asset
Disposition to the Lenders as a prepayment of the Loans (to be applied
as set forth in Section 3.3(c) below).
12
(iii) Issuances of Equity. Immediately upon receipt by the
Borrower or any of its Subsidiaries of proceeds from any Equity
Issuance (other than the issuance of capital stock of the Borrower in
connection with the Borrower's purchase of the Acquired Assets), the
Borrower shall forward 50% of the Net Cash Proceeds of such Equity
Issuance to the Lenders as a prepayment of the Loans (to be applied
as set forth in Section 3.3(c) below).
(iv) Recovery Event. Subject to the terms and conditions of
Section 7.6 hereof, immediately upon receipt by the Borrower or any
of its Subsidiaries of proceeds from any Recovery Event, the Borrower
shall forward 100% of the Net Cash Proceeds from such Recovery Event
to the Lenders as a prepayment of the Loans (to be applied as set forth
in Section 3.3(c) below).
(v) Debt Issuances. Immediately upon receipt by the Borrower or
any of its Subsidiaries of proceeds from any Debt Issuance, the
Borrower shall prepay the Loans in an aggregate amount equal to 100%
of the Net Cash Proceeds of such Debt Issuance to the Lenders such
prepayment to be applied as set forth in Section 3.3(c) below.
(c) Application of Prepayments. All amounts required to be paid
pursuant to Section 3.3(b)(ii), (iii), (iv), (v) and (vi) above shall be
applied, first pro rata among the outstanding Tranche A Term Loans, the
Tranche A Supplemental Term Loans and Tranche B Term Loans (which
amounts shall then be applied to the remaining Principal Amortization
Payments due with respect to the Tranche A Term Loans, the Tranche A
Supplemental Term Loans and Tranche B Term Loans in inverse order of
maturity thereof), second to the Revolving Loans (with a corresponding
reduction in the Revolving Committed Amount) and third to Swingline
Loans (with a corresponding reduction in the Revolving Committed
Amount). One or more holders of the Tranche B Term Loans may decline to
accept a mandatory prepayment under Sections 3.3(b)(ii), (iii), (iv),
(v) or (vi) with respect to the Tranche B Term Loans (to the extent
there is sufficient Tranche A Term Loans and Tranche A Supplemental
outstanding to be paid with such prepayment) in which case such declined
prepayments shall be allocated pro rata among the Tranche A Term Loans
and Tranche A Supplemental Term Loans and among the Tranche B Term Loans
held by Lenders accepting such prepayments; provided, however a Lender
declining to accept a mandatory prepayment shall be required to make
such election to decline with respect to the Tranche B Term Loan of such
Lender. Within the parameters of the application set forth above,
prepayments shall be applied first to Base Rate Loans and then to
Eurodollar Loans in direct order of Interest Period maturities. All
prepayments hereunder shall be subject to Section 3.15.
(d) Prepayment Penalty. In the event the Borrower voluntarily elects to
prepay any Tranche A Supplemental Term Loan and Tranche B Term Loan
within one year following the Closing Date as permitted by Section
3.3(a) hereof and such prepayment is made with the proceeds of any other
Indebtedness, the Borrower shall be obligated to pay a prepayment fee
equal to one-half percent (1/2%) of the principal amount prepaid;
provided, however, the prepayment fees referred to in this Section
3.3(d) shall not apply to any voluntary prepayment made with any part of
the fifty percent (50%) portion of proceeds from an Equity Issuance that
the Borrower is permitted to retain pursuant to Section 3.3(b)(iv) hereof.
After one (1) year
13
from the Closing Date, the Borrower may prepay the Tranche A Supplemental
Term Loan and Tranche B Term Loan without a prepayment penalty or fee.
3.4 FEES.
The Borrower agrees to pay to the Agent, for its own account, an annual fee
as agreed to between the Borrower and the Agent in the Fee Letter.
3.5 PAYMENT IN FULL AT MATURITY.
(a) On the Tranche A Supplemental Term Loan Maturity Date, the entire
outstanding principal balance of all Tranche A Supplemental Term Loans,
together with accrued but unpaid interest and all other sums owing with
respect thereto, shall be due and payable in full, unless accelerated
sooner pursuant to Section 9 hereof.
(b) On the Tranche B Term Loan Maturity Date, the entire outstanding
principal balance of all Tranche B Term Loans, together with accrued but
unpaid interest and all other sums owing with respect thereto, shall be
due and payable in full, unless accelerated sooner pursuant to Section 9
hereof.
3.6 COMPUTATIONS OF INTEREST AND FEES.
(a) Except for Base Rate Loans, in which case interest shall be
computed on the basis of a 365 or 366 day year as the case may be
(unless the Base Rate is determined by reference to the Federal Funds
Rate), all computations of interest and fees hereunder shall be made on
the basis of the actual number of days elapsed over a year of 360 days.
Interest shall accrue from and include the date of borrowing (or
continuation or conversion) but exclude the date of payment.
(b) It is the intent of the Supplemental Credit Lenders and the Credit
Parties to conform to and contract in strict compliance with applicable
usury law from time to time in effect. All agreements between the
Supplemental Credit Lenders and the Borrower are hereby limited by the
provisions of this paragraph which shall override and control all such
agreements, whether now existing or hereafter arising and whether
written or oral. In no way, nor in any event or contingency (including
but not limited to prepayment or acceleration of the maturity of any
obligation), shall the interest taken, reserved, contracted for,
charged, or received under this Credit Agreement, under the Tranche A
Supplemental Term Loan Notes, Tranche B Term Loan Notes or otherwise,
exceed the maximum nonusurious amount permissible under applicable law.
If, from any possible construction of any of the Supplemental Credit
Documents or any other document, interest would otherwise be payable in
excess of the maximum nonusurious amount, any such construction shall be
subject to the provisions of this paragraph and such documents shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or
new document. If any Supplemental Credit Lender shall ever receive
anything of value which is characterized as interest on the Tranche A
Supplemental Loans or Tranche B Term Loans under applicable law and
which would, apart from this provision, be in excess of the maximum
lawful amount, an amount equal to the amount which would have been
excessive interest shall, without penalty, be applied to the reduction
of the principal amount owing on the
14
Tranche A Supplemental Term Loans or Tranche B Term Loans, as
appropriate, and not to the payment of interest, or refunded to the
Borrower or the other payor thereof if and to the extent such amount
which would have been excessive exceeds such unpaid principal amount of
the Tranche A Supplemental Term Loans or Tranche B Term Loans. The right
to demand payment of the Tranche A Supplemental Term Loans or Tranche B
Term Loans or any other indebtedness evidenced by any of the
Supplemental Credit Documents does not include the right to receive any
interest which has not otherwise accrued on the date of such demand, and
the Supplemental Credit Lenders do not intend to charge or receive any
unearned interest in the event of such demand. All interest paid or
agreed to be paid to the Supplemental Credit Lenders with respect to the
Tranche A Supplemental Term Loans or Tranche B Term Loans shall, to the
extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full stated term (including any renewal or
extension) of the Tranche A Supplemental Term Loans or Tranche B Term
Loans so that the amount of interest on account of such indebtedness
does not exceed the maximum nonusurious amount permitted by applicable
law.
3.7 PRO RATA TREATMENT.
Except to the extent otherwise provided herein, each Loan borrowing, each
payment or prepayment of principal of any Loan, each payment of fees and the
Administrative Fees retained by the Agent for its own account, each reduction of
the Revolving Committed Amount, and each conversion or continuation of any Loan,
shall be allocated pro rata among the relevant Lenders in accordance with the
respective Revolving Loan Commitment Percentages, Tranche A Term Loan Commitment
Percentages, Tranche A Supplemental Term Loan Commitment Percentages and Tranche
B Term Loan Commitment Percentages, as applicable, of such Lenders (or, if the
Commitments of such Lenders have expired or been terminated, in accordance with
the respective principal amounts of their outstanding Loans and Participation
Interests of such Lenders); provided that, if any Lender shall have failed to
pay its applicable pro rata share of any Loan, then any amount to which such
Lender would otherwise be entitled pursuant to this Section shall instead be
payable to the Agent; provided further, that in the event any amount paid to any
Lender pursuant to this Section is rescinded or must otherwise be returned by
the Agent, each Lender shall, upon the request of the Agent, repay to the Agent
the amount so paid to such Lender, with interest for the period commencing on
the date such payment is returned by the Agent until the date the Agent receives
such repayment at a rate per annum equal to, during the period to but excluding
the date two Business Days after such request, the Federal Funds Rate, and
thereafter, the Base Rate plus four percent (4%) per annum.
3.8 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provisions of this Credit Agreement or the New
Credit Agreement, after the occurrence and during the continuance of an Event of
Default, all amounts collected or received by the Agent or any Lender on account
of amounts outstanding under any of the Credit Documents or in respect of the
Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
the Agent in connection with enforcing the rights of the Lenders under
the Credit Documents and any protective advances made by the Agent with
respect to the Collateral under or pursuant to the terms of the
Collateral Documents;
15
SECOND, to payment of any fees owed to the Agent in its capacity as the
Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and expenses,
(including, without limitation, reasonable attorneys' fees) of each of the
Lenders in connection with enforcing its rights under the Credit Documents;
FOURTH, to the payment of all accrued fees and interest payable to the
Lenders hereunder and under the New Credit Agreement;
FIFTH, to the payment of the outstanding principal amount of the Loans, and
to any principal amounts outstanding under Hedging Agreements, pro rata, as set
forth below;
SIXTH, to all other obligations which shall have become due and payable
under the Credit Documents and not repaid pursuant to clauses "FIRST" through
"FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category and (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans,
and obligations under Hedging Agreements held by such Lender bears to the
aggregate then outstanding Loans, and obligations under Hedging Agreements) of
amounts available to be applied pursuant to clauses "THIRD", "FOURTH," "FIFTH,"
and "SIXTH" above.
3.9 SHARING OF PAYMENTS.
The Supplemental Credit Lenders agree among themselves that, except to the
extent otherwise provided herein, in the event that any Lender shall obtain
payment in respect of any Loan or any other obligation owing to such Lender
under this Credit Agreement or the New Credit Agreement through the exercise of
a right of setoff, banker's lien or counterclaim, or pursuant to a secured claim
under Section 506 of the Bankruptcy Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, in excess of its pro rata share of such payment as provided for in
this Credit Agreement and the New Credit Agreement, such Lender shall promptly
purchase from the other Lenders for cash an interest in such Loans and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement and the New Credit Agreement. The Supplemental Credit Lenders further
agree among themselves that if payment to a Lender obtained by such Lender
through the exercise of a right of setoff, banker's lien, counterclaim or other
event as aforesaid shall be rescinded or must otherwise be restored, each Lender
which shall have shared the benefit of such payment shall, by repurchase of the
interest theretofore sold, return its share of that benefit (together with its
share of any accrued interest payable with respect thereto) to each Lender whose
payment shall have been rescinded or otherwise restored. The Borrower agrees
that any Lender so purchasing such an interest may, to the fullest extent
permitted by law, exercise all rights of payment, including setoff, banker's
lien or counterclaim, with respect to such interest as fully as if such Lender
were a holder of such Loan or other obligation in the amount of such
16
interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Agent shall fail to remit to the Agent or any other Lender
an amount payable by such Lender or the Agent to the Agent or such other
Lender pursuant to this Credit Agreement or the New Credit Agreement on the
date when such amount is due, such payments shall be made together with
interest thereon for each date from the date such amount is due until the
date such amount is paid to the Agent or such other Lender at a rate per
annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu
of a setoff to which this Section 3.9 applies, such Lender shall, to the
extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders under this Section 3.9 to
share in the benefits of any recovery on such secured claim.
3.10 CAPITAL ADEQUACY.
If, after the date hereof, any Supplemental Credit Lender has determined
that the adoption or the becoming effective of, or any change in, or any change
by any Governmental Authority, central bank or comparable agency charged with
the interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Supplemental Credit Lender with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Supplemental Credit Lender's
capital or assets as a consequence of its commitments or obligations hereunder
to a level below that which such Supplemental Credit Lender could have achieved
but for such adoption, effectiveness, change or compliance (taking into
consideration such Supplemental Credit Lender's policies with respect to capital
adequacy), then, upon notice from such Supplemental Credit Lender to the
Borrower, the Borrower shall be obligated to pay to such Supplemental Credit
Lender such additional amount or amounts as will compensate such Supplemental
Credit Lender for such reduction. Each determination by any such Supplemental
Credit Lender of amounts owing under this Section shall, absent manifest error,
be conclusive and binding on the parties hereto.
3.11 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, the Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, the Agent shall promptly give telecopy or telephonic
notice thereof to the Borrower and the Supplemental Credit Lenders. If such
notice is given (a) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as Base Rate Loans, (b) any Tranche A
Supplemental Term Loans or Tranche B Term Loans that were to have been converted
on the first day of such Interest Period to or continued as Eurodollar Loans
shall be converted to or continued as Base Rate Loans and (c) any outstanding
Eurodollar Loans shall be converted, on the first day of such Interest Period,
to Base Rate Loans. Until such notice has been withdrawn by the Agent, no
further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Base Rate Loans to Eurodollar Loans.
3.12 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date
17
shall make it unlawful for any Supplemental Credit Lender to make or maintain
Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Supplemental Credit Lender shall promptly give written notice of such
circumstances to the Borrower and the Agent (which notice shall be withdrawn
whenever such circumstances no longer exist), (b) the commitment of such
Supplemental Credit Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar Loans
shall forthwith be canceled and, until such time as it shall no longer be
unlawful for such Supplemental Credit Lender to make or maintain Eurodollar
Loans, such Supplemental Credit Lender shall then have a commitment only to
make a Base Rate Loan when a Eurodollar Loan is requested and (c) such
Supplemental Credit Lender's Tranche A Supplemental Loans and Tranche B Term
Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to Base Rate Loans on the respective last days of the then
current Interest Periods with respect to such Tranche A Supplemental Term
Loans and Tranche B Term Loans or within such earlier period as required by
law. If any such conversion of a Eurodollar Loan occurs on a day which is not
the last day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Supplemental Credit Lender such amounts, if any,
as may be required pursuant to Section 3.15.
3.13 REQUIREMENTS OF LAW.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Supplemental Credit
Lender, or compliance by any Supplemental Credit Lender with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority, in each case made subsequent to the Closing Date
(or, if later, the date on which such Supplemental Credit Lender becomes a
Supplemental Credit Lender):
(a) shall subject such Supplemental Credit Lender to any tax of any kind
whatsoever with respect to any Eurodollar Loans made by it or its obligation to
make Eurodollar Loans, or change the basis of taxation of payments to such
Supplemental Credit Lender in respect thereof (except for Non-Excluded Taxes
covered by Section 3.14 (including Non-Excluded Taxes imposed solely by reason
of any failure of such Supplemental Credit Lender to comply with its obligations
under Section 3.14(b)) and changes in taxes measured by or imposed upon the
overall net income, or franchise tax (imposed in lieu of such net income tax),
of such Supplemental Credit Lender or its applicable lending office, branch, or
any affiliate thereof);
(b) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any office
of such Supplemental Credit Lender which is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(c) shall impose on such Supplemental Credit Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such
Supplemental Credit Lender, by an amount which such Supplemental Credit
Lender reasonably deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, upon notice to the
Borrower from such Supplemental Credit Lender, through the Agent, in
accordance herewith, the Borrower shall be
18
obligated to promptly pay such Supplemental Credit Lender, upon its demand,
any additional amounts necessary to compensate such Supplemental Credit
Lender for such increased cost or reduced amount receivable, provided that,
in any such case, the Borrower may elect to convert the Eurodollar Loans made
by such Supplemental Credit Lender hereunder to Base Rate Loans by giving the
Agent at least one Business Day's notice of such election, in which case the
Borrower shall promptly pay to such Supplemental Credit Lender, upon demand,
without duplication, such amounts, if any, as may be required pursuant to
Section 3.15. If any Supplemental Credit Lender becomes entitled to claim any
additional amounts pursuant to this Section 3.13, it shall provide prompt
notice thereof to the Borrower, through the Agent, certifying (x) that one of
the events described in this Section 3.13 has occurred and describing in
reasonable detail the nature of such event, (y) as to the increased cost or
reduced amount resulting from such event and (z) as to the additional amount
demanded by such Supplemental Credit Lender and a reasonably detailed
explanation of the calculation thereof. Such a certificate as to any
additional amounts payable pursuant to this Section 3.13 submitted by such
Supplemental Credit Lender, through the Agent, to the Borrower shall be
conclusive and binding on the parties hereto in the absence of manifest
error. This covenant shall survive the termination of this Credit Agreement
and the payment of the Tranche A Supplemental Term Loans and Tranche B Term
Loans and all other amounts payable hereunder.
3.14 TAXES.
(a) Except as provided below in this Section 3.14, all payments made by the
Borrower under this Credit Agreement, any Tranche A Supplemental Term Loan Notes
and any Tranche B Term Loan Notes shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any court, or governmental body, agency or other official, excluding taxes
measured by or imposed upon the overall net income of any Supplemental Credit
Lender or its applicable lending office, or any branch or affiliate thereof, and
all franchise taxes, branch taxes, taxes on doing business or taxes on the
overall capital or net worth of any Supplemental Credit Lender or its applicable
lending office, or any branch or affiliate thereof, in each case imposed in lieu
of net income taxes: (i) by the jurisdiction under the laws of which such
Supplemental Credit Lender, applicable lending office, branch or affiliate is
organized or is located, or in which its principal executive office is located,
or any nation within which such jurisdiction is located or any political
subdivision thereof; or (ii) by reason of any connection between the
jurisdiction imposing such tax and such Supplemental Credit Lender, applicable
lending office, branch or affiliate other than a connection arising solely from
such Supplemental Credit Lender having executed, delivered or performed its
obligations, or received payment under or enforced, this Credit Agreement, or
any Tranche A Supplemental Term Loan Notes or any Tranche B Term Loan Notes. If
any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to the Agent or any Supplemental Credit Lender hereunder or
under any Tranche A Supplemental Term Loan Notes or any Tranche B Term Loan
Notes, (A) the amounts so payable to the Agent or such Supplemental Credit
Lender shall be increased to the extent necessary to yield to the Agent or such
Supplemental Credit Lender (after payment of all Non-Excluded Taxes) interest or
any such other amounts payable hereunder at the rates or in the amounts
specified in this Credit Agreement, any Tranche A Supplemental Term Loan Notes
or any Tranche B Term Loan Notes, provided, however, that the
Borrower shall be entitled to deduct and withhold any Non-Excluded Taxes and
shall not
19
be required to increase any such amounts payable to any Supplemental Credit
Lender that is not organized under the laws of the United States of America
or a state thereof if such Supplemental Credit Lender fails to comply with
the requirements of paragraph (b) of this Section 3.14 whenever any
Non-Excluded Taxes are payable by the Borrower, and (B) as promptly as
possible thereafter the Borrower shall send to the Agent for its own account
or for the account of such Supplemental Credit Lender, as the case may be, a
certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the Agent
the required receipts or other required documentary evidence, the Borrower
shall indemnify the Agent and the Supplemental Credit Lenders for any
incremental taxes, interest or penalties that may become payable by the Agent
or any Supplemental Credit Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this Credit
Agreement and the payment of the Tranche A Supplemental Term Loans, Tranche B
Term Loans and all other amounts payable hereunder.
(b) Each Supplemental Credit Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(i) (A) on or before the date of any payment by the Borrower under
this Credit Agreement or Tranche A Supplemental Term Loan Notes or
Tranche B Term Loan Notes to such Supplemental Credit Lender,
deliver to the Borrower and the Agent (x) two duly completed copies
of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, certifying that it
is entitled to receive payments under this Credit Agreement, any
Tranche A Supplemental Term Loan Notes or Tranche B Term Loan Notes
without deduction or withholding of any United States federal income
taxes or (y) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be, certifying that it is
entitled to an exemption from United States backup withholding tax;
(B) deliver to the Borrower and the Agent two further copies of
any such form or certification on or before the date that any such
form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
(C) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower
or the Agent; or
(ii) in the case of any such Supplemental Credit Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Internal Revenue
Code, (A) represent to the Borrower (for the benefit of the Borrower and the
Agent) that it is not a bank within the meaning of Section 881(c)(3)(A) of
the Internal Revenue Code, (B) agree to furnish to the Borrower, on or before
the date of any payment by the Borrower, with a copy to the Agent, two
accurate and complete original signed copies of Internal Revenue Service Form
W-8, or
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successor applicable form certifying to such Supplemental Credit Lender's
legal entitlement at the date of such certificate to an exemption from U.S.
withholding tax under the provisions of Section 881(c) of the Internal
Revenue Code with respect to payments to be made under this Credit Agreement,
any Tranche A Supplemental Term Loan Notes and any Tranche B Term Loan Notes
(and to deliver to the Borrower and the Agent two further copies of such form
on or before the date it expires or becomes obsolete and after the occurrence
of any event requiring a change in the most recently provided form and, if
necessary, obtain any extensions of time reasonably requested by the Borrower
or the Agent for filing and completing such forms), and (C) agree, to the
extent legally entitled to do so, upon reasonable request by the Borrower, to
provide to the Borrower (for the benefit of the Borrower and the Agent) such
other forms as may be reasonably required in order to establish the legal
entitlement of such Supplemental Credit Lender to an exemption from
withholding with respect to payments under this Credit Agreement, any Tranche
A Supplemental Term Loan Notes and any Tranche B Term Loan Notes.
Notwithstanding the above, if any change in treaty, law or regulation has
occurred after the date such Person becomes a Supplemental Credit Lender
hereunder which renders all such forms inapplicable or which would prevent such
Supplemental Credit Lender from duly completing and delivering any such form
with respect to it and such Supplemental Credit Lender so advises the Borrower
and the Agent then such Supplemental Credit Lender shall be exempt from such
requirements. Each Person that shall become a Supplemental Credit Lender or a
participant of a Supplemental Credit Lender pursuant to Section 11.3 shall, upon
the effectiveness of the related transfer, be required to provide all of the
forms, certifications and statements required pursuant to this subsection (b);
provided that in the case of a participant of a Supplemental Credit Lender, the
obligations of such participant of a Supplemental Credit Lender pursuant to this
subsection (b) shall be determined as if the participant of a Supplemental
Credit Lender were a Supplemental Credit Lender except that such participant of
a Supplemental Credit Lender shall furnish all such required forms,
certifications and statements to the Supplemental Credit Lender from which the
related participation shall have been purchased.
3.15 INDEMNITY.
The Borrower promises to indemnify each Supplemental Credit Lender and to
hold each Supplemental Credit Lender harmless from any loss or expense which
such Supplemental Credit Lender may sustain or incur (other than through such
Supplemental Credit Lender's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement and (c) the making of a prepayment of Eurodollar Loans on
a day which is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to (i) the amount of interest which
would have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of the applicable
21
Interest Period (or, in the case of a failure to borrow, convert or continue,
the Interest Period that would have commenced on the date of such failure) in
each case at the applicable rate of interest for such Eurodollar Loans
provided for herein (excluding, however, the Applicable Percentage included
therein, if any) minus (ii) the amount of interest (as reasonably determined
by such Supplemental Credit Lender) which would have accrued to such
Supplemental Credit Lender on such amount by placing such amount on deposit
for a comparable period with leading banks in the interbank Eurodollar
market. The agreements in this Section shall survive the termination of this
Credit Agreement, the payment of the Tranche A Supplemental Term Loans and
the payment of the Tranche B Term Loans and all other amounts payable
hereunder.
3.16 REPLACEMENT OF LENDERS.
If any Supplemental Credit Lender delivers a notice to the Borrower
pursuant to Sections 3.10, 3.13 or 3.14, then the Borrower shall have the
right, if no Default or Event of Default then exists, to either (i) replace
such Supplemental Credit Lender (the "Replaced Lender") with one or more
additional banks or financial institutions (collectively, the "Replacement
Lender"), provided that (A) at the time of any replacement pursuant to this
Section 3.16, the Replacement Lender shall enter into one or more assignment
agreements substantially in the form of Exhibit 11.3 pursuant to, and in
accordance with the terms of, Section 11.3(b) (and with all fees payable
pursuant to said Section 11.3(b) to be paid by the Replacement Lender)
pursuant to which the Replacement Lender shall acquire all of the rights and
obligations of the Replaced Lender hereunder and, in connection therewith,
shall pay to the Replaced Lender in respect thereof an amount equal to the
sum of (a) the principal of, and all accrued interest on, all outstanding
Loans of the Replaced Lender, and (b) all accrued, but theretofore unpaid,
fees owing to the Replaced Lender pursuant to Section 3.4, and (B) all
obligations of the Borrower owing to the Replaced Lender (including all
obligations, if any, owing pursuant to Section 3.10, 3.13 or 3.14, but
excluding those obligations specifically described in clause (A) above in
respect of which the assignment purchase price has been, or is concurrently
being paid) shall be paid in full to such Replaced Lender concurrently with
such replacement or (ii) if a Replacement Lender is not located within 60
days of such notice, terminate the Commitments and repay the Loans in full
within 120 days of receipt of such notice without incurring any prepayment
penalty under Section 3.3(d).
SECTION 4
GUARANTY
4.1 GUARANTY OF PAYMENT.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Supplemental Credit Lender, each
Affiliate of Supplemental Credit Lender that enters into a Hedging Agreement and
the Agent the prompt payment of the Credit Party Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise). The Guarantors additionally, jointly and severally, unconditionally
guarantee to each Supplemental Credit Lender the timely performance of all other
obligations under the Supplemental Credit Documents and Hedging Agreements. This
Guaranty is a guaranty of payment and not of collection and is a continuing
guaranty and shall apply to all Credit Party Obligations whenever arising.
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4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity
or enforceability of any of the Supplemental Credit Documents or the Hedging
Agreements, or any other agreement or instrument referred to therein, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor. Each Guarantor agrees that
this Guaranty may be enforced by the Supplemental Credit Lenders without the
necessity at any time of resorting to or exhausting any other security or
collateral and without the necessity at any time of having recourse to the
Tranche A Supplemental Term Loan Notes, Tranche B Term Loan Notes or any
other of the Supplemental Credit Documents or any collateral, if any,
hereafter securing the Credit Party Obligations or otherwise and each
Guarantor hereby waives the right to require the Supplemental Credit Lenders
to proceed against the Borrower or any other Person (including a
co-guarantor) or to require the Supplemental Credit Lenders to pursue any
other remedy or enforce any other right. Each Guarantor further agrees that
it shall have no right of subrogation, indemnity, reimbursement or
contribution against the Borrower or any other Guarantor of the Credit Party
Obligations for amounts paid under this Guaranty until such time as the
Supplemental Credit Lenders (and any Affiliates of Supplemental Credit
Lenders entering into Hedging Agreements) have been paid in full, Tranche A
Supplemental Term Loan Committed Amount and the Tranche B Term Loan Committed
Amount under the Credit Agreement have been terminated and no Person or
Governmental Authority shall have any right to request any return or
reimbursement of funds from the Supplemental Credit Lenders in connection
with monies received under the Supplemental Credit Documents. Each Guarantor
further agrees that nothing contained herein shall prevent the Supplemental
Credit Lenders from suing on the Tranche A Supplemental Term Loan Notes, the
Tranche B Term Loan Notes or any of the other Supplemental Credit Documents
or any of the Hedging Agreements or foreclosing its security interest in or
Lien on any collateral, if any, securing the Credit Party Obligations or from
exercising any other rights available to it under this Credit Agreement, the
Tranche A Supplemental Term Loan Notes, the Tranche B Term Loan Notes, any
other of the Supplemental Credit Documents, or any other instrument of
security, if any, and the exercise of any of the aforesaid rights and the
completion of any foreclosure proceedings shall not constitute a discharge of
any of any Guarantor's obligations hereunder; it being the purpose and intent
of each Guarantor that its Guarantor's obligations hereunder shall be
absolute, independent and unconditional under any and all circumstances.
Neither any Guarantor's obligations under this Guaranty nor any remedy for
the enforcement thereof shall be impaired, modified, changed or released in
any manner whatsoever by an impairment, modification, change, release or
limitation of the liability of the Borrower or by reason of the bankruptcy or
insolvency of the Borrower. Each Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Credit Party
Obligations and notice of or proof of reliance by the Agent or any
Supplemental Credit Lender upon this Guarantee or acceptance of this
Guarantee. The Credit Party Obligations, and any of them, shall conclusively
be deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon this Guarantee. All dealings between the
Borrower and any of the Guarantors, on the one hand, and the Agent and the
Supplemental Credit Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon this
Guarantee.
4.3 MODIFICATIONS.
Each Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b)
23
the Supplemental Credit Lenders shall not have any obligation to protect,
perfect, secure or insure any such security interests, liens or encumbrances
now or hereafter held, if any, for the Credit Party Obligations or the
properties subject thereto; (c) the time or place of payment of the Credit
Party Obligations may be changed or extended, in whole or in part, to a time
certain or otherwise, and may be renewed or accelerated, in whole or in part;
(d) the Borrower and any other party liable for payment under the
Supplemental Credit Documents may be granted indulgences generally; (e) any
of the provisions of the Tranche A Supplemental Term Loan Notes, Tranche B
Term Loan Notes, or any of the other Supplemental Credit Documents may be
modified, amended or waived; (f) any party (including any co-guarantor)
liable for the payment thereof may be granted indulgences or be released; and
(g) any deposit balance for the credit of the Borrower or any other party
liable for the payment of the Credit Party Obligations or liable upon any
security therefor may be released, in whole or in part, at, before or after
the stated, extended or accelerated maturity of the Credit Party Obligations,
all without notice to or further assent by the Guarantor, which shall remain
bound thereon, notwithstanding any such exchange, compromise, surrender,
extension, renewal, acceleration, modification, indulgence or release.
4.4 WAIVER OF RIGHTS.
Each Guarantor expressly waives: (a) notice of acceptance of this Guaranty
by the Supplemental Credit Lenders and of all extensions of credit to the
Borrower by the Supplemental Credit Lenders; (b) presentment and demand for
payment or performance of any of the Credit Party Obligations; (c) protest and
notice of dishonor or of default (except as specifically required in the Credit
Agreement) with respect to the Credit Party Obligations or with respect to any
security therefor; (d) notice of the Supplemental Credit Lenders obtaining,
amending, substituting for, releasing, waiving or modifying any security
interest, lien or encumbrance, if any, hereafter securing the Credit Party
Obligations, or the Supplemental Credit Lenders' subordinating, compromising,
discharging or releasing such security interests, liens or encumbrances, if any;
(e) all other notices to which the Guarantor might otherwise be entitled; and
(f) demand for payment under this Guaranty.
4.5 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees of counsel) incurred by an Agent
or such Supplemental Credit Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
4.6 REMEDIES.
The Guarantors agree that, as between the Guarantors, on the one hand, and
the Agent and the Supplemental Credit Lenders, on the other hand, the Credit
Party Obligations may be declared to be forthwith due and payable as provided in
Section 9 (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 9) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Credit Party
Obligations from
24
becoming automatically due and payable) as against any other Person and that,
in the event of such declaration (or such Credit Party Obligations being
deemed to have become automatically due and payable), such Credit Party
Obligations (whether or not due and payable by any other Person) shall
forthwith become due and payable by the Guarantors. The Guarantors
acknowledge and agree that their obligations hereunder are secured in
accordance with the terms of the Security Agreements and the other Collateral
Documents and that the Supplemental Credit Lenders may exercise their
remedies thereunder in accordance with their terms.
4.7 LIMITATION OF GUARANTY.
Notwithstanding any provision to the contrary contained herein or in any of
the Supplemental Credit Documents, to the extent the obligations of any
Guarantor 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 obligations of such
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
4.8 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
next sentence hereof), pay to such Excess Funding Guarantor an amount equal to
such Guarantor's Pro Rata Share (as defined below and determined, for this
purpose, without reference to the properties, assets, liabilities and debts of
such Excess Funding Guarantor) of such Excess Payment (as defined below). The
payment obligation of any Guarantor to any Excess Funding Guarantor under this
Section 4.8 shall be subordinate and subject in right of payment to the prior
payment in full of the obligations of such Guarantor under the other provisions
of this Section 4, and such Excess Funding Guarantor shall not exercise any
right or remedy with respect to such excess until payment and satisfaction in
full of all of such obligations. For purposes hereof, (i) "Excess Funding
Guarantor" shall mean, in respect of any obligations arising under the other
provisions of this Section 4 (hereafter, the "Guaranteed Obligations"), a
Guarantor that has paid an amount in excess of its Pro Rata Share of the
Guaranteed Obligations; (ii) "Excess Payment" shall mean, in respect of any
Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess
of its Pro Rata Share of such Guaranteed Obligations; and (iii) "Pro Rata
Share", for the purposes of this Section 4.8, shall mean, for any Guarantor, the
ratio (expressed as a percentage) of (a) the amount by which the aggregate
present fair saleable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (b) the amount by which the
aggregate present fair saleable value of all assets and other properties of the
Borrower and all of the Guarantors exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrower and the Guarantors
hereunder) of the Borrower and all of the Guarantors, all as of the Closing Date
(if any Guarantor becomes a party hereto subsequent to the Closing Date, then
for the purposes of this Section 4.8 such subsequent Guarantor shall be deemed
to have been a Guarantor as of the Closing Date and the information pertaining
to, and only pertaining to, such Guarantor as of the date such Guarantor became
a Guarantor shall be deemed true as of the Closing Date).
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SECTION 5
CONDITIONS TO EXTENSIONS OF CREDIT
5.1 CONDITIONS TO EXTENSIONS OF CREDIT.
The Supplemental Credit Lenders shall not be obligated to continue or
convert Tranche A Supplemental Term Loans or Tranche B Term Loans unless:
(a) Notice: The Borrower shall have delivered in the case of any
continuation or conversion of a Tranche A Supplemental Term Loan or Tranche B
Term Loan, a duly executed and completed Notice of Continuation/Conversion by
the time specified in Section 2.2;
(b) Representations and Warranties. The representations and warranties made
by the Credit Parties in the Supplemental Credit Documents are true and correct
in all material respects at and as if made as of such date;
(c) No Default. No Default or Event of Default shall exist or be continuing
either prior to or after giving effect thereto; and
(d) No Material Adverse Effect: There shall not have occurred any Material
Adverse Effect.
The delivery of each Notice of Continuation/Conversion shall constitute a
representation and warranty by the Borrower of the correctness of the matters
specified in subsection (b), (c) and (d) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Supplemental
Credit Lender that:
6.1 FINANCIAL CONDITION.
The financial statements delivered to the Lenders pursuant to Section
5.1(c)(iv) of the New Credit Agreement, (a) have been prepared in accordance
with GAAP and (b) present fairly (on the basis disclosed in the footnotes to
such financial statements) the consolidated and consolidating (as applicable)
financial condition, results of operations and cash flows of the Credit Parties
and their Subsidiaries as of such date and for such periods. Since November 30,
1996, there has been no sale, transfer or other disposition by the Borrower or
any of its Subsidiaries of any material part of the business or property of the
Borrower or any of its Subsidiaries and no purchase or other acquisition (other
than the Acquired Assets) by any of them of any business or property (including
any capital stock of any other Person) material in relation to the consolidated
financial condition of the Borrower and its Subsidiaries, in each case, which,
is not reflected in the foregoing financial statements or in the notes thereto.
26
6.2 NO MATERIAL CHANGE.
Since November 30, 1996, (a) there has been no development or event relating
to or affecting Borrower or any of its Subsidiaries which has had or would be
reasonably expected to have a Material Adverse Effect and (b) no dividends or
other distributions have been declared, paid or made upon the capital stock or
other equity interest in Borrower or any of its Subsidiaries nor, except as
otherwise permitted under this Credit Agreement, has any of the capital stock or
other equity interest in a Credit Party been redeemed, retired, purchased or
otherwise acquired for value.
6.3 ORGANIZATION AND GOOD STANDING.
The Borrower and each of its Subsidiaries (a) is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State (or other jurisdiction) of its incorporation, (b) is duly qualified and
in good standing as a foreign corporation authorized to do business in every
jurisdiction where the failure to be so qualified would have a Material
Adverse Effect and (c) has the requisite corporate power and authority to own
its properties and to carry on its business as now conducted and as proposed
to be conducted.
6.4 DUE AUTHORIZATION.
Each Credit Party (a) has the requisite corporate power and authority to
execute, deliver and perform this Credit Agreement and the other Supplemental
Credit Documents to which it is a party and to incur the obligations herein and
therein provided for and (b) is duly authorized to, and has been authorized by
all necessary corporate action, to execute, deliver and perform this Credit
Agreement and the other Supplemental Credit Documents to which it is a party.
6.5 NO CONFLICTS.
Neither the execution and delivery of the Supplemental Credit Documents, nor
the consummation of the transactions contemplated therein, nor performance of
and compliance with the terms and provisions thereof by such Credit Party will
(a) violate or conflict with any provision of its articles or certificate of
incorporation or bylaws, (b) violate, contravene or materially conflict with any
Requirement of Law or any other law, regulation (including, without limitation,
Regulation U or Regulation X), order, writ, judgment, injunction, decree or
permit applicable to it, (c) violate, contravene or conflict with contractual
provisions of, or cause an event of default under, any indenture, loan
agreement, mortgage, deed of trust, contract or other agreement or instrument to
which it is a party or by which it may be bound, the violation of which could
have or might be reasonably expected to have a Material Adverse Effect, or (d)
result in or require the creation of any Lien (other than those contemplated in
or created in connection with the Supplemental Credit Documents) upon or with
respect to its properties.
6.6 CONSENTS.
No consent, approval, authorization or order of, or filing, registration or
qualification with, any court or Governmental Authority or third party in
respect of a Credit Party is required in connection with the execution, delivery
or performance of this Credit Agreement or any of the other Supplemental
27
Credit Documents by a Credit Party, or if required, such consent, approval
and authorization has been obtained.
6.7 ENFORCEABLE OBLIGATIONS.
This Credit Agreement and the other Supplemental Credit Documents have been
duly executed and delivered and constitute legal, valid and binding obligations
of each Credit Party enforceable against such Credit Party in accordance with
their respective terms, except as may be limited by bankruptcy or insolvency
laws or similar laws affecting creditors' rights generally or by general
equitable principles.
6.8 NO DEFAULT.
Neither the Borrower nor any of its Subsidiaries is in default in any
respect under any contract, lease, loan agreement, indenture, mortgage, security
agreement or other agreement or obligation to which it is a party or by which
any of its properties is bound which default would have or would be reasonably
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred or exists except as previously disclosed to the Supplemental Credit
Lenders.
6.9 OWNERSHIP.
The Borrower and each of its Subsidiaries is the owner of and has good and
marketable title to all of its assets and none of such assets are subject to any
Lien other than Permitted Liens.
6.10 INDEBTEDNESS.
The Borrower and its Subsidiaries have no Indebtedness except (a) as
disclosed in the financial statements referenced in Section 6.1, (b) as set
forth on Schedule 6.10 and (c) as otherwise permitted by this Credit Agreement.
6.11 LITIGATION.
Except as disclosed in Schedule 6.11, there are no actions, suits or legal,
equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against the Borrower or any of its
Subsidiaries which, if adversely determined, would have or would be reasonably
expected to have a Material Adverse Effect.
6.12 TAXES.
Each of the Borrower and its Subsidiaries has filed, or caused to be filed,
all tax returns (federal, state, local and foreign) required to be filed and
paid (a) all amounts of taxes shown thereon to be due (including interest and
penalties) and (b) all other taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. No Credit Party is aware of any proposed tax assessments
against it, any of its Subsidiaries or any other Credit Party.
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6.13 COMPLIANCE WITH LAW.
Each of the Borrower and its Subsidiaries is in compliance with all
Requirements of Law and all other laws, rules, regulations, orders and decrees
(including without limitation Environmental Laws) applicable to it, or to its
properties, unless such failure to comply would not have or would not be
reasonably expected to have a Material Adverse Effect. No Requirement of Law
would be reasonably expected to cause a Material Adverse Effect.
6.14 ERISA.
Except as set forth on Schedule 6.14 or except as would not result in a
Material Adverse Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no Termination Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any Termination Event could reasonably
be expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section 412 of
the Code, whether or not waived, has occurred with respect to any Plan; (iii)
each Plan has been maintained, operated, and funded in compliance with its own
terms and in material compliance with the provisions of ERISA, the Code, and any
other applicable federal or state laws; and (iv) no lien in favor or the PBGC or
a Plan has arisen or is reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" under each
Single Employer Plan (determined within the meaning of Section 401(a)(2) of the
Code, utilizing the actuarial assumptions used to fund such Plans), whether or
not vested, did not, as of the last annual valuation date prior to the date on
which this representation is made or deemed made, exceed the current value of
the assets of such Plan allocable to such accrued liabilities.
(c) Neither the Borrower, nor any of its Subsidiaries nor any ERISA
Affiliate has incurred, or, to the best knowledge of the Credit Parties, are
reasonably expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither the Borrower, nor any of
its Subsidiaries nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section 4241 of
ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been
terminated (within the meaning of Title IV of ERISA), and no Multiemployer Plan
is, to the best knowledge of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) or breach of fiduciary responsibility has occurred
with respect to a Plan which has subjected or may subject the Borrower or any of
its Subsidiaries or any ERISA Affiliate to any liability under Sections 406,
409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which the Borrower or any of its
Subsidiaries or any ERISA Affiliate has agreed or is required to indemnify any
person against any such liability.
29
(e) The present value (determined using actuarial and other assumptions
which are reasonable with respect to the benefits provided and the employees
participating) of the liability of the Borrower and its Subsidiaries and each
ERISA Affiliate for post-retirement welfare benefits to be provided to their
current and former employees under Plans which are welfare benefit plans (as
defined in Section 3(1) of ERISA), net of all assets under all such Plans
allocable to such benefits, are reflected on the Financial Statements in
accordance with FAS 106.
(f) Each Plan which is a welfare plan (as defined in Section 3(1) of ERISA)
to which Sections 601-609 of ERISA and Section 4980B of the Code apply has been
administered in compliance in all material respects with such sections.
6.15 SUBSIDIARIES.
Set forth on Schedule 6.15 is a complete and accurate list of all
Subsidiaries of each Credit Party. Information on Schedule 6.15 includes
jurisdiction of incorporation, the number of shares of each class of capital
stock or other equity interests outstanding, the number and percentage of
outstanding shares of each class owned (directly or indirectly) by such Credit
Party; and the number and effect, if exercised, of all outstanding options,
warrants, rights of conversion or purchase and all other similar rights with
respect thereto. The outstanding capital stock and other equity interests of all
such Subsidiaries is validly issued, fully paid and non-assessable and is owned
by each such Credit Party, directly or indirectly, free and clear of all Liens
(other than those arising under or contemplated in connection with the
Supplemental Credit Documents). Other than as set forth in Schedule 6.15,
neither any Credit Party nor any Subsidiary thereof has outstanding any
securities convertible into or exchangeable for its capital stock nor does any
such Person have outstanding any rights to subscribe for or to purchase or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to its capital stock.
6.16 USE OF PROCEEDS; MARGIN STOCK.
The proceeds of the Tranche A Supplemental Term Loans and Tranche B Term
Loans hereunder will be used solely for the purposes specified in Section 7.10.
None of the proceeds of the Tranche A Supplemental Term Loans and Tranche B Term
Loans will be used for the purpose of purchasing or carrying any "margin stock"
as defined in Regulation U, Regulation X or Regulation G, or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry "margin stock" or any "margin security" or for any other purpose which
might constitute this transaction a "purpose credit" within the meaning of
Regulation U, Regulation X, Regulation G or Regulation T. None of the Credit
Parties owns any "margin stock".
6.17 GOVERNMENT REGULATION.
No Credit Party is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of 1940
or the Interstate Commerce Act, each as amended. In addition, no Credit Party is
an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, or controlled by such a company, or
a "holding company," or a "Subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "Subsidiary" or a "holding company,"
within the meaning
30
of the Public Utility Holding Company Act of 1935, as amended. No director,
executive officer or principal shareholder of the Borrower or any of its
Subsidiaries is a director, executive officer or principal shareholder of any
Lender. For the purposes hereof the terms "director", "executive officer" and
"principal shareholder" (when used with reference to any Lender) have the
respective meanings assigned thereto in Regulation O issued by the Board of
Governors of the Federal Reserve System.
6.18 ENVIRONMENTAL MATTERS.
(a) Except as set forth on Schedule 6.18:
(i) each of the Real Properties and all operations at the Real Properties
are in compliance with all applicable Environmental Laws, and there is no
violation of any Environmental Law with respect to the Real Properties or the
businesses operated by the Borrower or any of its Subsidiaries (the
"Businesses"), and there are no conditions relating to the Businesses or Real
Properties that could give rise to liability under any applicable Environmental
Laws.
(ii) None of the Real Properties contains, or has previously contained, any
Hazardous Materials at, on or under the Real Properties in amounts or
concentrations that, if released, constitute or constituted a violation of, or
could give rise to liability under, Environmental Laws.
(iii) Neither the Borrower nor any of its Subsidiaries has received any
written or oral notice of, or inquiry from any Governmental Authority regarding,
any violation, alleged violation, non-compliance, liability or potential
liability regarding Hazardous Materials or compliance with Environmental Laws
with regard to any of the Real Properties, Leasehold Properties or the
Businesses, nor does the Borrower or any of its Subsidiaries have knowledge or
reason to believe that any such notice is being threatened.
(iv) Hazardous Materials have not been transported or disposed of from the
Real Properties, or generated, treated, stored or disposed of at, on or under
any of the Real Properties or any other location, in each case by, or on behalf
or with the permission of, the Borrower or any of its Subsidiaries in a manner
that would reasonably be expected to give rise to liability under any applicable
Environmental Law.
(v) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower or any of its Subsidiaries,
threatened, under any Environmental Law to which the Borrower or any of its
Subsidiaries is or will be named as a party, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Borrower or any of its Subsidiaries, the
Real Properties or the Businesses.
(vi) There has been no release or threat of release of Hazardous Materials
at or from the Real Properties, or arising from or related to the operations
(including,
31
without limitation, disposal) of the Borrower or any of its Subsidiaries in
connection with the Real Properties or otherwise in connection with the
Businesses.
(vii) Neither the Borrower nor any of its Subsidiaries has assumed any
liability of any Person (other than another Credit Party) under any
Environmental Law.
(b) The Borrower has adopted procedures that are designed to (i) ensure that
each Credit Party and their Subsidiaries, any of their operations and each of
the properties owned or leased by each Credit Party and their Subsidiaries
remains in compliance with applicable Environmental Laws and (ii) minimize any
liabilities or potential liabilities that each Credit Party and their
Subsidiaries, any of their operations and each of the properties owned or leased
by each Credit Party and their Subsidiaries may have under applicable
Environmental Laws.
6.19 INTELLECTUAL PROPERTY.
The Borrower and each of its Subsidiaries owns, or has the legal right to
use, all trademarks, tradenames, copyrights, technology, know-how and
processes (the "Intellectual Property") necessary for each of them to conduct
its business as currently conducted except for those the failure to own or
have such legal right to use would not have or be reasonably expected to have
a Material Adverse Effect. Set forth on Schedule 6.19 is a list of all
Intellectual Property owned by the Borrower and its Subsidiaries or that the
Borrower or one of its Subsidiaries has the right to use (which list shall
identify the Person that owns or has the right to use each such item of
Intellectual Property). Except as provided on Schedule 6.19, no claim has
been asserted and is pending by any Person challenging or questioning the use
of any such Intellectual Property or the validity or effectiveness of any
such Intellectual Property, nor does any Credit Party know of any such claim,
and to the Credit Parties' knowledge the use of such Intellectual Property by
the Borrower or any of its Subsidiaries does not infringe on the rights of
any Person, except for such claims and infringements that in the aggregate,
would not have or be reasonably expected to have a Material Adverse Effect.
6.20 SOLVENCY.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement and the New Credit Agreement, will be
Solvent.
6.21 INVESTMENTS.
All Investments of the Borrower and each of its Subsidiaries are either
Permitted Investments or otherwise permitted by the terms of this Credit
Agreement.
6.22 NO FINANCING OF CORPORATE TAKEOVERS.
No proceeds of the Loans hereunder have been or will be used to acquire,
directly or indirectly, any security in any transaction which is subject to
Sections 13 or 14 of the Securities Exchange Act of 1934, as amended (including,
without limitation, Sections 13(d) and 14(d) thereof) or to refinance any
Indebtedness used to acquire any such securities.
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6.23 LOCATION OF COLLATERAL.
Set forth on Schedule 6.23(a) is a list of all Real Properties and Leasehold
Properties with street address, county and state where located. Set forth on
Schedule 6.23(b) is a list of all locations where any personal property of a
Credit Party is located, including county and state where located. Set forth on
Schedule 6.23(c) is the chief executive office and principal place of business
of each Credit Party.
6.24 DISCLOSURE.
Neither this Credit Agreement nor any financial statements delivered to the
Supplemental Credit Lenders nor any other document, certificate or statement
furnished to the Supplemental Credit Lenders by or on behalf of any Credit Party
in connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein or herein not misleading.
6.25 LICENSES, ETC.
The Borrower and each of its Subsidiaries has obtained and holds in full
force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
their respective businesses as presently conducted.
6.26 NO BURDENSOME RESTRICTIONS.
Neither the Borrower nor any Subsidiary of the Borrower is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, would have or be reasonably expected to
have a Material Adverse Effect.
6.27 BROKERS' FEES.
No Credit Party has any obligation to any Person in respect of any finder's,
broker's, investment banking or other similar fee in connection with any of the
transactions contemplated under the Supplemental Credit Documents.
6.28 LABOR MATTERS.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or any Subsidiary of the Borrower and
none of such Persons has suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last five years.
6.29 COLLATERAL DOCUMENTS.
The Collateral Documents create valid security interests in, and first Liens
on, the Collateral purported to be covered thereby, which security interests and
Liens are and will remain perfected security interests and Liens, prior to all
other Liens other than Permitted Liens. Each of the
33
representations and warranties made by the Borrower and its Subsidiaries in
the Collateral Documents is true and correct.
6.30 RELATED TRANSACTIONS.
The closing of the acquisition of the Acquired Assets will occur
simultaneously with the making of the initial Loans hereunder and under the New
Credit Agreement, and no party waived, without the consent of the Required
Lenders, any condition precedent to their obligations to close as set forth in
the Purchase Agreement. True and complete copies of the Purchase Agreement have
been delivered to each of the Supplemental Credit Lenders, together with a true
and complete copy of each document to be delivered at the closing of the
acquisition of the Acquired Assets.
6.31 REPRESENTATIONS AND WARRANTIES INCORPORATED FROM PURCHASE AGREEMENT.
As of the Closing Date, each of the representations and warranties made in
the Purchase Agreement by each of the parties thereto is true and correct in all
material respects, and such representations and warranties are hereby
incorporated herein by reference with the same effect as though set forth in
their entirety herein, as qualified therein.
6.32 SENIOR DEBT.
The Tranche A Supplemental Term Loans and Tranche B Term Loans are Senior
Debt under Article 10.02 of the Indenture, meaning the Supplemental Credit
Lenders shall have all of the rights and privileges of a holder of Senior Debt
under the Indenture including, but not limited to, the rights set forth in
Article 10 of the Indenture.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans, together with interest, fees and
other obligations hereunder have been paid in full and the Commitments hereunder
shall have terminated:
7.1 INFORMATION COVENANTS.
The Borrower will furnish, or cause to be furnished, to the Agent:
(a) Annual Financial Statements. As soon as available, and in any event
within 120 days after the close of each fiscal year of the Borrower, a
consolidated and consolidating balance sheet and income statement of the
Borrower and its Subsidiaries, as of the end of such fiscal year, together
with related consolidated and consolidating statements of operations and
retained earnings and of cash flows for such fiscal year, setting forth in
comparative form consolidated figures for the preceding fiscal year, all such
financial information described above to be in reasonable form and detail and
audited by independent certified public accountants of recognized national
standing reasonably acceptable to the Agent and whose opinion shall be to the
effect that such financial statements have been prepared in accordance with
GAAP (except
34
for changes with which such accountants concur) and shall not be limited as
to the scope of the audit or qualified in any manner.
(b) Quarterly Financial Statements. As soon as available, and in any event
within 45 days after the close of each fiscal quarter of the Borrower (other
than the fourth fiscal quarter, in which case 120 days after the end thereof) a
consolidated balance sheet and income statement of the Borrower and its
Subsidiaries, as of the end of such fiscal quarter, together with related
consolidated statements of operations and retained earnings and of cash flows
for such fiscal quarter in each case setting forth in comparative form
consolidated figures for the corresponding period of the preceding fiscal year,
all such financial information described above to be in reasonable form and
detail and reasonably acceptable to the Agent, and accompanied by a certificate
of the chief financial officer of the Borrower to the effect that such quarterly
financial statements fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries and have been prepared in
accordance with GAAP, subject to changes resulting from audit and normal
year-end audit adjustments.
(c) Monthly Financial Statements. As soon as available and in any event
within 20 days after the end of each month of the Borrower (other than the last
month of the first three fiscal quarters in which case 45 days after the end
thereof), a consolidated balance sheet and income statement of the Borrower and
its Subsidiaries as at the end of such month together with (i) related
consolidated statements of operations and retained earnings for such month in
each case setting forth in comparative form consolidated figures for the
corresponding period of the preceding fiscal year and (ii) a separate income
statement for each Foreign Subsidiary (and such other financial information as
reasonably requested by the Agent or the Required Lenders), all such financial
information described above to be in reasonable form and detail and reasonably
acceptable to the Agent, and accompanied by a certificate of the chief financial
officer of the Borrower to the effect that such monthly financial statements
fairly present in all material respects the financial condition of the Borrower
and its Subsidiaries and have been prepared in accordance with GAAP, subject to
changes resulting from audit and normal year-end audit adjustments.
(d) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate of
the chief financial officer of the Borrower substantially in the form of Exhibit
7.1(d), (i) demonstrating compliance with the financial covenants contained in
Section 7.12 by calculation thereof as of the end of each such fiscal period and
(ii) stating that no Default or Event of Default exists, or if any Default or
Event of Default does exist, specifying the nature and extent thereof and what
action the Borrower proposes to take with respect thereto. The Borrower shall
also deliver a copy of such certificate to the Agency Services Address.
(e) Annual Business Plan and Budgets. At least 60 days after the end of each
fiscal year of the Borrower, beginning with the fiscal year ending November 30,
1997, an annual business plan and budget of the Borrower and its Subsidiaries
containing, among other things, pro forma financial statements for the next
fiscal year.
(f) Compliance With Certain Provisions of the Credit Agreement. Within 120
days after the end of each fiscal year of the Borrower, the Borrower shall
deliver a certificate, containing information regarding (i) the calculation of
Excess Cash Flow and (ii) the amount of
35
any Asset Dispositions, Debt Issuances, Equity Issuances and Recovery Events
that were made during the prior fiscal year.
(g) Accountant's Certificate. Within the period for delivery of the annual
financial statements provided in Section 7.1(a), a certificate of the
accountants conducting the annual audit stating that they have reviewed this
Credit Agreement and stating further whether, in the course of their audit, they
have become aware of any Default or Event of Default and, if any such Default or
Event of Default exists, specifying the nature and extent thereof.
(h) Auditor's Reports. Promptly upon receipt thereof, a copy of any
"management letter" submitted by independent accountants to the Borrower or any
of its Subsidiaries in connection with any annual, interim or special audit of
the books of the Borrower or any of its Subsidiaries.
(i) Reports. Promptly upon transmission or receipt thereof, (a) copies of
any filings and registrations with, and reports to or from, the Securities and
Exchange Commission, or any successor agency, and copies of all financial
statements, proxy statements, notices and reports as the Borrower or any of its
Subsidiaries shall send to its shareholders generally or to a holder of any
Indebtedness owed by the Borrower or any of its Subsidiaries in its capacity as
such a holder and (b) upon the written request of the Agent, all reports and
written information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental matters, the
United States Occupational Health and Safety Administration, or any state or
local agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety matters.
(j) Notices. Upon a Credit Party obtaining knowledge thereof, such Credit
Party will give written notice to the Agent immediately of (a) the occurrence of
an event or condition consisting of a Default or Event of Default, specifying
the nature and existence thereof and what action the Borrower proposes to take
with respect thereto, and (b) the occurrence of any of the following with
respect to the Borrower or any of its Subsidiaries (i) the pendency or
commencement of any litigation, arbitral or governmental proceeding against the
Borrower or any of its Subsidiaries which if adversely determined would have or
would be reasonably expected to have a Material Adverse Effect, or (ii) the
institution of any proceedings against the Borrower or any of its Subsidiaries
with respect to, or the receipt of notice by such Person of potential liability
or responsibility for violation, or alleged violation of any federal, state or
local law, rule or regulation, including but not limited to, Environmental Laws,
the violation of which would have or would be reasonably expected to have a
Material Adverse Effect.
(k) ERISA. Upon any of the Credit Parties or any ERISA Affiliate obtaining
knowledge thereof, Borrower will give written notice to the Agent and each of
the Supplemental Credit Lenders promptly (and in any event within five Business
Days) of: (i) any event or condition, including, but not limited to, any
Reportable Event, that constitutes, or might reasonably lead to, a Termination
Event; (ii) with respect to any Multiemployer Plan, the receipt of notice as
prescribed in ERISA or otherwise of any withdrawal liability assessed against
the Borrower or any of its ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the meaning of
Title IV of ERISA); (iii) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which the Borrower or any of
its Subsidiaries or ERISA Affiliate is
36
required to contribute to each Plan pursuant to its terms and as required to
meet the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (iv) any change in the funding status of any Plan that
could have a Material Adverse Effect; together, with a description of any
such event or condition or a copy of any such notice and a statement by the
principal financial officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any, which has
been or is being taken or is proposed to be taken by the Credit Parties with
respect thereto. Promptly upon request, the Borrower shall furnish the Agent
and each of the Lenders with such additional information concerning any Plan
as may be reasonably requested, including, but not limited to, copies of each
annual report/return (Form 5500 series), as well as all schedules and
attachments thereto required to filed with the Department of Labor and/or the
Internal Revenue Service pursuant to ERISA and the Code, respectively, for
each "plan year" (within the meaning of Section 3(39) of ERISA).
(l) Environmental.
(i) Upon the reasonable written request of the Agent, the Borrower will
furnish or cause to be furnished to the Agent, at the Borrower's expense, an
environmental assessment of reasonable scope, form and depth, (including,
where appropriate, invasive soil or groundwater sampling) by a consultant
reasonably acceptable to the Agent as to the nature and extent of the
presence of any Hazardous Materials on any property owned, leased or operated
by the Borrower or any of its Subsidiaries and as to the compliance by the
Borrower and each of its Subsidiaries with Environmental Laws. If the
Borrower fails to deliver such an environmental report within seventy-five
(75) days after receipt of such written request then the Agent may arrange
for same, and the Borrower hereby grants to the Agent and its representatives
access to the Real Properties and a license to undertake such an assessment
(including, where appropriate, invasive soil or groundwater sampling). The
reasonable cost of any assessment arranged for by the Agent pursuant to this
provision will be payable by the Borrower on demand and added to the
obligations secured by the Collateral Documents.
(ii) The Borrower and each of its Subsidiaries will conduct and complete all
investigations, studies, sampling, and testing and all remedial, removal, and
other actions necessary to address all Hazardous Materials on, from, or
affecting any real property owned or leased by the Borrower or its Subsidiaries
to the extent necessary to be in compliance with all Environmental Laws and all
other applicable federal, state, and local laws, regulations, rules and policies
and with the orders and directives of all Governmental Authorities exercising
jurisdiction over such real property to the extent any failure would have or be
reasonably expected to have a Material Adverse Effect.
(m) Star Report. At the time of delivery of the financial statements
provided for in Section 7.1(b) above, a company-prepared report containing
information as to brand sales and advertising cost analysis for the fiscal
quarter of the Borrower most recently ending.
(n) Other Information. With reasonable promptness upon any such request,
such other information regarding the business, properties or financial condition
of the Borrower and its Subsidiaries as the Agent or the Required Lenders may
reasonably request.
37
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Each of the Credit Parties will, and will cause each of its Subsidiaries to,
do all things necessary to preserve and keep in full force and effect in all
material respects its existence, rights, franchises and authority.
7.3 BOOKS AND RECORDS.
Each of the Credit Parties will, and will cause each of its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW.
Each of the Credit Parties will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
property (including, without limitation, Environmental Laws) if noncompliance
with any such law, rule, regulation, order or restriction would have or
reasonably be expected to have a Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each of the Credit Parties will, and will cause its Subsidiaries to, pay and
discharge (a) all taxes, assessments and governmental charges or levies imposed
upon it, or upon its income or profits, or upon any of its properties, before
they shall become delinquent, (b) all lawful claims (including claims for labor,
materials and supplies) which, if unpaid, might give rise to a Lien upon any of
its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that a Credit Party or
its Subsidiary shall not be required to pay any such tax, assessment, charge,
levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with GAAP, unless the failure to make any such
payment (i) would give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) would have a Material Adverse Effect.
7.6 INSURANCE.
Each of the Credit Parties will, and will cause each of its Subsidiaries to,
at all times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice. All liability policies shall have each Supplemental
Credit Lender as an additional insured and all casualty policies shall have the
Agent, on behalf of the Supplemental Credit Lenders, as loss payee.
In the event there occurs any material loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party shall
promptly give written notice thereof to the Agent generally describing the
nature and extent of such damage or destruction. Subsequent to any loss, damage
to or destruction of the Collateral of any Credit Party or any part thereof,
such Credit Party, whether or not the insurance proceeds, if any, received on
account of such damage or destruction shall
38
be sufficient for that purpose, at such Credit Party's cost and expense, will
promptly repair or replace the Collateral of such Credit Party so lost,
damaged or destroyed; provided, however, that such Credit Party shall not be
obligated to repair or replace any Collateral so lost, damaged or destroyed
to the extent the failure to make such repair or replacement (a) is desirable
to the proper conduct of the business of such Credit Party in the ordinary
course and otherwise is in the best interest of such Credit Party and (b)
would not materially impair the rights and benefits of the Agent or the
Supplemental Credit Lenders under this Credit Agreement or any other
Supplemental Credit Documents. In the event a Credit Party shall receive any
insurance proceeds, as a result of any loss, damage or destruction, in a net
amount in excess of $100,000, such Credit Party will immediately pay over
such proceeds to the Agent as cash collateral for the Credit Party
Obligations. The Agent agrees to release such insurance proceeds to such
Credit Party for replacement or restoration of the portion of the Collateral
of such Credit Party lost, damaged or destroyed if, (A) within 120 days from
the date the Agent receives such insurance proceeds, the Agent has received
written application for such release from such Credit Party together with
evidence reasonably satisfactory to it that the Collateral lost, damaged or
destroyed has been or will be replaced or restored to its condition (or by
Collateral having a value at least equal to the condition of the asset
subject to the loss, damage or destruction) immediately prior to the loss,
destruction or other event giving rise to the payment of such insurance
proceeds and (B) on the date of such release no Default or Event of Default
exists. If the conditions in the preceding sentence are not met, the Agent
shall, on the first Business Day subsequent to the date 120 days after it
received such insurance proceeds, apply such insurance proceeds as a
mandatory prepayment of the Credit Party Obligations for application in
accordance with the terms of Section 3.3(b)(v) and Section 3.3(c). All
insurance proceeds shall be subject to the security interest of the
Supplemental Credit Lenders under the Collateral Documents.
The present insurance coverage of the Borrower and its Subsidiaries is
outlined as to carrier, policy number, expiration date, type and amount on
Schedule 7.6, as Schedule 7.6 may be amended from time to time by written notice
to the Agent.
7.7 MAINTENANCE OF PROPERTY.
Each of the Credit Parties will, and will cause its Subsidiaries to,
maintain and preserve its properties and equipment in good repair, working order
and condition, normal wear and tear excepted, and will make, or cause to be
made, in such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.8 PERFORMANCE OF OBLIGATIONS.
Each of the Credit Parties will, and will cause its Subsidiaries to, perform
in all material respects all of its obligations under the terms of all material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it is a party or by which it is bound.
7.9 COLLATERAL.
If, subsequent to the Closing Date, a Credit Party shall (a) acquire or
lease any real property or (b) acquire any intellectual property, securities
instruments, chattel paper or other personal property required to be delivered
to the Agent as Collateral hereunder or under any of the Collateral Documents,
the Borrower shall immediately notify the Agent of same. Each Credit Party shall
take
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such action (including, but not limited to, the actions set forth in Sections
5.1(g) and (h) of the New Credit Agreement), as requested by the Agent and at
its own expense, to ensure that the Lenders have a first priority perfected
Lien in all owned real property (and in such leased real property as
requested by the Agent or the Required Lenders) and all personal property of
the Credit Parties (whether now owned or hereafter acquired), subject only to
Permitted Liens. Each Credit Party shall adhere to the covenants regarding
the location of personal property as set forth in the Security Agreements.
7.10 USE OF PROCEEDS.
The Credit Parties will use proceeds of the Tranche A Supplemental Term
Loans and Tranche B Term Loans solely (a) to refinance on the Closing Date the
existing Indebtedness of the Borrower under Prior Supplemental Credit Agreement,
(b) to pay on the Closing Date up to $29 million on the cash portion of the
purchase price for the Acquired Assets pursuant to the Purchase Agreement and
(c) to related fees and expenses in connection with the foregoing.
7.11 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours, each Credit Party
will, and will cause its Subsidiaries to, permit representatives appointed by
the Agent or any Lender, including, without limitation, independent accountants,
agents, attorneys and appraisers to visit and inspect such Credit Party's (or
its Subsidiary's) property, including its books and records, its accounts
receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of the Credit Parties and their Subsidiaries. The Credit Parties
agree that the Agent, and its representatives, may conduct an annual audit of
the Collateral, at the expense of the Borrower.
7.12 FINANCIAL COVENANTS.
(a) Interest Coverage Ratio. The Interest Coverage Ratio, as of the end of
each fiscal quarter, shall be greater than or equal to:
(i) From the Effective Date to and including August 31, 1997, 1.25 to
1.0;
(ii) From September 1, 1997 to and including August 31, 1998, 1.30 to
1.0; and
(iii) From September 1, 1998 and thereafter, 1.40 to 1.0.
(b) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio, as of the
end of each fiscal quarter, shall be greater than or equal to:
(i) From the Effective Date to and including August 31, 1998, 1.10
to 1.0; and
(ii) From September 1, 1998 and thereafter, 1.20 to 1.0.
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(c) Leverage Ratio. The Leverage Ratio, as of the end of each fiscal
quarter, shall be less than or equal to:
(i) From the Effective Date to and including August 31, 1997, 6.50
to 1.0;
(ii) From September 1, 1997 to and including May 31, 1998, 6.0 to
1.0;
(iii) From June 1, 1998 to and including August 31, 1998, 5.50 to 1.0;
(iv) From September 1, 1998 to and including May 31, 1999, 5.0 to 1.0;
and
(v) From June 1, 1999 and thereafter, 4.50 to 1.0.
(d) Senior Leverage Ratio. The Senior Leverage Ratio, as of the end of each
fiscal quarter, shall be less than or equal to:
(i) From the Effective Date to and including August 31, 1997, 4.0 to
1.0;
(ii) From September 1, 1997 to and including May 31, 1998, 3.25 to 1.0;
(iii) From June 1, 1998 to and including August 31, 1998, 3.0 to 1.0;
and
(iv) From September 1, 1998 and thereafter, 2.50 to 1.0.
(e) Net Worth. At all times Net Worth shall be no less than negative Three
Million ($3,000,000) increased on a cumulative basis by an amount equal to, (i)
as of the last day of each fiscal quarter, 50% of Net Income for the fiscal
quarter then ended (without deductions for any losses) plus (ii) 100% of the Net
Cash Proceeds from any Equity Issuance subsequent to the Closing Date (other
than the issuance of shares of capital stock of the Borrower in connection with
the Borrower's purchase of the Acquired Assets).
(f) Appraised Brand Value. As of the end of each fiscal quarter of the
Borrower, with respect to the Borrower and its Subsidiaries on a consolidated
basis, the most recent appraised value of all brands or product lines of the
Borrower and its Subsidiaries on a consolidated basis on such date shall be
greater than or equal to 110% of Funded Debt on such date.
7.13 ADDITIONAL CREDIT PARTIES.
At the time any Person becomes a Subsidiary of a Credit Party, the Borrower
shall so notify the Agent and promptly thereafter (but in any event within 30
days after the date thereof) shall cause such Person to (a) if it is a Domestic
Subsidiary, execute a Joinder Agreement in substantially the same form as
Exhibit 7.13, (b) cause all of the capital stock of such Person (if such Person
is a Domestic Subsidiary) or 65% of the capital stock of such Person (if such
Person is a Foreign Subsidiary) to be delivered to the Agent (together with
undated stock powers signed in blank) and pledged to the Agent pursuant to an
appropriate pledge agreement in substantially the form of the Pledge Agreement
and otherwise in a form acceptable to the Agent, (c) if such Person is a
Domestic Subsidiary, pledge all of
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its assets to the Lenders pursuant to a security agreement in substantially
the form of the Security Agreements and otherwise in a form acceptable to the
Agent (d) if such Person has any Subsidiaries, (i) deliver all of the capital
stock of such Domestic Subsidiaries and 65% of the capital stock of such
Foreign Subsidiaries (together with undated stock powers signed in blank) to
the Agent and (ii) execute a pledge agreement in substantially the form of
the Pledge Agreement and otherwise in a form acceptable to the Agent (e) if
such Person owns or leases any real property in the United States of America,
execute any and all necessary mortgages, deeds of trust, deeds to secure
debt, leasehold mortgages, collateral assignments of leaseholds or other
appropriate real estate collateral documentation in a form acceptable to the
Agent and (f) deliver such other documentation as the Agent may reasonably
request in connection with the foregoing, including, without limitation,
appropriate UCC-1 financing statements, real estate title insurance policies,
environmental reports, landlord waivers, certified resolutions and other
organizational and authorizing documents of such Person and favorable
opinions of counsel to such Person (which shall cover, among other things,
the legality, validity, binding effect and enforceability of the
documentation referred to above), all in form, content and scope reasonably
satisfactory to the Agent.
7.14 INTEREST RATE PROTECTION AGREEMENTS.
The Borrower shall, within 30 days of the Closing Date, have in place
interest rate protection agreements, in form and substance acceptable to the
Agent, protecting against fluctuations in interest rates which agreements shall
provide coverage for a period of three (3) years, and in a notional amount of at
least fifty percent (50%) of the outstanding principal amount of the Term Loans.
7.15 OWNERSHIP OF SUBSIDIARIES.
The Borrower shall at all times own 100% of the capital stock of its
Subsidiaries (other than to the extent necessary for Chattem (U.K.) Limited and
HBA Insurance Limited to qualify for incorporation in their respective countries
of incorporation, any nominal qualifying shares owned by any necessary
governmental authorities) and may not sell, transfer or otherwise dispose of any
shares of capital stock of any of its Subsidiaries.
7.16 APPRAISAL REPORTS.
The Borrower and its Subsidiaries shall provide the Agent, upon the request
of the Agent and at the expense of the Borrower, with asset appraisal reports
with respect to the real and personal property of the Borrower and its
Subsidiaries including, without limitation, appraisals of brand values
(provided, however, the Borrower shall not be required to pay for more than one
appraisal of brand values per year). In the event the Agent needs more than one
asset appraisal report of the real and personal property of the Borrower and its
Subsidiaries during any year, the Agent shall have the right to arrange and pay
for such report.
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SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans, together with interest, fees and
other obligations hereunder, have been paid in full and the Commitments
hereunder shall have terminated:
8.1 INDEBTEDNESS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement, the other Supplemental
Credit Documents and the New Credit Agreement Documents;
(b) the Subordinated Debt;
(c) Indebtedness existing as of the Closing Date as referenced in Section
6.10 (and renewals, refinancings or extensions thereof on terms and conditions
no more favorable, in the aggregate, to such Person than such existing
Indebtedness and in a principal amount not in excess of that outstanding as of
the date of such renewal, refinancing or extension);
(d) Indebtedness owing by one Credit Party to another Credit Party;
(e) purchase money Indebtedness (including Capital Leases) incurred by the
Borrower or any of its Subsidiaries to finance the purchase of fixed assets;
provided that (i) the total of all such Indebtedness for all such Persons taken
together shall not exceed an aggregate principal amount of $2,000,000.00 at any
one time outstanding (including any such Indebtedness referred to in subsection
(c) above); (ii) such Indebtedness when incurred shall not exceed the purchase
price of the asset(s) financed; and (iii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing;
(f) obligations of the Credit Parties evidenced by the interest rate
protection agreements referred to in Section 7.14; and
(g) Indebtedness incurred by Foreign Subsidiaries not to exceed $500,000.00,
in the aggregate, at any one time outstanding (including any such Indebtedness
referred to in subsection (c) above).
8.2 LIENS.
No Credit Party will, nor will it permit its Subsidiaries to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, except for Permitted Liens.
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8.3 NATURE OF BUSINESS.
No Credit Party will, nor will it permit its Subsidiaries to, alter the
character of its business from that conducted as of the Closing Date or engage
in any business other than the business conducted as of the Closing Date, which
with respect to Signal shall be limited to the ownership of trademarks and
tradenames for the purpose of licensing such trademarks and tradenames to the
Borrower.
8.4 CONSOLIDATION AND MERGER.
No Credit Party will, nor will it permit its Subsidiaries to, enter into any
transaction of merger or consolidation or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution); provided that notwithstanding the
foregoing provisions of this Section 8.4, the following actions may be taken if
(a) the Agent is given prior written notice of such action, and the Credit
Parties execute and deliver such documents, instruments and certificates as the
Agent may request in order to maintain the perfection and priority of the Liens
on the assets of the Credit Parties and (b) after giving effect thereto no
Default or Event of Default exists:
(i) any Credit Party may be merged or consolidated with or into the Borrower
or any Credit Party (other than the Borrower) may be merged or consolidated with
or into any other Credit Party; provided that if such transaction shall be
between the Borrower and another Credit Party, the Borrower shall be the
continuing or surviving corporation; and
(ii) any Foreign Subsidiary may merge or consolidate with any other Foreign
Subsidiary.
8.5 SALE OR LEASE OF ASSETS.
No Credit Party will, nor will it permit any of its Subsidiaries to, convey,
sell, lease, transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business or assets whether now owned or
hereafter acquired, including, without limitation, inventory, receivables, real
property, leasehold interests, equipment and securities other than (a) any
inventory or other assets sold, leased or disposed of (or simultaneously
replaced with like goods) in the ordinary course of business, (b) obsolete, idle
or worn-out assets no longer used or useful in its business, (c) the sale, lease
or transfer or other disposal by a Credit Party other than the Borrower of any
or all of its assets to the Borrower or to any other Credit Party, or (d) sales
of product lines (or the right to produce a consumer product or products)
provided that the dispositions permitted under this subparagraph (d) during the
term of this Credit Agreement shall be limited to product lines (or the right to
produce a consumer product or products) having sales for the twelve-month period
ending on the fiscal quarter ending immediately preceding the sale in an
aggregate amount of $4,000,000 or less.
8.6 ADVANCES, INVESTMENTS AND LOANS.
No Credit Party will, nor will it permit any of its Subsidiaries to, make
any Investments except for Permitted Investments.
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8.7 DIVIDENDS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
directly or indirectly, (a) declare or pay any dividends (whether cash or
otherwise) or make any other distribution upon any shares of its capital
stock of any class other than the payment of dividends by the Subsidiaries of
the Borrower to the Borrower or (b) other than Permitted Investments purchase,
redeem or otherwise acquire or retire or make any provisions for redemption,
acquisition or retirement of any shares of its capital stock of any class or any
warrants or options to purchase any such shares.
8.8 TRANSACTIONS WITH AFFILIATES.
Except as set forth on Schedule 8.8, no Credit Party will, nor will it
permit its Subsidiaries to, enter into any transaction or series of
transactions, whether or not in the ordinary course of business, with any
officer, director, shareholder, Subsidiary or Affiliate other than on terms and
conditions substantially as favorable as would be obtainable in a comparable
arm's-length transaction with a Person other than an officer, director,
shareholder, Subsidiary or Affiliate.
8.9 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
No Credit Party will, nor will it permit any of its Subsidiaries to, change
its fiscal year or materially change its charter documents or its bylaws without
the prior written consent of the Required Lenders.
8.10 PREPAYMENTS OF INDEBTEDNESS.
No Credit Party will, nor will it permit any of its Subsidiaries to, (a)
amend or modify (or permit the amendment or modification of) any of the terms of
any Indebtedness if such amendment or modification would add or change any terms
in a manner adverse to the Supplemental Credit Lenders, including but not
limited to, shortening final maturity or average life to maturity of such
Indebtedness or requiring any payment to be made sooner than originally
scheduled or increasing the interest rate applicable thereto or change any
subordination provision thereof, (b) during the existence of a Default or Event
of Default, or if a Default or Event of Default would be caused as a result
thereof make (or give any notice with respect thereto) any voluntary or optional
payment or prepayment or redemption or acquisition for value of (including,
without limitation, by way of depositing money or securities with the trustee
with respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of any other Indebtedness.
8.11 SUBORDINATED DEBT.
No Credit Party will (a) make or offer to make any principal payments with
respect to the Subordinated Debt, (b) redeem or offer to redeem any of the
Subordinated Debt, or (c) deposit any funds intended to discharge or defease any
or all of the Subordinated Debt. The Subordinated Debt may not be amended or
modified in any material manner without the prior written consent of the
Required Lenders, it being specifically understood and agreed that no amendment
to Article 4 or Article 10 of the Indenture shall be made without the prior
written consent of the Required Lenders.
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8.12 LIMITATIONS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any such Person to (a) pay dividends or make any
other distribution on any of such Person's capital stock, (b) pay any
Indebtedness owed to the Borrower or any other Credit Party, (c) make loans or
advances to any other Credit Party or (d) transfer any of its property to any
other Credit Party, except for encumbrances or restrictions existing under or by
reason of (i) customary non-assignment provisions in any lease governing a
leasehold interest, (ii) this Credit Agreement, the other Supplemental Credit
Documents and the New Credit Agreement Documents and (iii) the Indenture.
8.13 SALE LEASEBACKS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
directly or indirectly become or remain liable as lessee or as guarantor or
other surety with respect to any lease, of any property (whether real or
personal or mixed), whether now owned or hereafter acquired, (a) which such
Credit Party or Subsidiary has sold or transferred or is to sell or transfer
to any other Person other than a Credit Party or (b) which such Credit Party
or Subsidiary intends to use for substantially the same purpose as any other
property which has been sold or is to be sold or transferred by such Credit
Party or Subsidiary to any Person in connection with such lease.
8.14 NEGATIVE PLEDGES.
Other than as set forth in Section 4.12 of the Indenture, none of the Credit
Parties will, nor will it permit any of its Subsidiaries to, enter into, assume
or become subject to any agreement prohibiting or otherwise restricting the
creation or assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation.
8.15 CAPITAL EXPENDITURES.
The Credit Parties and their Subsidiaries will not make Capital
Expenditures, in any fiscal year, that would exceed $3,500,000.00 in the
aggregate.
8.16 OPERATING LEASES.
Neither the Borrower nor any of its Subsidiaries shall create, incur, assume
or permit to exist obligations under Operating Leases which require aggregate
annual payments in excess of $1,500,000.00.
8.17 PAYMENT BLOCKAGE NOTICE.
The Borrower (i) covenants and agrees that it will not give the Payment
Blockage Notice (as defined in the Indenture) without the consent of the
Required Lenders and (ii) hereby designates and appoints the Agent, as
attorney-in-fact of the Borrower, irrevocably and with full power of
substitution, to deliver any Payment Blockage Notice that the Borrower has the
right to deliver pursuant to the terms of the Indenture; provided that the
foregoing appointment shall
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terminate at such time as the Loans, together with interest, fees and other
obligations hereunder, have been paid in full and the Commitments hereunder
shall have terminated.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall:
(i) default in the payment when due of any principal of any of
the Tranche A Supplemental Term Loans or Tranche B Term Loans; or
(ii) default, and such default shall continue for three or more
days, in the payment when due of any interest on the Tranche A Supplemental
Term Loans or Tranche B Term Loans, or of any fees or other amounts owing
hereunder, under any of the other Supplemental Credit Documents or in
connection herewith.
(b) Representations. Any representation, warranty or statement made or
deemed to be made by any Credit Party herein, in any of the other Supplemental
Credit Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material respect
on the date as of which it was made or deemed to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.4, 7.5, 7.6, 7.9, 7.10,
7.12, 7.13, 7.14, 7.15, 7.16 or 8.1 through 8.17 inclusive; or
(ii) default in the due performance or observance by it of any
term, covenant or agreement contained in Section 7.1 and such default shall
continue unremedied for a period of five Business Days after the earlier of
an officer of a Credit Party becoming aware of such default or notice thereof
given by the Agent; or
(iii) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in subsections (a),
(b) or (c)(i) or (ii) of this Section 9.1) contained in this Credit Agreement
and such default shall continue unremedied for a period of at least 30 days
after the earlier of an officer of a Credit Party becoming aware of such
default or notice thereof given by the Agent.
(d) Other Credit Documents. (i) Any Credit Party shall default in the due
performance or observance of any term, covenant or agreement in any of the other
47
Supplemental Credit Documents and such default shall continue unremedied for a
period of at least 30 days after the earlier of an officer of a Credit Party
becoming aware of such default or notice thereof given by the Agent, or (ii) any
Supplemental Credit Documents shall fail to be in full force and effect or to
give the Agent and/or the Supplemental Credit Lenders the security interests,
liens, rights, powers and privileges purported to be created thereby.
(e) Guaranties. The guaranty given by the Credit Parties hereunder or by any
Additional Credit Party hereafter or any provision thereof shall cease to be in
full force and effect, or any guarantor thereunder or any Person acting by or on
behalf of such guarantor shall deny or disaffirm such Guarantor's obligations
under such guaranty.
(f) Bankruptcy, etc. The occurrence of any of the following with respect to
the Borrower or any of its Subsidiaries (i) a court or governmental agency
having jurisdiction in the premises shall enter a decree or order for relief in
respect of the Borrower or any of its Subsidiaries in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appoint a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of any of the Borrower or any of its
Subsidiaries or for any substantial part of its property or ordering the winding
up or liquidation of its affairs; or (ii) an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect is commenced against the Borrower or any of its Subsidiaries and such
petition remains unstayed and in effect for a period of 60 consecutive days; or
(iii) the Borrower or any of its Subsidiaries shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of such Person or any substantial part of its property or
make any general assignment for the benefit of creditors; or (iv) the Borrower
or any of its Subsidiaries shall admit in writing its inability to pay its debts
generally as they become due or any action shall be taken by such Person in
furtherance of any of the aforesaid purposes.
(g) Defaults under Other Agreements. With respect to any Indebtedness
(other than Indebtedness outstanding under this Credit Agreement) of the
Borrower or any of its Subsidiaries in a principal amount in excess of
$500,000.00, including, without limitation, the Subordinated Debt and any
indebtedness under the New Credit Agreement (i) a Credit Party shall (A)
default in any payment (beyond the applicable grace period with respect
thereto, if any) with respect to any such Indebtedness, or (B) default (after
giving effect to any applicable grace period) in the observance or
performance of any term, covenant or agreement relating to such Indebtedness
or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event or condition shall occur or condition exist, the
effect of which default or other event or condition is to cause, or permit,
the holder or holders of such Indebtedness (or trustee or agent on behalf of
such holders) to cause (determined without regard to whether any notice or
lapse of time is required) any such Indebtedness to become due prior to its
stated maturity; or (ii) any such Indebtedness shall be declared due and
payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof.
(h) Judgments. One or more judgments, orders, or decrees shall be entered
against any one or more of the Borrower or any of its Subsidiaries involving a
liability of $500,000.00
48
or more, in the aggregate, (to the extent not paid or covered by insurance
provided by a carrier who has acknowledged coverage) and such judgments,
orders or decrees shall continue unsatisfied, undischarged and unstayed for a
period ending on the first to occur of (i) the last day on which such
judgment, order or decree becomes final and unappealable or (ii) 30 days.
(i) ERISA. Any of the following events or conditions: (A) any "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, shall exist with respect to any Plan, or
any lien shall arise on the assets of the Borrower or any of their Subsidiaries
or any ERISA Affiliate in favor of the PBGC or a Plan; (B) a Termination Event
shall occur with respect to a Single Employer Plan, which is, in the reasonable
opinion of the Agent, likely to result in the termination of such Plan for
purposes of Title IV of ERISA; (C) a Termination Event shall occur with respect
to a Multiemployer Plan or Multiple Employer Plan, which is, in the reasonable
opinion of the Agent, likely to result in (i) the termination of such Plan for
purposes of Title IV of ERISA, or (ii) the Borrower or any of its Subsidiaries
or any ERISA Affiliate incurring any liability in connection with a withdrawal
from, reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency or (within the meaning of Section 4245 of ERISA) such Plan; or (D)
any prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) or breach of fiduciary responsibility shall occur
which may subject the Borrower or any of its Subsidiaries or any ERISA Affiliate
to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section
4975 of the Code, or under any agreement or other instrument pursuant to which
the Borrower or any of its Subsidiaries or any ERISA Affiliate has agreed or is
required to indemnify any person against any such liability;
(j) Ownership. There shall occur a Change of Control;
(k) Subordinated Debt. (i) Any holder of the Subordinated Debt alleges (or
any Governmental Authority with applicable jurisdiction determines) that the
Supplemental Credit Lenders or New Credit Agreement Lenders are not holders of
Senior Debt (as defined in the Indenture) or (ii) the subordination provisions
in the Indenture shall, in whole or in part, terminate, cease to be effective or
cease to be legally valid, binding and enforceable against any holder of the
Subordinated Debt;
(l) Business. The Borrower commences to engage in any material respect in a
line of business or activity other than the business of manufacturing and
marketing of brand name over-the-counter pharmaceuticals, dietary supplements,
functional toiletries and cosmetics; or
(m) Indenture/Change of Control. There shall occur (i) a Change of Control
(as defined in the Indenture) under the Indenture or (ii) a Change of Control
Triggering Event (as defined in the Indenture) under the Indenture.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived in writing by the
Required Lenders (or the Lenders as may be required hereunder), the Agent shall,
upon the request and direction of the Required Lenders, by written notice to the
Borrower, take any of the following actions:
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(a) Acceleration of Loans. Declare the unpaid principal of and any accrued
interest in respect of all Tranche A Supplemental Term Loans and Tranche B Term
Loans, and any and all other indebtedness or obligations of any and every kind
owing by a Credit Party to any of the Supplemental Credit Lenders
hereunder to be due whereupon the same shall be immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Credit Parties.
(b) Enforcement of Rights. Enforce any and all rights and interests created
and existing under the Supplemental Credit Documents, including, without
limitation, all rights and remedies existing under the Collateral Documents, all
rights and remedies against a Guarantor and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then all Tranche A Supplemental Term Loans and Tranche B
Term Loans, all accrued interest in respect thereof, all accrued and unpaid fees
and other indebtedness or obligations owing to the Lenders hereunder shall
immediately become due and payable without the giving of any notice or other
action by the Agent or the Lenders, which notice or other action is expressly
waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Agent, each Supplemental Credit Lender has a separate right of payment and shall
be considered a separate "creditor" holding a separate "claim" within the
meaning of Section 101(5) of the Bankruptcy Code or any other insolvency
statute.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT.
Each Supplemental Credit Lender hereby designates and appoints NationsBank
of Tennessee, N.A. as Agent of such Supplemental Credit Lender to act as
specified herein and the other Supplemental Credit Documents, and each such
Supplemental Credit Lender hereby authorizes the Agent, as the agent for such
Supplemental Credit Lender, to take such action on its behalf under the
provisions of this Credit Agreement and the other Supplemental Credit Documents
and to exercise such powers and perform such duties as are expressly delegated
by the terms hereof and of the other Supplemental Credit Documents, together
with such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere herein and in the other Supplemental Credit
Documents, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein and therein, or any fiduciary relationship with any
Supplemental Credit Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Supplemental Credit Documents, or shall
otherwise exist against the Agent. The provisions of this Section are solely for
the benefit of the Agent and the Supplemental Credit Lenders and none of the
Credit Parties shall have any rights as a third party beneficiary of the
provisions hereof. In performing its functions and duties under this Credit
Agreement and the other Supplemental Credit Documents, the Agent shall act
solely as the agent of the Supplemental Credit Lenders and does not assume and
shall not be deemed to have assumed any obligation or relationship of agency or
trust with or for any Credit Party.
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10.2 DELEGATION OF DUTIES.
The Agent may execute any of its duties hereunder or under the other
Supplemental Credit Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
10.3 EXCULPATORY PROVISIONS.
Neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (a) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Supplemental Credit Documents
(except for its or such Person's own gross negligence or willful misconduct)
or (b) responsible in any manner to any of the Supplemental Credit Lenders
for any recitals, statements, representations or warranties made by any of
the Credit Parties contained herein or in any of the other Supplemental
Credit Documents or in any certificate, report, document, financial statement
or other written or oral statement referred to or provided for in, or
received by the Agent under or in connection herewith or in connection with
the other Supplemental Credit Documents, or enforceability or sufficiency
therefor of any of the other Supplemental Credit Documents, or for any
failure of the Borrower to perform its obligations hereunder or thereunder.
The Agent shall not be responsible to any Supplemental Credit Lender for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Credit Agreement, or any of the other Supplemental Credit
Documents or for any representations, warranties, recitals or statements made
herein or therein or made by the Borrower or any Credit Party in any written
or oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or
therewith furnished or made by the Agent to the Supplemental Credit Lenders
or by or on behalf of the Credit Parties to the Agent or any Supplemental
Credit Lender or be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or
agreements contained herein or therein or as to the use of the proceeds of
the Tranche A Supplemental Term Loans, Tranche B Term Loans or of the
existence or possible existence of any Default or Event of Default or to
inspect the properties, books or records of the Credit Parties. The Agent is
not a trustee for the Supplemental Credit Lenders and owes no fiduciary duty
to the Supplemental Credit Lenders.
10.4 RELIANCE ON COMMUNICATIONS.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Agent with reasonable care). The Agent may deem
and treat the Supplemental Credit Lenders as the owner of its interests
hereunder for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Agent in accordance with Section
11.3(b). The Agent shall be fully justified in failing or refusing to take any
action under this Credit Agreement or under any of the other Supplemental Credit
Documents unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense
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which may be incurred by it by reason of taking or continuing to take any
such action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or under any of the other Supplemental
Credit Documents in accordance with a request of the Required Lenders (or to
the extent specifically provided in Section 11.6, all the Lenders) and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders (including their successors and assigns).
10.5 NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless the Agent has received
notice from a Supplemental Credit Lender or a Credit Party referring to the
Supplemental Credit Documents, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that the Agent
receives such a notice, the Agent shall give prompt notice thereof to the
Lenders. The Agent shall take such action with respect to such Default or Event
of Default as shall be reasonably directed by the Required Lenders.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Supplemental Credit Lender expressly acknowledges that neither the
Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to
it and that no act by the Agent or any affiliate thereof hereinafter taken,
including any review of the affairs of any Credit Party, shall be deemed to
constitute any representation or warranty by the Agent to any Supplemental
Credit Lender. Each Supplemental Credit Lender represents to the Agent that
it has, independently and without reliance upon the Agent or any other
Supplemental Credit Lender, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Credit Parties and made its own
decision to make its Tranche A Supplemental Term Loans and Tranche B Term
Loans hereunder and enter into this Credit Agreement. Each Supplemental
Credit Lender also represents that it will, independently and without
reliance upon the Agent or any other Supplemental Credit Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking
or not taking action under this Credit Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Credit Parties. Except for notices, reports and other
documents expressly required to be furnished to the Supplemental Credit
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Supplemental Credit Lender with any credit or
other information concerning the business, operations, assets, property,
financial or other conditions, prospects or creditworthiness of the Credit
Parties which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
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10.7 INDEMNIFICATION.
The Supplemental Credit Lenders agree to indemnify the Agent in its capacity
as such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
percentage of the Tranche A Supplemental Term Loan Committed Amount and Tranche
B Term Loan Committed Amount, collectively, (or if the Tranche A Supplemental
Term Loan Committed Amount and Tranche B Term Loan Committed Amount has expired
or been terminated, in accordance with the respective aggregate principal
amounts of outstanding Tranche A Supplemental Term Loans and Tranche B Term
Loans and Participation Interest of the Supplemental Credit Lenders), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including without limitation at any time
following payment in full of the Credit Party Obligations) be imposed on,
incurred by or asserted against the Agent in its capacity as such in any way
relating to or arising out of this Credit Agreement or the other Supplemental
Credit Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agent under or in connection with any of the foregoing;
provided that no Supplemental Credit Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of the Agent. If any indemnity furnished
to the Agent for any purpose shall, in the opinion of the Agent, be insufficient
or become impaired, the Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional indemnity
is furnished. The agreements in this Section shall survive the payment of the
Credit Party Obligations and all other amounts payable hereunder and under the
other Supplemental Credit Documents.
10.8 AGENT IN ITS INDIVIDUAL CAPACITY.
The Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower or any other Credit
Party as though the Agent were not the Agent hereunder. With respect to the
Tranche A Supplemental Term Loans and Tranche B Term Loans made and all
obligations owing to it, the Agent shall have the same rights and powers under
this Credit Agreement as any Supplemental Credit Lender and may exercise the
same as though it were not the Agent, and the terms "Lender", "Lenders",
"Supplemental Credit Lender" and "Supplemental Credit Lenders" shall include the
Agent in its individual capacity.
10.9 SUCCESSOR AGENT.
The Agent may, at any time, resign upon 20 days written notice to the
Supplemental Credit Lenders. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 45 days after the notice of resignation, then the retiring
Agent shall select a successor Agent provided such successor is a Supplemental
Credit Lender hereunder or a commercial bank organized under the laws of the
United States of America or of any State thereof and has a combined capital and
surplus of at least $400,000,000. Upon the acceptance of any appointment as the
Agent hereunder by a successor, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations as an Agent, as appropriate, under this Credit Agreement and the
other Supplemental Credit Documents and the provisions of this Section 10.9
shall
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inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Agent under this Credit Agreement.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address or telecopy numbers set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto.
11.2 RIGHT OF SET-OFF.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
of an Event of Default and the commencement of remedies described in Section
9.2, each Supplemental Credit Lender is authorized at any time and from time to
time, without presentment, demand, protest or other notice of any kind (all of
which rights being hereby expressly waived), to set-off and to appropriate and
apply any and all deposits (general or special) and any other indebtedness at
any time held or owing by such Supplemental Credit Lender (including, without
limitation branches, agencies or Affiliates of such Supplemental Credit Lender
wherever located) to or for the credit or the account of any Credit Party
against obligations and liabilities of such Credit Party to the Supplemental
Credit Lenders hereunder, under the Tranche A Supplemental Term Loan Notes,
under the Tranche B Term Loan Notes, the other Supplemental Credit Documents or
otherwise, irrespective of whether the Agent or the Supplemental Credit Lenders
shall have made any demand hereunder and although such obligations, liabilities
or claims, or any of them, may be contingent or unmatured, and any such set-off
shall be deemed to have been made immediately upon the occurrence of an Event of
Default even though such charge is made or entered on the books of such Lender
subsequent thereto. The Credit Parties hereby agree that any Person purchasing a
participation in the Tranche A Supplemental Term Loans and Tranche A
Supplemental Term Loan Committed Amount and/or Tranche B Term Loans and Tranche
B Term Loan Committed Amount hereunder pursuant to Section 11.3(c) or 3.9 may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a Supplemental Credit Lender hereunder.
11.3 BENEFIT OF AGREEMENT.
(a) Generally. This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto; provided that none of the Credit Parties may assign and transfer
any of its interests without the prior written consent of the Lenders; and
provided further that the rights of each Supplemental
54
Credit Lender to transfer, assign or grant participations in its rights
and/or obligations hereunder shall be limited as set forth in this Section
11.3. Notwithstanding the above, nothing herein shall restrict, prevent or
prohibit any Supplemental Credit Lender from (i) pledging its Tranche A
Supplemental Term Loans and/or Tranche B Term Loans hereunder to a Federal
Reserve Bank in support of borrowings made by such Supplemental Credit Lender
from such Federal Reserve Bank, or (ii) granting assignments or participation
in such Supplemental Credit Lender's Tranche A Supplemental Term Loans and/or
Tranche A Supplemental Term Committed Amount or Tranche B Term Loans and/or
Tranche B Term Loan Committed Amount hereunder to its parent company and/or
to any Affiliate of such Supplemental Credit Lender or to any existing Lender
or Affiliate thereof.
(b) Assignments. Each Supplemental Credit Lender may, with the prior written
consent of the Borrower and the Agent (provided that no consent of the Borrower
shall be required during the existence and continuation of an Event of Default),
which consent shall not be unreasonably withheld or delayed, assign all or a
portion of its rights and obligations hereunder pursuant to an assignment
agreement substantially in the form of Exhibit 11.3 to one or more Eligible
Assignees; provided that (i) any such assignment shall be in a minimum aggregate
amount of $5,000,000 of (A) (I) the Revolving Loans, Tranche A Term Loans and
Tranche A Supplemental Term Loans or (II) the Revolving Committed Amount,
Tranche A Term Loan Committed Amount and Tranche A Supplemental Term Loan
Committed Amount or (B) Tranche B Term Loans, as applicable, and in integral
multiples of $1,000,000 above such amount (or the remaining amount of (C) (I)
the Revolving Loans, Tranche A Term Loans and Tranche A Supplemental Term Loans
or (II) the Revolving Committed Amount, Tranche A Term Loan Committed Amount and
Tranche A Supplemental Term Loan Committed Amount or (D) Tranche B Term Loans,
as applicable, held by such Supplemental Credit Lender), (ii) each such
assignment shall be of a constant, not varying, percentage of all of the
assigning Supplemental Credit Lender's rights and obligations under the Tranche
A Supplemental Term Loans or Tranche B Term Loans, as applicable, being assigned
and (iii) unless otherwise agreed to by the Borrower and the Agent, such
Supplemental Credit Lender proposing to assign all or a portion of the Tranche A
Supplemental Term Loan Committed Amount or Tranche B Term Loan Committed Amount
shall be required to assign to such Eligible Assignee or Assignees (to the
extent held by such Supplemental Credit Lender) an identical percentage of
Revolving Committed Amount, Tranche A Term Loan Committed Amount, Tranche A
Supplemental Term Loan Committed Amount and Tranche B Term Loan Committed Amount
of such Supplemental Credit Lender. Any assignment hereunder shall be effective
upon (i) satisfaction of the conditions set forth above, (ii) delivery to the
Agent of a duly executed assignment agreement together with a transfer fee of
$3,500 payable to the Agent for its own account and (iii) the recordation of an
appropriate entry with respect to such assignment in the Register pursuant to
this Section 11.3. Upon the effectiveness of any such assignment, the assignee
shall become a "Supplemental Credit Lender" for all purposes of this Credit
Agreement and the other Supplemental Credit Documents and, to the extent of such
assignment, the assigning Supplemental Credit Lender shall be relieved of its
obligations hereunder to the extent of the Tranche A Supplemental Term Loans and
Tranche A Supplemental Term Loan Committed Amount or Tranche B Term Loans and
Tranche B Supplemental Term Loan Committed Amount components being assigned.
Along such lines the Borrower agrees that upon notice of any such assignment and
surrender of the appropriate Tranche A Supplemental Term Loan Note or Tranche A
Supplemental Term Loan Notes and/or Tranche B Term Loan Note or Tranche B Term
Loan Notes, it will promptly provide to
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the assigning Supplemental Credit Lender and to the assignee separate
promissory notes in the amount of their respective interests substantially in
the form of the original Tranche A Supplemental Term Loan Note or Tranche A
Supplemental Term Loan Notes and/or Tranche B Term Loan Note or Tranche B
Term Loan Notes (but with notation thereon that it is given in substitution
for and replacement of the original Tranche A Supplemental Term Loan Note or
Tranche A Supplemental Term Notes and/or Tranche B Term Loan Note or Tranche
B Term Loan Notes or any replacement notes thereof).
By executing and delivering an assignment agreement in accordance with this
Section 11.3(b), the assigning Supplemental Credit Lender thereunder and the
assignee thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (i) such assigning Supplemental Credit
Lender warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim; (ii) except as set forth
in clause (i) above, such assigning Supplemental Credit Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Credit Agreement, any of the other Supplemental Credit Documents or any other
instrument or document furnished pursuant hereto or thereto, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, any of the other Supplemental Credit Documents or any other
instrument or document furnished pursuant hereto or thereto or the financial
condition of any Credit Party or the performance or observance by any Credit
Party of any of its obligations under this Credit Agreement, any of the other
Supplemental Credit Documents or any other instrument or document furnished
pursuant hereto or thereto; (iii) such assignee represents and warrants that it
is legally authorized to enter into such assignment agreement; (iv) such
assignee confirms that it has received a copy of this Credit Agreement, the
other Supplemental Credit Documents and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such assignment agreement; (v) such assignee will independently and without
reliance upon the Agent, such assigning Supplemental Credit Lender or any other
Supplemental Credit Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement and the other
Supplemental Credit Documents; (vi) such assignee appoints and authorizes the
Agent to take such action on its behalf and to exercise such powers under this
Credit Agreement or any other Supplemental Credit Documents as are delegated to
the Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Credit Agreement and the other Supplemental Credit Documents are required
to be performed by it as a Supplemental Credit Lender.
(c) Participations. Each Supplemental Credit Lender may sell, transfer,
grant or assign participations in all or any part of such Supplemental Credit
Lender's interests and obligations hereunder; provided that (i) such selling
Supplemental Credit Lender shall remain a "Supplemental Credit Lender" for all
purposes under this Credit Agreement (such selling Supplemental Credit Lender's
obligations under the Credit Documents remaining unchanged) and the participant
shall not constitute a Supplemental Credit Lender hereunder, (ii) no such
participant shall have, or be granted, rights to approve any amendment or waiver
relating to this Credit Agreement, or the other Supplemental Credit Documents
except to the extent any such amendment or waiver would (A) reduce the principal
of or rate of interest on or fees in
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respect of any Tranche A Supplemental Term Loans or Tranche B Term Loans in
which the participant is participating, (B) postpone the date fixed for any
payment of principal (including extension of the Tranche A Supplemental Term
Loan Maturity Date or Tranche B Term Loan Maturity Date or the date of any
mandatory prepayment), interest or fees in which the participant is
participating, or (C) release all or substantially all of the collateral or
guaranties (except as expressly provided in the Supplemental Credit
Documents) supporting any of the Tranche A Supplemental Term Loans or Tranche
A Supplemental Term Loan Committed Amount or Tranche B Term Loans or Tranche
B Term Loan Committed Amount in which the participant is participating, (iii)
sub-participations by the participant (except to an Affiliate, parent company
or Affiliate of a parent company of the participant) shall be prohibited,
(iv) any such participations shall be in a minimum aggregate amount of
$5,000,000 of the (A) (I) Revolving Loans, Tranche A Term Loans and Tranche A
Supplemental Term Loans or (II) the Revolving Committed Amount, Tranche A
Term Loan Committed Amount and Tranche A Supplemental Term Loan Committed
Amount or (B) Tranche B Term Loans, as applicable, and in integral multiples
of $1,000,000 in excess thereof and (v) unless otherwise agreed to by the
Borrower and the Agent, such selling Supplemental Credit Lender proposing to
grant or assign a participation in Tranche A Supplemental Term Loans or
Tranche B Term Loans shall be required to grant or assign a participation to
such participant, in like percentage, of Tranche A Term Loans, Tranche A
Supplemental Term Loans, Tranche B Term Loans and Revolving Loan Committed
Amount, as applicable, of such Supplemental Credit Lender. In the case of any
such participation, the participant shall not have any rights under this
Credit Agreement or the other Supplemental Credit Documents (the
participant's rights against the selling Supplemental Credit Lender in
respect of such participation to be those set forth in the participation
agreement with such Supplemental Credit Lender creating such participation)
and all amounts payable by the Borrower hereunder shall be determined as if
such Supplemental Credit Lender had not sold such participation; provided,
however, that such participant shall be entitled to receive additional
amounts under Section 3.15 to the same extent that the Supplemental Credit
Lender from which such participant acquired its participation would be
entitled to the benefit of such cost protection provisions.
(d) Registration. The Agent, acting for this purpose solely on behalf of the
Borrower, shall maintain a register (the "Register") for the recordation of the
names and addresses of the Supplemental Credit Lenders and the principal amount
of the Tranche A Supplemental Term Loans and/or Tranche B Term Loans owing to
each Supplemental Credit Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Agent and the Supplemental Credit Lenders shall treat each Person whose name is
recorded in the Register as the owner of a Tranche A Supplemental Term Loan
and/or Tranche B Term Loan or other obligation hereunder for all purposes of
this Credit Agreement and the other Supplemental Credit Documents,
notwithstanding notice to the contrary. Any assignment of any Tranche A
Supplemental Term Loan or Tranche B Term Loan or other obligation hereunder
shall be effective only upon appropriate entries with respect thereto being made
in the Register. The Register shall be available for inspection by the Borrower
or any Supplemental Credit Lender at any reasonable time and from time to time
upon reasonable prior notice.
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11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Supplemental Credit
Lender in exercising any right, power or privilege hereunder or under any other
Supplemental Credit Documents and no course of dealing between the Borrower or
any Credit Party and the Agent or any Supplemental Credit Lender shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or under any other Supplemental Credit Documents
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Supplemental Credit Lender would otherwise have. No notice to
or demand on any Credit Party in any case shall entitle any Credit Party to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent or the Supplemental Credit
Lenders to any other or further action in any circumstances without notice or
demand.
11.5 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket costs
and expenses of (i) the Agent in connection with the negotiation,
preparation, execution and delivery and administration of this Credit
Agreement and the other Supplemental Credit Documents and the documents and
instruments referred to therein (including, without limitation, the
reasonable fees and expenses of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, special counsel to the
Agent and the fees and expenses of counsel for the Agent in connection with
collateral or foreign issues), and any amendment, waiver or consent relating
hereto and thereto including, but not limited to, any such amendments,
waivers or consents resulting from or related to any work-out, renegotiation
or restructure relating to the performance by the Credit Parties under this
Credit Agreement and (ii) the Agent and the Supplemental Credit Lenders in
connection with enforcement of the Supplemental Credit Documents and the
documents and instruments referred to therein (including, without limitation,
in connection with any such enforcement, the reasonable fees and
disbursements of counsel for the Agent and each of the Supplemental Credit
Lenders) and (b) indemnify each Supplemental Credit Lender, its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way
related to, or by reason of, any investigation, litigation or other
proceeding (whether or not any Supplemental Credit Lender is a party thereto)
related to (i) the entering into and/or performance of any Supplemental
Credit Documents or the use of proceeds of any Tranche A Supplemental Term
Loans or Tranche B Term Loans (including other extensions of credit)
hereunder or the consummation of any other transactions contemplated in any
Supplemental Credit Documents, including, without limitation, the reasonable
fees and disbursements of counsel incurred in connection with any such
investigation, litigation or other proceeding (but excluding any such losses,
liabilities, claims, damages or expenses to the extent incurred by reason of
gross negligence or willful misconduct on the part of the Person to be
indemnified), (ii) any Environmental Claim and (iii) any claims for
Non-Excluded Taxes.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement, nor any other Credit Document, nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders and the Credit Parties; provided that
no such amendment, change, waiver, discharge or termination shall
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(a) without the consent of each Lender affected thereby,
(i) extend the final maturity of any Tranche A Supplemental Term
Loan or Tranche B Term Loan, or any portion thereof,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any post-default
increase in interest rates) thereon or fees hereunder,
(iii) reduce or waive the principal amount of any Tranche A
Supplemental Term Loan or Tranche B Term Loan,
(iv) increase the Commitment of a Lender over the amount thereof
in effect (it being understood and agreed that a waiver of any Default or
Event of Default or mandatory reduction in the Commitments shall not
constitute a change in the terms of any Commitment of any Lender),
(v) release all or substantially all of the Collateral securing
the Credit Party Obligations hereunder (provided that the Agent may, without
consent from any other Lender, release any Collateral that is sold or
transferred by a Credit Party in conformance with Section 8.5),
(vi) release the Borrower or substantially all of the other
Credit Parties from its obligations under the Credit Documents,
(vii) amend, modify or waive any provision of this Section or
Section 3.7, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 9.1(a), 11.2, 11.3 or
11.5,
(viii) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders, or
(ix) consent to the assignment or transfer by the Borrower (or
another Credit Party) of any of its rights and obligations under (or in
respect of) the Credit Documents except as permitted thereby; and
(b) without the consent of Lenders holding in the aggregate more than 50% of
the Tranche A Supplemental Term Loans and more than 50% of the outstanding
Tranche B Term Loans, extend the time for or the amount or the manner of
application of proceeds of any mandatory prepayment required by Section
3.3(b)(ii), (iii), (iv), (v) or (vi) hereof. No provision of Section 11 may be
amended without the consent of the Agent.
(c) Notwithstanding the above, the right to deliver a Payment Blockage
Notice (as defined in the Indenture) shall reside solely with the Agent, and the
Agent shall deliver such Payment Blockage Notice only upon the direction of the
Required Lenders.
(d) Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled to vote
as such Lender sees fit on any bankruptcy reorganization plan that affects the
Tranche A Supplemental Term Loans
59
and Tranche B Term Loans and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow
a Credit Party to use cash collateral in the context of a bankruptcy or
insolvency proceeding.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts, each of
which where so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 DEFAULTING LENDER.
Each Supplemental Credit Lender understands and agrees that if such
Supplemental Credit Lender is a Defaulting Lender then it shall not be entitled
to vote on any matter requiring the consent of the Required Lenders or to object
to any matter requiring the consent of all the Lenders; provided, however, that
all other benefits and obligations under the Supplemental Credit Documents shall
apply to such Defaulting Lender.
11.10 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND WARRANTIES.
All indemnities set forth herein and all representations and warranties made
herein shall survive the execution and delivery of this Credit Agreement, the
making of the Tranche A Supplemental Term and Tranche B Term Loans, the
repayment of the Tranche A Supplemental Term and Tranche B Term Loans and other
obligations and the termination of the Tranche A Supplemental Term Loan
Committed Amount and Tranche B Term Loan Committed Amount hereunder.
11.11 GOVERNING LAW; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER SUPPLEMENTAL CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TENNESSEE. Any legal action or proceeding with respect to this Credit
Agreement or any other Credit Document may be brought in the courts of the State
of North Carolina or the State of Tennessee or of the United States for the
Western District of North Carolina or the Eastern District of Tennessee, and, by
execution and delivery of this Credit Agreement, each Credit Party hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. Each Credit Party further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or
60
certified mail, postage prepaid, to it at the address for notices pursuant to
Section 11.1, such service to become effective 30 days after such mailing.
Nothing herein shall affect the right of a Lender to serve process in any
other manner permitted by law or to commence legal proceedings or to
otherwise proceed against a Credit Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Credit Agreement or any
other Supplemental Credit Documents brought in the courts referred to in
subsection (a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
11.12 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OF THE OTHER SUPPLEMENTAL CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
11.13 TIME.
All references to time herein shall be references to Eastern Standard Time
or Eastern Daylight Time, as the case may be, unless specified otherwise.
11.14 SEVERABILITY.
If any provision of any of the Supplemental Credit Documents is determined
to be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.15 ENTIRETY.
This Credit Agreement together with the other Supplemental Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Supplemental Credit
Documents or the transactions contemplated herein and therein.
11.16 BINDING EFFECT.
This Credit Agreement shall become effective at such time when all of the
conditions set forth in Section 5.1 of the New Credit Agreement have been
satisfied or waived by the Lenders and it shall have been executed by the
Borrower, the Guarantors and the Agent, and the Agent shall have received copies
hereof (telefaxed or otherwise) which, when taken together, bear the signatures
of each Supplemental Credit Lender, and thereafter this Credit Agreement shall
be binding upon and inure to
61
the benefit of the Borrower, the Guarantors, the Agent and each Supplemental
Credit Lender and their respective successors and assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above
written.
BORROWER:
CHATTEM, INC.
a Tennessee corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: EVP-CFO
GUARANTOR: SIGNAL INVESTMENT & MANAGEMENT CO.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Pres.
SUPPLEMENTAL CREDIT
LENDERS:
NATIONSBANK OF TENNESSEE, N.A.,
individually in its capacity as a
Supplemental Credit Lender and
in its capacity as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: EVP
Signature page to Amended and Restated Credit Agreement dated June 26, 1997
among Chattem, Inc., as Borrower, each of the Borrower's Domestic
Subsidiaries, as Guarantors, the Supplemental Credit Lenders, and NationsBank
of Tennessee, N.A., as agent for the Supplemental Credit Lenders.
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Title: Authorized Agent
-------------------------
CREDITANSTALT BANKVEREIN
By:
---------------------------
Name:
-------------------------
Title:
------------------------
FIRST AMERICAN NATIONAL BANK
By:
---------------------------
Name:
-------------------------
Title:
------------------------
PRIME INCOME TRUST
By:
---------------------------
Name:
-------------------------
Title:
------------------------
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By:
---------------------------
Name:
-------------------------
Title:
------------------------
Signature page to Amended and Restated Credit Agreement dated June 26,
1997 among Chattem, Inc., as Borrower, each of the Borrower's Domestic
Subsidiaries, as Guarantors, the Supplemental Credit Lenders, and NationsBank
of Tennessee, N.A., as agent for the Supplemental Credit Lenders.
THE FIRST NATIONAL BANK OF CHICAGO
By: ----------------------------
Name: --------------------------
Title: -------------------------
CREDITANSTALT BANKVEREIN
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ W. ▇▇▇▇▇ ▇▇▇▇▇
By: ---------------------------- By: ----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ W. ▇▇▇▇▇ ▇▇▇▇▇
Name: -------------------------- Name: --------------------------
Executive Vice-President Senior Associate
Title: ------------------------- Title: -------------------------
FIRST AMERICAN NATIONAL BANK
By: ----------------------------
Name: --------------------------
Title: -------------------------
PRIME INCOME TRUST
By: ----------------------------
Name: --------------------------
Title: -------------------------
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: ----------------------------
Name: --------------------------
Title: -------------------------
Signature page to Amended and Restated Credit Agreement dated June 26, 1997
among Chattem, Inc., as Borrower, each of the Borrower's Domestic
Subsidiaries, as Guarantors, the Supplemental Credit Lenders, and
NationsBank of Tennessee, N.A., as agent for the Supplemental Credit Lenders.
THE FIRST NATIONAL BANK OF CHICAGO
By:-------------------------------
Name:-----------------------------
Title:----------------------------
CREDITANSTALT BANKVEREIN
By:-------------------------------
Name:-----------------------------
Title:----------------------------
FIRST AMERICAN NATIONAL BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Title: Vice-President
------------------------------
PRIME INCOME TRUST
By:-------------------------------
Name:-----------------------------
Title:----------------------------
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By:-------------------------------
Name:-----------------------------
Title:----------------------------
Signature page to Amended and Restated Credit Agreement dated June 26, 1997
among Chattem, Inc., as Borrower, each of the Borrower's Domestic
Subsidiaries, as Guarantors, the Supplemental Credit Lenders, and NationsBank
of Tennessee, N.A., as agent for the Supplemental Credit Lenders
THE FIRST NATIONAL BANK OF CHICAGO
By: ------------------------------
Name: ----------------------------
Title: ---------------------------
CREDITANSTALT BANKVEREIN
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
FIRST AMERICAN NATIONAL BANK
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
PRIME INCOME TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Title: SR. VP
---------------------------
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
Signature page to Amended and Restated Credit Agreement dated June 26, 1997
among Chattem, Inc., as Borrower, each of the Borrower's Domestic
Subsidiaries, as Guarantors, the Supplemental Credit Lenders, and NationsBank
of Tennessee, N.A., as agent for the Supplemental Credit Lenders
THE FIRST NATIONAL BANK OF CHICAGO
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
CREDITANSTALT BANKVEREIN
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
FIRST AMERICAN NATIONAL BANK
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
PRIME INCOME TRUST
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Title: Vice President
---------------------------